onthis is "market makers" bloomberg television. i am erik schatzker here with every role. apple investors have not had a day like this in two years. the stock is up 7.3% on the back of surprisingly strong iphone sales plus an increase in

apple's buyback and a big stock split. editor bloomberg news tom giles in our san francisco bureau this morning. tom, if we had to distinguish results foriphone sure and some of the other metrics in apple's earnings report and the buyback and the stock split, which seems the most important from an investor's perspective this morning? balance, the market is telling us loud and clear they like what they heard from apple. they like the iphone news, they like being news about the buyback, the dividend, the stock split, all things we have not heard a lot from apple recently, as much as investors would have liked. callsok has been facing from carl icahn and other investors, returned that catch, you were at 150 billion of that is more than enough, tim, get some of it back, he is giving a log back. he is boozing up i $30 billion.

-- he is boosting that up by $30 billion. the iphone sales getting a boost from china. that is good news, better than had been expected. the thing that cook is under, the pressure that he remains under, and it has not gone away, even with yesterday's really nice result, is where are the new products? show us the next big thing, tim. that is something they are working on. he has alluded to it. now he just needs to cough it up. >> is all of this really about responding to carl icahn and his gripe? because that is certainly not what steve jobs did. demonstratedjobs that once he can write to crank out new products. do not talk to me about returning cash to shareholders. that is not the kind of company we are. apple has matured and has changed a great deal not only because of the leadership change. cook has a different style, he is more responsive, he listens to investors and again look, he

has not come out with a new product, that killer thing, that killer app that everybody wanted to do. we know he is working on it. we know there is a tv up his sleeve, wearable technology is going to be good. now it is about delivering. but no, stephanie, as you point out, that is not steve jobs' m.o. we know that carl met with tim cook. he has communicated his message. have beennd apple fairly responsive. >> so do they have to be, by default, because as you said he theot coming up with extraordinary magic products that steve jobs -- steve jobs did not have to answer to anybody because every time you turn around you but something great out. tim cook has not done that. >> exactly. he does not have the luxury of simply saying no, we got this. is just aabout it, it huge cash pile. there is only so much you can spend on r&d, there is only so much you can spend on the supply chain, there is only so much you can spend on acquisitions.

there are only so many things they can do better that big. i mean apple tends to focus on smaller deals, smaller startup stuff that does not cost quite that much. made away, tim cook point yesterday on yesterday's call -- we are still going to be doing acquisitions and a lot of our cash is held overseas, and don't rely the possibility of us putting some of that to work in the form of acquisitions. it will be small, it will be strategic. we will not see the big whatsapp deals and deals in other sectors where these guys have a lot of cash overseas, ge comes to mind. i know you guys have been talking about that. you will not see those big megadeals from apple, but you will see them looking for some smart ways to put that cash to work. >> tom, thank you very much for joining us here on "market makers." tom giles got up early this morning out on the west coast so he could be with us. >> coming up, a surprise jump in durable goods orders last month. we will see what that means for

america's factories. you are watching "market makers" on bloomberg tv. ♪

aret looks like companies finally spending again. a strong durable goods report this morning show that they are replacing equipment that in some cases is more than a decade old. that is good news for manufacturers and maybe for the rest of us as well. our economics editor michael mckee is excited about it. mike, excite the rest of us. >> well, i was as excited as in a room full of investment bankers. >> investment makers can excite me. >> all right, then derivatives. this is what we really care about. capital goods spending. you take about defense, and that

was up, the trend seems to be changing, and here's why that is important -- we spent tons of money gas companies did, in the 1990's, biting computers, getting into the internet, doing all that kind of stuff. then it fell off. and after the recession of 2001, as you can see, that line goes way down. years in which investment spending contracted, and what that left us with -- a very old infrastructure in business. the stuff that we use to make historicapproaching age. that means a lot of companies have a lot of spending catch-up to do, which is good for the economy. >> what is the incentive exactly though? if you are a ceo of a company, many of them are sitting there, happy, don't want to move, they are playing defense, not offense. >> that is a very good question because if you go back over the last couple of years, the money that put their money to work in did not do as well in terms of share returns, it and you can

see that. share buybacks were the big thing, and big dividend payout, comes out in terms of big dividend returns. if you pay, your incentive is not there. productivity goes down, you cannot get as much out of your yourrs for the money, and profits go down. if you look at profits over the it economy, not just the s&p 500, it has been trending lower and lower. with those two things in mind, companies want to start spending. >> what is the relationship between capital investment like this and durable goods and employment goods? >> be more we spend to make stuff, it means more people get jobs. caterpillar reporting this morning they are raising their forecast because they are starting to see companies increase spending in their company. that makes it the stuff. where to look for other companies? willrock's forecast of you

see a lot more spending in telecom, which is kind of obvious. health care and financials, which is interesting. also staples and technology. these are the companies of the future. there make the stuff that the companies of today will will be using to build at capacity, increase their product. waiting for that to happen. hopefully today's durable goods order is a fine it is starting. you, a mckee, thank harbinger perhaps, our economics editor michael mckee on durable goods. past are approaching 26 the hour, time for bloomberg to take you on the markets. here is what is interesting, erik, just yesterday we had bill ackman of purging square creating this -- pershing square trying to create this major market between allergan and valeant. both stocks down today. many people are saying besides the fact that bill ackman likes the business model, think about the market they are in,

eyelashes, breast implants, botox, these are unregulated markets, markets that can continue to charge off, people are willing to pay for -- >> not covered by medicare -- >> and guess what -- people are not looking for generic or discount implants? they want the good stuff. it is like what do you want me to say. >> coming up right here on "market makers" -- >> who once implants on sale? i don't think they do. he says i don't care. >> yes, i am moving on. we're going to see how her longshot idea gets turned into a viable business. >> also, the idea is a slamdunk. want a lot of success? ask someone who has had a lot of it. shaquille o'neal. this is "market makers," on bloomberg television, streaming on your phone, your tablet, at bloomberg.com, on apple tv and amazon's fire tv. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle.

>> welcome back to "market makers." you know what? i am a bad listener. [laughter] ," it is "market makers bloomberg television, and i'm erik schatzker. stephanie ruhle. i am sorry. our producers are saying -- she never listens. just so everyone knows, i now owe our producer a dollar. the tribeca festival is underway. the festival is not just about movies, it also plays a march to innovation in all areas. we will be highlighting a few of those ideas and the minds behind them. one of those honorees joins us now, the vp of corporate avelopment at idea paint, company that can turn any service into a dry erase board with the swipe of a tame rise.

congratulations. welcome. before i tell you what a disaster this would be in my home am a tell us about the product. >> so we created a single coat turns anyduct that service into a writing surface just like a white board. the vision is huge. we're disrupting the way people create office spaces and school, to help them team around collaboration, creative thought, and drive results for companies and education. >> can i do say at they parent, say you are trying to market this for people to have in their home, i put an eye wall, are we teaching our kids paint on a wall? what about walls that do not have this on it, isn't this dangerous territory? >> we like to think that we are inspiring kids' creativity. picasso,eating young little einstein. they are teaming around -- we're teaming around things in education, creating spaces with 360 degree learning environments

to help with team teaching and collaborative learning. this is inspiring kids to learn in a team-oriented fashion, which is just how the workspace is working today. learning solo at a desk -- that is a very different learning style than what we are seeing around the world in workspaces today. >> it is very cool. very bloomberg. >> yes. >> i hate whiteboards because after a while they tend to smudge. the marker never comes off the whiteboard and eventually you just want to throw the thing at the back door into the garbage pile. does that work better? >> absolutely. we designed this product to be among the gold standard of dry erase writing service. you are investing in a power space empowered by ideapaint, and we wanted to last as long as humanly possible. >> if you put a coat of , house andn the wall we need to repaint it with regular use? paint oldest ideapaint

installed right now is eight working. and still >> eight years is amazing. where is the recurring revenue here? >> the recurring revenue is the fact that our customers are at the bleeding edge of innovation. we are in some of the most innovative companies around the world, like bloomberg. once you get an ideapaint wall in your conference room, people are empowering frictionless collaboration by painting all four walls, the hallways, the kitchen, the cafeterias -- >> they love it so much they will put more of it out. >> it is kind of selling me while we are sitting here. i do like the idea. >> there are too many glass walls in this building. >> that is true. >> companies like adobe are using us in 16 countries around the world. people have been using this for over six years now and they are using more and more and more of it because of the impact it has on the workers. >> how exactly? tell me how does it improve collaboration, ideas, i mean i think it is cool, but tell me

how it really impacts things? >> one of the most natural things for us to communicate is face to face in person. you take friction out of any communication process and between two people, and you are going to get a higher rate of ideas, you're going to get a better form of communication. we like to say that when you are in a meeting and the person that owns the marker at the front of room owns the meeting -- >> erik always have a marker. >> i am sure he does. when you paint with ideapaint, the person that owns the marker goes by the wayside and the shy people,. >> now stephanie like this even more. presidente vice corporate development. what are you doing, what is next, and what kinds of new markets can you exploit? >> that is a great question. one of our focuses is taking ideapaint around the world. we are actively distributed in 50 countries around the world. we are helping to service some

of our major national accounts internationally. we are working on ways to take your ideas off the whiteboard or off the idea wall and get them into the digital space, so capture and share your ideas in a digital format. we are also working with development partners on dry erasable lines of furniture. you think of the open office plans just like you guys have here at bloomberg. in guys want to collaborate between the cubicle systems, you want to collaborate between the desks, and we are working to empower those services and make it dormant services functional and utilize them for creative -- >> werhat products are you displacing in the process? if you are successful with that, maybe post it notes you leave on somebody's desk with a call so and so disappear. has toort paint, that is be going out the window. >> it is a big window. the easiest one to displace is the whiteboard. they are ugly and they disrupt your creative thought process

was up i look around offices and see dormant walls and we are empowering those dormant walls to have a function and utility to inspire creative thought -- >> are you on any college campus is yet? what you think he would be great for college dorms? >> so that every college dorm good look like the bathroom stall? >> but you can erase it! >> we are all over college campuses. one of phil knight's buildings in oregon is covered in ideapaint. ofhave heard of a lot college campuses applying it over things like dorm room doors. >> that is what i was thinking. i think that is awesome. good for you. congratulations on the award. pretty awesome. >> thank you. >> you sold me, brother. all right, jeff avallon, vp of corporate development of ideapaint. paint overt want to my hand-painted wallpaper at my house. i can just see my kids -- >> when we come back, it could be the message system your boss

could be using and you would never see a thing. we're talking with the cofounder of confide. ♪

>> welcome back to "market makers." i am stephanie ruhle with erik schatzker. think of it as snapchat for the corner office. confide lets you send self-destructing text messages. sounds cool, but is it being used for nefarious purposes. ? joining us now is president cofounder jon brod. you are in high demand. why? cs want to bee naughty? >> maybe not naughty, but off the record. what you write online anymore or text remains forever archived in the arm and a digital record, so

that is why we created confide. >> can we talk for a minute about the implications that -- what information to people since? i bet heen of sac, wished he had that, chris christie's aides, i bet they wish they had it. >> anytime you send a message that says confidential, do not forward, or anytime you say you know what, i will call you in response to an e-mail, or the third is can i get your personal e-mail address, let's take this off the work servers. we really think the use cases are for things like job references or job referrals, deal points, some office gossip, conjecture on a sensitive issue. lerman,nder, howard recently used to do to out an employee. he said i am glad i wrote it, i'm glad she read it, and i'm glad it is gone. the idea that everything has to remain -- >> it just disappears? so there is absolutely no record

of it whatsoever? >> i don't believe that. >> we use and two and encryption, so the minute you hit send, it goes across encrypted, we could not read even if we wanted to, which optically we don't. it looks for a unique key in the recipient's phone. once that is received, it ts the message, we only unveil 25 characters at a time and that is important because it really prevents screenshots. >> why can't i send pictures yet? if you can do this and pictures, you will kill those little snapchatters. >> we are not trying to kill snapcaht. >> what you want to? great jobe doing that for teenage audiences. this is for professionals also >> i am a professional who uses snapchat. don't be so sure. >> the first thing you do is take a picture, but in professional, i came from a well , and that is why we invented

and five. >> so clearly there are all kinds of legit uses for a product like come five, but the point that stephanie was making, if you are a criminal prosecutor, what you look at this quite a bit differently? >> we look at this as a utility. >> i know that. put yourself in the shoes of a criminal prosecutor. >> we look at it as a phone. ermanente is an imp way to communicate. >> but if i am a prosecutor, i can get a court warrant to listen to your cell phone. >> right. against our terms of use, any illicit activities is against our terms of use -- >> what constitutes a list activities? >> anything illegal. >> anybody who is going to break the laws will still check the box and say i agree anyway. >> that is not why we invented confide. any utility can be used, but people use it for good, but that

people can use of her back, we invented it for professionals to deal with issues and solve a particular use case and that is what we're focused on. >> do you feel like your brand is a little bit naughty and you need to get around that? confide, why say erik, don't text me, let's confide, what do you think of that, you? >> i am thinking you are going to tell me something you do not want everybody else to know. >> and are you ok with that? for sensitive material. keep using e-mail and things he won on the permanent record. you guys invented the notion of off the record as journalists -- >> i hated. >> we are bringing out with the -- for a phone call and a cup of coffee. >> what happens if snapchat start to do more textbased stuff? >> out of it they will. facebook could have gone the link in route, but they are building a very large, very valuable business. in many ways we consider is toves what linkedin

facebook as we are to snapchat. >> was to say snapchat does not confit and five, satan -- de, say, you know what, i will do that. >> i would continue doing exactly what i'm doing and consider it fantastic. have you here.o >> anything you want to confide? jon brod of confide, now you can do it on your android as well as your iphone. >> when we come back, how to handle big money, we will get advice from a big guy -- shaquille o'neal. ♪

likes you are watching "market on bloomberg television. i am erik schatzker here with stephanie ruhle. are you a morning person? city, were to new york

you may not have to be. he worked a year starts later than in any other american city. hard to believe if you get up as .arly as stephanie and i do >> we are nothing. [inaudible] -- he saidrl hourly you when i get up. what time do you get up? >> at 3:00 a.m. level. is a whole other >> that is yesterday. >> the average start time in the new york city area is 8:24 a.m. with a buffer of about one hour on either side. atlantic city has the second latest start time at 8:20 -- >> is that considered a city? >> it is a city, of course it is. >> boston, washington, chicago, l.a. -- i do not think i'm giving atlantic city -- strong,on, new jersey a it is still a city. crunching numbers and the american community survey, his

reason here is that cities like new york, san francisco, and boston are homes to young, creative professional time to start their work day later. you have also got college towns -- >> they cannot drag themselves -- >> so it goes. ithaca, a college town of course as well. atlantic city more toward gambling, so they start later. a quarter of the city's workforce does not begin their work day until 11:26 a.m. >> what times does the workday ends, though? >> they can go on all my. >> do we have data on how long the workday is? >> no, this is just the start time. the flipside of the late starters -- >> who are the early birds? :01 a.m. along with jacksonville, north carolina, killeen, texas.

>> honolulu is a city, jacksonville is a city. >> you have one company in that town and they have an early start time -- >> it is a military town. hinesville is home to port is a militaryen town. honolulu is a military time, but they are six hours behind eastern time, so if you want to coordinate with people in washington, you have to get there early. bakersfield, california also early because it depends on agriculture and farming. on average, across the united states, the workday begins at around 7:55 a.m. >> and 7:55, that is midday for scarlet fu. >> that is, that is like lunchtime. >> all right, scar, off the charts today. when we come back, here is a guy who probably gets a pretty early in the morning. i do not know if he gets up early. shaquille o'neal, this man has

champions is, don't over 2000 times, and at a mere 74'1" was the biggest player in the game. he makes more money now than he did when he was playing. as heows best than shaq launches the new shaq-approved brand. he tells us what shaq-o-nomics are all about. take a look. >> what saved me as a youngster was when i am 40, 45, that is the only diverse thing. >> you can't mess with

perfection, but you can moisturize it. i started drinking arizona in college because for $.99, it was a no-brainer to start a deal with them. macy's line is the affordable sue line. big guys, we only have a couple of places to go. i want to be able to go in there and just buy something off the rack. this is everyday. this is every time i go to the mall. >> everyone right here, you win a pair of shoes. [cheers] wife you have got to have a shaq pack, baby.

you have to hire people smarter than you. are thetest leaders ones who are smart enough to higher people smarter than them. ♪ >> they are great. >> i love frosted flakes, i would love to be on the cover of that cereal, but the only call i am getting is wheaties, and i really hate wheaties. when you have money, a lot of people say hey, invest in this box. this box are here will be the next box. if you give me $1 million, i will give you $10 million, but you have to be educated enough to do your due diligence, you have to say ok, our box is still in, or are we going green now. a lot of people just look the monetary value and it messes them up. school, get your education. i think for me that is the best thing to do.

>> the big business of being shaq. you can read more in the latest edition of bloomberg's "businessweek." of thesewatch some mega-athletes, the moguls they turn into, if you turn the clock s back, maybe an athlete would do an advertisement front of an auto dealership, on as suit store, they are whole other level now. >> they had to look for another career, and they went into marketing effectively. >> well, it is working. >> it certainly is. it is just about 56 minutes past the hour. we will look at sotheby's, stephanie. theby's is actually up today. the report from iss basically backing maybe it makes sense, this argument that dan loeb is making, he put his name up along with harry wilson to join the

board. iss seems to be saying that makes sense. the largesth is proxy adviser to institutional investors, telling mutual funds and others how to vote their shares, so it is an important voice command the debate is pretty much endorsing a good part of dan loeb's argument. >> they are also saying take a look at what their numbers look like. maybe they do not make a lot of sense. " isll right, "market makers coming back to in a couple of minutes. up ahead, a lifetime of disruptive innovation. that is what priceline founder jaywalker is being honored for, and he will be with us to talk about it when we return. ♪

. .

>> live from bloomberg world headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle.

>> general motors keeps on trucking. earnings beat estimates at higher truck prices make up for the cost of all of the recalls. >> no doubt about it -- facebook gets mobile. it wasn't that long ago the social network wasn't making a dime from smartphone ads. now it makes up almost 60% of book'sk's will stop -- revenue. >> we will show you how shutter stock the new home in an architectural icon -- the empire state building. makers."ack to "market i'm stephanie ruhle. >> i'm erik schatzker. let's start with general motors -- reporting a stronger than expected first-quarter this morning. the ceo admits to a challenging first few months on the job, could be the understatement of the year. she's dealing with the ignition 13 deaths.ll and

matt miller is here to tell us about the impact he recall as having on general motors earnings. we talked about better-than-expected results, but a year ago, gm made 80% less. >> you can see the impact the recalls are having on the perception if you look at analyst estimates. 12 of 14 ellis cut their estimates by 90% and one analyst from barclays was looking for a it actually came out much better than expected. c.t.s. was $.29 versus the final estimate of four cents. the beating by a quarter. on the revenue side, a little lighter, 37 point $4 billion is with a made in sales and we were looking for $37.9 billion. that's a little better than the first quarter of last year. general motors was really focusing on margins at the cost

of topline growth. they wanted to make more money, for example the trucks they are selling, they were not willing to reduce the prices even as they have a lot of inventory. >> that should encourage investors will stop >> at the size, where they are as well, looking at margins. it's not just her first few months on the job, the cfo -- listen to what he had to say about their performance. >> if you exclude the impact, earnings were up year-over-year with margins just under eight percent. earnings were up just over nine percent and continued improvement in europe. when we looked at our expectations, broad-based improvement across the business. >> the recalls took $1.3 billion

of pretax earnings out of the north american unit. the question investors should have going forward our number one, is the cost of the recall behind us or the majority of the cost? number two, is it going to affect sales going forward as you don't see that in the first quarter. has the corporate culture changed because it was really bad? as different? >> i want to put all three questions to gerry myers, the former ceo of the american motors or abrasion, currently a professor at the michigan business school. let's deal with the first one. to what degree can we look at this cost of charging $1.3 billion and say if it's not it, how much more might gm had to eat in the coming months to account for the recall? tried to sweep as

to try to get behind them. off hisillion right in thebut it's not huge overall gm context. they're trying to get saving behind them but we haven't seen the end of the costs of this recall situation. >> that is one of the issues you definitely have to look at. the other issue is the quality of the product. you talk about the business as it is now. what do you think about the quality of today's american cars? specifically general motors saw 10ompared to what we years ago? >> i think the quality of all american cars, some of the imports also is immensely improved.

we have learned how to design and build cars and do so with high quality in a way that hasn't been thought of before. to quality inn the industry now and the hard of the forcese we've just been talking about. more importantly, the pressure coming from the imported vehicles or import branded vehicles have always been high-end quality and they are forcing u.s. makers to get up to speed. >> if american automobiles are as good as they've ever been, to what degree is gm insulated from the brand impact the recall might have on customer demand? >> i don't think anybody is insulated from bad news will stop gm is no exception.

the great attention to quality underscores the subject of the itety problems will stop means it's more important and companies both domestic and foreign are paying more attention for the >> with you think about the cultural issues? a bloomberg reporter the other day pointed out as a family run has the bmw and toyota advantage over general motors which he says runs more like a government organization. big businesses tend to be run by government organization. you get to the very large large companies and you find the many layers below, andunications are difficult some of the gm situation, one of

its problems was the communication was not good enough to sensitize top management about how serious the problems were before they finally stepped up to it and mary barra took over and she is taking full charge. >> thank you for joining us this morning. we should talk a little bit about these gm results because nobody is insulated from bad news, but if gm is making cars people like and are getting great reviews in places like consumer reports, is it not possible that could counter the negative impact? >> that is definitely what i hope. >> i know they hope. >> vm paula was named the best consumer debt -- consumer does that -- consumer sedan.

>> i know you hate that. >> do people really like it? >> a lot of people really do. >> it's like the old school 1970's mullet. >> i wish i was taller. wish i had an impulse that a lot of people love the brand. >> it's a classic. incredibleso have halo cards like the corvette, the cadillacs are amazing, and they have this luxury brand none of the american carmakers have. they have the high-end high-margin and locked up. >> that is what lincoln wants to be. >> that's who wrote that song? >> that's 45 seconds to think about.

was tribes thought it called quest. >> i think the video was in california. formula.finds the it has figured out the secret to mobile advertising. >> creating a totally cool office of a skyscraper built when herbert hoover was president. empire stock and the state building. you are watching "market makers those quote on bloomberg television, streaming on your phone, tablet, bloomberg.com and apple tv and fire tv.

>> it's time now for some "bloomberg west" top tech and media headlines. shares of apple are up 8%. money of encouraging news in the latest earnings report for investors. apple is boosting its share buyback and dividend will stop

the stock could split 71 and apple could end up in the dow. internet service providers big issue pay for access fields with come knees like amazon and google. current rules do not allow providers to charge for faster or more reliable access. the fcc has been trying to replace the net neutrality rule voided by federal court in january. and a side of the times at columbia university -- the student newspaper, the daily paper will switch to a weekly edition starting this fall. its website will be up aided ailey. the spectators publisher says the paper lost money for the first time. it is the first ivy league paper to go weekly. sometimes you look like zoo lander. facebook is riding high after reporting earnings that little

way analyst expectations angst to a surgeon mobile revenues. today, the company announced it has acquired a fitness tracking app called moves. but just how sustainable is this kind of growth? let's bring in the senior research analyst at pivotal research. he joins us from portland. i want to talk about why you cover facebook will stop you are not a tech analyst. you cover advertisers. is that true? >> it's true and facebook is the world's third biggest seller of advertising. the commonality facebook has with viacom, cbs and others is followed -- is far greater than anything similar to amazon or ebay which is typically how -- most analyst cover companies based on how into two -- institutional organizers analyzer systems which is unrelated to industries. >> lots of people still think of facebook as a tech ebony.

asbe they think of facebook a software company. you think of it as an advertising company. there's no question that the reason for their better than expected for months when they reported earnings yesterday was all about advertising all stop -- advertising. but what happens when facebook moves into markets like what's up where there is no monetization strategy and doesn't look like ads are going to be part of the equation at all. >> that's very true. companies that are ad supported are increasingly less ad supported. cbs, only 50% of their avenue is advertising -- revenue is advertising. but that doesn't mean they aren't ultimately dependent on advertising. they are trying to invest in new platforms against which business models have not evolved. >> what does that mean? say that again. >> they are investing in

platforms. like virtual reality. it is very early of course. i'm not saying we are going to see banners and billboards on the side of your goggles, but don't rule out that marketers will not have a role in this. about's go back and talk advertising and why it is so important to facebook. they seem to be able to generate advertising from mobile. i don't want to be a facebook naysayer because the company seemed to do so well in advertising info, but just to be the devils advocate, how much longer can that continue for when user growth is slowing down? they let's separate what report as global growth into two components. first piece is that which is bundled in the sale. goyou are a big brand tommy to facebook and sam got million dollars to spend. you don't tell them i want

mobile and i want desktop. he gets allocated were you. it's a bit of a misnomer to talk about facebook in terms of mobile growth. they talk about it separately but that's not what's going on. where there is a cure mobile number is the app installed number. they have not broken out what that means but my estimate is it's several hundred million dollars of incremental revenue. of the billion dollar growth in ad revenue in this quarter, maybe 300 million came from mobile apps installed. that's dependent on the prevalence of apps, some of which comes from big rants, but a lot of it comes from small developers. that is where this changes. >> should advertisers and or investors be concerned by the trend in mobile active users? better thanare

facebook's monthly active users overall but artie percent year-over-year growth versus 50% 12 months ago. >> it's a bit of a red herring. advertising is a least bad alternative's business. when you spend money, it's about what is your objective and what is the least that way to do it? if you are going to spend money in a digital environment and the only mobile environment has no ads on it. your budget is what your budget is. it doesn't change that much. >> are you concerned when people say facebook's organic road is not increasing the number of users they have? is that an issue? do they need more? >> you have heard me say this schmoozers.sers facebook is far and away the

for anyd alternative advertiser trying to spend money in a digital environment. there is nothing else comparable. as long as they have 20% or 40% more tonnage -- >> let's get technical. you are making it sound like advertising on regional stinks. >> there are certainly a lot of issues with digital. it's flawed. if you have decided you're going to have a digital budget or set aside a certain goal like engaging consumers, then you are going to spend money on facebook. point's go back to the you're are making about facebook being the third largest the jewel advertising company? >> third largest of all companies on the planet, all media. elative to its comparative --

>> how is facebook doing as an advertising platform question mark >> unfortunately we just lost brian. >> he was done with us. us from portland, oregon. coming up -- >> the travel industry. with the founder of the company priceline. he's got another business will stop >> i said i was not going to use that word in 2014. stay with us. ♪

>> we are approaching 26 minutes past the hour. time to go on the market and look at time warner cable. >> slower subscriber losses, the company also reporting first-quarter earnings that beat analyst estimates. every which way we say traditional cable is over and yet here you are feeling it. >> i use time warner cable.

i'm a prisoner. time warner cable is being acquired by comcast. the current ceo of time warner cable says by the time we close the deal, time warner able will be in the best shape ever. he's being more flexible with the kinds of roddick sees offering customers like us. for example tablet-based stuff. time warner cable has been losing residential tv customers. those losses are still happening but he's not losing as many customers. overall, if you account for internet, voice and television, time warner cable added the most subscribers. >> and if you don't like it, tough nuts. >> caterpillar is of the most in the dow today floors -- up today. raised --r

>> it could be held by strong herbal goods order report. that affects a company like caterpillar. >> it is reflective of the underlying trend that could help a company like caterpillar. >> when we come back, priceline founder jaywalker is added again. wait until you see what industry he wants to bust into this time. fireso, potential house as appeared last month. we will see what it says about the real estate market. it bloomberg television, streaming on your phone, tablet, bloomberg.com and you can find us on fire tv and apple tv. >> we are everywhere. ♪

>> live from bloomberg world headquarters in new york, this is "market makers" with erik

schatzker and stephanie ruhle. >> welcome back to "market makers." i'm stephanie ruhle. priceline.com disrupted the travel industry when it debuted back in 1997 and today, its founder is out to distract the way we think of medical research. honored at thebe ceremony. he joins us now to talk about his new initiative. >> inky for having me. there are 40,000 medical research labs in america and yet young people have -- they can say is -- they are behind closed doors and the head of the nih has agreed to open up those labs and allow student film makers to come in and film these young scientists. any of them women and minorities to create thousands of new role models. >> is a business case?

>> is this a nonprofit? who's going to pay for this question mark >> people usually say where is the business. big you have a really problem, it's never in isolation. if you are a large drug company, you are competing against research labs and need to get your best young scientists. by building a place where everyone can go from private industry as well as nonprofit, you open up a place where recruiting and rewarding young scientists -- >> i still don't get to pays for it and how you make money with it. i love the nih but they don't have any money. it sounds like an amazing idea. the first place where young scientists can go to see what other young scientists are doing. you then sell the opportunity for commercial companies.

you have thousands and thousands of young scientists to work on nih grants and tens of thousands of scientists who want to work for the public. towhy is it you need tourneys people into stars today? is that because we have created a celebrity culture around business people? medicalave been making advances yet there was no celebrity culture around jonas auld or louis pasteur. >> you've got it exactly. young kids today want to grow up and be doctors. but many people want to write apps on social media. we need our best students saying medical research. it is so competitive now, these kids don't even know. they all think they can be a doctor, but who is going to cure cancer? >> some of the reasons people go to silicon valley is because of the dollars.

they are not going because they want to do really cool stuff, which they may do equally well in a research lab as an incubator in silicon valley. they just think i'm going to become rich. >> there are plenty of kids who say i want to do something useful with my life up teach for -- the key is if you show these young kids they can be a scientists, especially women and minorities, they say i can grow up and be a doctor, but i could cure that. it's that idea. if we don't get these kids thinking about it, we're not going to have the best and brightest. >> don't you want your daughter to do that? >> but i worry at the same time that perhaps -- i imagine you've given this some thought. be setting unreasonable expectations. i spent some time in medical labs and grew up in a doctor's household. a lot of the research that gets

done in medical labs moves along at a very slow pace will stop >> the world is changing. with 3-d printers and synthetic biology, the information revolution is coming to biology. they are not going to move that giant and the slow moving the labs. all across the country, this idea of slow and plodding labs is yesterday. the research frontiers and writing dna code and splicing that code into living organisms and working with viruses -- this is a completely different world in these young kids are doing stuff you wouldn't believe. >> why are you so passionate about this? >> at the end of the day, america needs to compete with its brainpower and if we don't, we are not going to win in the global economy. we've got to get our best and brightest working on the stuff that matters. lex one of the issues i have is this term with destructive innovation makes people like me feel like you are over the hill. you're not creative and never had an original thought. millenials are shaking up stop

albert einstein should get up. >> you get these risible investigators that are 35 and 45. they bring the kids along. it being marketed like it is a new concept? >> i'm not in charge of marketing innovator. i hold 700 because i have props will stop >> i'm looking for smarter ways to do it. if you want to call me a disruptor, be my guest. i'm a person who tries to change things and at the end of the day, business matters but we have to move the country forward. but america has to compete with its rain power. is going on in china. china has become the second largest spender on medical research. ink at what's going on

singapore and western europe. there's an entire generation using technology. you don't need million-dollar labs. at the end of the day, we are competing with the whole world. >> what is your biggest challenge? >> the biggest challenge is to make sure we continue to fund by keeping the funding pressure on in ways that are commercially viable. bringing that research to the marketplace and not only get the public will. >> i am excited about lab tv. jaywalker, founder of lab tv and priceline. i was hoping for jj walker. coming up, the housing market is hitting a speed bump. buyers and sellers want to blame

. >> if you missed any of our canrviews, guess where you watch them? and is on and apple tv. ♪

>> you are watching "market makers" on bloomberg television. if you look at the data, there are signs the housing recovery may be faulting. home sales plunged last month and by one measure, homebuilders are more pessimistic than they have been in a year. bloomberg government senior analyst neil richardson is with us and says washington may be what is standing in the way of a housing recovering. what do you mean by that? is puttingwashington the cart before the hearse -- before the horse. they prove their value in the housing market is slow and looks just like it does now. and yet, next week, congress

will start putting in place a that will eliminate freddie and fannie. that will make a slow housing market even slower. >> we all know congress moves really slowly. even if they start to debate a bill and even if a bill gets passed, there is no expectation legislation will be passed before the midterms in november. it's going to be years before fannie and freddie are truly reformed. thatmebuyers think about now? >> i grant you all of that and it's not just homebuyers. there's a lot of different pieces that make the mortgage world go round and round. the key driver of any market is certainty about policy. anytime there's uncertainty about policy or its effects, has a drying effect on the market. it really stops it in its tracks . but we've seen in the latest housing data is a 15% drop month

over month and existing home sales down. home building and new construction down. down, i could go on and on. >> some people feel like we are in an economic recovery. if you look at the market in places like new york and l.a., --re hasn't been a pickup look at the numbers two or three months from now they will look a lot better. agree, but right now, they look bad across the country. pockets in new york, pockets and pockets everywhere. but if you look at the national picture, you are not seeing the groundswell of growth. there is about a month to get this bill done before congress are thinking about it term elections. if the housing market looks sick, and going to kill the momentum. >> has the housing market really

proven to be that accurate a reflection -- all markets function on certainty and i just don't know. he had very strong numbers or stronger numbers, there was certainly growth happening in existing new home sales in 2010 and 2011. i don't think anybody would say those were times of certainty at all. there were times of certainty about direction of the stock market, wage growth, economic growth, but there was no certainty about any of that. >> accept the place of government and housing. government was 90% of the market with freddie, fannie, and ginnie mae. is eliminate does the key source of government involvement. >> those are things lenders think about. those are things policy makers and movers and shakers in

corporate america think about house,i'm going to buy a i'm not thinking about the certainty. i'm thinking about whether i've got enough to make a down payment and whether i can get a loan from the bank. i'm also thinking about the cost of the property. higher, rates are higher than they were one year ago. but more than anything else, things are more expensive. hoppity priceser is what is to blame for the flows -- the slow sales. lex i don't think it is about rates at all. is credite problem availability has not come forth. 43% of the market is all cash hires. first-time homebuyers are having a hard time getting mortgages.

to get ae able mortgage right now at the price point you want to a lot of people can't will stop >> you are right, but then we can get into a debate whether that's a bad day. you could make the argument we had too much homeownership will stop >> in 2005 and 2006, think about all the people who are out there buying homes because they were under this arnie frank idea that it's part of one's birthright to buy a home and maybe it shouldn't be. maybe renting is a-ok if you can't afford it. >> absolutely, but here is where the policy comes in. what's shown in 2005 at 2007 is that the private market could own housing whenever it wants to. it can make freddie and fannie andelevant stop -- fannie freddie irrelevant. that is when fannie and freddie show up and prove their value and that's what they are doing now.

the private market has backed away, the government is here to stay. the trick policy wise is to get freddie and fannie to shrink in good times and allow the private market to come back. that is the heart art. >> a good conversation as always. neil or richardson, senior economist at bloomer government. -- at bloomberg government. ♪

>> shutter stock has a brand-new and very fitting address them. they just moved into one of manhattan's's most photographed landmarks, the empire state building. i went inside their new office to see how the high tech fit into the iconic building. welcome to shutter stock headquarters, home of one of the world are just digital stock photo libraries. the 20th and 21st floors of the empire state

building. brings a startup vibe to an old school building. >> this is the alice in wonderland room. ask are you kidding me? food, affice as free massage room, a secret library and to unbelievable game rooms. >> we get so much done here, but we like to have fun also. >> shutter stock was started 11 years ago when he took the company public in 2012 and is known as the first billionaire to come out of new york city's growing tech scene. new york is the business center of the world. by being here, it allows us to react biggest media agencies in the world. that's important to us. >> 300 employees work in shutter stock's new headquarters but remote employees have a presence in the new office also. this belongs to a remote employees inside here somewhere. >> he can control this from

where he is and work with people in the office. onshutter stock's team voted conference room names and food choices, but big data determine the office layout. rex we looked and found out conference rooms were used by two to five people, so we decided to create a lot of smaller ones to accommodate that. >> building the office is a snapshot of a much bigger picture for snapshot. me tell you how amazing that robot is. you are sitting there doing your work and your colleague from minneapolis, brian, walks up and is in your face like a little robot. it's eerie cool. -- it's a very cool. ryan from minneapolis why he didn't work in new york. he has seven kids. there you go, shutter stock and the empire state building. this is "market makers." ♪

>> that is it for "market makers." it was a great day but i have a feeling tomorrow will be better. but we will talk to the top media banker at blackstone, peter cohen. >> now we're going to send you out to the newsroom where matt miller is going to take you on the markets. >> you know what time it is. check out the markets. stocks rising as much as you

would have maybe thought from the earnings picture due to tensions in ukraine overshadowing the strong corporate performance this morning. we are still seeing gains across the board there. joining me with today's options investmenthe chief officer joining us from the cme. tell me what you think about this overall market. i came in with a traitor today who expected the top to blow off and it's not very exciting. most hated market of all time is what we are witnessing right now and the market is hopelessly resigned to residing between 1840 and 1880 until further notice. justy fascinating, not looking at the volatility of the s&p 500 but other asset class volatility. all of them are grinding toward

the bottom and seems like right now we are in a very apathetic market and just waiting for the next move and no one knows what will cause the catalyst to grind as higher or lower. >> you say grinding and some it's a gold futures are rallying. it's a very low bar from a 10 week low. are goingou think we to see gold moving going forward? still very bearish on gold and the overlying element to that is that the policyzation of monetary around the world is going to act as a cross over gold pots head. it's going to be really hard for gold to rally. there's no concern for a wind down of tv, especially since it might cause credit breaking. there's a premium for asia in gold and tells me there's a lot of supply will stop and at india. i don't think it's in any rush to relax the him rotation

policies they introduced last year. i just can't see gold going any higher. $1200 makes a lot of sense by the end of the year. >> that is your take on the trade? >> i like gld because implied volatility is very low right now. take advantage of low volatility and bias. i'm looking at december -- you have seven months to play with 120-100 put the spread. you can buy it for under four dollars. you need a 6.5% on moved to break even on this trade. dropsase scenario, gold 15% or 20% and you have cashed in and you are risking four dollars to make a net of 16. i think that's a good way when you look at implied volatility. rex one reason people are excited this morning was apple's earnings last night. they announced an increase to the stock buyback and dividend program. what type of action are you

seeing in the stock? >> uc see implied volatility drop quite precipitately will stop -- precipitously. and increased quite a bit people were very bearish. what not to like about the report let's might? increased dividend and the seven point stock split. he put skews relaxed and implied volatility down. i love what happened yesterday but i have cautioned over and over again -- i would buy the stock or by put spread against the old stop -- and by put spread against it. i've stay hedged against apple. >> exactly. rex enck you for joining us. we are on the markets again in 30 minutes. "lunch money" is up next. stay with us on bloomberg television. ♪

. i am adam johnson. a big news for you. one buffet, and the cubbies. in motors, a heavy-duty quarter. higher-priced pickups. they take away the sting of the 7 million recalls. it is not just gm today. we have 64 companies in the s&p 500 all reporting today. we will give you the rundown. properties, though the in empire. we