>> live from pier 3 in san francisco, welcome to "bloomberg west" where we cover innovation, technology, and the future of business. i am emily chang. it's a decision that could turn the internet search industry upside down. google must remove search results. and he had a major impact on the development of beats. we speak with the founder of monster about how beats was born. your top tech headlines. verizon and comcast among the companies urging the fcc not to micromanage the internet by setting prices for how companies

route web traffic. the letter urged the fcc to take a light tough approach. al franken wants the company to address security concerns after research in germany posted a youtube video of them exploiting this scandal. and new supreme court judge has blocked the state subpoena seeking users who -- rent out their apartment on the site. the new york attorney general says she will issue a new subpoena to see users who are breaking new york law.

it could be a game changer when it comes to privacy laws. the european union's highest court has ruled against google, saying users have the right to be forgotten. that means that google and other search engines must grant request to remove links to personal affirmation if a person's fundamental rights are harmed and there is a public interest in publishing it it was filed by a man who wanted links about his 1998 repossession taken down. google called the situation disappointing. cory johnson is with me here. this could have huge implications. >> this is a fascinating case of a new law being applied. the eu is trying to figure out what an individual's right is on the internet. the phrase they are using, essentially is the right to be forgotten. this right to be forgotten is

this interesting concept in privacy law. it is unforgettable. this will change the way google works, and not just google. there are big implications for companies like facebook. >> google doesn't do anything immediately, but if they don't grant your request you can petition to the national data protection agency and then they can ask google to take it down. >> the fines could be as much as two percent of world wide web for revenue. a enormous implications for these companies. let me read specifically what they said in the decision. it compromises the fundamental right to data protection. the dignity of persons in the broad sense concerning that stated not be known. >> we should clarify they don't need to erase the article completely, they have to take the link out of search results. >> it is not clear what they

have to do and what the ramifications are. ramifications are interesting. google laid this out many months ago. they talk about these big issues. first of all, there is your post. if you take a picture of this, an embarrassing picture, do you have the right to remove that? an interesting question. then there is another issue. what if someone reposts that picture? then there's the question, what is the right you have of your own image that somebody else might put up about you? these things have been sorted out. -- haven't been sorted out. the difference is european law and american law. we believe the press has the right to publish things that are true. in new york there is a french law that says there is a right to oblivion. the concept is, if you commit a crime but you have served your crime, and rehabilitated, you

have a right have the crime go away. that is no one's business because you serve the time. >> this couldn't happen in the united states. >> probably not. it is a different concept. information is public. in europe it is a different standard that goes back a long time. people have a right to oblivion. >> thank you. something we will continue to follow. turning now to twitter and the company efforts to grow user base and revenue, membership hit 285 million active users during the first quarter. user growth slowed year-over-year. in an effort to attract more users, and grow revenue, the company is turning to small businesses and launching a small business guide to help entrepreneurs use twitter. i said ok president global revenue answered by asking how to get more users signed on and engaged. >> what is important for us, we

are just getting started in rolling out the tools to a wider audience. we started in the u.s. now we are moving from market to market. we just announced the availability in japan to go along with our activity in the u.k. and in dublin. we're rolling out across the globe. what we are seeing from consumers is that they not only see and experience content on the platform, but it drives them to make a purchase. i did a study that showed 73% of consumers that followed or engaged with a small business on twitter led to some level of purchase activity for them. >> i spoke with facebook head of small business last week. they are making huge efforts to reach small businesses. what does twitter offer? >> i think would in general all we hear from businesses and

people is that twitter is the only platform that is live, public commerce a shuttle and distribute it. those combinations make it interesting for a business to connect to their potential customers, and engage and sell. when people such twitter they are in a different mode. they in the mode of what is hot, what is new? what is going on in the world. we think those questions that they come to twitter with, what's up, businesses can help answer those. >> do you think live tv can play a role? >> sure. live tv can. they look at twitter is a live platform to medicate and connect with customer base. >> some small businesses have told us that twitter has an help me that much. i haven't gotten new customers from them i haven't generated sales from it. how do you respond?

>> we are just getting started. here's what i can tell you. we're seeing great adoption from businesses using the platform. i will give you a real tangible example. about a month ago we launched a platform called me generation cards. when you see a promoted tweet from a business am a sometimes there is a button that says submit request information. when a consumer touches that button the e-mail is sent to the business to follow-up. it is an easy way to strengthen this between discovering a business and getting information. we have a software company that is using a platform to read affect. they saw 3.5 times lived in leaves that came from the platform. in terms of roi twitter is the , number one marketing channel digitally and physically. >> you are the head of revenue. is the goal to get businesses to spend money on twitter?

>> our holistic goal is to get as many businesses on the platform, and get them used to using the platform. we have a goal ultimately to be, to allow them to be successful. once they are great on the platform, the tools are just application tools. we view our role not at the end, and talk about the paid platform, but holistically from the beginning. getting them on the platform and telling them how to do it the right way. >> as you're developing ad products, are you thinking about what might be good for small business? does that factor in? >> the consumer base as well. what we're trying to do, the best products that we roll out our win-win for the consumer base and for the business. we have seen that as we rolled up products across the board. we think about is what is great for the overall audience. >> twitters revenue growth story seems spectacular.

how do you see that evolving down the line? how do you keep up the momentum? >> it is early days but we saw over 119% growth quarter on quarter this past quarter. the ads part was even higher. we are thinking about all the other things that we have teed up for the rest of the year. we made a huge announcement a couple of weeks ago with our acquisition. this is one of the world's largest mobile exchange businesses out there. what it allows us to do is touch over one billion users for ios and android apps. now we are working on connecting the dots between the twitter app platform and run a campaign on twitter and off twitter. >> amplifying is a big part of what you are believing the future is. how do you see that playing into live tv?

they are cutting the cord. >> we have 70 content partners who are signed up and using twitter amplified. if you are not familiar, it is our wide video experience or premium broadcast providers. if you video that appears on tv, you can bring onto twitter and we co-monetize the experience with you. it has a monetization angle. consumers get to see content they might not have seen. it is helping drive adoption and tune in for broadcast partners. >> what is your vision for advertising? in five years, how does advertising with different? >> we've started planting the seeds around that, which is we want to touch every single

business on the planet. we will not rest until we are done with that. part of the ad experience for twitter is that content is native inorganic to the platform. it actually looks and feels like traditional content. you can re-tweet a promoted tweet. you can reply a promoted tweet. what we're trying to do is get businesses to get better at reducing twitter contents would provides value. >> that was adam bain of global revenue. we will be right back. ♪

>> welcome back. i'm emily chang. seven years before apple's bid to buy beats electronics, dr. dre teamed up with monster to design headphones, to create a stylish accessory for mainstream consumers as well as audio quality fanatics. to create the perfect sound, monster's founder created profiles that serve as a baseline for beats products. noel lee is with me now in the studio. you, seven years ago, struck a deal to make headphones. tell me how this came about. >> jimmy was looking for something else to do. he wanted to do speakers prayed i said the new speaker is the headphone. people don't listen to speakers anymore. they are too big. that is how it started.

i wanted to get into making the best headphone in the world. >> dr. dre used used fifty cent as a soundboard. we have beats headphones with us today. what part of these headphones are you responsible for? >> those are the new ones. we didn't do any of that. the previous winds, we did everything. the engineering, the design, and the great thing about what we did was -- get base out of headphones. >> what was it like working with them? >> probably the most rewarding time ever. in my career. i was exposed to the music business, and to jimmy, who is a marketing genius, and dre who is a music icon ray begot to meet

cool people. it was fantastic. >> what do you think of this deal? does it surprise you. >> it is a shock to everybody. we have the same questions everybody else has. what the final outcome is going to be. we would like to see it because audio, high-quality sound, and valuation of what the company could be. >> how much are you getting? >> like that. >> zero. i wish we could've participated more. we got the valuation out of it. lots of good shining light on our technology. the things that monster is doing now. >> before we shot the headphones, do you have any regrets about the deal that you struck with them?

they actually, you parted ways in 2012. they sold half the company to htc. why do you think they did that? >> jimmy told me, you build companies to keep them. i build companies to sell them. he is in a different mode than i am. i'm an entrepreneur. i never took in any extra income. 35 years we've been in business. it is a passion for me. i never thought of selling my company. >> you are not upset about not getting a cut of this? >> no. it is not about the money. it is always about the sound quality in my passion for what is happening in the audio business. i have some regrets on the lack of recognition monster has gotten after our split with beats. i wish we could've got more

recognition. being on the show, people don't know that monster designed the beats products. >> let's take a look at the headphones you are making now. you are still in the game. >> those are diamond. stunning. >> what is so special about these? >> we've gone on to new technologies. what i designed was five years old now. the new stuff is phenomenal. the sound quality, the dynamics, we call it pure monster sound. you get closer to the music. we are reinventing the game. this is our collaboration with james lindsay on promoting that for the hip-hop audience. this is our new technology. >> last question. how do you view competition in the headphone industry? some don't like beats

headphones very much. it is a competitive industry. there is skullcandy. >> there are a ton of products. with beats, kids want to hear the base. they want to hear the punch. that is what i designed. some critics say it is overhyped. if you listen to hip-hop, maybe that is what you want to do. monster sound is about clarity. with all of the competition, they have their own versions. i have yet to find a competitor that can compete with either one. >> all right. noel lee, thank you for joining us. >> thank you. >> we will be right back. ♪

>> welcome back. i'm emily chang. we turn now to our wiring the world series. how technology is changing retail. millions of customers may be hesitant is what credit cards after the data breach but target is one of many retailers hit by hackers in 2013. cyber thieves aren't slowing down anytime soon. cory johnson is back with us. we had been focused on target over the last year. a lot of retailers have been hit. >> we talk about hacking, we shot the video a few years ago. i wonder if we had known the 2013 would've been the year of the retail hack. you had so many hit last her in ways we haven't seen. sprouts, others, neiman marcus.

target got the attention for its massive attack. the neiman marcus one got nearly as much focus. there was a jump in the increase in the number of attacks. >> how much is a cost? >> the costs are all over the place. it is always cheaper to stop and remediate the problem. one of the things we saw was the level of increase. a lot more money being spent by these companies. according to one of the studies, there was a 14% rise for the cost of companies, predicted $5 billion. these are estimates. no one really knows how much is being spent behind the scenes. a lot of companies as well. >> the question remains how businesses are responding to this. are they beating up their security products?

later in the show, more bloomberg west. ♪

>> welcome back. i'm emily chang. about a year after tumblr was acquired by yahoo!, there are questions about whether the acquisition is going to pay off. the ceo, david karp, spoke to market makers. here is what he said about integration between the the companies. >> we are partnered on projects, powered by tumblr today. we are working on a host of projects. we are on our own path.

we are ultimately in control of her own destiny. >> tumblr has 160 advertisers on the platform. also joining us, the ceo and founder of the share space. as companies like facebook, twitter, and interest are increasingly competing for ad dollars, they help connect with consumers and grow businesses through the power of social. she joins me now. think you for joining us. >> great to see you. >> we were just speaking with the head of revenue about small businesses using twitter. obviously, there are a lot of platforms out there. if you are a small business, how

could you approach social and choose where to spend your time? >> we tell businesses it is four steps. be aware of the customers. grow your network or fan base. do that organically through existing customers and fans. also invest in these paid opportunities. step three is to listen to customers, hear what they are saying, and respond. it is a circle. >> that is a lot of status. how much time customers need to invest? they can just hope everything will follow. >> that is just the first step. it depends on the business you are in. increasingly, consumers are spending time on these sites. we are using the sharing and posts to make important purchases.

businesses have to be where they are. they have to be a part of the conversation. >> do you see a difference between facebook, twitter, pinterest, and linkedin? are there anyone that is a must? >> it depends on the business. they have emerged to occupy different places on the social web. just like there wasn't one internet company that one out, several, we're seeing the same thing with these networks. >> how do you decide where to spend money we are marketing dollars? where would they get the most bang for their buck? >> we are seeing businesses, small and large, continue the shift from off-line to online. within on when they are doing a lot. they are starting to experiment more and more and seeing great results on social media sites.

i think that the f8 conference last week, facebook announced the mobile ad network, the power of social combined with global. >> how do you view facebook's mobile ad offering differing from twitter? >> it is a different audience. each business needs to look at where their target customer spends time. they should start with a one, experiment, they continue to go from there. you can compare results from one versus the other. >> pinterest is rolling out paid pins this week with a select group of brands. how impactful are these going to be? when it comes to interest, a lot of people have been trying to get in the door because they want to advertise there.

>> it has been wise to focus on the user base and to go from there. the brands that are there that are launching this month are very exciting. i'm curious to see how. promoted pins underscores the maturation. it speaks to the social nature and the importance of highly visual customer experiences online. >> what brands are doing social well? >> it is so difficult to compare. every industry has their leaders. i am biased. starbucks does a terrific job. the ones that i mentioned earlier, disney, gap, google. all of those brands are cutting-edge.

they are willing to experiment. it goes to show, when it comes to innovation, you don't always get it perfect the first time. you develop muscle memory and it becomes part of your innovation and culture. >> the ceo and founder of hearsay social. thank you. beauty lovers flock to social media to write about their favorite products. but how do the brands turn digital chapter into sales? that is next. you can watch just reaming on your phone, tablet, bloomberg.com, apple tv, and bloomberg.com

>> welcome back. i'm emily chang. blackberry unveiled a new low-cost phone in indonesia today. it will be available exclusively in that country where the company is still having success. the ceo spoke with bloomberg tv about whether blackberry will be releasing tablets.

>> eventually, we will have to do something. i think you will probably see from us a tablet sooner than a tab. by the way, i like both. i think for my enterprise focus, there is a place for a phablet and a tablet. >> blackberry is producing it in a partnership to compete in emerging markets. we turn back to our wiring the world series. we look at how a more connected world is changing the retail industry. how do beauty brands turn

content into cash? the beauty board is a website allows users to upload photos and tag beauty products they use to create their looks. the senior vice president to explain how it works. this used to be your night job. we have to focus on digital, somebody has to run this thing. tell me about that. >> many moons ago, six years ago, sephora was launched on social media platforms. our clients were clamoring to speak with us. they love posting about beauty products and asking a lot of questions. we realize this is a real thing. this is a focus for sephora. we want to answer those beauty questions. in the evenings my boss and i would respond to clients and

decided that this was not sustainable. we need to focus and create an interactive digital group and focus on social media. >> there seems to be something special about beauty products it makes it a particularly, a subject people like talking about. we have people posting pictures of themselves, and their makeup, and asking questions. is there something about the beauty community that is like sales gold for you? >> makeup has been a natural conversation for women. women talk about makeup in the ladies room, and a bar, anywhere they are. they come together and bond over makeup. especially at sephora. women speak and talk to each other and are experts in the stores. >> how do you translate into this? >> our clients actually love creating beautiful looks and sharing them online. they were doing that on instagram, beauty talk to them

our beauty community. the number one question is, what are the products that you use? you can't do that on a lot of social media platforms. we created the ability for clients to upload their photo and tag every product that you use pre-she can show someone how to create that look themselves. >> can you give us any numbers? before the beauty board, and after? >> absolutely. one of the things that is fascinating is that our clients, over 55% are tagging products. six products or more on every photo that they are uploading. if you think about social media, you can typically link it to one spot. that is a fabulous way that we have increased the number of products people can focus on. the fact that mobile has been

such an instrument. clients have mobile phone, and they can publish so easily. we have seen 60% of our views on mobile, and photos from mobile devices. >> any product that do better on social and mobile? >> anything that pops. right now i would say urban decay makeup. >> specific. [laughter] >> we have some hot product right now. nails and lips are the other two categories that clients can demonstrate nail art. >> you are harnessing beauty influencers. describe that term for me. >> there are women out there who have gained a following because

it is amazing how many women can create absolutely brand-new looks every week and show people how they are doing it. they have immense followings. they are coming on the beauty board and showing their beautiful looks. they love helping other women. >> i love talking about makeup. this was fun for me. so for apostasy in your vice president. thank you. check out the beauty board online. managing a creative worker can be an art form. we asked the yahoo! chairman about the science behind that art, next. watch a streaming on your tablet, phone, and bloomberg.com . ♪

>> welcome back.

i'm emily chang. the banker who helped take twitter public is leaving goldman sachs. he was a cohead of the firm telecom group and was a top ranked analyst. his statement, over the course of his career he has made a significant contribution and growing the franchise. he is been entrusted to a number of clients and played a central role in several transactions. he is joining a hedge fund. it is time for our office hours segment. he served as the coo of ebay and sits on the board of salesforce. this week, focusing on managing creative talent. cory johnson is with us. creative talent. how is that different than other talent? >> creative talent likes to be free and challenged.

you have to give them something to do. >> they are notoriously difficult. when someone is called creative, that is calling them a pain in the butt. >> challenging and wanting to be inspired. a lot of our workforce is more creative today than they have ever been. they want to be inspired and challenged. they don't want to be told what to do. we want to be able to find their own path. >> when it comes to managing them, how are you supposed to manage them? without giving them more priority than everyone else. >> i try to give them hard things to do. i try to make sure that they have something immediate to chew on. i also make sure there are checkpoints along the way. it is not ok to not deliver something. we spent time up front making sure that everybody agrees on

what the end goal is. then i let them find their own path. it is an art form. some people tell you trust me, you can. some people, when they say trust me, you have to check more. >> in a technology company, who qualifies as a creative? designers? can a product person be a creative question? >> some of us like to respond. some of us like to set our own path. some of us like to have structure and say i'm going to deliver this by this time. it is really trying to manage everybody based on what works best. >> i fully spot creativity falls

in the managers. in places i have worked the been the most creative, all of them shared similarity were all the people on the team will sit around a round table like this and talk about ideas for hours for one stupid little paragraph in a magazine. it is about a creative process. >> it is about making space for creativity and let people find a way to deliver what they are called to deliver. i don't think it is about -- and by the way, i worry about words. when you secrete a people, that doesn't mean they are noncreative people. you have to channel the form in which they are most inspired to do it. i find that you have to make room to let people do it their own way. let them create a path to get to your objective.

setting the objective of front, and say how are we going to do this? >> this is all mushy stuff. >> let me give you an example at ebay. it wasn't a great time for creativity. it was time for getting stuff done. i asked a question, when did we hit the wall? when do we actually hit the wall on growth? would've never been asked that before. how about we get an answer. they said ok, we have three weeks to live. it is time to get creative. what do we do? when is the next box that we can upload? that won't work. we found a way to do a lot of things, to tune and tweak. and find a way to get our head room we needed that. >> inking of a creative solution.

>> in that case it was shear terror. >> what is the alternative manager choice? in a creative situation, you say here is the goal. , find an answer. >> a lot of time somebody will say here is the way to get there. i need to micromanage every day to make sure you have done what you were supposed to do. often, that turns people off. they want to be, they want to deliver. at the same time they want to work what they want to work. from 8:00 to 2:00 in the morning, be here at 6:00 in the morning, i need to make sure you made progress, that's not want to work so well. >> thank you as always for joining us and sharing your life lessons in our office hours. it is time for the "bwest byte."

one number that tells a lot. jon is with us. cory has the byte. >> the revenue estimated by billboard magazine. merchandising brought him another $200 million. just in 2012. michael jackson, even in death. killing it financially. >> three years after passing away. >> speaking of being creative, here is this day where there is a new michael jackson album and well-known producers were brought in to take stuff we have never heard before and make it popular. you have this highly valuable word that is michael jackson. it is going to be interesting to watch a performance of this new album and see how it does. >> we have so many artists, if you look at the lasting revenue,

those are big numbers. >> i wish i had asked this. can you put a price on creativity? should creative people get paid more? >> absolutely. a lot. i think creative people who get things done should get paid more. >> i should get paid more than cory. thank you. cory johnson, thank you to everyone for watching this you can get the latest headlines at the top of the hour. we will see you later. ♪

>> the following is an exclusive -- dermtion for durham exclusive antiaging brought to you by by beach body. >> wow! >> hi, everybody, and welcome. i'm deborah norville, and i am joined by chilli of tlc and