live from pier three in san francisco, welcome to "bloomberg west." on emily chang. repairs to go public, their new questions about whether these trainees companies will do enough to protect investors. streaming music sales crossed a major milestone for breaking one $1 billion in sales. can they save the music business? first, check of your bloomberg

top tech headlines. the number of americans who pay fell byitional cable more than 250,000 last year. more turn to streaming services like netflix. satellite and fiber failed to make up for the 2 million americans who don't cable last year. the first full-year decline on record. mike lynch iser accusing hp management of misleading shareholders. lynch calls on it hp ceo to provide detailed evidence about y's alleged accounting problem. .oogle wins in court a federal judge rejected the plaintiffs request to unify all lawsuits on the matter into a single class-action suit.

central to the case is whether or not the plaintiff gave consent to google. that must be litigated on an individual basis. , cory johnson with me here in the studio. there seems to be rising concerns about some of these chinese tech companies that are going public. they're goingid to go public in the u.s.. lots of questions about the e corporate governance structure. what worries you? >> first of all, it's interesting. a lot of these things are overlooked. not just the companies like baidu that have come up, but the crummy ones. a couple years back. >> that all sound so great. what makes it different gekko ?> who canhave rules about own companies. it's not people who don't live

in that country. the owners of these companies are not the owners of the companies. -- the shareholders are not the owners of the companies. it's an s-1 filing and their f-1 filing make it very clear that what you are actually buying is another company in beijing that owns the company. what you are buying is a holding company that does not contain the same shareholder rights that -- those of other ownership structures. >> how does the chinese government fit into this? weibo, whoes to could be facing stricter censorship guidelines. >> their censorship and the accounting issue. we have rules about accounting -- accounts have to be inspected

by the public company standard accounting board. they can't go in and look at these chinese companies. that's one of the risks cited. independenter accounting firms operating in china are not permitted to be subject to inspection by the public company oversight board. consequently, investors decried the benefits of inspections. i'm not saying anything about , butccounting of weibo they can't actually look at the accounting board. >> another point you raised is that the u.s. actually doesn't have as good investor protections as hong kong. can you explain how that fits into all this? ing that if hong kong -- it ali baba were to list in , they're allowed to

take away the right of an individual shareholder to have a single vote to determine corporate governance. the shareholders in the west cannot change the board in the ways that they can another companies as hong kong. >> many chinese companies have gone public in the u.s. like baidu. what makes that any different gekko why can't ali baba be like baidu? >> history as told by the victors. the chinese security and -- there is a long list of failed companies that didn't live up to their promises. companiesd chinese that went to zero because there were big questions about their process. those same structures are here in the weibo filing. excitedody else not too about these tech companies going public in the west

-- he worked in china for almost two decades. first of all, what concerns you and about alibaba weibo? >> these companies have invariable interest structures. you have to remember that the structure is the successor to what they did in the telecom sector. in the 1990's, the chinese government basically took the foreign investors out of chinese intercom by taking away their shareholders. , like the vip structure that ali baba is going to use, is probably illegal. you have a situation where the chinese government is submitting the situation -- permitting the situation to continue but can change its mind anytime. >> you have a long list of

baba's ipo could be disastrous. the condition of the economy in china. the fact that gdp is growing more slowly than it has been. how much growth will be in the a? they havelibab more transactions than ebay and amazon combined. declining. a it's like 50% already. clearly it's at the point where it is at saturation. the most important thing is that alibaba has competition. it is very capable. tensen is the social media king in china. it can be much easier monetized for their base then for alibaba to socialize their

base. tensen has a lot of ability to make up ground. i think there is -- you look at the competition and you look at what is going to happen in the future. i think tensen is a better deal and it's not overhyped as alibaba is right now. ibosomething in the we filing talks about the cities where they have had success. the expanded to talk about the 24 tier two cities. once you get beyond the cities, they suggest they have difficulty growing. one wonders if in fact the market is not as big in china. it's just those 28 cities or so. weibo has had a limit. the number of subscribers is starting to decline. the reason is the chinese central government has seen weibo, which is where the

chinese go to have their conversations and the chinese government does not like a lot of what is said on weibo. they have started to attack 50se posters who have million followers. leads. called the big we have seen their conversations become less vibrant. when you look at what is happening, people are migrating tensenat, which is holdings instant messaging system. we can see a migration of conversations from weibo to wechat. ba,t is not good for aliba because they own 18% of weibo. >> all of these issues, we will continue to examine as alibaba and weibo follow this road to

ipo. music streaming -- technology still a huge threat to the music industry. we will explain, next on "bloomberg west. ." we are on apple tv. ♪

>> welcome back. i'm emily chang. pandora is rising the price of its ad free pandora one service. listeners currently pay $36 a year and will now have to pay $40 a year when they renew. he subscribers will be charged $60 a year. -- new subscribers will be charged $60 a year. pandora will have to pay 1.85% of its annual revenue to one of the largest performance rights organizations. songwriters have been pushing for pandora to pay more. cory johnson is back with me now. ofdora has led to a rise other streaming music services. the bottom line seems that they are not charging consumers as much as the music industry is charging them. 1.7%at 1.85% compared to

paid by terrestrial radio. you have a higher fixed cost songwriters.he that is one of the reasons you see them raising prices because it's the only way to get profitability. music revenue dropped last year. you continue to see the music industry as we know it -- the music industry was built around distribution. not just around content creation. when distribution mulls change, you see the fall of cd sales like the fall of record sales. remer those things called records echo -- remember those things called records? >> kind of. it said. our correspondent jon erlichman

is an l.a.. do you remember playing record? >> they are selling them at whole foods now. final is having a bit of a resurgence. good sound quality. vinyl is having a bit of a reacsurgence. they're still the question as to whether the rise of services like pandora will be good for the industry. are people willing to pay whatever it is -- $10 a month -- consistently? numbers like downloads have suffered as a result of the rise of these services. close to having hundreds of millions of people willing to sign up for the services and pay for them consistently echo i don't think we are there. users.of global internet >> i found that shockingly high because these music services

like spotify and pandora are taking off. i think the pirating of music is declining. >> you have done a lot of work on pandora and spotify. to youe model appeal more than others? does one seem more likely for success? >> when i think about the services, i'm so cheap i will go from one to the next as fast as i can whenever i run out of the limit of how many songs you can listen before they don't let you skip anymore. i think that's why pandora thinks about the best way to integrate ads into the listening experience and to let you listen porphyry. clearly their model is different from spotify in that spot wants you to pay the monthly fee whereas pandora wants to maximize advertising revenue knowing that people will be listening and using the services more. modelse different but maybe advertising does have

a bigger potential than the number of people who actually signed up. -- sign up. >> i need people to tell me who to listen to. i may lean backlist there. i'm not good at building my own music list. >> we see the number of listeners actually slowing down quite a bit. engagement is increasing. the company is facing a different challenge. the initial challenge is to get people to use the service. now it's like they're reaching the limits of that. how will they get listeners to listen more to increase revenue? >> thank you. we will be back with more bloomberg west, talking about facebook's $19 billion purchase sapp.at that's next. ♪

>> welcome back to "bloomberg

news considering ukraine. the security council gf is speaking in key have right now saying that ukraine will remove military from crimea to the mainland. saying they will fortify its military on the eastern border. headlines are coming up very late quickly -- fairly quickly not. they will strengthen security at nuclear power plants and seek to demilitarize zone status in crimea. it will seek compensation for russia seizing assets. we have been hearing about russianilitary -- military seizing assets. they will try to seek some sort of compensation for that. the big headline is ukraine will remove its military from crimea to the mainland. welcome back to "bloomberg west." facebook's $19 billion purchase of whatsapp shocked the

technology world. what does that price tag mean for whatsapp employees? and started the ceo by asking what his company actually does. front is the largest and fastest growing software-based financial advisor. we believe that everyone deserves sophisticated financial for countsr free under $10. we charge only a fraction of you have ando. >> appeal to tech employees. >> we appeal to young people. over 50% of our clients are under 35. we're talking about a generation that grew up with software. there are couple with the idea of software managing their money and they preferred. obviously technology is one of those industries where it bring success to a lot of young

people. these are young people who have a bias towards technology. >> it can become located because maybe you're getting a salary and you get shares that are on paper. >> technology employees have a fortune that wealth is shared with the employees. they make financial decisions earlier life. >> what advice do you give tech employees in terms of managing their finances? how do you advise them on how to use those shares down the line? >> the truth is, some of the oldest advice is the best advice. markets go up, markets go down. you can control it. what you can control is keeping fees low, diversifying your portfolio and being smart about taxes. althfrontat well fron

does. you can rebalance your portfolio or harvest tax losses. >> everybody's talking about the whatsapp employees and founders right now. you guys have been doing some calculations in terms of how much these people are actually bringing home. what can you tell us? i have read that on average, they may take home $150 million apiece. >> they are a private company at it's hard to ignore number like $19 billion. joining a startup is not like 20 normal company. th amount of equity varies depending on when you joined the company. most people ignore the fact that you invest your equity over time. when you get acquired by facebook, it's not like winning the lottery. if there's not a big check in your bank account. you have time to work through to earn those shares. >> a lot of people are a lot

richer because of this. what do you advise in these situations? >> the great thing -- this is a great situation to be in. this is a great outcome for everyone at whatsapp and facebook as well. the advice we tend to give his two things -- you don't have to make any urgent decisions. you have time to figure this out. is good news for whatsapp they have 50 people in a similar situation. you see companies like facebook and google and linkedin where we get a lot of clients -- there's a lot of sharing of information and knowledge. make these decisions together and we recommend that they talk about these issues. >> what about when your company goes public echo how does that change things for employees ?uestion mark you ar yet

how to advise employees when comes to that? >> the more often you look at a stock price the worse your decisions are. >> there's been a lot of controversy about the tech community -- people who have become wealthy leading to greater income disparity in the city. a lack of housing. what's your take on all of these discussions? >> i'm hardly an expert on all the issues around this area. i think the tech industry has created a new set of challenges. it's a great fact about the technology industry that instead of all the wealth going to a select few, technology companies share about 10%-15% of their value with their employee base. there are tens of thousands of employees at google who are making good money. are finding great

opportunities in technology. it creates a new problem for a city like san francisco or new york when you all of a sudden don't have just a few evil coming into money at once but tens of thousands. maybe even hundreds of thousands of people. ♪

>> welcome back to "bloomberg west." a beautiful day in san francisco. we are outside because we are talking about drones, not just any drones but autonomous drones. that means that a human does not have to be at the controls. >> that is the whole point of this whole future technology. we will see. >> chris sands is here right now. tell us how your drums are different from other drones. you don't have to swap batteries. you don't have to charge them. you don't have to send the data

out to the cloud. you can scale this with thousands of ground stations. >> what do humans actually do? . >> today, you have to swap the battery out and you have to upload data to the cloud. so you don't have to do any of that today with our system. >> show us how this works. >> i can actually run it right now and activate it. it will take off autonomously. >> go for it. so you just basically -- >> i thought your texting someone. >> there it goes off. >> it is a preprogrammed thing. >> what can this be used for? >> some of our clients are construction firms. they use it as analysis for stockpiles. some of our clients are mining companies.

they use it for purveying stockpiles. >> why is a drone better? what do these currently? . >> right now, they use a lot of people. >> how about for minds, for example? . mines are very dangerous places. imagine yourself at a desk and you want the new stockpile purveying. you press a button and it takes often brings you data back. >> can your kind of drones find a missing plane? . >> it does but not that one. >> why not? >> you need to give it coordinates and send it to a location. ? >> so it does not work for masses amounts of territory. >> it also irritates the singles here. >> it's not going to hit us, is it? >> i'll protect you. don't worry. i am a bigger target. >> how does what you are working

on the into what amazon is doing, what facebook is doing? they are reportedly buying a drone company. >> i think we are all aligning in a place -- >> it is hovering there. >> a little distracting. on the amazon site, they are tried to make it so that it carries things around, delivery. we are focused more on it a collection. having someone highlight it and extracted from remote areas is really complex. towe scale and allow you improve a lot of data to scale. rules coming off her drones, best practices. what would you like to see from the faa to help your business grow? faa. agree with the we want to establish the

framework before they actually launch some. >> are you guys making money now? >> we are. we are within the legal boundaries. ? >> how much money are you making? >> we have six clients. some of our clients are the largest in the world. >> what do you mean within the legal limits? how can you use them commercially if you can't use them commercially? >> there are two types of drones. inre are really big drones the national airspace and then you have a model aircraft. the model aircraft are within 400 feet and a easily -- if you and you are400 feet within eyesight, you are good to go. in private area and public -- in other people's areas. >> so these are under the official rules of a model airplane, not a drone itself.

is that about the size of the device? >> that is the size of a model aircraft. >> what is the maximum size it can be? >> that is debatable right now. this is like many grams below that size limit. >> what is your vision? how mainstream do you imagine drones will be? will they be part of our daily lives? >> absolutely. i think search-and-rescue is one of them. having drums follow you on ski resorts and get some really good footage or motorcross. there are a lot of areas -- >> because we really need more to distract us when we are snowboarding. >> you said it could not find the malaysia 370, but on a larger skill, could it be helpful in a search like that? >> yes, if you have a massive earthquake or a tsunami, you can send these guys and put a thermal sensor and find people who are surviving.

you can send food in that direction or just go down and actually look at them. >> given the wealth of opportunity, i imagine it is hard to focus what you're best business is going to be. how do you do that and what have you identified that you want to focus -- if you -- as you want to develop the business, you want to focus that point of view. >> we have been approached the companies wanting us to do all sorts of different things. we gather a ton of images and give you also images top-down or 3-d models. >> how sensitive is it's imaging technology? does it make mistakes? can it say that is a rhinoceros? >> our technology is there a precise. whether you want to track a train that is moving or the side of the building because they -- they are putting in panels

today. [no audio] pattern recognitions. >> how many of these drums are operational. a fleet of 15 operational already. >> in terms of the building, do you see a one where the manufacturing will be easier and cheaper to do or do every single one of them have to be made by hand? >> in construction or mining, in construction, you can they be a lot of man-hours are a lot of issues in construction is people not having answers to questions on the ground and making decisions very ugly. when you have this ability, things change very quickly. by q3 next year, we will be able to fulfill a fleet of thousands of these units everywhere. >> that will be a lot of take

off singles. [laughter] >> can you make it land? shall we bring it home? that is really cool. >> is a dangerous? if you read into it, could it hurt you? yes, you definitely want to stay away from them. you don't want to fly than in populated areas. that is also part of what the faa regulates. you do not want to fly these things in stadiums and things like that. >> really cool stuff. thank you so much. we will be back with more of " bloomberg west" after this quick break.

>> welcome back to "bloomberg west."

in the last two decades, just 3% women.anies had care.com is not one of those companies. it helps parents find health care. sheila there are marcelo is one of those women who founded the company in 2006 and you just went public. >> yes, we went public in january. tween been growing 89% 2010 and 2013. the company is doing very well and we are serving about 2 million families and caregivers. >> i looked up the filing and it was over 9 million. >> i think we will continue to invest in overall growth. organically, the company grew

60% around that time period. last year, we grew organically 52%. >> what is the core of the work you do? are you trying to get more caregivers online? or are you try to attract more parents? >> we are trying to do more. under 18with children and families and 65 years and older, and a lot of families are looking for care and it is a very specific need. we are trying to fill the need around the intricacies of families. 60% of the jobs are for part-time jobs. there were really no options. >> a very fractured market in general. everybody sort of cobbles together. >> exactly. it is very fragmented and massive. during the summer, you try to figure out who is going to care

of my kid and they have an average of two kids, and they are just trying to make ends meet. who is going to care for kids? prior to us, there was no scalable solution. >> do you find that some of the adoption cases change? >> that is exactly what has happened on care.com. over 50% of the families are coming back to reuse it again. we price it like prescription, but they use it like de-services over and over again because there are always care needs. a cost about $35 a month for care packages that are $70. >> so once you match someone -- >> it is a lot like linkedin where you go in and browse for free and we only charge you when you are wanting to connect with a caregiver and access their background checks. so it is pretty open. it is really easy to use the service. >> we have talked about the issues around uber and insurance

issues and sharing economies that -- >> every sort of new company like that has a weird story. >> we haven't hoover-like service because we also -- we have an uber-like service because we also offer options. you don't have to run to the atm anymore. >> do you offer any assurances? >> we don't offer guarantees like that. but we do best in class features when it comes to safety checks, criminal records, safety check registries. states moms in several reviewing each of the caregivers and we provide tools to make parents smarter to use the service in a way that is a lot a for them would be if they just went to their neighborhood library and put an a half by 11 little thing that you tore off.

so that makes it easier. when making families aware of the safety precautions out there, we even offer services that they can hire a private investigator for an additional fee. online, it would be a cheaper option on care.com. >> when you are raising money, a company taking care of children, did people understand? >> i think it has gotten better over the last seven years. certainly, itays, was challenging and i would always encourage our mail investors to ask the women in their lives to find out what it was like to higher caregivers and the pain that they were going through. >> so that is the challenge itself, that they did not understand? >> i think relating to the overall service. if ild get the question, found my nanny, why would i ever have to go back to the service? i explained that there is a lot

of turnover and your many may work full-time, but there our date nights where you have to figure it out. those are challenges for moms. and families are very fragmented and it is difficult to find caregivers. it has actually gotten a lot better. we looked at data that pitch book put out. d.c. funding has gone up to women. years, 4%he past 10 went to women. in the first half of 2014, it is up 10%. there are some great companies not getting funded so that is super exciting. >> thank you so much for joining us today. facebook is rolling out video ads. let's talk a little bit about how nielsen is measuring their

effectiveness next. ♪

>> welcome back to "bloomberg west." facebook is rolling out video ads than the reach and frequency of those video ads are being studied by nielsen. jon erlichman has more from l.a. >> we have spoken more about facebook rolling out video ads. we have talked less about the nielsen relationship which means a way to effectively measure how those ads will do, the same way they measure how tv ads do. we spoke with steve pastor of nilsson and he explained it in a little more detail. >> the news from facebook is big news because what they are going to do is that the video creative to their advertising service means that they can take 1.2

billion people and expose them to the most compelling form of advertising and media, which is video. from a nielsen perspective, this extends our perspective. facebook has chosen no sin to be the measurement standard or service on their site and given the importance of a spoke and the prevalence of facebook across the world and particularly for younger audiences, this is a big development for us. thiscebook is positioning as a way for them to potentially get advertising dollars from television or at least there are a lot of pundits who would suggest maybe that that -- that is the end goal here. shows that are created and the marketers who then want to put advertising dollars tied to a specific show, facebook is very different. you are not thinking in that same way. his face but really in a position to get advertising dollars that are currently dedicated to tv? >> the bottom line is we are --

we will see. facebook brings tremendous scale, 1.2 billion people. they also target the ads. they can't pick and choose people amongst that 1.2 billion to expose particular as to given their behaviors on facebook. that is a very compelling proposition. what they don't have that the tv players have is the brands and the stories and the franchises, the characters and so forth around particular programs. traditionally, advertisers have picked programs and put their messages against specific programs. facebook to take convince the advertiser that it is all about the audience rather than all about the audience to a particular program. we will see how that plays out. >> maybe it ends up being tv dollars or maybe digital dollars or some combination of it. what about for nielsen? how are we supposed to think for your business what this does, financially, for example, what it could mean? >> we have been the standard

come if you like the currency for the treating a tv advertising, for about 50 years. we are the basis on which the buyers and sellers of tv advertising trade, determine the price and commit, if you like. basically, what we are turned to do is extend that into the digital environment. but also invideo, audio and text and be able to bring together traditional media and digital media. so we'll see if facebook can get tv and dollars. do you think they will? >> facebook is so well-positioned to get digital dollars. when marketers are putting ads to work on television, they kind of have a pretty good idea of what they are targeting. during "american idol," you know what that is. facebook is a different experience.

i think there is a a lot of comments about advertising dollars coming facebook's way. >> a story came out saying that the number of tv viewers or cable viewers are actually down. i don't remember that ever happening before. is that really about for cutting or something else? >> that has to be some part of the story. that has not happened before. they look at the cable companies, the satellite companies, the telecom companies, all those who offer video and add it all up. it has dropped 250,000 subscribers over the last year. if you are a player like facebook, you can use that as an advantage to talk with marketers down the road. so you can see that is something that they would use in their arsenal in convincing advertisers. bike.is time for the talked earlier about the

places where it is being used and the conversion rate, the number of daily active users compared to monthly active users , has stayed pretty fly for this company. i think that will be one >> of the big -- >>and right now it is basically only in china. >> although they talk about using it in lots of different countries. >> but mostly in china by far. john, i know you don't use weibo , do you? >> i will work on my language skills. [laughter] you can probably even measured -- even measure a global channel like ours and whether that sort of brings in this story the tie-ins between television and a service like that because we talk about twitter and teeny and the big opportunity there, too. >> we will be keeping a close

eye on them. thank you for watching this edition of " bloomberg west." >> we focus on the federal reserve. the open market committee has been meeting for the first time under new chair janet yellen. the fomc releases a statement at exactly 2:00 and we will have live extensive coverage. she will then hold her first news conference as fed chief at 2:30 p.m. watching 10 times. we will have complete live coverage of that as well. -- washington time. we will have complete live coverage of that as well. tina martin adams with wells

fargo, michael mckee joining us as well. on the markets for us today is my colleague alix steel. what are we expecting? >> the two things to watch for our what do they do about the 6.5% threshold? market expectations are that they trap it. -- they drop it. you want to look at their new economic rejections. -- new economic projections. does that influence their thinking about where to put the fed funds rate? we will also look at -- only nine members voting this time. there are three empty seats on the board of governors. you cannot count the number of dots but you can look at where they are placed. >>did michael miss anything?

the communication style of our new chairwoman. this is a whole new fad and a whole new chairperson leading the fed. -- new fed and a whole new chairperson leading the fed. this is our get to new -- get to know you, are coming out party. >> what the she have to tell the markets? >> she will not be talking about a change in policy. it is how she will communicate the policy. we are going to be looking to see what she says about the labor market, other ways of assessing its health. >> is it going to be data driven? >> they said it is going to be quality of guidance. we do not know exactly what that means. air been some discussions talking about ways of -- there have been different discussions talking about ways to handle the labor market. any indicationve

of what they will give us more clarity. >> we will get back to our roundtable in a few minutes. we are awaiting the fed decision from washington. peter cook is standing by. you are watching a special edition of "bottom line" on bloomberg television. it is 2:00 in washington. >> there is another 10 billion reduction in the bond buying by the federal reserve. the six point five percent unemployment threshold has been replaced with a more qualitative approach. the economy slowed in the winter months due to the inclement weather. let me get to the forward guidance changes. let me redirect you. maximum employment and price stability, a highly commodity to state -- stance remains appropriate.