>> this is "taking stock" for wednesday, april 16, 2014. i'm pimm fox. today's theme is twisted. some small business owners feel a bit twisted by yahoo! and yell. they're upset that local online reviews are being wiped out after yahoo! partnered with yelp. we're going to have both sides of the story. plus, the kiss lead singer, paul stanley, has provided us with

decades of twisted music. but he's going to talk today about his induction into the rock 'n roll hall of fame, as well as his new book. and the chief executive of the philly pretzel factory, his twisted products have led him to profits. all that and more over the next hour. first the headlines. >> google out with its earnings after the close of u.s. trading. the company's sales falling short of estimates. revenues excluding sales passed on to partners was $12.2 billion in the first quarter, shy of a projection by analysts for 12ds.3 billion. shares are dropping in the after hours trade. american express also out with its results. the company said first quarter profits rising 12% and that beast analysts' estimates as customer spending improved. and new york attorney general is said to have sent subpoenas to six high frequency trading firm asking for information about special arrangements they have with exchanges as well as their trading strategies. that's a look at some of the top

headlines at this hour. >> thanks very much. now google reported first quarter results today after the close of trading, sales falling short. as advertising rates for advertising on smartphones and tablets showed a decline. for perspective, i want to bring in the stanford university in california, a fellow at the arthur rock center school for corporate governance. and the founder, president and chief executive of united entertainment group. they've done deals with google. let's start off with you. when they talk about sales online, are they really saying, look, it just costs less to advertise on a smartphone or a tablet than it does on the traditional medium, as we say traditional, but we mean the screen that sits on your desk. >> yeah, i think what happens is when people buy into these alternative vehicles, the

overall aggregation of the cost per thousand that you reach becomes lower. therefore it becomes morph of an efficient buy for an advertiser. >> it becomes more efficient for an advertiser but it may not be so great for google, i imagine. what do you see happening in the future as google tries to sort of wean itself not necessarily away from advertising, but at least add something that's complimentary? >> the loss of the desk top to laptops to mobile is almost certain right now. we're seeing a major shift happening in technology. we're seeing social media become less social. this is why facebook have bought what's app. i remain very optimistic about google because unlike everyone else, it's doing charts. the majority of phones right now, mobile phones, run on android. google, i use google maps on my iphone. my mail is delivered to me by google. i make calls over google infrastructure. moving forward i'll be driving

my car using google's self-driving software and we'll have google delivering us internet. they're everywhere. they're also building robots. i'll probably be buying robots from them who come and clean up my house. google is working on all of the big things. you have ups an downs, you have technology shifts but the big shifts are still ahead. >> what happens when google has all of this information on many customers all over the world? they don't say that they have the same kind of infrastructure as facebook. but when you talk about hundreds of millions and billions of people, what do you do with that data? >> this is a scary part. google gets to know us better than we do. they're trying to take all the information they have about you and re-engineer the human brain, to understand how you work and think. to be able to predict that you're going to go out to a restaurant tonight and make a reservation for you. to be able to tell you what you

want and have you -- have it delivered to you before you order it. all of these data are going to be used in amazing ways and in really, really scary ways. we can talk about the wonderful, we can talk about the dark side, how google is becoming the most powerful corporation in the world. you can talk any way you want to. >> i want you to talk about advertising because it seems as though the whole concept what have advertising really is is changing. tell people about your company and how you have to identify those changes really almost before they happen. >> absolutely. i think that the whole base plan to this google phenomenon is really what the trend is going towards in the law of advertising which is direct marketing to your consumer and almost lifestyle mapping, what they do on a daily basis. so whether it's lifestyle mapping, so when you wake up in the morning, you go to the gym obviously, you eat a certain meal, you go to work, you take a car home and -- >> and they have all this information about you so they can track you from let's say

general mills, they can find out whether you're using an at&t phone plan. >> that's right. and google buys nests so they know what your home temperature is like or when you watch television or turn lights on. they know where you're driving. >> in a benign world, there's nothing wrong with this information and you can opt in and opt out as the case may be. does this mean that the way the companies -- because you have relationships with companies, does this mean that the way they are going tone gauge with the customer is going to be different and they're going to want to see much more direct results? >> yeah. more precise and the return on investment has to be faster and much more effective and efficient. so instead of spending millions of dollars and casting a very large net in the world of traditional television, this way i could pinpoint my consumer and get direct results within the second. >> so what they're talking about is they're going to know what kind of toothpaste you use but also they're going to find out

how much is left in the tube and ship it to you before you even notice that you're running low. >> google is going to know you better than your wife or your girlfriend or your better half does. that's the amount of information they're gaining about. they're going to know what your friends think about you, where you go, what you do. that's the world we're moving into. >> how do you separate what is an advertisement from what is in a sense real? because if you -- >> why do we need ads? that's a good point made recently. that the entire nation of advertising has changed. the only reason we need ads is to be persuaded to buy things. if google did all the work for us, they can decide what's good for us. this is how google is thinking. to be able to predict what we want and where we want to go. >> that kind of artificial intelligence, how does that also play into the role of the government? because somewhere you'd think everybody has this information. not just google.

>> well, that's again -- now we're getting to the scary part of it. google has more information than big brother ever dreamed about. there's no government that has this type of information. the n.s.a. tries to hack into certain information about us. google has all of this data. who knows what happens in the future? that's where we're headed. >> one of the things that makes me think about is the work that you've done with mobile advertising companies. for example, starbucks. you get messages. is this now a point in which everything's going to be pushed to you? nothing's going to be passive anymore, at least on the surface? >> absolutely. on a minute by minute, second by second basis, as you walk down the street you'll get a push message, whether you want a new cup of coffee or a new shirt. >> or you get a google drone that knows where you are so they can personalize whatever message they have. >> that's right. we talk about procter and gamble and starbucks, they love this type of platform because it makes things more efficient for them. but if you think about that

third party, small mom and pop shop, what's also interesting about this platform, it gives them the opportunity to market to the consumer. >> it means they can limit the shelf space. i want to thank you very much for joining me. much appreciated. my thanks. coming up on "taking stock," you're going to learn about a reputation online. reputations, they're made by customer reviews. now some customers claim that old reviews of their businesses are being replaced by new ones. we'll find out why that is important and why that matters to you. but first, we will head to the new york auto show and talk to a kia executive about a new, redesign of the sedona. >> the new york international auto show opened to the media today. car executives unveiled their latest designs and models. >> the new york international

auto show opened to the media today. car executives unveiled their latest designs and models. kia reveals its new redesign of the sedona. matt miller is at the new york international auto show. he's standing by with one of the chief executives. tell us about the sedona and kia. >> i'm here with the head of marketing for kia. they're looking to him to do a really important task here. you've got a big job ahead of you because you're looking to push kia upmarket, aren't you? >> we see other luxury brands coming down into our space. we have customers coming in asking for more technology, more attributes on the car, better cars. and so we say, hey, why not? if the luxury brands can come down and customers are asking for it from a kia, why can't we move up? >> they're going to make four

cylinders. you can make a five-liter v-8. >> which is now on sale starting in the west. coming to the northeast and the midwest late may, early june. so, yes, the others are doing it, why can't we? >> and talk to me about the technology. because i noticed when i see it, it's got really striking headlines -- head lights. it's got the full l.e.d. head lights which is something you only see on top of the line audis and b.m.w.'s. they move when you go into corners. >> it's adaptive head lamps and it's available on a lot of the other luxury vehicles. we can benchmark the best in the industry and we've got a vehicle that comfortably equipped is just as good if not better than other luxury vehicles. >> it is $66,000. so it's not like you're coming in here and asking nothing for it. it's a fair amount of money, isn't it? >> that's the fully loaded

vehicle. so the v-8 will start off around $58,000. with the kia you're getting a comparably equipped vehicle versus a mercedes, a b.m.w., an audi, for thousands of dollars less. >> so that's the one that caught my eye right away. i'm a single man, just with a dog. but pimm fox, who is anchoring this show, is a family man and he's looking for a minivan. sedona is the one that you actually unveiled here at the new york auto show. you unveiled it with "u.s.a. today" in a big public relations move on monday. but it's the new vehicle. tell me about it. >> we're calling it a multipurpose vehicle. because it's more than just a minivan. the united states market is really the only market that calls for minivans. around the world it's multipurpose vehicle. it's targeted at people who have very active lifestyles. whether they're families or empty nesters. you need the functionality, you

need the safety, you need the technology. but now you want more than that. you want a great-looking vehicle. that's what the sedona is. it looks very c.u.v.-ish. it doesn't have the traditional ho-hum minivan design. it's a crossover urban vehicle. c.u.v. >> a lot of acronyms. what do you think you need to do or is it just the product or is it important to do the right kind of advertising to get, to boost the image up a little bit so people are going to come in and pay $50,000? >> first of all, in our business it is all about the product. and of course the marketing helps drive people into the show room. but this is very competitive. now the competition is intense. and so we have to differentiate ourselves. one way that we differentiate ourselves is design. but also technology, safety and of course value. >> and super bowl ads. >> yes. we used lawrence finish burn to introduce the k-900 to the american public. he did a great job of really introducing the vehicle as an

alternative to traditional luxury brands. like the mercedes and the b.m.w.'s. what he said was, you know, here's something that isn't traditional. there's a new way to look at luxury. based on design and it's based on technology. >> thank you so much. head of marketing for kia. maybe a sedona for you. >> maybe you want a k-900 for you. >> yes. the k-900. >> we'll be right next to each other. thanks to matt miller and kia. you can watch all of our automobile show interviews on a special channel on mobile and connected tv. we are on the bloomberg tv app for ipad, amazon fire and apple tv. also want to mention that i'll be broadcasting live from the new international auto show tomorrow at 2:00 p.m. eastern. "taking stock" on radio, bloomberg 1200 in boston and 1130 in new york. coming up on "taking stock," is a partnership between yahoo! and yelp just wiping out local reviews of small businesses? one of my next guests says yes and we'll tell you why it's meaningful. >> this is "taking stock" on

bloomberg. i'm pimm fox. if you are a small business owner, online reviews probably mean everything to your online and your business reputation. and a deal between yahoo! and yelp in february seems to threaten some of those reviews. beverly says her dog training business is called the pooch coach, lost many of its yahoo! local reviews as a result of the deal with yelp. she joins us from san francisco. also in san francisco to help us understand and response is the vice president of corporate communications at yelp and also joining us from california, the fellow at stanford university. i want you to just start it off for us. explain to people that may not be familiar this idea of an online review and your online

reputation. it lives in an online world. but it means a lot to those businesses. explain. >> when i want to buy something the first thing i do is i do a search on it. then the reviews come up and i read reviews. we look at yelp or google or yahoo!. we look at the review and then decide where to go and what to do and what to buy. that's how we make decisions these dales. so there is this whole thing doesn't seem right to me. >> we'll find out why you don't think it's right. beverly, i want to bring you in. just explain, what was your experience? >> i was just contacted a few days ago about this. that i guess what happened was yahoo! had a bunch of reviews and i had about 20 reviews views up on yahoo! and then all of a sudden they disappeared and all the reviews from yahoo! went away and you can't find them or locate them anymore. now yelp reviews have replaced the yahoo! reviews. we lost all the data.

>> has that hurt your business at the pooch coach? >> yeah. the problem is the yahoo! reviews aren't filtered, none are deleted or anything, so it's all true. what is up there stays up. i had 5.5 out of six stars there. 90% of the people, 95% even were five-star reviews. but on yelp they filter and get rid of some of your good reviews sometimes or in my case all of the time. i only have a few good reviews up on yelp. if you look at my yelp reputation it looks bad. >> can you help beverly? can you explain what's going on? >> sure. as folks might understand, yelp has to recommend reviews that they find reliable. the reason that there are a number of positive reviews for beverly's business that are not being recommended is because in fact 10 of them came from the very i.p. address that was used to claim her business owner's account. and one of them actually was for a review of a competing business

to hers. so the problem is, business owners try to game the system and websites that don't try to filter out or remember -- reliable reviews can get gamed. that's probably why yahoo! decided to go ahead and use yelp as the de facto standard for search. >> beverly, do you have any response to this? >> yeah. first of all, in some cases clients are at your house and they can be using your i.p. address to write something. that is possible. so it's -- i.p. address isn't the best judgment. people can be at a cafe. i don't think the location of the person writing the review is relevant. i had one guy, for instance, that is in my five-star deleted which are 34 five-star deleted reviews now, another 14 that have been deleted. so that's a big ratio.

we're talking 50 to seven airborne ratio here. i had one guy that had to go to the library and open an account in order to be able to write a review for me because he didn't have a computer service and he wanted to be able to review me because i did good work with him and he was very pleased. and yelp removed his review because it seemed suspicious or whatever. but he's a real person and -- and i even talked to at the time the c.e.o. of yelp back then. i could write back and forth with him. i couldn't get anybody to help me. i couldn't get help on either side or really any explanation as to why real client's reviews, the last 13 reviews since september, 2011, have been denied. they're real clients. >> vincent, is there a process by which a business owner such as beverly can sort of have you look into it? because obviously not every situation is the same. and you want the integrity of your reviews to be worth while. >> right. i think another important thing to realize about yelp is that yelp is a branded consumer guide book. the reason we're successful and have trustworthy and reliable content that

consumers use is because we have a community of passionate locals that we have faith and trust in and those are the reviews that we're able to recommend. beverly was talking about an individual who doesn't even have computer capabilities and went to the library to open up an account and write one review for her business. well, at yelp we don't have a whole lot of information about that person and nor would reviewers and readers and so we night be able to recommend that review. certainly testimonials like that can be posted on her website but on our website, we have to recommend reviews we can stand behind. >> but having said that, vincent, is there a process by which now beverly can take and see whether some of this can be corrected or modified? >> not sure what's to correct or modify. i'm trying to explain that yelp

serves as a recommendation service. we help consumers know what the yelp community thinks about local businesses. consumers like that approach and use it and that's what helps them find local businesses. certainly other businesses that take other approaches, but we have to make sure that the information on our site is reliable. >> we've got to leave it there. vince joining us from yelp. my thanks to beverly from the pooch coach. >> this is "taking stock" on

bloomberg. i'm pimm fox. we've reached out to yahoo! for comment about that story having to do with yelp and online reviews and they issued a statement which we want to share with you. they say we have partnered with yelp, one of the most trusted, relevant sources of consumer business reviews, to provide a richer search experience for yahoo! users. that's why when yelp reviews are available for u.s. businesses, they replace yahoo! local reviews. that's a statement from megan rose of yahoo!.

now let's turn to the world of high frequency trading. the new york attorney general, he's reviewing the industry. he has sent subpoenas to six high frequency trading firms. for details i want to bring in keri. you've been following the story about high frequency trading and now the attorney general of the state of new york, what exactly does he want through these six subpoenas? >> it looks like they are asking for information about trading strategies as well as special arrangements between these firms and the exchanges. so that's what we know so far. and those are really kind of the crux of what this big controversy over h.s.t. that we've been talking about for the last several weeks is. >> you mentioned three groups basically. you have the high frequency and then the exchanges and then the dark pools. the high frequency traders, in some cases they are owned by brokerages, by investment professionals. they are a distinct group of investors. >> they are.

they're often independent firms. then you have dark pools which a lot of the wall street firms, particularly ones that get talked about a lot is goldman sachs and credit swiss, they run dark pools. then the exchanges offer services that the high frequency trading firms and dark pools utilize and that's called co-location which allows them to get the really, really fast, millisecond faster trade which is the center of what high frequency trading is and the really rich proprietary data that they use for their strategies. >> when you talk about the investigation into the strategies of these high frequency trading firms, that could be a strategy that says what? we get information at one moment in time but it doesn't get to everybody else until a millionth of a second later and result we can program a computer to take

advantage of that price and time discrepancy? >> that's very much what it is. are these strategies laid out in a way that's fair? are they breaking any rules? are they breaking any laws? and how the dissemination of information is reaching different traders at different times. that's kind of what i would suspect is probably being looked at most closely here. >> is this information getable? is this a list of all the trades? if you talk about high frequency trading, the very notion of high frequency means you've got thousands of trades going through every day. >> i think that's a really good point. i think the subpoenas, which we know were sent out, is the starting point to kind of see what kind of information that you can glean from these firms and what they're doing. >> you can imagine a lot of people using u.s.b. sticks and trying to download really a variety of information? because if every trade has a time stamp, then they're going to want the record of all these trades. >> a lot of these investigations

when it comes to securities and banks and traders, the information is just limitless. so it's a starting point and we'll see where it goes. >> want to thank you very much. >> thank you. >> bloomberg news on high frequency trading and six subpoenas issued by the new york state attorney general. now from high frequency trading to some high frequency music. very good. my next guest is the co-founder and front man of a band that has sold over 100 million records worldwide. and he was recently inducted into the rock 'n roll hall of fame and he also has a memoir out documenting his journey that has made him one of the most successful rockers and musicians of all time. paul stanley of kiss. he joins us now from los angeles. great to have you with us here on bloomberg. you talk about the cover of the book first, "face the music" that's what you've done by revealing so much of what you went through. start us off with how you wrote the book. >> for years i was totally against the idea of writing an auto biography because they tend to be boasting about achievements or claimed achievements that mean very little in the scheme of things. i wrote the book because i wanted my children to understand

what i had gone through and also perhaps inspire other people. i was born deaf in one ear, i was born without a right ear. i had quite a bit of dysfunctionality in my household growing up and was ridiculed, taunted and had quite a hard time coming up in the ranks. i wanted to become successful because i thought that that was the antidote, that that would take care of everything. when i was lucky enough to become successful, i saw that i was still miserable, had the same doubts i'd always had and at that point i was faced with, what do i do now? you either face your life as a victim or roll up your sleeves and make a great life for yourself. mine wasn't easy but maybe other people can see themselves in my book. i have a spectacular life. some people say it was brave to write this book but it has a happy ending and that's why i could write it. >> you wanted to be zorro. you wanted to be the lone ranger.

you became starface. >> i became a superhero with a guitar. i dreamed it and i achieved it. i think if everybody looks inside themselves and does a hard assessment of what their capabilities are, then the only thing standing between them and success is hard work. i worked hard and i have the life to show for it. i have four spectacular children, an amazing wife and i found at this stage in life that the way you heal yourself and the way you get the most out of life is by what you give other people. >> tell us a little bit about what goes through you now when you perform? you describe in the book the rush that you feel when you go onstage and you say now that rush stays with you. >> it may be a bit of a cliche but when you leave the stage, you leave that fantasy and you have to deal with reality. everybody goes home at night and has to look at themselves and either like themselves or loath

themselves. when i leave the stage now it's not because i'm going to something that i dread and there was a time it was like that. i played madison square garden and after the show, soldout show, i said good night and went to have dinner by myself at a deli. so it's been a great, great journey and it's exhilarating to have the kind of adulation i have. but it's also exhilarating to have the kind of home life i have. there's a lot of people who don't want to go home. i love being home. i'm feeling a bit celebratory right now because we found out that the book is the number two best seller on "the new york times" best seller list. that's quite an accomplishment at this stage in my life. >> congratulations for that. talk a little bit if you can about the music. you bought your first guitar i believe at the age of 14. and in fact the first group you were in, you were singing because you couldn't really afford a musical instrument.

>> correct. i grew up, i was blessed to be in a family, whatever they were deficient in, they exposed me to the arts. i grew up in a household where fine art was really looked upon as nourishment. the arts, music, drama, theater. so i always sang. it was something we did in our household as a very natural, natural extension of being together. so music's always been not only my blood, it's my air, it's a passion. and i urge everybody out there to find a passion in life. if you find a passion in life, you not only have the key to success but you have the key to dealing with failure. >> and in some cases it also gives you the key to the rock 'n roll hall of fame. >> and even when they don't want you in it. it took them 14 years. took them 14 years to let us in.

it's clear that they didn't really want us at the party but the people spoke loud enough and at some point you must address the people. because the people speak volumes. >> you also have to address yourself. can you tell the story about performing in the "phantom of the opera" in a production in toronto. and you were playing the lead and this changed your life. >> it did. it did indeed. i had seen the show in london, in the west end, in 1988 and somehow i had this epiphany when i watched it, i thought to myself, i can do that. it was based on nothing except this innate sense of what i was connecting with. 10 years later i was asked if i wanted to audition and go to new york, do a full audition and perhaps go up to toronto where the show had run for 10 years. i think it had grossed over $500 million there. they certainly didn't need me to come in and ruin their show. did a full audition. wound up going up there and it was a life-changing experience. i never realized that my connection to it was, here's

this disfigured musician who wants desperately to reach out and connect emotionally with a woman and can't. that was my life. somehow i didn't see it. at one point a woman sent me a letter backstage saying that she seemed to see something in my performance that had been lacking in others. she told me she worked for an organization called aboutface that dealt with children and adults with facial differences. and it was the first time i opened up and said, well, i was born without an ear. i have a condition called microtia and that was the start of this wonderful journey where i started meeting with children, letting them know that they aren't like everybody else. sometimes parents make this mistake with what they think is tough love, telling you, you're just like everyone else. well, how often can a kid listen to you when you don't understand that they're not like anyone else? i like to sit with kids and tell them, life can be tough, but you can have a great life if you're willing to work hard.

i'm the proof of it and i love to speak to parents and tell them the same thing. what i found once again is the more i give to other people, the happier i am. the way to heal yourself is to heal others. >> thanks very much for your book. i appreciate it. "face the music: a life exposed" by paul stanley. thank you. coming up next, i'll speak with the company founder who says that he has developed the solution to a problem that affects millions of americans. millions of people around the world. how to keep rodents and raccoons out of garbage bags. yes. details ahead. >> all right.

i'm going to outline a problem that i hope you do not have. rodents or raccoons getting into your trash bag. my next guest, he's got a solution. joe is the founder and the chief executive of mint-x. thanks for being here. just give us the sort of short version. what's this status of mint-x, the trash bags? >> we right now are the only rodent-repellent, e.p.a.-registered trash bag in the world. we are in 50 states, including

alaska and hawaii. we are in 5,000 retail stores across the country. and we're in home depot, we're in costco, in wal-mart, lowe's. >> you're everywhere. ok. >> it's like we sound like we're an overnight success, but not so. >> ok. >> 11 years in the making. >> go back, i was going to say, reel back the years a little bit and explain how you came to create these mint-x trash bags. >> our parent company began manufacturing plastic bags in the mid 1960's when local law 14 came into effect and you

couldn't burn and incinerate anything anymore and you needed to compact trash. so now we had all of these trash bags outside and we became the leading manufacturer of heavy duty garbage bags. well, one monday i got a telephone call from one of our large customers, has a 2,400-unit complex, and he said, did you see the photograph in the paper yesterday? he said it was one of our developments downtown, your bags were neatly piled up by the curb, there were a bunch of little children playing with their communion outfits on, a photographer took a photo and he drew lines and circled a half a dozen rats. and the children looked uncomfortably close. he said, can't you make a bag that kills rats? my kneejerk reaction was, if you make a bag that kills rat, it can harm children, it can hurt pets. you have to look at what rats don't like. we did years of investigation. looked all over the world. and we found the solution right in our own backyards. >> literally.

>> literally. our own backyards. when colonial times came and settlers came over here and they planted their gardens for their own vegetable consumption, they planted mint leaves all around the gardens. i even remember my grandmother planting mint leaves around the garden. why? because rodents, raccoons have very, very sensitive sinuses and that's how they find food for miles around and that's how key keep themselves away from predators. being in the plastic business, we were able to develop a scent, because we also make cleaning supplies, and we dealt with a chemist, we were able to mimic the scent using natural plant oils and get the scent that was right on the line of where it smells great to us and horrible to rodents and raccoons and we were able to develop a process to infuse that in plastic bags. so now we have a plastic bag that smells like mint and the rodents stay away from it. >> and this can be part of the

program to get rid of the rodents permanently, right? because i remember you telling me that the idea of having a trap or any kind of device to try to get rid of rodents is not going to work if you don't have a bag or something that repels them from eating the food to begin with. >> what we did is took the food source away. the traps at best, and they're very good, a rat has a choice between rat bait or chicken fried rice or pizza, you know where they're going to go. what we've done is taken the food source away and made the rat traps much, much more effective. >> tell me about the expansion of the company. because i once talked to you, you were in the midwest, i believe you were in dallas, in texas, and you said business is good, you're building things, you're looking

for new locations. >> yes, we manufacture right here in good old queens, new york, and right now we're putting up a plant in dallas and we are expanding our actual operations so we're able to meet the demand. we're on a vertical sales, we have no curve. we're going straight up. we're opening up retailers daily. >> i want to thank you very much for sharing this. >> thank you for having me on. >> revolution in trash collection. the co-founder of mint-x. congratulations. coming up next, we'll give you a little twist on the pretzel. we'll give you a taste of what it's like to run a pretzel franchise business. you're going to meet the chief executive of philly pretzel factory. that's next. >> now, according to historical

legend, pretzels were first

brought to america on the mayflower in 1620. they're stale by now. today their popularity is going strong. a franchise called philly pretzel factory has been growing all along the east coast, who knows where it goes next. joining me now is the company's co-founder and chief executive, dan dizio. thank you for being here. you were just telling me that you have been in the pretzel business since you were 11 years old? >> 11 years old. my next door neighbor owned a pretzel bakery. one day asked me what i was doing. i was playing in the backyard. pretty much set me up on the street corner out in philadelphia and sold all their pretzels. it's what i've been doing the rest of my life. >> how did this happen? someone just say, all right, go out be pretzel seller? >> i got stuck with 1,000 pretzels that day. so i went out and sold them. it was five for $1 back then. 1982. we ended up splitting the profits. so i got $14u7b that day. he got $100. my allowance at the time was $3 a week so this was like a gold

rush for me. next thing i know he says, let's do it again and again. eventually i started getting all my buddies to do it from school and my job before cell phones and computers was to organize 45 sometimes guys to get together and he would set them up on the street corners of philadelphia. that's how it began. >> how big is the operation now? >> this year we'll do over 125 million pretzels. at least. >> 125 million pretzels? and there's a variety of pretzels, right? >> we have our classic-traditional. that's the philly-style pretzel. back in the day a pretzel bakery in philadelphia couldn't keep up with the demand and they pushed the pretzels together like an accordion and hence came the philly pretzel style from there. that's what they're known for.

>> i also know that the dipping sauces are part of the philly pretzel experience. tell us about that. >> yeah. we have a variety of dipping sauces. the pretzel's like a conduit for a lot of different things. we have 10 varieties of pretzels and our own brand of mustard. >> do the pretzels have to be warm in order to really enjoy them? >> yeah. that's what the secret of our success has been. hot out of the oven pretzels. they'll stay warm and fresh. so what made us successful at the beginning was right from the beginning people were used to philadelphia pretzels off the street corners. they were cold and here we were, we create a wholesale pretzel bakery in a retail environment and people were able to get hot pretzels and it got us going and had the success. >> how do you determine the fillings for the pretzels? that's even a bigger endeavor. the things that you have in the pretzels themselves. >> the pretzels are traditionally simple pretzels. we do different things to add on top of the pretzels. we don't fill the pretzels.

>> like the -- >> the variety, the ingredients in there, we use top of the line ingredients. every pretzel, every store we have is a factory. so we're making pretzels from scratch every day. we just opened up 11 wal-mart locations in the last couple of months, inside wal-marts, and they're traditional pretzels inside a wal-mart and bake them from scratch every day. >> where's the biggest growth right now? >> right now it seems to be -- we have 11 stores opening in the next couple of weeks in virginia. so that's a big. north jersey has been great for us. all down the eastern part of the country has been big. i eat one every day still. still good for you. 14 grams of protein in each pretzel. not bad. >> all right. pretzel a day. thanks very much, dan dizio, the chief executive and co-founder of the philly pretzel factory. 56 past the hour. that means it's time for the markets on bloomberg. the dow gains 162 points.

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