♪ >> live from pier three in san francisco, welcome to "bloomberg west." we cover innovation, technology, and the future of business. i'm emily chang. tech companies could face major changes over how they collect personal data. from selling burberry's luxury goods to all things apple, the new head of retail. a check of your top headlines. samsung has sent out in this -- invitations for a health-related event on may 28 in san francisco, one week before the apple developers conference.

apple is expected to introduce a new health tracking unit software. the galaxy features a heart monitor. samsung introduced the gear fit health tracking wristband. google is accused of keeping smartphone prices high and stifling competition in a new class action lawsuit. the suit claims that google abused its market power by tocing android device takers buy various google apps. says greater competition in smartphones has given consumers more choices and lower prices. has been filed against the city of san francisco over those corporate buses that shuttle employees from the city to silicon valley. the lawsuit says a pilot program charging the bus one dollar per stop violates the state traffic code and environmental regulations. the pilot program is set to begin in july. "bloomberg west" reached out to

the city for comment and have not has bird -- has not heard back. the president's big data review is out, and the white house is proposing changes that could have a huge impact on technology companies. changes range from how companies report hack attacks to putting limits on how companies can use customer's digital profiles. the government's own spying programs were revealed. the 90 day review was released by the white house. counselor john tedesco, along with the commerce secretary and economic advisor jeff zients. megan hughes joins us now with more. walk through the report with us, and the major highlights. >> the president just wrapped up speaking about this privacy issue in the rose garden in a news conference with the german chancellor, saying we have tried to reform what we do.

this report is part of that. it is focusing on the private sector, not specifically on the nsa. what is interesting about this report, it does make some concrete recommendations. it is not just a review of big data. let's take a look at these. number one, advancing the consumer privacy bill of rights. that is something privacy advocates have been pushing for, standards on how your personal information is used. another one, data breach legislation that would provide for a single standard. right now there is a patchwork of standards around the states. that is something target has backed. privacy protections for non-us citizens. making sure that data is collected in schools only used for educational purposes, so it is not used inappropriately. technical better expertise within the government. in terms of how they higher, to

look specifically at discriminatory impact of big data. also supporting a law to make sure a person's e-mail and digital communications have the same protections against warrantless snooping. that is something that advocates as well as privacy advocates have been pushing for. >> what is the industry saying about this? what about privacy advocates? >> there's a lot in here for privacy advocates to cheer, but there have been some concerns expressed. we have heard privacy advocates saying, where is the timeline? you look at these recommendations. three of the six would require congressional action and approval, and that's not part of this report here it -- report. there's concern from the industry standpoint that some of these laws would not be necessary, that they would be stifling to innovation. we are hearing criticism from both sides. house's policyte

recommendations out, the question is how will the impact technology companies? here to talk with us is dan rosensweig. so great to have you here. report,you make of this and how do you guys handle all of the data you collect about your customers? >> there's a lot to cheer and a lot to question. cheering,ts that are we all want greater transparency and consistency. certainly things around data breaches, whether you are an internet company or just consumer -- we are part of the same situation. standardsefit from over transparency and communication and how we handle things and how people communicate with banks. concern over if you go too far. the internet is about personalization. block that capability, a

lot of the products and services people love will not be nearly as good. i've always been a fan of opt-in. dogg asks permission to things, and we make it clear what we want to do with information. we do not sell the information, and we protect it. our whole brand is based on how well we treat our customers. >> it was interesting to see someone like mark zuckerberg offer a feature like log in anonymously. facebook still gets the information, but users can feel a little bit better about how much they have to share. isyou think the industry headed towards a reset of the way they think about collecting our information? >> i would say that's a very different situation. mark has always been about transparency. a direct result of increasingly people are unwilling to download the apps.

not facebook's apps, but all the apps they are promoting and they get paid to promote on the site because you don't want your information to be shared on everybody's websites. if you download spotify, you may or may not want people to understand you are listening to music at 2:00 in the afternoon or what you are listening to. log in anonymously protects you, the consumer, from that. the real motivation is to get people to use more apps, not to protect privacy from facebook. >> i want to talk to you about your earnings. revenue up 22% grade digital revenue up 60 six percent. do you see digital becoming the majority of your business someday? >> yes. we put out our 50-50-50 plan. by 2016, we believe we will have relationships with over 50% of all high school students in the country, 50% of all college students in the country, and 50%

of our revenue will be from digital. for the first time we broke out not just our revenue, but our gross profit margins. 65%elieve we will be over gross profit margins. become 25% already of our business, and we are predicting by the end of the year it will be 30% of our business. believe it will be over 50% of our business. for the first time, we have done a better job of helping investors understand not just how fast it is going, but how profitable it will be. >> chegg stock is still down more than 50% since the ipo. a number of tech stocks are being revalued. in the marketon and industry? >> it's never good to ask a ceo what's going on in the market. there are variables that are in the control of the company and

variables that are not. market conditions, ukraine, oil prices. money flows in and out. rates, unemployment numbers, they affect the overall general market. stocks shift into different categories based on what investors [inaudible] are just trying to understand that valuations probably got a little bit frothy, and they're trying to reevaluate the winners and losers in the categories. for chegg, the fact that we have such great response to our earnings is a result of people beginning to separate long-term value and the ones they are not so sure of. >> we are waiting for alibaba to file for its ipo. familiaru are very with alibaba. how do you think alibaba will come out of the gate? >> in or mislead powerful. i was fortunate -- in or mislead powerful. -- enormously powerful.

i was fortunate. the investing community has probably been less patient with ali baba. they're putting their house in order. my understanding it may file as early as next week. i think it will be extremely well received, assuming it continues to perform. yahoo's earnings always give insight into alibaba. alibaba looks like it has accelerated its growth on a massive scale. dan rosensweig, thank you for joining us on the show. has formallyry ceo joined apple as the head of retail. we will discuss her new role next. watch a streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire. ♪

♪ >> welcome back to "bloomberg west." i'm emily chang. apple welcomed the former burberry ceo. john broward left after six months on the job. first of all, tom, what do you think angela ahrendts brings to apple? they do not often hire somebody from outside the job. >> not a lot of women at that level at apple. that was a really important breakthrough with angela. she brought high-end customers back to burberry at a time that it had lost a lot of its --. it had become too commonplace. she brought back the high-end customer people, and made it

more of a luxury brand again. that's an important thing to be done at apple right now. she's technologically savvy. she made the website a sales hub, which is something burberry was not known for before. she got a lot done in her tenure at burberry, and she certainly has a lot of header for at apple -- a lot ahead of her at apple. >> what kind of things do you expect her to do? >> they become crowded, they become this educational hub, a place you get repairs, you test out new things. they are a busy place. they certainly rake in a lot of sales, higher per square foot than tiffany, for example. the thing she has to think about, where do we take the retail store from here? apple is on the cusp, we believe, and we are told, of introducing some new products. , more in the tv

arena. she's going to have to accommodate the retail space for these new products. that's going to be a big challenge. this concern about whether some apple products have lost their luster. a lot of people are flocking to the other brands for ipads. even the mobile phones, which did well last order -- last of aer did well because relationship with china mobile. how do you keep those products vital and attractive? a buzze posted a job for marketing manager. is this a sign that apple is not getting the high-profile exposure with celebrities that it needs? >> it's possible. they've had a very distinct -- they have had a very distinct

approach to marketing and their commercials. samsung has stolen their thunder in recent years, making fun of the people who line up outside the apple, who believe the apple products are the next big thing. conveyed, the next big thing is here and it is samsung. it's not apple. some people are buying into that, and that's definitely a problem apple will need to overcome. the products are still very popular. people in china do not like it when the products are not available. apple could use a bit more buzz. >> tom giles, thanks so much. the publisher behind "vogue" and "gq" is bringing content to life with digital video. the new push onto multiple screens, next. ♪

>> that was a clip from one of my favorites. our next guest help develop that series, along with "vampire diaries." now she's turning her focus from traditional tv to digital video. conde nast entertainment president joins us to talk about how the magazine publisher is taking their content off the page and onto your screen. she joins us from new york. i'm a huge fan of many of your shows. i'm curious what the transition has been like for you from creating shows like that to creating content for digital video challenges -- channels. >> it started when i was at the cw. we were targeting 18-year-olds

to 34-year-olds. they were leaving the television screen and watching our content in different places. that is when we realized there is something tooth reading content for different platforms. it ratedrs will find the transition has been remarkably easy. lot of the digital content is premium. a lot of people who produce television are getting into the digital business. there is not as much of a digitalce between content being produced professionally as there is tv content being produced professionally. it's a little shorter many times. other than that, a lot of producers who are in television and film and documentaries are getting into this space. >> we know conde nast as "vogue. " where does conde nast entertainment fit in? we dofit in because

entertainment, film, television, and we started a digital video network using all of the different conde nast brands. brandsat means is the the published every month, or in the case of "the new yorker," every week -- we have over 80,000 articles in the archive. we are able to go back and find fascinating stories. movies like "broke back they all come from the pages of conde nast magazines. the company has never participated in making television with the content that they ultimately released through the magazine. that's why we started our group and since then we have also built a digital video network, which has channels -- right now we are at 11 -- we have 14 of them up within the next few months. amount ofnsiderable content. we will produce next year over

100 series for our digital video network. expected to reach one billion viewers in the next month. we are gaining a lot of momentum. week,the new front this this is where publishers make their case to advertisers, you guys announced something called the scene. is this your version of hulu, but for digital video? >> that is one way to look at it. what we notice is that there are many different places that you can find video content in the digital space here and -- space. what we were doing is specific premium content that was being made for the digital platforms, but there is nowhere specific for people to find that kind of content. as a result, we saw there was a void in the market and we decided to build a platform that we can have our content on, and also invite other companies who

have premium digital content that they are trying to showcase in a particular environment. we announce the scene, which will launch this summer. in addition to the conde nast brands and channels, we will also have launch partners. abc news will be one of our launch partners, as well as variety, buzz feed, weather soccer, and major league and a comedy channel. >> what are the biggest challenges when it comes to digital video and driving viewership? how do you convince viewers to put their money there? >> this year, advertisers will splendid -- spent close to $6 billion in this space. by 2018, they are projected to double that. advertisers are interested in being in the digital video environment. seeing is thato

while a lot of the advertising market this year will be stagnant, we know that digital video is set to grow 40%. president of conde nast entertainment, thanks so much for joining us. we will be keeping our eye on the scene. the be aad, where massive selloff on monday -- will there be a massive selloff on monday? watch as streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire. ♪ >> bloomberg tv is on the markets. i'm julie hyman. let's look at where stocks are trading on this jobs report day. that jobs report came in. a mixed one. on the one hand, we saw an increase of 288,000 jobs added last month. we also saw a drop in the unemployment rate, the lowest we have seen in quite some time.

at the same time, stagnation in hourly earnings. ukraine may ben holding back any rally in stocks. we will be back on the markets a bit later. ♪

♪ >> you are watching "bloomberg west." we fit -- focus on technology and the future of business. i'm emily chang. million sha400 t9 res. jack dorsey, along with major investors including benchmark capital, have announced publicly they have no plans to sell. what about the rest? joins me now in the studio. thank you for joining us again. aside from the top insiders and investors who say they are not

selling, how many shares are actually eligible? >> there are several hundred million. nearly 500 million shares will technically be available for trade. there's a big difference between what you can do and what you should do, and what people will do. that is why there are is so much attention on these lockup dates. >> how many employees do you think will sell? >> it varies. wealthfront is the largest and fastest growing software advisor. we launched the single stock peppers vacation -- diversification. when we announce the feature in the fall, 10% of investors signed up for the service. twitter stock? >> we have some data on what employees are planning to do. >> what are they planning to do? thehey are in it for

long-haul. a vast majority of employees are not selling the first day. we did research across 250 relevant ipo's and published it two weeks ago. it's almost impossible to pick the right day to sell a stock, whether it's the first day or the second. a thoughtful selling program over a long period of time, getting to a diversified portfolio is the right answer. most of the employees who signed up with wealthfront are reflecting that. more than 60% are picking selling plans of two years or more. they are in no rush. >> dick costolo believes in the future of twitter as well. i want you to take a quick lesson -- listen to what he had to say about the long-term. a very specific way of thinking about the long-term plan for the company. it's about balancing investment and growth, and operating leverage and operating efficiency. that combination of growth,

operating efficiency and operating leverage is the way i think about how we will build a business and how we will build the company while we are a paying attention to the market landscape. >> that is dick costolo's vision of the future. what about what is happening in the markets right now? we have seen some tech stocks being fairly dramatically revalued. markets go up, and markets go down. it's one of the most predictable things, that they're unpredictable in the short term. dick is a great technology leader. we have a lot of great technology leaders now. it's hard being a public company and easy to get focused on the day-to-day. technology great companies have had a focus on the long-term, not just the next year, but the next three years. what is really going to build significant economic value. companies are fairly focused on that. about aall of this talk

potential bubble, is that something you think about? we stay away from predicting where markets will be day today. wealthfront advocates for a very simple solution, which is that you are unlikely to be the markets. you cannot control that. what you can control our fees, diversification, and taxes. they should balance and be smart about taxes. >> you say you cannot pick the right day. the first day the lockup expires is almost never the right day. why? >> when you look at the history of ipo's, every company is different and the market is different on those days. it's hard to predict what people will do in the days before the lockup expiration.

you're never going to pick the right day. there will always be a feeling you could have sold higher. you could have bought lwoer. -- lower. the biggest problem that individual investors have is that they get so hung up on picking the right day that they don't do anything at all. decision paralysis. that's what you do not want to be in. that's why we advocate for a steady selling plan. most founders, executives, wealthy individuals put in place regular selling plans. they sell regularly to diversify over a long period of time. >> you were at linkedin during its ipo. thatarallels between ipo's can be applied to twitter? >> it was a big driver for me at well front, providing the service to twitter employees. you linkedin went public, had the same effect where the traditional industry swarms the campus, looking for the 50 or

100 executives or early employees who can meet their high minimums. linkedin had 1500 employees when it went public. what about the other employees? i'm very proud of the team for putting this together for twitter employees. all the other employees who have equity, but do not get a lot of support making it -- if we can help them do that, i feel good about what wealthfront is doing. >> thank you, adam nash. we will be watching on monday, when the lockup expires. corporated, from shuttle buses to expensive housing, there's a battle raging over inequality in san francisco. ♪

♪ >> i'm emily chang. this is "bloomberg west." heats inequality debate up in silicon valley, some entrepreneurs are focusing on creative ways to get back to the community. a san francisco native is one of them. startup, he'st focused on marrying charitable giving with high-end experiences. he joins me in the studio. you founded four companies before this. >> all here in san francisco. >> how did you come up with the idea for ifonly? >> there are so many great stores where you can buy things s, but more and more people one experiences. they want to share stuff and give experiences. a greatt, why not build store for experiences rather than things. >> by experiences, what do you

mean? billionsre from $30 to of dollars, cooking with famous chefs, seeing called wineries from the inside, -- cult wineries from the inside, maybe just meeting the band after the concert. if we do not have it on ifonly.com, we will design it for you. >> tennis with andre agassi? >> that's right. and steffi graf. a penthouse at the bellagio. >> you also have mother's day stuff coming up. >> we have the coolest mother's day's gifts, from sheryl todberg's hand signed books cooking lessons for mom with well-known chefs. people, whole team of and their whole job is to ask our consumers, what would you like to do? what would your friends like to do? what would your family like to do? we go out and design these

experiences. if we do not have them, people will call us and say, create a perfect birthday or gift and we will do it for them. >> the business is for profit but you give a large portion to charity? >> about $.70 on the dollar we collect goes to charity. we take a fee on top. it's a great thing. if people want to check out ifonly.com, there's a code, bloomberg, that your viewers can use to register. >> you have been watching what is going on with the inequality debate in san francisco. your family is well established in san francisco. what has been going through your mind as you have been seeing the tensions simmer? >> there is a lot of new affluence in the city, and it's very understandable that can create resentment, and also that people on the margin get edged out. that is why ifonly, at the urging of our investor, has joined sf gives, the new

initiative to raise awareness through tipping point, the wonderful charitable organization, to give back to san francisco and make it a better place for everyone. againsts been outspoken the google buses, the shuttle buses that take employees from the city to silicon valley. do you think things like that are unfair? do you think things like that are important and need to stay? >> mark is an investor, a dear friend, and hero of mine for everything he does to give back to this community. quietly, i would add red these -- add. these are legitimate debates. the buses seem unfair, but taking thousands of cars off the road is good for the environment and traffic. i am a fifth-generation san franciscan. sometimes i watch these arguments, and it is someone from maine yelling at someone from cleveland about how they're

changing san francisco. that being said, there are serious issues at play here. >> do you think tom perkins and the issues surrounding that and the comments he made took it to an unnecessary level? >> tom is a brilliant guy, and i think he means really well. the way he said what he said was very inappropriate. and very misconstrued. i think it was important just because there should be debate about what's going on here, and there is a healthy debate. area lot of tech people really concerned about making the city better. they are very aware of poverty, and they want to do more, particularly through tipping point, they are doing more. >> what do you think the responsibility is of the tech arena? our companies -- are companies doing enough to give back or should they not have to focus on that? >> everyone needs to think about giving back. ifonly supports 150 charities

read -- charitiers. look at salesforce. there model drives profits into nonprofits and they send their workforce into the community. everyone should care about it. worstr went to the section of san francisco, put their headquarters there, and in a couple of years i have been amazed by the blossoming of the neighborhood. i hope it will continue. >> they did get a tax break. they did not do it for nothing. because of that, is there some greater responsibility? ofi have built a number companies here, and that tax we talk about is actually counterproductive. it is saying, for every new job you created, we will tax you more. when you are small and don't have a lot of funding and you're trying to get people, that is a disincentive. i think the tax should be construed differently, because we want more jobs here. company is hard.

you have been an entrepreneur five times over. do you think entrepreneurs need to think about this at the beginning, or do they think about this when they have got to a point where they feel more comfortable? or should it be baked in from the start? >> the way it has been happening is that people graduate from school, they spent 24 hours a day working, they do not think about anything, they do not go out -- they build and build, and one day they are successful and they look around and think, maybe now i can help. from the point of view of these engineers, that is all there focused on. in businesse schools and conversations, we are talking about, let's set these companies up from the get-go like ifonly so they are doing good all along the way. risingcost of living is in the city. there's talk of bubble valuations that are rising. do you think this is a phase? do you think it's a bubble? do you think this will pass? >> we are definitely in a

bubble, but this is different from the last bubble. there's a lot more platforms and technologies people are building on. it's a lot more real. cycles come and go and prices come up and down again. the city is becoming more expensive and built out. we need to do more to help those who cannot afford it. traina, founder of ifonly. up, and oscar winner is using technology in her fight to bring some titles to online programming. more about why she is turning to crowd sourcing to help the more than 35 million americans who are deaf and hard of hearing. ♪

♪ >> welcome back to "bloomberg west." i'm emily chang. deaf, butlin may be

she can make a lot of noise. tolin has won the fight bring some titles online. starting this week, streaming video services have to offer closed captioning or face the same fines as traditional broadcasters. matlin is partnering with vicky.com, a stream a size -- site that works with crowd sourcing. cory through an interpreter. as a little girl, i remember watching television without any assistance with captions. there was nothing there, so i had to make of stories on my own. -- go backd to 1989 to when i was a little girl again, i wrote a letter to the president saying, we need captions.

no answer. and i had aa movie, little media attention as a result. a little. so then i use that attention and that media from the studios to talk about closed captioning. then i got the attention of washington, d.c. passed that all television programs on television need to be captioned. fast-forward another 20 years. we are all using now are laptops, iphones, whatever mobile device. >> all these new technologies. >> exactly. the closed captions did not follow the technology. this time i had to make even more noise. you had companies like netflix and hulu. we had to wait for them to captioned. 35 million of us had to wait. 35 million of us.

i'm not talking about international, just in the u.s. we had to wait. i said, i'm tired of waiting. that is where vicky comes in. allowsses crowd sourcing the people who watch the programming to create the captions, create the subtitles. in over 200 line which is. >> -- languages. >> so you are using crowd sourcing for new technology. >> absolutely. because theyracy are policing each other and making sure every word on the screen or on the film is accurate. in 200 languages. >> the close captioning we see is so often accurate. >> it is terrible. it is sloppy and lazy. we had enough. vicky is doing is great. it's run by the consumers. our goal is with the one billion words march to have one billion

words captioned by the end of the year. right now we're at 600 million words. it's wonderful what they're doing, and i'm very excited to jump on board. >> there are requirements for this company to do this within a certain amount of time. >> the fcc has mandated that all internet broadcasts that come from broadcast television has to be captioned, and it has to be accurate. my kids even catch the mistakes. they say, this isn't right. viki steps in and fills the void. with somes this work of the things you have done specifically on that show? >> we are in the third season now. abc family has been very supportive. they subtitled all the sign

language. they even do entire episodes done completely with subtitles, without any sound, and no television show in history has done that. >> let me guess that the captions were more correct in that one. >> of course they were. i'm in it. it has to be right. i made noise. i can be loud. that's where they jump in. >> cory johnson, our editor at large, with academy award-winning actress marlee matlin. it's time for the bwest byte, one number that tells a whole lot. sarah frier, are bloomberg news reporter -- what do you have? >> zero. it is the number of lines of code that oculus uses that john carmack road while he was at the mac. -- panamax. cinemax has said they might sue oculus, which facebook is trying about $2 million.

cinemax says that carmack wrote lines of code for them that are their intellectual property and they deserve some slice of the pie for oculus being sold to facebook. >> coming more about this john carmack guy. i saw he has over 100,000 followers on twitter. >> he's a big name in video games he was behind doom, quake, some of the graphics that led to these first-person shooters. people look up to him and when he joined oculus, that is what gave palmer lucky some of the clout he needed to say this vision could be a reality. >> facebook is still not commenting on this story? >> not really. i think they wanted to go way. [laughter] >> sarah frier, thanks so much. and thank you all for watching this edition of "bloomberg west ." have a wonderful weekend. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line tur." council meets an emergency session to address the crisis in ukraine. u.s. jobless rate drops in april to the lowest level in nearly six years. 140th run for the roses as the kentucky derby is tomorrow. to our viewers here in the u.s. and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines.