>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. johnson. me is cory had a lot of controversial things to say.

he took questions from the audience. he is still saying the same things. i think it is interesting to hear from the other side of this debate. it is good to have a voice and put a face to it. you become that voice for the 1%. >> the most controversial thing he said is that rich people should get more votes. you pay more in taxes, you should get more votes. we will talk about that coming up. >> the struggles having going on for so long. publication that wrote the nsa spying story. on the show come later to talk about how inhnology talks about nsa ways they have never before.

nsa gather cyber material. drones making the strikes. humans involved hardly at all. we will talk about that and the publication as well. new newsere is a organization that he has founded. the top story is twitter. insiders will be able to sell their shares for the first time tomorrow. yes, saturday. why tomorrow? >> it is after trading when they start. >> it is a small percentage of shares. 1.8%. compare that to 13%. facebook allowed its employees to sell that amount when their lockup expired. >> we will see how big of a deal this is. there are companies like facebook and twitter that are somewhat new to selling on the private market before the company went public. maybe there will be that rush to sell.

again, twitter shares are quite a bit. it, they arestand only allowing them to do this so they can pay taxes that they owe. >> perhaps. tax revenue drives a lot of decisions. it is a trickle that will turn into a flow. >> tell me if you think this number sounds right. i saw somewhere that on average, twitter employees could oh war than $400,000 in taxes. >> it could be, but it could be skewed based on how many people in big positions could skew the average. we know they did a lot of hiring so low -- so late and so close to that ipo. >> all right. i want to bring in a chief economist. is that $400,000 per employee

sound right to you? >> a pleasure to join you. things for having me. it sounds like one of the averages that their average family has 1.3 kidss. sometimes averages are not that useful. the average may not be all that elicited in this case. lock upuch will this impact twitter share prices? obviously it has been on a roller coaster. it has been hit hard. will this be a big deal? will be at think it begin. there will be a coming around and focus on the bear sentiment on the name. we have seen a 14% slide. i do not think that is important. the real challenge is there is a good chance that twitter will best those. twitter goes from being a phenomenon to a utility to an ipo story. it will go to being a part of

the markets. it is a growing up point. i do not think it is a major point. be though that people decide to stake their winnings and leave. people made money on this thing. one third can sell their shares. you wonder what could happen. we have seen many silicon valley's that have a year or so after the ipo are people who work there and they decided they have achieved a certain amount of personal wealth and have walked away. we saw it with yahoo! and google. he saw some with facebook. we have seen those people leave those companies and go start their own companies. >> absolutely. twitter was fairly aggressive. they did a lot of hiring. they sucked up a lot of other firms. he made purchases with stock. -- they made purchases with stock. now they have some shares. maybe they will be the first guys to go and look for the new

start up opportunity somewhere in the area and be a part of that energy as opposed to the various challenges of being in a big public company. theow would you compare way twitter handle the lockup process with facebook? >> we had a better test of how goes. the truth is that facebook had such a wild flurry of unconstrained trading. it created an overhang of some folks who were trapped in there and trying to get the money out, particularly given five spoke -- facebook had a much unpleasant ipo run than twitter. it is an apples and oranges story. there is always newfound millionaires were under kinds of real pressure. they want to buy a home or support a family member, etc. some will make it out the door. is --uess what i wonder

what would that tell you about what is going on with facebook if a lot of secondary shares are offered and whether that is with employees selling shares are the company selling treasure shares as well. >> i think we will see a little bit of both. an interesting thing is facebook has been settling into a pretty aggressive evaluation as of late. that will be the true test. secondaries are a test of the strength around the price point in a public share. it could be a small expiry. facebook began the process of earning its evaluation. it is bumping up at a pretty high range. a lot of people who want to go back in and by the next facebook and owning facebook is buying the last facebook and not the next facebook. , there we saw was zynga was the secondary that was announced so soon after the ipo that some of the insiders were able to sell on the secondary

and other employees were locked up. it twitter follow that, would that concern you? >> it would concern me quite a bit. there's almost no chance of seeing things handled that way. a lot of managerial issues started intensely. do not spend more than your total freak cash flow in a year -- free cash flow in a year. that is a rough combo. >> if i am a twitter employee, should i sell now? >> i do not think you have to. it is a wealth management strategy. it might seem funny to some people, but it is a good idea. if you want to be a part of the story in the valley, you need free cash flow. yes, you can sell some, but i don't think you are walking away. , thank you for joining us. "house of cards" is back.

yay! i could not stay up until the night to watch it, but i will watch it this weekend and binge watching. we will talk more about how the netflix series has a high risk profile fans in washington coming up. ♪

>> welcome back to "bloomberg west." i am emily chang. the time warner cable and comcast have raised a lot of questions about media companies and the ability to negotiate higher fees. -- the leader of lifestyle television home to popular networks like hgtv reported earnings today. jon erlichman has more from elliott -- l.a. >> there was this immediate reaction. what does this mean for time warner cable on comcast getting

together? a lot of the bigger players seem to be feeling ok about everything. ken joins us now. asould love to get your take an observer of everything going on on those two companies getting together outside of what it ultimately means for your business. >> good day. beis always a pleasure to with you. yes, you're right. our industry always seems to have something interesting going landscapedistribution . announcement yesterday was nothing unusual. industry, we cable have been in this for about 20 been, there has a was consolidation. there has always been change. are us, we see it is opportunistic. we are big believers in that tv everywhere model and initiative. it is an opportunity to take our brands beyond just the totscreen tvs on the wall

mobile devices. as a matter of fact, we have committed to about 70% of our footprint to the tv everywhere initiative. is an enormous opportunity. at the end of the day, we are a content company. we are about quality content. it is what we do as good as everybody. you are always going to be desirable to distributors. lastly, we have a great track record of partnering with our distributors in many ways beyond includingerywhere, helping them with local advertising sales. it is interesting. it is exciting in many ways. it doesn't really change our game plan. >> let's talk about that content. thet of people will say best thing you can have is live programming. people will tune in for that. in my house, we watch a lot and

we will watch it back to back. i have gotten the sense from what you have said that a lot of people on your different channels do that. they turn it on and they watch for a long time. that gives you some leverage. can you elaborate? >> yes. tv watching.your you're among the majority of viewers in the country. you are grateful for that. about 94% of our viewing is done live. it is the highest of any cable sportss except barring and life programming events. people do tend to watch our programming. they leave it on. it is about the home category or the food category are the travel category. that bodes well for engaging upscale consumers. it is a great opportunity for our advertisers. live viewing and binge viewing

will sometimes delay people from watching commercials. it is one of the hallmarks of our company and networks. i think that rings a different aspect to the partnership with the distribution community. >> what about where your content is going when it comes to new platforms? amazon is a partner of yours. you admittedly were cautious about making the move into that world, especially because of the audience and the live programming. what should we think about the amazon partnership? will that be a long-term partnership? is netflix a long-term potential partner for you? what do you think about streaming deals? >> you go back to the amount of live programming that we do. there is probably less of an opportunity for cable networks like ours and those types of screening deals.

having said that, we have been pleased with the amazon deal. they have been a great partner. less of a partner relationship with netflix. not because they're not a great company, but the netbooks model doesn't work quite as well as amazon does as far as downloading our content. going forward, we are open to all distribution partners. at the end of the day, we are on thech row active cable and satellite distribution model and dual revenue streams. it has served us so well. back to the advertising aspect, a cousin we deliver an upscale audience that is highly engaged, it is a hallmark for their advertisers to do business with us. we are about establishing. we're about getting into as many homes as they can. you think this streaming model -- we think the streaming model is not a major play for us in the coming years. >> before we go, there were

reports recently about discovery being interested in acquiring scripps. know you love s cripps. would you ever be interested in selling or listing it? >> i would expect you to ask that question. a get that question quite bit. we have no comment there. we have great brands. we have a great company. we have a great future ahead in the cable network industry. >> all right. thanks for joining us. ken lowe. back to you, emily. >> coming up, "house of cards" has returned.

we will discuss next on "bloomberg west." ♪

>> there is one rule. hunt or be hunted. welcome back. >> i'm intrigued. a clip from "house of cards" season three. binge watching is so good when you are doing it. >> it is like binge eating. >> 13 new episodes of "house of cards" were available at a.m.ght or 12:01 fans asked netflix to

release it early during the snowstorm. season, jon and phil mattingly join us. no spoilers, please. >> i only got one episode in. in.t that first episode it is great. i'm pretty psyched to spend a long weekend watching the rest of it. >> how much do people in d.c. love this show? is there really a huge fan club? >> it is crazy. you mentioned the snowstorm when everyone started clamoring for netflix to release it. they decided not to. it is huge. netflix really involved everyone in this. they got lawmakers to come in and help them out with the process. people really love watching something that is so intriguing. we took a camera up to capitol hill and asked senators their thoughts on the series. >> the only unrealistic thing about the show is that a

democrat could represent south carolina. that would never happen. >> i think kevin spacey makes it look a lot more exciting than it actually is and a lot more devious. >> probably a composite. none of us are quite that interesting. i'm one of the few americans that haven't watched it, but i will. >> is this different than "west wing"? it reminds me of the way that news people would watch "the newsroom" on hbo. i love it. i wonder if it is the same kind of reaction? >> everyone kind of hated "the newsroom." it is different with "house of cards." everyone loves it. that lawmaker was from this state but would never say that.

everyone loves it. i can tell you without fail that the people behind me in the white house, including the president, all be spending the three day weekend watching the new season of this. >> what is the view from netflix on this? >> i think in retrospect, they are glad they picked a town that likes to talk about itself more than the town that i am in. great marketing approach. what is different with the second season is that there is a show that everyone knows. i could launch subscribers for them. they did not know what would happen with the program. it turned out well. you talked about binging. for netflix, it is more about consumer choice. episode in. some people like emily will watch it all at once. their hope is to say, we're different than what you usually get, which is one episode a week.

that helps with their business. jon erlichman phil mattingly, thank you for bringing us the story today. coming out, will the faa start cracking down on the use of illegal drones? we will discuss that next on "bloomberg west." ♪

>> this is "bloomberg west," where our focus is on technology and the future of business. i'm emily chang with your bloomberg top headlines. is raising funds and putting evaluation at roughly $3 billion. is raising funds and putting evaluation at roughly $3 billion. products.kes rakuten buys chat app viber.

it will help expand their user base outside of japan. and smartphone growth is slowing in china. shipments fell in the fourth quarter. the first drop since 2011. several factors may be behind the drop due to the popularity the fact that they did not start selling the iphone until the end of the quarter. businesses are not waiting for drone rules to be issued by the faa. f drone usage is in the tens of thousands. this drone boom is overwhelming the faa. airborne. >> drones have gone mainstream. >> they are making a movie without me. real estate is one area where

real-life drones are being flown today. drones should neighborhood anderty and neighborhoods even capturing surfers hanging 10 off the hawaiian sure. -- shore. >> and has a high death camera. it can shoot from a few feet off the ground to 400 feet in the air. >> they are beautiful shots, but also might be illegal. the faa does not promote drones for commercial use. >> you cannot does acquire one of these vehicles and launch it into the airspace. that is not how it works. >> but you can. it is how it works. >> i'm saying that regulation needs to say that. go in this range. 1500-2000oser to the range. >> can we try it out? >> sure. >> the technician says the

phantom 2 is flying off the shelves and the sales are legal. how the drones are you a star someone else's problem. >> is there something in here that will show me what the faa says i can are cannot do? >> no. >> others are worrying about crashes. you can see a chopper in the drone airspace. >> the worst case is that the drone can take down the helicopter. has sent some 17 notices ordering people to stop using drones, the only issued one fine. ordered a, the faa company to stand down after a drone was delivering beer to an ice fisherman in minnesota. >> what is the timeline for the

naa to let businesses know what they can -- faa to let businesses know what they can do? >> it is a huge source of frustration. rules were supposed to be out back in 2011. now they are expected to be out in november. they're waiting on final rules that incorporate drones into the airspace along with planes and helicopters. congress directed the faa to have that done by 2015. a lot of people expect that will be delayed as well. >> i wonder if drum companies are enjoying the fact that the rules are so vague -- drone companies entering the fact that the rules are so vague. >> isn't quite the contrary. a lot of people want to bring their businesses to scale. the representative we spoke to said a lot of them are going overseas. use is a lotne bigger than it is here. it is much more widespread and permitted.

there is a lot of frustration. this is an industry where they are begging for regulations so they can have their businesses be legal here. followill continue to what in fact they do manage to do in washington. thank you. tadata.y me they might be replacing human intelligence on the ground. >> interesting stuff coming from a good source. i want to get right to it. it is an interesting thing from an interesting publication. there is a publication called the intercept. about your story. i want to talk about the publication.

let's start with the story that you came out with. it is something that is near and dear to the technology company. that technological intelligence is being used for drone strikes. >> a lot of americans are under the perception that with the drone program that we know the individuals who are involved with terrorists. what we found in our investigation that in part is based on two sources from within the u.s. military that worked on the program, as well as documents provided to us by the nsa whistleblower, edward snowden. in many cases, what they are doing is simply using the metadata provided by the nsa satellite technology or cell phone towers that have been put on the bottom of drones that are used to track and other sim cards are handsets of mobile phones. in many cases, the u.s. does not even know the identity of individuals using these phones

or in possession of these phones. it has simply bill a web of their own social network tracking. they're basically targeting people on the metadata of where the phone was and who that phone was in contact with. these people can be cleared for a drone strike. they are targeting people because of the metadata activity and not necessarily that they know they are a terrorist involved with criminal activity. >> the notion that technology has its limits, it is the human intelligence versus a signal intelligence. of the the mastery mastery of technology over human intelligence? some form of another, they have used a signals. and as a was been a part of u.s. military operation. what we're seeing now with the rise of the use of drones and the ability of the nsa to tap

into fiber-optic cables around the world to penetrate phone networks and to track sim cards within a goofy of the user, i think we are entering an age of pre-crime. where people can have a pr ofile build on them. is it a night identity, we target them based on the activity that they are engaged in on the internet or with their handheld devices. ofand also seems that sales military businesses is a lot -- they are providing the tools for the kind of research by the nsa. >> this is a booming industry. amazon was talking about using drones to deliver their products. let's remember one thing we have seen as everything goes digital for medical records to intelligence files, what we have seen with hackers and

whistleblowers is that there is this sort of cyber war going on. on the one hand, the u.s. can use the drones as a bombing alternative to sending in actual pilots in planes that can be shot down. on the other hand, it is a matter of time before we see hackers, including those sponsored by nation states, hacking into the u.s. drone program every directing these drones. that will call into question -- more than 80 countries around the world right now have weapon iced drone technology. -- weaponized drone technology. it is a matter of time before another nationstate uses them. it will cause a real debate of the morality and legality under international law to kill people. >> i want to switch to talk about your publication. it has very interesting things. the publication has been known for his breaking of the nsa prism story.

the founder of ebay, for a long time he has wanted to get into the world of media. iter--sort of for two fortuitous. we were talking about a news organization that would have this posture when it came to violation of the first amendment and the fourth amendment of the constitution. he reached out to greenwald through a mutual friend. im.was always re-tweeting h would you guys want to collaborate in some way? he didn't envision building a news organization. he wanted to collaborate. i had a conversation and said, let's pitch pierre on this idea that we could work with him and build a news organization.

at first were talking about building a much broader feature news organization with sports and entertainment and politics and the national security reporting. what pierre and his team came up with is a brilliant idea. he would create several digital be led bythat would seasoned reporters or journalist in that area. they will build infrastructure around those individuals. intercept is the first site that he launched. it is being edited by myself and glenn. you have got a, movie, a documentary nominated for an award. >> absolutely. we envisioned working with all activists.sual data, laura is an academy award nominee and a filmmaker. we are barry -- we are a very

exciting world. we are looking forward to the futile. jeremy scahill, we appreciate your time. >> thank you. >> we will be back with more "bloomberg west" after the break. ♪

>> welcome back. i am emily chang. tom perkins is sounding off on what he perceives as america's war on the rich. he spoke at a club at a fortune magazine event where he railed taxing in the u.s., saying it would lead to economic extinction of the 1%. he also spoke about new idea. youhe perkins system is do not get to vote unless you pay a dollar of taxes. i think if you pay $1 million in taxes, you should get one million votes. >> asked mckee spoke to me

exclusively on "bloomberg west" ofre he dreaded the comments the bridge being compared to the nazis and hews. 0-- jews. trulia reported earnings. the revenue was up. the ceo is here in studio. we'll get to the inequality thing in a minute. let's talk about earnings. give me the highlights. >> significant growth in our core market base based on revenues. 100%.up more than record. it is growing rapidly. of our growth in mobile.

the big announcement was the strategic marketing campaign focusing on how to scale the awareness and engagement of trulia. >> you are hiring a cmo. >> yep. mo has joint asc to drive the marketing campaign and awareness. we think of it as the evolution of our business. we scaled our audience. now is opportunity to expand that. >> how do changes in the market effective business? if the prices in san francisco are higher than ever before, what does that mean for you guys? marketook at it as opportunity. that is home prices and home sales. last year in the

2013. prices were up significantly, as were home sales. we look in the bay area. home prices have gone through the roof. >> right. >> home sales are not growing as fast because there is no inventory. it is struggling to find inventory in the market. over the next several years, clearly we are on a , the product -- isthe study came out with interesting. it shows technology was not necessarily the reason prices were going up. they were high to begin with before san francisco became the tech that it is today. you heard what tom perkins had to say.

there have been protests against google buses. as a company based in san francisco, what do you think of the tensions that have been going on? what do you feel is trulia's responsibility in this environment? >> the employment situation in the bay area, for many people who live here, it is interesting. there are more jobs. clearly we are watching the tension. there is a minority of people who are having that housing and the evictions that is unsettling them. i think it is then cast it for unemployment and housing growth ploymentstic for em and housing growth.

unbelievable the amount of construction. every block, there is a new building going up. there is nothat enough housing to meet the demand. within over the next years, all of these buildings will come on board. >> you think the rent will come down? >> i think it will stabilize. exactly what is imagine thatut i this is an opportunity to increase the number of housing units that are available. double moderate over the -- that will moderate. ofis the manhattanization silicon valley. maybe in five years time, you will start to think of san francisco like manhattan. >> i do not know.

if the prices going higher, there might be mutiny. thank you for joining us. we will be back after a quick break. ♪

>> welcome back to "bloomberg west." it isnot forget that valentine's day. happy valentine's day. >> same to you. >> thank you. we have with us the ceo of eharmony. thank you for joining us. how is your business on valentine's day? what happens to traffic for you guys? >> we have five times the traffic on valentine's day. we wish every day was valentine's day. do not see you you that kind of growth for the rest of the year. how does that high into the way your business is growing? we have grown 50% in our business during the past 12 months. everything is growing rapidly. , especiallyday

since this year there is a four-day holiday, it is the top of the top. >> what do you think of some of the newer dating apps like tinder? >> that is popular right now. we do not think much of it. status 25% marital satisfaction rate in america the way it is. tharmony tries to do in dep matching. we think if you do not do that, the divorce rate will go higher. we do not think much of the sites that sort people together. >> i know people who use tinder who are in a very serious and committed relationship. be better if they did not find love because then they would keep coming back to you? we have always tried to say

to ourselves to let's do it the best way we know how. i have been a psychologist for 40 years. we brought in seven psychologist and a large group of social scientists. we try to do it the best we can. if other people can do it as well as we can, we salute them and congratulate them and encourage them to keep doing it. marriage needs all the help it can get. mobile and let at anything in dating, the revenue is less than it was online. do you think you'll make as much on the mobile the business as the online business? who aref the people with us now or applying from a mobile device. it is a challenge to make that work, but we think it is a great opportunity. as soon as people get used to the idea -- manticallyave to unro leave it there.

thank you for joining us. happy valentine's day. have a wonderful weekend. ♪

>> welcome to "lunch money" where we tie together the best stories, interviews, videos, and business news. i am adam johnson. joseph banks spends valentine's day looking for love. eddie bauer selling his warehouse. starbucks is using a firm in costa rica to stop the potential coffee-pocalypse. california is in the worst drought ever. in today's wild card, love and