>> live from san francisco, welcome to "bloomberg west," i am emily chang. startsrush maker king trading the shares are getting crushed, we will look into why investors are having reservations about the ipo. his firm was one of the main companys in oculus, the facebook is buying for $2 billion. spark capital founder santo politi will be joining us.

first the headlines, rupert murdoch is putting his son to succeed him as the head of his media empire. ashas named his oldest son the nonexecutive chairman of news corp. and 21st century fox. embroiledr son james, in the phone hacking scandal, will become co-chief operating officer. twitter has filed in turkey to have the six-day ban lifted. of refusingaccused to comply with court orders to remove posts about government corruption. twitter said it never received those orders. it is a war of words between michael arrington and google. he is certain google accessed his gmail account after he broke a major story on the company a few years ago.

who will denies the allegation. "we have never done this and it is hard to imagine circumstances where we would investigate a leak in that way." sure is a crushed down about 10%. crushed downcandy about 10%. >> is jpmorgan the lead underwriter on this deal weak and not able to support the price of the market? we did talk to the ceo of .ing digital he commented on the price this morning. take a listen. >> my focus is not on the price. is long-termynergy and by focusing on the long-term

would create shareholder value. that is what we have been doing. right now we are in an incredibly strong position. >> in the background was characters from the game. does that make you more or less confidence? that the issue with this company is, is it again maker plural? can they make many games? they're trying to create that impression. they have 180 until actual properties. -- intellectual properties. one hit to seems to make a company, but does not. >> can they make more than one, that is the question. the joining us is p.j. mcnealy, focused on consumer attitudes and behaviors. what do you think? what is their talent like compared to the other game

makers? the currentok at game makers in the mobile space, a company that is either really tied to a platform we saw with zynga tied to facebook and being concentrated and now king is an ip-based company concentrated in 86% ofe, candy crush, mobile revenue. so we see two tries, single being tied to facebook, we will see about king. this issue, about creating another hit. another candy crush. take a listen to what he had to say. >> our synergy is not focused on finding another candy crush. candy crush has been a success. we have 100 million players every day. the target and the synergy is to build a portfolio of high-quality games where we

retain the user and number two also monetize. retention is our number one focus. >> how do you feel about that answer? does that give you more confidence or less? face value you have to think of course they want another candy crush. another gamey want that dominates the mobile space. the portfolio approach is where they need to go and i think when they will gone, and buy more content because the mobile space is concentrated. for them it is. it is incredibly competitive. look at the ios store. we are talking about 2000 games being added every month. 24,000 games a year. right now king has four games. toy have to find some way find more leadership position in

a crowded market right now. >> 2000 a month. that is hard to get your mind around. is there a suggestion companies are able to take a consumer from one game to the next? that there is value to having a subscriber list? for the big game makers like electronic arts. business, itsole is different because they are annualized franchises where you worry about them once a year. in the mobile space, we are talking about daily active users. the only examples of converting bam whos a company like made hard-core role-playing games with a lot of whales. king is in a casual space. becauseallenging there's not much loyalty and they are not spending much money to begin with.

>> p.j. mcnealy, thanks for weighing in. we will continue to follow king and its performance. ceo of digital world research. we will be talking about facebook buying oculus. a lot of people caught by surprise. the virtual reality company bought for $2 billion. we will speak to an early investor next. ♪

"bloomberg west welcome back to "bloomberg west." i am emily chang. talking about facebook still buying oculus for $2 billion and for all of the crazy deals this one, nobody saw coming. >> this is a shocker. kind of deal that is so far in left field, because it is company not just without

revenue, it does not have a product. >> they deliver a product to developers but we as consumers can't buy it. the zuckerberg says it is platform of tomorrow. a lot of people think facebook missed mobile and they do not want to miss virtual reality is that is next. one person who is happy joins us now, santo politi, the founder of smart capital -- of spark capital. invested about $19 million in oculus. can we check our math? did you make a 20 fold return on this deal? >> something very close to that, yes. really screwed up here. you should have had a bigger position. [laughter] it is an amazing return. when you make that kind of investments, do you think in this environment quick exits are to be had? >> i don't think so.

we are early-stage investors and it takes like five to seven years for a company to mature. we did not expect this to be this quick. yes, it happens with amazing teams. this company has an amazing young team and they executed one incredible feat after another very quickly. in agot a cold following short time. so i am actually not surprised with the outcome. i think it will be a very valuable company in the future and hopefully we will think of this one has another great company facebook has bought early on. is so muchere potential in virtual reality, why now? isn't it too early? know, the answer is

probably yes and no. undertaking. a lot of people have to understand this, they have to give it a try. in love.do, you fall many consumers don't even know what to expect. nobody has put on a goggle yet. technology, the computing technology we are using today has to improve quite a bit for everybody to be able to use it. there is a lot of hurdles. it will take a lot more money to take it to market in a meaningful way. with a company like facebook, where they have a huge audience already, convincing their audience to try this on come is going to be easier than just a start up. it is an interesting combination right now. >> why do you compare it to google and android? what do you know about what facebook plans to do with it?

>> i know what the team's plan are, and they have audacious plans on what virtual reality could be and what it should mean in the future. as apeople think of it gaming device, but it is much more than that. world transport you to a of your choosing, wherever you are. distances disappear. you may be in florence with a friend of yours in 10 minutes strolling through the avenues or something like that, or you can be in a distant world in space. it is an immersive virtual world. distances don't matter, location does not matter. it is a brand-new way of thinking about computing and thinking about entertainment and a brand-new way of experiencing the world where it was not available before.

that was the statement that jumped out of me in the press release and later in the conference call, arcs zuckerberg talking about this as a platform. i have to imagine it is difficult to sort of say let's focus on one market before we go after every market. how did you try to guide oculus about what to do first? has a razor-sharp focus on providing the best virtual reality experience. that is their goal, which is a very difficult task. they are close to making it happen. what they were thinking is, their first market was going to be gamers. that is a very specific market. -- that would have been easy for them to try as

their first goal. there was never an issue on whether they have the right focus. i think focus number one, best experience. ityou do not do it right, can be overwhelming for the user. you have to make sure they deliver the best consumer product possible so that when anyone splits these goggles on, they really feel transformed and it is comfortable. that was their first and foremost goal and we already have a market we are going after because of the background of most of the people in the company, most of them are from , all of theompanies grade gaming companies we know of. experts suggested that facebook may have been defensively, that facebook may have been trying to one up google, how much interest was there from other players? nothere was interest, i'm

at liberty to tell you what happened, but there were some other interests from other companies. was very appealing to the oculus team is that mark eye ton, they all saw eye on what this thing could be and it was more important for whereeam to be in a place they're going to not only toefit from the resources pull off this project, but at theirme time to have vision understood and shared on what the future could be. is great, facebook regardless of the price they paid, i think they have the same fission the founders are dreaming of, that is very important. company on your

list of big exits recently, twitter, santo politi, founder of spark capital, thanks for giving us the back story. santo really on top of it with the ocular jokes. >> can social media unlock the mysteries of deep space? the neil armstrong of canada, next. ♪

that is the most viral video

ever shot in space. it was chris hadfield's cover of david bowie, the former commander of the international space station joining us from canada. you are called the neil armstrong of canada, commander, designed or stand it. how many times have you been to i understand it. how many times have you been to space? and then iacewalks, flew the third time on a spaceship as the pilot and then live on the space station for the better part of half a year and as you said eventually commanded it. so i flew to space three times. i am a lucky man. >> you have a lot of popular videos. you demonstrate things like what it is like to brush your teeth in space. why do you do all of this? was an astronaut 21 years.

i have spoken everywhere from elementary schools to united nations, thousands of times. i resolved if i ever got to space for a long enough time, i would try to explain the most common questions and give them answers, going to the bathroom, brushing your teeth, what do you do if there is a fire? what experiments are you doing? the canadian space agency had one big event a week, science competitions and things like that. we made almost 100 videos science, entertainment, all of them. hopefully it is a lasting legacy of my five months on the station people and teachers will be able to use for years to come. >> i would imagine the trade-off of doing those things to get people excited about space take away from the actual work you could only do when space and the reason you are there.

how would you balance that time when every second is so precious? people would imagine that. i traded off sleep to do it. for the number of hours of science done on station and the number of operational utilization. not only that, four days before we came home, the space station had a serious leak of the ammonia. we had to do an emergency spacewalk with almost no warning. we worked with mission control in houston and two of us managed to fix the leak. worked really hard -- we really hard and also to share it with people, show them what they paid for. all of the capabilities of the station and how it is a cultural extension of life on the

surface. it is an amazing thing we have built a one of the few people on board, we worked night and day to try to let people see what we were doing. to richardbe talking branson, who has virgin galactic going on. year taking passengers into the base for the very first time, everyday people like me and corey. what are the some of the challenges of commercial space travel and doing it on a broader basis? i have actually been talking to sir richard branson about that. he is a really brave man to do it. it is a technically difficult thing to try to make it safe enough that you can take paying passengers up and touch that first taste of the bottom edges of space and feel weightlessness. some of the challenges i guessing on the commercial market. does he have a viable business

model? did they miss anything in all of their testing? he is doing everything that needs to be done to privatize space flight and eventually we will get there. he is a brave man and putting a lot of his own wealth and name into trying to make it happen. i am pleased they think they are within a year of spaceflight and i with some success. it is where we have to go, from government to eventual privatization. it is what we have always done. commander, just like richard branson, you have a musical background. do you have a guitar with you right now? >> i do. a lovely new guitar. sure. i will play you a song. a song i played with 700,000 students live, we sang this together on the space station. it is written by ed robertson from bare naked ladies.

turn the key and light the fire ♪ ♪ we are leaving earth today of an astronaut's guide to life on earth. thank you very much. ♪

>> welcome back to "bloomberg west," i am emily chang. musk to jeff bezos, the commercial space race is very much on and also making waves in this race is virgin galactic. i spoke with the cofounder and chairman sir richard branson. the interview happened at a screening of a documentary about the war on drugs produced by his son sam. besides virgin galactic, i asked him how technology is helping to fight in the war on drugs. he is also on the global

commission for drug policy. take a listen. mediangs like social plays an important role. have blogged and tweeted about the war on drugs, debated it with thousands of people around the world, if not millions. and i think people have been educated through that. we have done google plus debates on the war on drugs, should they be treated as a health problem or a criminal problem? 93% of people said it should be a health problem. so i think social media complain important role. alsour son's film was released online on youtube. has it gotten the different response than it might have if theaters?eased in on youtube, it free

something like one million people saw it. generally speaking documentaries are seen like by 50,000 people. social media has played an important role. >> some people might argue technology has made the drug problem worse. they can use social networks to find people who want to buy them, things like the silk road, it can and make the problem worse? >> if somebody wants to buy the they will be able to find them. i don't think technology has made it particularly any easier than it is already. are readilys available. if you can actually make marijuana available and regulate it isu can make sure clean marijuana, it is not very strong that will damage your

head. that is asarijuana harmless as possible. >> what about bitcoin? can people say bad people hide behind it. is bitcoin good or bad for the war on drugs? use, people can use ordinary currency to buy drugs and nobody need to know they have used a pound or a dollar. it is no different. it is just another currency. you are not hiding behind bitcoin then you are using the dollar. >> technology, the landscape changed quickly. i wonder, what are the most important issues you are dealing with on drug policy? what do we need to do to get countries to work together? >> politicians need to be

educated. they need to read the reports. they are very clear that there needs to be a shift in policy. if you say take care when -- heroin, by not treating it as a health problem, you are creating thousands of people with hiv and aids. particularly in places like russia where people give out clean needles and clean methadone, they are managing to stop the spread of aids. you go without asking about purging black chick. what is the latest timeline -- without asking about virgin galactic. what is the latest timeline? a i'm terrified of giving specific month because things can get delayed. disappointed if we are not in space within not too

many months from now. you and elon musk in jeff bezos, what is your vision for the future in space 20 years from now? >> tremendously exciting. because private companies are running space travel, we want to enable you, me, as many as possible to become astronauts and have a chance to marvel back at our earth. another inountry to a fraction of the time. be able to colonize other planets, have hotels in space and do wonderful things and create massive satellites that can transform things for the better honor. exciting days -- for the better on earth. exciting days. spaceshipsing the

altogether. they have all been tested. there will be a couple more test s and then we will be up and away. richard branson, we actually have video of their last test flight in january. with each of these, they are gathering more data, super.net -- supersonic data, they have an experimental license from the faa, but not a commercial license. me,ou don't know this about i was at the first launch of the first test flight when it went into orbit. that was back in the 1920's. 2004 as i recall. >> a decade in the making for him. it is a fairly amazing thing. a very revolutionary business model. isn't he amazing to talk to? >> he is fascinating. such a vision.

optimistic. any entrepreneur has to have that. >> my favorite interview might be him. >> breaking news now, charlie mike recently contacted white to discuss a merger of the satellite companies. sources say they are just talking and no deal has begun but alex is actually with us now on the phone from florida. what can you tell us? is that awhat we know discussion happened recently, one person told me it was prompted by comcast acquiring tom morgan cable where they discussed merging the companies. at this stage there is no formal process, no banks have been simply discussion only. another person told me there is a decent amount of reluctance on directv to get involved because

directv does not seem comcast as a direct proxy for what look alikemay because dish and directv compete with each other and time warner cable and comcast don't. hard to imagine the deal working financially. directv has 77 billion dollars 32ue, dish is much smaller, billion in enterprise value. both of them have a good chunk of debt. hard to imagine. , there is awould be lot of questions on how this financially would be structured, some sort of stock for stock swap, who knows. all of these things are still just questions, would charlie ergen want to be involved, would

he be the chairman? there are so many questions about how something like this would be structured that i think favors lookingly strategy is.s charlie ergen went after sprint, he tried to go after wireless, this indicates he is staying in the pay-tv world. if he can convince directv to go along with him. >> dish shares are up seven percent. alex, how much of this is a reaction to what is going on with comcast and time warner and consolidation we are looking forward to in the cable business? looks atg question, it what the video market looks like. the big question directv is going to be thinking about, keep in mind they try to merge in

2002 and the justice department blocked that deal. world of video distribution changed enough the last 12 years for regulators to ok a deal now when they turned it down in 2002? is netflix a competitor? is amazon prime a competitor? or only the cable companies? the justice department is not going to look much if they see it as an old world distribution where the large, big companies like comcast are the only competitors because otherwise there are certain areas of the country where customers can only get dish or directv. putting them together would be anti-competitive. if you add all of these other internet options, mobile phones, who knows? perhaps they would look at the market differently. >> all right, alex sherman, great scoop on charlie ergen approaching my quite about a

potential merger -- approaching mike white about a potential merger. >> maybe they could sneak this deal through in ways they could not in years past. special designur series this week, talking to the guy who created the like button that facebook. how that is informing his new company. ♪

>> i am emily chang. this is "bloomberg west." our special series on the role of design in technology. you use the like button on facebook? >> i have. that than theof poke button. >> does anybody use the poke button? to lead thest development on the like button and is now at a company you cofounded focused on enterprise

and design. justin rosenstein is in the studio. curious how your work has informed your work at the enterprise company. example of the like button, that was taking something we did all the time and making it simple. we are enabling gmail -- teamwork without e-mail. we're trying to get rid of e-mail. it, when e-mail came out, you might have said, why do we need e-mail? good enough. that e-mail did not slightly speed us up, it totally changed the nature of what teams could accomplish. now people have that same reaction. as a voicemail was the thing we would be stuck with forever. example how i know

it is going on and i communicate with people without e-mail. , we marry the conversations with the actual work itself. so you can always log in and see here is all of the things i need to work on or the steps for my team between now and accomplishing our goal in who is responsible for what. in e-mail, there is no way you could ask gmail, what are the things i should work on today in order? who is waiting on me? you would have to read through every e-mail. we just put the work front and center and conversations happen around lists of things you have to discuss. so tons of that painful work about work -- e-mail iss say someone else's to do list for you. there is a level of accountability that is

uncomfortable for some people because it puts your work and your progress front and center. ofit is transparent in a lot ways. there are ways to hide if you want to, we definitely default you into this world, everyone can see what we are responsible for us to accomplish our goals. and the net effect means that teams want to do great things and suddenly have this max if -- samassive ability to do that. companies that are doing huge things in the world and often say, there is no way we could do what we're doing with e-mail alone. likewould be impossible running bloomberg without e-mail. this is the next step after e-mail. >> you work with pinterest as well. for so long enterprise products have not been design focused or design friendly. how does the design factor into your process?

companies get these that cared about design on board? >> in the future everything in life is going to be beautiful and simple. work is no exception. >> sure it is. there is no way that is true, but i love the idea. >> in the future. it may take a while to get there. is the place we spend the majority of our hours or the time we spend interacting with a computer. it is shocking how little time has been spent on taking simplicity in design and bringing it into this world where it has not gone before. you are the last time using a piece of software that you said i love this. i haven't having an amazing emotional response -- i am having an amazing emotional response? it has been top-down and there is this transition where it really is the end-user who

are deciding what they want to use and so suddenly it is about the interface and the product. it is the software equivalent of byos, bring your own software to work. because of that transition, it is empowering people to make their own choices. they are not using the clunky thing that has the biggest sales and marketing department trying to convince their cio. and wellutiful designed and allows him to connect with the work and teammates. you aren rosenstein, making work sound awfully enjoyable. i hope you are right. >> getting there. >> coming up, talking to eventbrite. they have opened in australia. of all places. >> hired a lot of translators, i guess. >> i think they speaking which. we will ask. ♪

>> i am emily chang. this is "bloomberg west." officeite just opened an in australia, giving the company six offices worldwide and they have launched organizers to create event with reserved seating taking on companies like ticketmaster. now in the joins me studio. it was awesome because you and kevin, your husband, sent us a picture of "bloomberg west" on right now in australia. >> we were so excited. >> why australia? longtimeas been a company. australia represents four percent of our business, prior to do anything to show them love. it was really about timing and our traction in the market. >> a lot of tech talent, too. google had an operation they

shut down, which left hundreds of engineers looking for work. what are you finding in terms of talent? >> a wealth of talent. as we expand outside of san francisco, we are finding these niches of talented people and we are hiring in australia. we opened an office in melbourne, teaming with tech talent and cultural experience, which is in our zone. >> let's talk about reserved seating. it which you into competition with ticketmaster. how do you see that evolving? >> it is about empowering ticketing. we envision bringing the world together through live experiences and we have never offered a solution for reserved seating, which is a huge market for s. something we will see growth in. sold $1 billion worth of tickets and we are excited about what that represents around the world. >> does that change your revenue

model when you imagine your different places you are getting sales? >> it actually does not. we have built reserved seating into our core product. we do not think it makes sense to charge a different fee. >> i ask you this every time, eventbrite always comes up in the pipeline to go public, king digital went public today, how much attention do you pay to what is going on out there? we are also seeing mega rounds of funding. really special time, i will say. i'm excited about what our team has done to get us to where we are today. whoave incredible investors have recently doubled down in our company. for us is about options. i am never cory about it. eventbrite will be an independent company.

for us it is about when the company is ready and when the timing is right, we will be out there, but for us, it is not on the horizon. we are focused on building a company and expanding internationally. >> one of the effects of this use thefunding, i won't bubble word, hiring is tougher. what are you finding? talenterce battle for and we are on the front lines. it makes us more focused and more eager to expand, not only outside of san francisco, but in our own thinking around recruiting. >> julia hartz, cofounder of eventbrite, always great to have you on the show and congrats on the launch is you have had recently. and thank you for watching this edition of "bloomberg west." on the see later today late show. we'll have updates on king. >> and the dish and directv news. >> thanks for watching.

see you next time. ♪

>> from bloomberg world

headquarters in new york, this is "bottom line." today, president obama discusses uroplasty need to be less energy dependent on russia. then, the fed releases the results of its latest tank stress tests. the white house again extends the deadline for getting health insurance. to our viewers in the united states and those of you joining us from around the world, welcome. we have full coverage of the stock some stories making