>> live from bloomberg world headquarters in new york, this with erikmakers" schatzker and stephanie ruhle. >> un-following twitter. shares fund as investors focus on slowing user growth rather than better than expected sales. the ceo will be with us to tell us what he is doing to get more people to sign up. >> donald sterling could be forced to sell the clippers because of his alleged racist remarks. optingnew breed of ceos for getting out of the conference rooms and into the great outdoors for some of their most important meetings. welcome to "market makers."

i am matt miller. >> i am scarlet fu. business stories from around the world kicking off with federal and state prosecutors considering charges against bnp harry bob according to a person familiar with the matter. overt suisse investigated whether it helped american evade taxes. -- bnp paribas. energizer holdings is splitting up into two publicly traded companies. one the unit will include household products. the other will be energizers personal-care business among products will be sure crater's -- razors and hawaiian tropic sunscreen. the biggest utility deal in north america best year. agreeing to buy pepsico holdings for 14 billion -- 6.8 billion in cash. the utilityrates

that serves the washington, d.c., area. i want to emphasize the word nuclear is not nuclear. definitely not nuclear. >> going to accompany story we have been following. twitter, a puzzle for you. posted first-quarter results that beat estimates on the top and bottom line. investors shrugging it off. focusing on slowing user growth and punishing the stock. down almost 12% right now at 37 point 58. bringing in an analyst at kelsey -- chelsea advisory group. 25% from 30%. still incredibly robust. is it therapy people to extrapolate this will mean 20% this quarter in 10% by the end of the year? >> using linkedin as a comparison. they had the celebration member growth until recently and reacceleration, the first from the ipo.

if you look at twitter, the first quarter earnings were much like fourth-quarter earnings, better than expected revenue on the ibo. and earnings. audience growth fell short of expectations. that is what is causing the stock to be under pressure today. >> why do people care so much about this particular number? they could have one billion users but no one ever longs on. it is really the opposite story for twitter because people blogging on are more engaged, looking at their feed more in doing more on it. levers, one iso audience growth, 200 55 million active users. the other is monitor novation. doing this fantastic job. ayer out monetizing the audience you could argue. the disappointment is if you look at first-quarter you had a academy awards, super bowl,

grammys -- all of the big events that drove engagement but not audience. i think they will continue to make the service easier to use. audience growth i think will improve over time. audience is very loyal and engaged. 255 million members. mammoth to beo be influential? >> if you want twitter the stock to maximize long-term value, we have a $70 price target predicated on a long-term audience of 800 million. either going to continue to grow the audience or they will have to do a better job monetizing the audience. hopefully they can do both. signed1.2 billion people up for facebook, are they using it on a regular basis? >> if using look at the daily active users -- if you look at the daily active users, that is a strength for them. they do have any people use the

service as many as 5-6 times per week. >> 70% of the revenue from the u.s.. everyone talks about the growth overseas but monetization is in the medium to high growth are gets. >> seeing high growth user growth here in the u.s.. >> loosely speaking, one quarter of the users is domestic. one quarter of the revenue is international, three quarters invested. international revenue growth for twitter is much like global monetization for facebook. worksk the stock beautifully overtime and working on that with salesforce at a local level and creating salesforce opportunities for advertisers. lex i want to ask about daniel graf. recently hiring away from global maps to be ahead of global product. they replaced michael sippy who left in january.

could that transition have hurt the company over the quarter? >> think often times when you have a growing company like twitter you have the initial product development percent and then have someone come in like google. i do not think it slowed innovation one bit. i think it is making it easier to use. in some instances they will not solve the problem. my parents are on facebook but may never use twitter. lex >> a lot of events that cause more invention -- engagement. what do they do to get engagement up in the second quarter? >> you have the world cup. activitya lot of around the academy awards, but they consistently get a lot of tweets on sports, music, a lot of important events. they have great opportunities to modernize. >> thank you so much. senior research analyst. stay right here on bloomberg television for the interview with the costello, ceo -- with

dick costolo. >> a big day for economic news. the u.s. economy basically stopped in its tracks in the first quarter, growing as 0.1%, almost european. some good news in that data. consumer spending jumped by three percent. at 2:00 we will find out if janet yellen keeps tapering the bond purchases. we will bring in our economics editor, michael mckee, to break it all down for us. the economy a dead stop and spending more. i fail to see how that is good news. like it appears weather-related. this misspending the biggest all pretty here. dropped off, contracted actually. almost no inventory build. those areas are ripe for a snapback. good as spending not as it appears. about half of the three percent rise was due to obamacare.

war people spending more on health care. that will be a lasting contribution. as the americans feel better about the economy as the weather warms, they will come back to the malls as well. set up nicely in the second quarter. a lot of people going to look past this. >> we have the jobs report coming up later on this week. that is something janet yellen will look at. expecting any surprises on the announcement? >> no news conference, no new orderly forecast. you will not get anything out of it. a real non-event for the markets. inple much more interested the jobs report friday. that is why the adp was greeted with a little bit of a yawn. it's cemented the idea that the weather snapback is in place. better than expected job creation from adp. we will see things improve, probably a strong jobs report.

will starte economy expanding again. >> i was listening to you guys this morning i'm as i always do. tom and john riding talking about whether or not the possibility that we could eventually get a press conference after every meeting. >> talking about that a lot. a number was like to do that because they feel it takes their weaponry away. if they wanted to move, it would be very difficult. that is something likely coming down the road. >> we do not get new dots today. known new quarterly projections. that will make people really unhappy. >> no new orderly projections. lex do investors pay as much attention to each eta points as they might a year ago? important in their every decision? >> no. when the data comes out, it is a roulette wheel.

traders betting on where the number lands. longer-term, no. you may see movement on friday morning, the long-term will take time to develop. you will see that more in the bond and currency markets. an inflation had number that did not tell you a lot today. it went up, but not as much as forecast. the question of what they will do next week with the fed and ecb lending, you do not know where the dollars will go. what does that mean for inflation or exports? a lot up in the air right now. the ecb meeting for drama as well. michael mckee, thank you. today, noma excitement. no matter how boring, we will still cover it. he sure to tune into mark

crumpton at 2:00, live coverage of the decision. probably just a nod. or a there are new dots press conference after every release, then wall-to-wall coverage. >> janet yellen, matt miller wants a press conference after every meeting. making it crystal clear he wants donald sterling to sell the l.a. clippers. we will tell you about potential buyers next. >> plus i'm a ceos who tell employees to take a hike because it is a great way to have a meeting. we are also streaming live on your phone, tablet. streaming livend through him is on fire tv and can get us on apple tv as well. tom keene says we are coming soon in smoke signals. ♪

>> the nba send a clear message to the clippers owner yesterday. time to sell the team.

can the nba really force a sale? partner at innovative sports entertainment and former president of madison square garden. also joined by cristina alesci who has been eating, sleeping and drinking this story for the past 20 four hours. let me start with you, is it possible for the nba? it is on for an american mindset to wrap around the fact that you citizen to private sell an asset just for being a jerk? >> the nba has a constitution him articles in the constitution. certainly language that allows them to do something like this. whether or not that says there is dialogue because you are racist i am not sure that is there but that is the issue that will be addressed. i believe they will have 29 votes, three quarter. they believe firmly they can do this through internal and external counsel's.

where it goes. >> does that mean we should affect donald sterling to file a lawsuit and to be a long, drawnout ugly battle? >> it is possible. it has been reported he does not want to sell. he has been lifted just in his history in the nba is certainly aware of that. he is with counsel now to see if he has a case or he may go quietly into the good night but i doubt it. with sterling and his estranged wife. himone who baited and taped for this. she must have been a very angry woman. love half no score in. no scorn.th what are we looking at as far as possible bidders? it is a really big, important and expensive

asset. >> that is what everyone in the industry says. sources are saying this could go from anywhere from 600 million billion. it is mind-boggling. he bought it for 12 million. ofionally speaking the value teams are based on three things. one is whether or not the team is in a big market him and obviously l.a. is not a big market. media second biggest market in the country. >> absolutely. the other thing is whether or not they own the arena. in this case the clippers do not, but the lakers do. that is one big against him as well. one positive thing for the clippers and sterling direction is the fact that other recent trades have been astronomically high. look at the valuation around the

sacramento kings was the highest valuation for an nba team. that sold for $335 million. just a couple of months ago the box went for 500 $80 million. $550. bucks went for so if you look at the clippers, there is a lot of opportunity. there has been under investment into the team. want to pour more money, there may be more opportunity. we do not know the status of the local television rights. we do not know what they are up for negotiations. no one has mentioned the one thing sports fan consider, the talent. they are good. having a good year. they are doing better than the lakers. first round of the playoffs. year attended going out.

they had 15 wins and the bad television markets and went for 500 a day. the clippers do not own their own building. the owner may want to build their own building to control the revenue stream. there is a whole other dimension , and that is fox owns their television rights. a very competitive market. i think that is up for negotiation and about two years. magic johnson and who then i'm own the dodgers, struggling for distribution. should they own the clippers and take media right, it tremendously hurts box. another sidebar owing to occur at some particular point is magic and google -- guggenheim are the winners. >> speaks to the value of owning a sports team and l.a. number two market after new york of course. you might, if you are magic

giant -- magic johnson be able to think that up with the doctor writes, but as a media mogul want to buy the team? >> in l.a.? yes. not a question. they would absolutely do it. they want to make it the number one franchise for sure. lakers are down a little bit. they will come back. ownership good strong that has capital that really wants to invest. this has been named one of the worst franchises in the past 35 years. a tremendous opportunity. it will go for big numbers. >> a grouping of a media mogul that might be interested. magic. heard david griffin. the richest guy in l.a. apparently. like he would have to own a stake in the lakers in order to buy the clippers but could very

well do that. we have seen other trades happened similarly where people have stakes in other teams and get out of them to own a team of their own. ditty? iitty back to was just wondering about that. always wondering. >> there were 10 bidders for the dodgers. an extremely competitive auction. even to this day people say pretty astronomical. what do we think sterling could walk away with? his punishment could net him a billion dollars? >> close to it. bought it for 12. from 800 29 hundred to one billion. not less than 800 million. a few dollars coming his way, certainly. >> if the clippers advance in the playoffs, does that change the playoff? >> a valuable franchise. a good team.

it is really going forward. one of the strongest franchises this fight sterling. anyone coming in now will have a tremendous opportunity. i think it will be a frothy auction. >> imagine if they wanted all. quite a story. they will never eclipse the lakers. they do not have the history the lakers has. knicks.ext -- >> one thing pumping up the valuation is the international the ability to really extricate value internationally. people are just starting to figure that out now. aret of the assumptions baked into the valuation. a couple of years ago the opportunity for international expansion were not being baked into the valuation. that is helping as well. >> maybe kim jong-un could come

by the team. the only person worse than donald sterling who could buy the team. >> thank you for joining us. always a pleasure to have you here. >> much more coming up. coming up, hot property. taking a look at one of the hottest markets in the country for commercial real estate. we will be right back. ♪

>> approaching 26 minutes on the hour. one stock we are highlighting is ebay, down in trading by 5.5% after reporting first-quarter net loss. the 3 billion dollar tax charge to repatriate foreign earnings. leave thes that?

earnings overseas. apparently they did not take that class as a result, the stock down five percent. coming up, membership growth that twitter cools off. talk into the ceo dick costolo. don't miss that at 11:00. ♪

>> live from bloomberg headquarters in new york, this with erikmakers" schatzker and stephanie ruhle. >> i am matt miller. i am scarlet fu. eric and stephanie on assignment and will be stuck with us tomorrow, too. commercial real estate is a hot commodity these days and no better face to witness the booming market than right here in the big apple. we sat down with jonathan pollack, the global head of commercial real estate at which a bank. -- duetsche bank. >> in the new york area we are

very involved. 17 million square feet over the next 5-6 years. we just announced a platform for them where they will build all that. we never run out of things to do there. very act. the number one issue were of commercial mortgage-backed securities. one thing that has helped us get to that place in the markets we have a number of the trophy buildings in manhattan. madison. >> what do you think about the hudson yard development. so massive. some people worried it is too frothy. by the time it is done the real estate market will have crashed. >> what is interesting is most of the office space has occupiers in them already. whether it is people biting the space or signing leases ahead of the development. forcreating that new supply the office outside of the demand

for space. there will be a tremendous amount of demand for the retail space because they are creating such critical mass. the two towers for office are 3.5 million square feet total. a lot of people and creates a lot of demand for retail. pretty exciting place. >> what about the hotel industry. already the hotel industry getting soft, and that is before -- buildingsstries are completed. >> the hotel market has been one of the best-performing asset classes since the crisis. you can see that. it is done extremely well up until now. to market daily rate, occupancy. to a degree, a little bit of softness. incredibly strong performer. that is the reason you see the companies go public.

we still see hotels we are asked to finance are still upward sloping performance. lex you asked me about development -- >> you asked me about that element before, the thing that causes softness is crane development. there has been a lot of hotels, whether it is conversion of office or new development. new york city has added a lot of rooms. it will be interesting to see how it gets absorbed. the rest of america has not seen that kind of development. where we have development right now is around strong fundamentals. they are building a new transportation center. a lot of development around that activity. condos. whether or not they can hit the $5,000 per foot number they're trying to get. no question demand for 2000 foot type apartments. are also working on

projects in spain where unemployment is almost 50%. >> the opportunity comes from two places. of banks are going through liquidation of legacy assets, which creates interesting investment opportunities of all kinds. trying to participate in this action by the government. the other thing the government has done is they have set up a set of reforms that has put spain in a position to outperform the rest of the european union in the coming years. a very exciting place. a place you can invest. economic reform is creating what should be a strong economic future. >> as a bank, can you invest? banks themselves were building hotels, office buildings and resorts. what can you do now? >> we provide that.

loans from financial institutions that are moderately sized loans. we are a finance company that follows our clients. lucky to be more active than most people in 2010. we are very broad and how we approach it. we finance it through transitional situation. thing buying assets in right now. that puts us in front of the clients for more things than anyone else and gives us a competitive edge. a lot of people find themselves being drawn to it because it is one of the few places they can earn a decent yield. is that a healthy sign that the pool of investors is broadening or a dangerous sign? >> i think it is healthy for now. like anything, you can get oversaturated with capital and supply. that has not happened yet. money going into

private equity was heavily concentrated. i think diversification of capital sources is very healthy for the market. the other thing it signifies, zero interest rates for the past three or four years that compress people's expert haitians for yields of all investment classes. has driven a lot of that as well. if you cannot find the yield you want. makes sense relative. it is a balance apply and have had very little. supply, fundamentals should stay relatively stable. >> that was jonathan pollack, global head of commercial real estate at deutsche bank speaking at the milken institute conference. >> taking a quick break.

when we come back, we will give you something to tweet about. >> shares of twitter taking a dive, down 12% in trading. in a moment, emily chang speaking to the twitter ceo dick costolo. ♪

>> disruption is the most annoying word and the tech land but what does it mean to innovate? stephanie ruhle had the question put to the test of -- to the founder and ceo of salesforce. mark, here we are in the middle of the milken global conference. so much talk about disruption. what does it mean to you? >> we live in amazing times because technology is constantly getting

the work cost and easier to use. all of these great inventions keep happening from amazing innovators and we call them disruptions. >> everyone is so excited. shouldn't we drill down and look at the best products, best technology? right now, at least for those of us in new york, it seems like all of the geniuses are in silicon valley. it is a little overdone. innovation in silicon valley and have to look at those things together. not just the technology and inventions and the new ideas but the great visionary leaders have, long to create the industry. you have to give them credit for what has happened. >> when people look at your success story, how would you define how you did it in one word? the product, the hostile -- hustle, passion? beginner's mind and

everything i do and meet and every new invention that comes along. i always try to clear my mind to the ideas i have had before that . god bless you. i make sure my mind is clear, that i can have a beginner's mind. that is the most important thing to be successful today. >> how do you really do that? when you are starting out, i understand how you can have a clear mind. at this point, you working on the hill. how do you make the right decision. >> you cannot take on that energy. .ou have to separate your self that might be a reality but does not need to be internal reality. your internal reality needs to be you have a beginner's mind. thinking to your self, what do i want now? how will i get it now? what is keeping me from

achieving this now? back, clear your mind and on everything that is happening, what should i do now to be successful? >> when you look at fortune 500 ceos right now hiding under the covers am awaiting for dan loeb, bill ackman to come knocking, what is your advice to them? >> this is the time you had to be more collaborative, bring in the board of directors and bring in management team and be more of all and open up more. i am part of the team here. together we can do it. we can come up with the right idea and bring forth new products.

the ceos know that. the ones that are by themselves know that. your analogy is a great one because they are by themselves undercover. the teamso embrace for will be successful. >> are there ceos that you look to and say he is doing it right? >> there are many. i have a lot of role models. is a phenomenal ceo. i think he is completely reconceptualized. he has revealed not just the technology models but fundamental business models. at that size and scale to do that come i think is all inspiring. aboutn i think philanthropy and real estate, is one of your goals to change the definition of capitalism? compassionatemore

capitalism. it is probably best said by milton friedman when he said this is business, make rockets complement -- constantly optimizing. it is not about constantly optimizing. if we are constantly optimizing, everyone gets distracted. the reality is we need to include more people than ever before. gets back to my idea of collaborative. do you get to too many people at the table? >> it back. the generous of heart. be more compassionate. share more with others. it will only make you happier. you can do that as a ceo and be successful. >> how have you ingrained that and the culprit culture of what you have created because philanthropy is part of what you do in every aspect of your life come and that is different from the leaders in the past? >> enqueue you for asking me that question.

the one percent of equity and one percent of profit into a nonprofit. it was very easy because we have no profit, no people. but the reality is we have been able to get around -- away huge amounts of volunteerism. 20,000 nonprofits. given away tens of millions of dollars in grants all over the world. it is really just knowing that was our intention. we did not just wants a new technology model. we did that. we created a new business model. pay-as-you-go software. pay-as-you-goew model as well. lots of new companies on board with this model. >> what is your proudest achievement? >> i think it is the ability to give back. sure our employees

are having that experience. say here is the cubicle, kitchen, toilet. we say here is the soup kitchen down the street. take all of day we our employees and set them up for volunteering event. we have done that from day one. we want to let them know we are a special company. we create great products, great industries. andnnovate in amazing magical ways but we are also giving back. >> that was stephanie ruhle talking to a truly inspirational salesforce founder and ceo marc at the milken conference. >> shares of twitter down 10% of the earthlink -- after the earnings report showed user growth slowed down. with emily chang

right now now in san francisco. >> great to be here with dick costolo. thank you for joining us in studio. a lot of people are questioning today whether twitter can ever be mainstream. you say it already is. ?hy you g twitter is in is, front of people around the world every day. constantly all over tv. i was watching the adam silver announcement yesterday and there were three on air under his press conference the whole time. a couple days after the oscars, over 3 billion views of tweets just about the oscars. --print, on air, and mobile it is already embedded into the fabric of the culture of the world. and that since i very much think

of it as a mainstream platform and durable and lasting upon which we can build a great business. >> the revenue story is incredible story. revenue per user is up. revenue for 1000 timeline views up 95%. investor analyst user in -- zeroing in on user growth. sequentially, why do you think there is a disconnect between what you see is a promise of twitter and wall street? >> has to do with your first comment about financial results. we are delighted in the first quarter financial results, particularly around revenue acceleration on top of amazing fourth quarter. that was delightful. the dissonance between what is happening inside the company and expectations are. today about we talk an ipo, we have a lot of work to

do. we know what we need to do in service to taking the mainstream understanding of twitter as part of the culture of the world and helping those people understand the value of logging into twitter and getting the additional benefit of it. he have a lot of work to do we have started on. great resultsow in quarter one that needs to continue the rest of the year while building on the things we have done to make it easier to use and bridge the gap of awareness between twitter and engagement. do you think if you took the name twitter off their earnings report the results would be different? >> the results are strong. why are they focusing on this one number? uponthink it is incumbent me a ceo to help the world understand the value of their broader platform. we have a platform with billions of views about an event in 48

hours when you look at other mainstream platforms, you could pick youtube again as an example where the bigger content views get billions of use over the course of a month. we can get your advertisement in front of over one billion ios and android users today. if you have a cell phone in your market, smart phone in your pocket and you fire it up today, more than likely you will see a twitter app. it is incumbent upon us to articulate the story of how big form is.er -- broader >> though you have made a lot of that form changes. i like it, the ability to pin tweeps. i am really liking it. i was a little apprehensive. what else can you do? you have

done so much, what else can you do? >> the kinds of things you just described, making twitter more visually engaging, helping people see the most evil content on the page are the kinds of things you just described about the profile page, ringing that to the rest of the product, making it more visually engaging. ringing content forward, pushing the language of twitter. pushing that into the background. allowing users to mark tweets as highly significant and wanting to get them in front of other people. so the kinds of changes we are already making that are showing great results, we need to thread goes through the rest of the year and hopefully we will see continued great result. >> how much product experimentation are you doing on a daily basis? how much do you guys actually play around with? appn our latest android

there are well over 100 experiments running in each of those. so hundreds. we beauty of the framework have worked on on the past 18-24 months is the speed for which it allows us to run more and more experiments and quickly take data from the experiments we can compare to a control group and then understand whether it is working or not. the faster we can move on those kinds of things, the faster we can execute changes. >> you have high-yield biannual -- how your day annual grass from google. -- hired daniel glass. me oniel will work with consumer product annual run consumer product. he was director of product for google maps. , what everyoner would agree is a wonderful consumer product.

has been the ceo of a startup, so i love the entrepreneurial spirit he will that alreadyplify exist. i think what you will see is daniel coming in and working to really implement the product strategy we have very laid out, and also bring the entrepreneurial spirit to the team and probably come up with a bunch of his own ideas that we will let him run with. a lot of twitter is the one-way communication. to be fully engaged, you have to tweet. >> the majority of active users tweet. there have been strange third party reports that have gone that wrong. we continue to grow. we added 14 million net new users in the fourth quarter. it will likely be the case more

of the users will come to the platform and be just consumers. that is fine. we make notes of ancient roman active user perspective for whether someone does or does not have to be an active user. it makes no difference to them whether they are consumers or consumers and producers. >> i have heard you call twitter the global town square. yesterday you called it the companion experience for what is happening in your world. others have said it is more like a democratized newswire. does it matter? i really like about the companion experience for what is happening in your world, it articulate -- it continually articulate for the design team what they should and should not be building in regard to the vision for the product. while i love the metaphor of the theal town square and visuals it creates for people in

the metaphor it creates for people, i do not think it is as good as informing the product and design team what they should hold for the user. i think it is the companion experience to what is happening in your world is a more crisp definition. >> messaging apps are really hot right now. dm uld like to never have they'll never again in my life. what do you mean by that am a what that would look like for talk about when i direct messaging in the twitter application and the work inc. done to improve it, there are frequently public conversations on twitter and it is an entirely public conversation. real-time for what it's happening right frequently public conversation she would like to take hold of and taken to whisper mode with a friend. dok what has happened, what you think about this? being able

to move fluidly between the public conversation and private conversation is something we will make simpler. >> in terms of the bigger picture him a window class of 2013 tech stocks are being revalued. some of them fairly radically. how much do you pay attention to what is going on in the markets environment? how much pressure do you feel? >> i would say the market environment is always in my periphery. we have a very specific way of thinking about the long-term plan for the company, and it is about balancing investment and and operating leverage and efficiency and making sure we are improving margins and ever-increasing drive toward profitability balanced against reinvesting and growth. that combination of growth am operating efficiency and leverage is the way i think about how we will build the business and company, while

always of paying attention to the market landscape. launching a mobile advertisement network. getting into video advertisements. how does this impair to twitter's offering? >> our mobile ad exchange. the differences are we are already in the market with thousands of mobile app. over one billion ios and android users. if you are an advertiser and want to reach people on their smartphones today, you can come to us and we can get your advertisement for over one billion users today. there has been questioned about social media and tv and whether or not it has been a game changer. twitter adding a bigger and bigger piece of the twitter advertisement high because the argument is people tweet about the shows they are watching and that drives viewership. you now have an nbc executive telling " the financial times"

social media is not driving viewership. how do you make sense of that? is there a shade of gray their? >> when we developed the twitter experience it is because we had a variety of data we saw that helped us to understand there was complementary to waive relationship between twitter and tv. by two way i mean not only did twitter drive the data but also tv was complementary to twitter and drove attention to twitter. as we have invested in the strategy vomit there has been an ever increasing and continuing drumbeat of independent third hardy research, -- third-party research that has reinforced and validated the complementry two-way relationship. the nielsen study even saying there are three things correlated with the tv ratings, prior year years rating for the show, ad spend and twitter.

reinforcement have seen in the market from the third hardy and the additional and continued investment like nbc and new partners has told us we are on the right track. next the buzz is way more than just buzz? >> we think so. facebook and google making big that's what that's are you making in the future? gets a mention are excited to work for twitter today? >> we are strengthening our core product and externally focused on strengthening our core product which is twitter and vine. most of the acquisitions we made to date are about strengthening the core and most of the work we are doing in product is about strengthening our core and that will continue to be our focus in the near-term. there is a lot of heat in the

inequality debate has been directed at twitter. how much are you thinking about that and what can twittered to from a philanthropic perspective given the uniqueness of the platform? twitter started in the city. we have been a company that has been in the city since we were created. so many of our employees live in the city. it is super important to us. we focus on it significantly and we spend a lot of time in the company talking about it at our meetings and we have some very explicit direct connections with the community groups in the neighborhoods in which we operate. we've got some really exciting announcements coming up about those relationships with these specific community groups that we are working directly within the neighborhood where we work and live. i am looking forward to being able to talk more about those in the almost immediate future. >> thanks so much for stopping by.

back to you in new york. >> thank you so much. we will take a quick break and be right back. ising up, mark zuckerberg kicking off the facebook developers conference today will come out with a plan where both parties can make money. him and some other party, apparently. both of them, yet. ♪

>> live from bloomberg headquarters in new york, this is "market makers." internet takes aim at thieves and they are still dealing with the fallout from that massive data breach and that was ranting on a former homeland security official to set things right. next moveckerberg's is speaking at the facebook developers conference and is expected to reveal a mobile ad network. >> will talk with the founder of the company that introduced self-serve frozen yogurt in new york. frozen yogurt -- welcome back to "market makers."

>> in every segment, i will possibly misuse the word disrupt. >> let's yet a disruptive newsfeed. virtualomy came to a standstill in the first quarter, gdp rose at an annual rate of just 1/10 of one percent. a private report says companies added more workers in april than at any time in the last five months. by says payrolls increased 20,000. the imf has lower the forecast for the russian economy for the second time this month. it should grow 2/10 of one percent. the reason for the lower forecast is fallout from the ukraine crisis. a new stress test shows that fannie mae and freddie mac would need another bailout in a severe downturn. the two markets finance giants might need $2.9 billion to keep it afloat.

that's the cost taxpayers last recession. >> federal and state prosecutors are considering charges against credit suisse and bnp paribas. it's credit suisse for helping americans invade taxes. -- evade taxes. the reason i mention the financial crisis in connection with this is a lot of americans thatrobbed in a sense nobody from the financial crisis was ever really punished or went least as far as the big banks are concerned. it looks like prosecutors want to take a harder stance now. these are issues that have nothing to do with the financial downturn. >> this could be really disruptive. >> good one. criticisms a lot of of how prosecutors have handled issues that came up from the

financial crisis. there has been a stream of settlements over these issues. we have seen jpmorgan settle issue after issue after the last 12 months and other banks have and up against prosecutors there are nonprosecution agreements or deferred which --ows them they settled on criminal charges without collateral damages. it prosecutors mover word with an indictment two of the world's biggest banks, how those banks will operate? we don't now. it has not been done. , the populist thatrn i mentioned is bankers were able to use shareholder money to pay fines and continue to give themselves

salaries and big bonuses and avoid not only going to jail but in most cases losing their jobs. >> that's absolutely the case and people are upset about this. is this the right way to do it? is the right thing to do to indict a bank because you could potentially put it out of business. that's what the experts are telling us. pretty intense collateral consequences. it might are called other issue with people who are upset about people prosecuting banks. there is not an easy answer. >> are credit suisse and bnp paribas surprised how far this is going/ >> i think the market is a little bit surprised by the of pressure being put on them. normally you can settle these issues and you can move on. >> is and that only if you are

an american back? >> not necessarily. paribast suisse and bnp are foreign institutions. >> it does not apply just to u.s. banks. >> i was being sarcastic. do you not get when i am being sarcastic? >> you are being very disruptive. >> they have chosen banks to go after that would not necessarily hurt american depositors or not en masse. >> but there are many americans that work at these banks. they are intertwined very heavily with the financial system. that was one of the big rings in the last financial crisis. >> how does this compare with other financial stories you have reported on? >> this is relatively straightforward. the tax issue is something that has come up with many banks in switzerland. credit suisse is feeling a lot of heat for this for allegedly helping americans even a taxes.

evade taxes. in washington, people want answers and they want names and they want people to resign and they want more accountability. is this a way to get more accountability? we will have to see. r> we will for sure, keri geige will cover this for us and thanks for joining us. >> target has turned to an outsider to take over its it security months after a data breach compromised personal data belonging to tens of millions of customers. megan hughes joins us now. tell us about the new guy in charge. ursose ande is bob d he will be in charge of the long-term it strategy security issues. who is he? he's got a lot of government experience and was an advisor to

homeland security and the department of justice and the department of defense and he has a lot of private sector experience. he works for a big payment processor and works for a big-box company, home depot. also, citibank, he did i.t. for credit cards. this is going to be a very important issue as target looks at securing data changes. greggnals a change in ceo hoffel's strategy hiring outside of the company. for most of target, the executive bios show it has been mostly insular. they are looking for fresh perspective when it comes to dealing with cyber security. >> this is a very visible change being taken by target. what about the mechanics of everything like they met processing? along with this personnel

announcement, they announced a partnership with mastercard where they are speeding up their process of moving from this magnetic strip that we are piniliar with to chip and technology. there was a congressional hearing back in february and john mulligan said this technology is what target is really focusing its efforts on. it's been $100 million. the first step there is there upgrading all of their registers in the retail stores. that is supposed to be done by september. the second step is the red card totfolio is switching over chip and pin technology. they are working with mastercard on that. that will be a big focus for target going forward. >> thank you so much. the magnetic strip is the same technology as in cassette tapes from the 1980's. >> that is not really disrupting credit card technology. coming up, mark zuckerberg has

and everybodyeady at his conference may make money with this one. >> also, where you can find the real power in washington, a billionaire hedge fund manager says to not look at the white house or the capitol. this is "market makers," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

top tech andome media headlines grid shares of ebay are falling today which forecast second-quarter revenue that was less than estimates per day for this -- they posted their first-quarter loss because the company repatriated foreign earnings and boosted its available cash. microsoft and the chinese part overstock selling the xbox one game counsel in china. the chinese lifted a 15 year ban on console sales and sunny and nintendo are considering whether to sell in china. billionaire barry diller is

fasting the -- blasting the big broadcasters. ands an investor inaereo last week the supreme court heard arguments that it should be shut down. mark zuckerberg has a message for developers -- build apps through facebook and you will make money. the message is part of a plan that he hopes will also make facebook more money as the company hosts its fate developers conference in san francisco today. jon erlichman is there. itf8? or moneymaking conference as you alluded to. >> what's the deal? >> first of all, this conference is taking place next door to where zynga is. in the earlier days of facebook when we used facebook on our desk top computers can he

understood zynga was an important partner with facebook. that world has changed in the sense that now the big partners for facebook are all those apps developers that are making apps for your smartphones. after having success with its own mobile ad strategy and to react ande respond and engage with the ads you're seeing on facebook, one of the things they will focus on today is to say to these developers that if you guys are using advertising in your own apps, let us handle it. there has been reporting about them introducing their own ad network and having good results and they understand who is using the product. they say we have good targeting. we can help you generate more ad revenue for each ad that pops up in your app and we will make money and you will make money and that's part of the game plan. i think that is part of today's story that investors will be watching. mark zuckerberg is trying to

get out of developers to choose facebook over apple and google? >> absolutely, in a world that is mobile and how many times have we said over the last few years there is a hyperfocus of facebook on mobile -- in part because they lose you a little bit in a world where a developer says i've got to develop something for the apple devices or the android devices. where does facebook fit into that? one thing they have done at this conference over the years is to find ways to integrate more with developers which is in the interest of facebook because they want to be able to follow you along as you are going to different spots on the mobile web. to stay a way for them connected you beyond the facebook app. that's what they will focus on today and they bought a business called parse which helps developers create their apps in their push will be that we can help market this to one billion users on facebook. can you say that about developing apps for apple?

it's hard to say but everybody is positioning themselves as facebook versus apple and google. >> as long as people are just dropped in, that's all we care about. thank you. -- as long as people are just instructive. -- disruptive. i hope people will stop using that word after this. maybe they can just say innovate. >> here's an innovative management tool -- more ceos are scrapping traditional meetings and holding them outdoors. it's a walk and talk. we will discuss that coming up on "market makers." ♪

>> the days of the power lunch i've been completely disrupted. the ceos of today think on their feet, literally. a growing number of executives are holding meetings while taking walks and one of them seth goldman, we talked to him about the walk and talk. >> holding a meeting in a walk changes the dynamic. if you have a meeting with someone in office, they are entering the room and you are entering the room with all the things that have been happening that day and the dynamics that they bring to an office setting. when you go outside, you change it. people are participating on the walk and not checking their e-mail or drifting off or looking at other things. they are totally focused on the conversation. there is a great bike path from our office that goes to georgetown and there are no cars . you don't have to worry about traffic or any other disruption. some of the more difficult conversations i have had have happened on walks and you're not always looking directly at each other and it might be helpful when you or the person you are

with might have to say something difficult or emotional. some of the toughest issues we are grappling with -- if we are near a decision, we may take one last walk to talk it through. the pace of walking brings a different energy to the conversation. i was ready to say something snarky but it makes perfect sense. sorkinedit this to arron on the west wing. they were always walking and talking. >> that's true. they were hardly ever in conference rooms. >> martin sheen started it all. >> you cannot look at your iphone or black berry or dream away. >> you have to stay on your feet and keep moving. >> he said no disruptions. >> he said it. it counts when you have your fit bit on?

>> does it? >> i had been -- i had one and i jumped into a pool with it. >> i think the jawbone up is probably the coolest one. the nike one seems to be headed for its demise. >> it needs to be upgraded. i feel like it is in the 1.0 stage. >> we are approaching 26 pass the hours so -- >> bloomberg is "on the markets ." after exelonp 13% agreed to buy it. in an all cash deal, $6.8 billion. i was thinking how much that would way. >> the biggest utility acquisition in north america. the full-year profit forecast at express scripts.

>> it is down about six percent. the general market seems pretty flat. >> the gdp number came way below economist estimates. how there willt be no surprises with the fmo say. -- fmo see. -- fmoc. traders will shut down their computers around a fed release. the computers are not sophisticated enough to go through and parse that language. on a day like this, you will not see a hack a lot of activity until after. >> nasdaq is falling a little bit more than everyone else because of the twitter results. twitter's monthly active user base only grew 25%. >> only. >> the previous quarter it grew 30%. 1/5 of how my users facebook has. >> i find the facebook numbers

hard to believe. if you know that i'm wrong, tweet me. >> coming up is the hedge fund manager, we will be right back. ♪

welcome to "market makers." >> we will talk about diaggio, the world's largest spirit maker. they have found success but the company is shifting focus to rum which makes up 16% of its sales in north america. visitsa wong paid them a -- vanessa wong paid a visit to them. in this high-security lab, a

team of experts is tasting a lot of booze. >> we are a combination of mixologist meets scientists. >> they work for diaggio, the world's largest spirit maker and they are searching for the next hit up golf labor. >> we have been working on whiskey and vodka and rum. we could be working on 50 different ideas. >> our consumers are constantly interested in new ideas in order to really grab the consumers attention, we need to put something out there that does not look like everything else out there. the latest idea is captain morgan's 1671 which is a limited edition premium rum finished in spanish of ringing the project like this to fruition can be a 6-9 month process and that usually starts with market research. >> a lot of the marketing team spends time at bars to identify what the trend is and what consumers are responding to. we seek movement into more savory flavors with spices and woods.

>> next, it's up to the team of liquid developers to come up with a new flavor alcohol that plays into those trends. it starts with they sell calls and they spice up the drink from a flavor library of thousands of extracts. i like applewood smoked. , chocolate, vanilla, cheers. i think that's delicious. >> not half bad. with the gold standard recipe in place, the product goes into mass production in some products like the 1671 or planned as limited releases to take advantage of hot flavor trends and key customers and gazed with the brand. >> at the end, the consumer decides whether these things will be successful. there's a difference between a flavor of the month and one when you want to enjoy for years. >> a picky band of hot flavors. would you ever have a drink that tastes like kale and alcohol? >> i don't think i have even had

killed but i would like to try. >> you can have kale juice. >> we will go on a non-rum juicing trip. i would not want any artificial flavors in my rum. now that i think about it, i'm not aware -- i have not looked at the label on the back of a black sealed bottle. a not sure if the rum i drink is flavored already. >> i don't usually have heart out all but on the beer i enjoy regularly, i like the ones that are flavored with apple and these other tastes. >> i would not jump to any conclusions but a lot of women tend to like the fruitier beers. >> its light. >> not all do. teel likes straight man there. she is a real beer drinker. we are going to take a quick break. >> tomorrow, betty liu is taking us inside pepsico. how do they get the chicken and waffle flavoring in their chips?

interview exclusive with the ceo coming up tomorrow on "in the loop." >> coming up next, the winner hedge fund manager paul singer tells investors where the real power lies in washington and what it has done to our society. if you missed any of our interviews come you can watch all of them now on either amazon fire tv or on an apple tv or you can use the old-fashioned internet on any of your mobile devices. ♪

pop quiz -- who is the most

powerful person in washington? billionaire hedge fund manager and republican donor paul singer says is not president obama or speaker john boehner. he says janet yellen is the real leader of the free world. is he right and what does that mean if he is? let's bring in al hunt. let me give you a quote -- he says the real power in the u.s. does not reside with the president -- what do you think? >> i have a couple of questions for mr. singer. where is chairman yellen sending drones? where is she attacking and which wars did chairman yellen send

mr. singer's kids to fight in? and who is chairman yellen going to,ort -- going to point the supreme court or the federal reserve and the answer is none of the above. that is a remarkably ill-informed comment. >> i think he is thinking of a world in which the wars we fight in the middle east or in thousands of miles away are not the most important thing to u.s. citizens. , he argues,reserve has the power to do something like create extreme income inequality which seems to be the hot button issue of the day. world whichn his percent that one the federal reserve matters more. some of his comments about her were awfully in something -- insulting and demeaning. i have read a fair amount about

government inequality. many people find there is no easy solution. i don't know anyone who think's it's principally caused by the federal reserve other than mr. singer. maybe taxes play a role or education or maybe the global economy. almost mr. singer who is unique in saying this is the fault of janet yellen and ben bernanke. let me read you another thing i said that i found offensive. it is not like janik yellen. -- janet yellen. mr. singer apparently does not think the federal reserve chairman go out with workers and people who are less than multimillionaires. he'd think she should eat caviar with his wall street pals. that is an offensive view. means isaul singer

that this is not the kind of thing the federal reserve chair does. she is making a political tour. she is doing a little pr. >> i'm sorry, he's wrong. >> she doesn't need to be doing this for the cameras. >> that is historically wrong. some of thatn did and paul volcker did some of that and ben bernanke did some of that. the federal mandate has a dual mandate unemployment and inflation. there is nothing in the statute that says the federal reserve should only spend time with wealthy market investors. it's important the federal reserve spends time with real workers. >> this brings us to the larger issue of income inequality. this resonates with a lot of people. are you hearing people in d.c. talk about income inequality? >> it is and i feel guilty.

this book is clearly a watercooler conversation it's a very complex issue. that's why it took objection to mr. singer's comments that it has to do with the federal reserve. i think the book has a point of view and some conservatives don't buy his point of view. it's a topic i think is terribly important for america to discuss. i have heard people make the point that paul singer is basically using this letter as a political soapbox. is to insultif it janet yellen the more to insult the president and congress in saying that they are not doing what they should do and their whiches are anti-growth is easier for them because of what the fed does. >> this is a mitt romney republican who is economically conservative.

what his agenda would be might be different than others. does he want more spending on a per structure? -- on infrastructure? would he like to do more for women's and infant programs? i suspect his interest have to do with tax rates and carried interest. >> thank you very much. >> coming up, the entrepreneur who found a fortune in frozen yogurt. >> disrupting for-yo. ♪

>> summer is right around the corner. people are clamoring for frozen you could. winter weather season freeze over the market? we have new york city's first self-serve frozen yogurt shop and the ceo.

you guys have a lot of stores in new york and you are also expanding across the east coast. how is frozen yogurt today different than during the frozen yogurt boom during the 1980's? >> people are focused today on finding something that is not just an alternative to ice cream but really a lifestyle product that addresses guilt free frozen dessert options. it look more concerned about what they are putting into their bodies. you can have something to taste... and still is a frozen treat. yogurt die inzen the 1990's? >> it was just an alternative at that point and people were not as concerned with what they were consuming. it was a non--- ice cream. it was ice cream's ugly stepbrother and now they are focused on more of a lifestyle product, not only something that you come a summer afternoon but throughout the day after the gym and things like that. 16 candles i thought was a

liquor store. how did you come up with that name? >> throwing up on the west coast, i loved the 31 flavors baskin-robbins. i understand what number represents as a child. one of my favorite movies was "16 candles." >> that is still a good one. >> jake is a hottie. >> i like the king of the nerds, anthony c. michael hall. are we talking about health food? i have been to one of these places and it's delicious, by the way. there areiced that healthy choices and then there is the sugared up high calorie choices. >> that's what it's about. we say frozen yogurt your way. our motto has been to find your flavor which might be healthy today. >> your motto is flaunt your flavor?

>> yes,. it's a lifestyle product. i think the help option is something where you can be healthier inside a frozen yogurt shop but we lead with bold and delicious flavors and it's a more guilt free snack. >> what do you consider your competition? or is it therry cupcake shop around the corner? >> all of the above. any time you have the option to five-sevenelf with dollars whether it is a cupcake or frozen yogurt or ice cream, those are considered -- >> did in our producer said she spent more? $12 but it's a pay by weight so she probably loaded up. do you pay by weight? >> it is paid by weight. have a twoose to dollar cup or a $12 cup. productolutely love the

and the stores are fantastic. but you have all the buzzwords memorized. did you study these buzzwords about frozen treats and doing it your way? >> being in the industry for the past 10 years, i have adapted those buzzwords of they are part of my daily vocabulary. i don't notice that i am saying them. >> you have been in this industry for a long time starting with your parents in the restaurant business. was not just a lucky 27-year-old kid who came to new york. >> why is the self-serve model better? >> i think from a business standpoint, the operations of the self-serve is more convenient to the operator. it's less labor because of less employees and being able to have more options with less employees. it's an advantage to the

consumer as well. >> people like to do it. people enjoy making their yogurt treats. >> but they waste a lot. i have seen people pull a whole handle down and say they don't like this and will try another one. >> i would charge them for that. >> for our pricing model, it works. pay for what they consume so it's a more superior model. >> is it only downtown or do you have an uptown store in new york? >> we have 10 locations in manhattan and 42 throughout six states and there is international development happening. >> i don't have to go below 58th street? >> we have some uptown locations. >> what about the west coast? >> before we jump to the west coast, there is a lot to build on the east coast and we have been very strategic with their approach to how we grow. we like to grow as a radius and that way our marketing efforts can make an impact into

bordering states and cities. it will probably be some time before we start opening in california. >> it's formulaic. where can investors get in? >> by forma franchisees. >> thank you for joining us. ♪

>> that does it for "market makers." it's been a disruptive two hours. >> we disrupted the hell out of

the show. what business travelers want from their hotels -- we will talk with choice hotels ceo stephen joyce about that. >> >> free wi-fi is my answer. a king-sized bed. >> early check-in. >> late check out. >> why do you want to check in early? >> it's a pain to wait until 3 p.m.. >> i gotcha. >> its 56 minus past the hour which means bloomberg television is "on the markets." stocks are little changed following a report showing the u.s. economy essentially stalled last quarter with gdp rising 1/10 of one percent well short of economist forecasts. investors are now waiting for today's fed decision on interest rates and joining me for today's options inside -- insight is the equity derivatives strategist at baycrest partners. how are the markets -- how are

the options market trading ahead of this 2:00 announcement? >> i don't think there will be much. people are pretty much staying in their positions. they understand the economy is weak and the weakness might be related to whether and we might see a bounce back. time, people know the fed is still there. there's not much activity going on. the vxx is relatively stable around 14 and people are just waiting. >> one stock is making waves in the options market is valet. i see the stock is trading near a 2008 low. part of the reason is there are concerns that the chinese economy is slowing down. it produces iron or so what's going on with that company? >> it's the largest producer of iron ore. it's about 85% of their business. a seller came in and sold a

september put against it into lots of around 60,000 contracts. said that somebody believes this story has legs and is willing to put money to it and investing a lot of money to make a little bit of money. >> they came out with earnings today and it showed that robert fell more than forecast, down 19% for the quarter. >> that's correct, rices are shaky -- prices are shaky but the overall economy, if it continues to chug along and some things vale is doing and they pan out, the company might see a turnaround. >> you've also got a trade on 3m? >> the stock has run up quite a bit since the lowest it got in

january of this year. i want to protect myself with some put options. if you are long, or if you want to play, i want to buy a put spread into july. july one buy the dollar 25 put spread the cost me around two dollars and it has a nice risk reward. justost of it is literally ofr one percent of the price those stocks. it provides the protection for about 10%. >> and your breakeven is about $133? >> that's correct. came out and despite the fact they missed estimates, they said they will boost the dividend and buyback more stock and they confirmed the earnings forecast for it that might be a bullish indicator. >> that's true but if you look

at 3m, the stock has benefited from the rotation out of high a cruel valuation stock. its switch to more defensive stocks. as pushed the stock higher from the previous report. we are saying that the stock could have some legs but it is a defensive stock and the valuation is high. >> we will live a right there, thank you so much. we will be "on the markets" again in 30 minutes but "lunch money" is coming up next. ♪

>> welcome to "lunch money" where we tie together the best business stories. intech, twitter tumbles. user growth slides and photos the stock. the ceo of script says it is simple, the online tv service is stealing. walk this way. how chief executives take care of business on the go. on $1.25ynahan living per day. she will explain why. in mobile, which makes the best wine? our answers coming