>> live from pier three in san francisco, welcome to "bloomberg west." i'm cory johnson come in for emily chang. fec --v host stop the the fcc from creating internet fast lanes? even if the fcc website went down briefly -- alibaba is superstitious in planning its ipo. say the founders both

see in august 8 ipo as a good omen. the number eight is considered lucky in china because it sounds like the word for posterity. baba as its prefer ticker symbol. the justice department says they will review the 1941 agreement with bmi which still governs song related royalties today. people have complained that the agreements don't take into account the rise of digital media. calling for a 60 day period of public comments. fcc islead story, the facing a growing backlash against its plan to redefine net neutrality and create internet fast lanes. tens of thousands of people flocked to the fcc website after john oliver urged viewers to post comments in a 13 minute

monologue in support of net neutrality. >> that's right. the fcc are inviting internet comments at this address. at this point -- i can't believe i'm about to do this -- i would like to address the internet commenters out there directly. good evening, monsters. the moment you have spent your entire life fighting for. thee has to work that into opening. good evening, monsters. the website responded to those monsters -- the site crashed following that's beach. there are 49,000 comments on this issue. the fcc chairman joins me now from washington. it's great to see you. when you are the chairman, this not happen. -- this did not happen.

>> you forgot that i invented the internet. >> of course. yes, you did. i remember working a people magazine story about you. , the internet was a glimmer in the eye of aol and others. have you seen a public response like this? >> back in the day, in the 90's, aol arranged -- the first e-mail of lyrical lobbying in history. 400,000 e-mails were sent to the united states congress to tell them to keep the unit open. it's the same issue. many years later, the power of the net roots has grown and the fcc chairman is getting a careful. -- getting an earful. >> i feel like i haven't done a

great job of explaining what this is all about. the notion of neutrality is sinking in. some things will be able to come to you faster of companies want to pay for that. there is a bigger regulatory framework. i wonder how you are trying to position the internet and what was relevant when you were trying to -- >> the fundamental view of the fcc, ever since i was there in the clinton administration, has been that the internet really ought to be open to all users, and that includes people who put content out and people who just want to see the content. it it ought to be neutral in the sense that anybody can put content out and anybody can access it. assia, andboard of we are launching a particular application that anybody can download for free on a smart phone. if you download that, you will be able to measure your wi-fi

speed in your house and you will be able to find out if you actually are getting the internet that you paid for. >> interesting. >> you will be able to measure or and find out whether they are delivering. the key point of the fcc is, you ought to be able to go as fast and go into the fast lane that you chose to any website and get any content. >> i think this is a fundamental -- it gets to fundamental beliefs about business and government responsibility. if comcast has to deliver everything at the same speed, a greater cost for the burden of what? for the benefit of home? whome?the benefit of >> you and me.

they are between you and the content. you also want them to close some doors and open other doors? slow some access speeds to create other access speeds? that is the fundamental issue at the fcc. you ought to be able to know that you got what you paid for. that is what the application will permit you to do. you know if you are getting what you paid for. >> not that we have concerns over what local viewpoints are, but somebody else with that kind of control -- it raises some big free speech issues. i was surprised to see john oliver take this on. let me lay a brief clip of his 13 minute speech. >> these companies have washington in their pockets way conveniently almost unbelievable degree. millionst has spent 18 in lobbying last year. more than any other company. clear, the ranking

of who buys government influence -- --bloomberg west viewers john oliver showed us how funny it could be. what about this revolving door thatrn and the concern they can't be fair because that gun so much influence from lobbyists in washington? >> back when the internet was in its youth, all of us in washington -- ira member sitting we wanted the internet to be a platform for grassroots democracy. what we are seeing in these comments to the fcc is, frank lee, what we hope for.

we hope everybody can log onto and submit their comments. i want people to download this and put itom assia on their smartphone and measure the bandwidth than their house and to tell the fcc whether they are getting what they paid for. it you will get a heck of a reaction from government if you report in that you are not getting what you pay for. if you are getting what you pay for, they will complement your cable guy. it's a free app. -- speeds the point are pathetic compared to the faster countries that have internet access. >> there is nothing wrong with whining about it. you download the free app, send the message to the fcc. tell them you don't want to be in japan in order to get fast internet. >> i'm right here for it.

really appreciate your time. thank you very much. -- thatp, alibaba's ipo is next. you can watch it streaming on your tablet, phone and at bloomberg.com and on apple tv. how did a four-year-old company overtake apple in china? find out tomorrow on a special edition of "bloomberg west." xiaomi rising. tomorrow at 10:00. ♪

>> welcome back. google planning a new e-mail

prodigy tool to prevent the nsa and others snooping called and to end. promises that data leaving your browser will be encrypted until the intended recipient decodes it. google has released the source code and wants developers to do some heavy testing before it's released to the general public as a chrome extension. alibaba hoping for a good fortune when the west trading begins. people involved in matter tell bloomberg the company is targeting august a sports ipo because the word "ba" for the "fa," eight is close to which means fortune. joining me to talk about all jeffs ali baba is mccracken. thank you. this is a challenge. it's interesting, culturally, but a challenge to get a deal in the middle of

the summer with a target date. >> you raise a number of good points. in a perfect market at the perfect time, a $20 billion ipo is going to be challenging to do. it's one of the largest ever and is likely to be one of the largest ever. august 8 it's that window where your early enough in august to avoid interrupting banker vacations and to avoid that real slump that happens in the second half of august where the market really slows down and trading volumes fall way off. they would like to do that and have baba as the ticker symbol but they are realistic. work, theynot will push it past labor day. >> this is such a big deal. are we getting any indication of appetite? cause's >> it has worked out reasonably

well for them. this tech selloff happened in the spring. not want to come in at the peak. they do not want to come in when everybody else was up and up. maybe the tech investors were exhausted. they put their money in a bunch of other places. , it is not a selloff the worst thing in the world. did an ipo in august. it can be done. >> i was looking back at 10 years ago this summer and it was the time when the biggest ipo -- could be the biggest ipo in the history of ideas. it willd to imagine drum up enough support. he suggested that the worst of ,he vacations -- the shopping

you have to have the shoppers in front of the screen. the bigey is -- institutional investors are the ones that will really matter here. you need people to take the fidelity's of the world and the youk rocks of the world -- will need them to take a couple of percentage points of any deal. it's going to be key that you are able to have a good roadshow through july and into early august to get a deal this size done. >> this is a big rock in the middle of the pond. i wonder what the other ripples are and how we see other deals affected by this. where it really plays a role is not just in the ipo landscape, but also the m&a deal --e because this softbank has a big stake here. you will see alibaba doing its own acquisitions. it has done a number already. they arently hear that

on the prowl looking to do others. once they have the ipo and they shares, that sell will make it easier for them to pursue deals. the impacts of this ipo is not just in the ecm space or textbased. you need to think more broadly about the trillion dollar m&a landscape as well. >> interesting stuff. we appreciate it. thanks. speaking of chinese tech giants, insure to tune xiaomi rising. a special "bloomberg west." ♪ giantis the latest tech trying to get into the growing smartphone deal. that is next. ♪

back.come i'm cory johnson third apple looking to take on the $10 billion connected home market during the developers conference here this week. they announced home kit, a platform that will allow home devices connect your apple gadgets. what challenge will this company face an existing smartphone markets? a leading provider of operating youems for your home -- guys are making a real business out of this. where is that business and why is it growing now? >> every today with a battery or power cord is become network aware. entering theare

home that are connectable and our job is to orchestrate them to the benefit of the family, making entertainment systems useful and compelling for everybody in the family, not just the technical junkie. making heating and air-conditioning systems correlated with windows su can harvest or insulate from solar energy. making lighting and security systems work together. we have been doing that for a decade and we have a channel that delivers that throughout the world. we support 7000 independent devices from hundreds of manufacturers. d it's onatform an the right side of history. have my system i on my iphone and my security system would chec. there are all of these other things i keep hearing about. locks in the house you can control with your phone and

stuff. they are all discrete systems. is that the key to making this really take off? have a similar operability? >> much like musical instruments, there are many of them. in order to have an orchestra, you need to conduct them together. does.s what control4 .e link up your systems when you are ready to go to work, you had one button on the way out on your phone or tablet or next to the wall and the house makes sure that doors are locked, entertainment systems are turned off, lights are turned off or on and that coronation is what a company like control4 brings to the party. different --tomer if the customer changing from the pro installer to the individual? >> everything is growing. we are seeing the demand for

professional installs growing. the demand for individual diy installs growing. most customers, when they are installing one or two devices, might be able to do that on their own. if you are doing a whole house, i think professional counseling and installation -- >> when you see things like the ast, which seems to be taking role of its own -- i went from one nest to half a dozen. it do you see those things really changing? >> they have built a fantastic product. it will be a category winner in most of the segments. those products will take consumers by storm when they get that formula right. making them work together across

corporate boundaries and product lines is another challenge. there is another big opportunity , and that is expanding also as more devices become compelling to consumers. want them to work together for their own benefit. >> what mistakes will apple make? >> they are a smart company. >> you know those guys. >> we know the apple culture. they have taught our lannett that great products matter and not much else does. they will take time. we deliver our software on the iphone and ipad. of both of those large developer communities and we look forward to seeing what the real tools are that come from apple and google. knows?far that goes, who think you very much. -- thank you very much. -- thek and talk

linkedin ceo says no to the traditional power lunch. ♪ thet is 26 minutes after hour. bloomberg television is on the markets. let's get you caught up with where stocks are trading right now. we are roundabout session highs. the s&p 500 up .5%. nasdaq up .4%. giving up the rally we are seeing. 2.6% as i speak. look out for that one. this week is about to get busy. for more, you've got the decision -- the overwhelming consensus is action. the jobs report will leave you

questioning your number for friday. be on the lookout for that one. ♪

>> you're watching "bloomberg west." i'm cory johnson. --g presentations interacted interrupted phone surfing. many top silicon valley executives are taking a page from steve jobs and shunning the conference room in favor of the walk and talk. the linkedin ceo known for taking walks with team members or one-on-one. i took a walk with him to learn why he is taking it to the streets. >> show me the way.

this is your regular walk. >> this is where it all begins. it was very practical at first. when we were at the early stages of hypergrowth, we were doing facility planning. and not lot of people enough space. one of our folks who was responsible for training and fitness here said, i've got a great idea. in addition to reducing the demand for conference rooms, you will be in better shape. this was apparently something that they had already started sharing as a tip to people in the office. i heard it and i thought it was so clever. you didn't want to sit in a conference room. >> we did. we continued to expand.

we have a growing presence in san francisco. very much a natural part of the evolution of the hypergrowth. find people very practically -- one of the hazards of the walk and talk. you have to come up with solutions for these things. it's so easily overlooked. >> what sorts of things do you get on a walk and talk that you would be able to -- >> it would be hard to characterize. getting out of the office changes the whole state of things. it is pretty incredible scenery. there is something about being outside that i think is a huge benefit. >> it beats the office. >> people interact and connect differently when they are outside. able to be more

direct and candid because they are not making direct eye contact. maybe their comfort with being outdoors is something changes. is itr interesting part minimizes distractions. there is no checking e-mail. i'm not doing this. people can't interrupt us. >> that is the nature of the times. this enables you to really get away from all of that and get really dialed in and focus on the people you're talking to. .> that was the linkedin ceo on the mean streets of mountain view, california. pandora is a leader in internet radio. agreements for songwriter royalties. that could change how much pandora has to pay songwriters.

john, this is a big deal for pandora. >> this is a story you have covered as well. like,iters generally feel in the process of music being played, they get a raw deal. they end up with less than performers do when their songs are played. you have groups that go everywhere chasing people down who are playing the songs and sang, hey, you have to pay the songwriters. the general beef they have had is twofold. all of the laws surrounding what they have to be paid are way too old. in a world oft internet radio. number two, coming back to what a company like pandora pays the songwriters and composers versus what ultimately pays the performers, it's pretty interesting when you look at at which saysom pandora that, last year, 7% of the

royalties that ended up being paid by pandora went to the songwriters and composers. the rest went to the bernice any spirits. the britneywent to spears's of the world. he gets angry when people suggest that pandora does not want to pay composers. --e of the most expensive extensive commentary he made on this was on a blog i while ago. we went to the management and we worked out a deal and we were going to pay them higher royalty rates. the board said, no, we are not going to go ahead with that. he basically said a few .igh-profile publishers agree as a result, pandora was in a position where he would be paying lower royalty rates than it would have otherwise. that is why this really has to

play out and figure out in washington. >> what about the artists? what do they think about this? >> the irony is, most of the artists like pandora. it is part of the future. a pandora today said it had something like 77 million active users. their share of the overall radio listening market in this country continues to grow. if you look at this in the context of the apple-beats deal -- they are not as inclined to download a song through service like itunes. all of a sudden, you have to think a lot more about the rising power of subscription services and internet radio services like pandora. as artists, we can either fight them or choose to be with them

because they represent the future. that is one of the other reasons why you're seeing a lot of artists really focused on concert touring because that is where huge amount of their income is now coming from as opposed to people just buying a cd. >> economics have changed so dramatically. it makes you wonder what apple is thinking with beats. if a streaming service will change so dramatically because of the justice department. >> absolutely. would apple has currently in place with their itunes radio service is, it gets really complicated. there is no ability to play some of your existing music coupled with listening to radio tracks coupled with the ability to go out and buy songs. in my be challenging to know exactly how you are getting paid for these services. you fight them or just assume that the apples and pandora's of the world are looking out for your best interest? >> i'm having trouble downloading the latest all

man brothers record. here is a question. video that is super sharp. could it be the next thing for your mobile device? a new feature that could define the future of the tablet. we will take a quick look. aomi come apple's biggest threat in china? 1:00 on the east coast. 10:00 on the west coast. ♪

back.come i'm cory johnson. meet the tablet of the future. putting users capture

ultrahigh def pictures. joins us right now. i'm excited to see what the next tablet will look like. it all starts with the chip. >> qualcomm drives innovation on the market to help come up with things that want -- that make you want to buy the next tablet. >> i've taken the devices apart and seen the chips in their. other day ceo on the talking about innovation in food making. after the show, we were talking out,ey don't get worn which is a great thing, except when you go to sell the latest and greatest. a show me something that will make me want to buy another tablet. >> you will see a real

transformation in the way the industry changes from hd today to four k. think back to the hd transition. it took a wild. you had to wait for the dvd player to change. it took years. .- it took a while you don't want to buy a tv every year. you want to buy a tv every 7-10 years. the smartphone industry moves incredibly fast. the design cycles are months, not years. people buy a smartphone every year. you might be surprised -- there are people carrying smartphones like the old samsung galaxy and 3 -- they have for 4k capture devices. people are already capturing 4k. how do you display it? build these for our

developers. >> let's see. going out ondeo our hd broadcast at 1080. >> i have to apologize. my tablet is better than your camera. >> this has never happened. it is pretty amazing. when i bring this device homecomings better than the consumer electronics in my house. >> talk to me about the chip itself. this is snapdragon? >> there is a whole variety of levels of snapdragon. in will start seeing it smart phones and tablets the second half of this calendar year. it will be an ultra hd christmas. >> you try to make it thinner and smaller and faster for. do you have to start working with the glass makers and the other people in that can make

this stuff work? >> we have to work with everybody. you need to be able to capture it. the sensors lined up around the vision of 4k. we need the chip to be able to capture the image signal processor. you have to have the right reference processing and you have to work with the display manufacturers. >> let's see this other machine you have here. >> is not just about video. it's really about 4k everything. i will show you a demonstration -- a graphics demonstration. a lot of the next generation consoles are using something called hardware-based tessellation. a- it'shey generate simple demonstration. this is console style technology showing up in the tablet. >> you have the rendering happening in a 3-d way. >> this is the polygons that

are making up this particular bug. he is an reasonable resolution. it looks like a toy that was put together. you see simple shapes. i will zoom in on him more and i will take up the resolution. -- the chip is not breaking a sweat. i will take the resolution up by 1000 times. >> you see how much mass has to be done in real time there. >> absolutely. we are adding detail within it. i will take the resolution down again and maybe take us in closer. here, he looks like a toy. like a lego. , he actuallytail looks much more realistic. you can see platelets and scales. >> five times more stuff.

it reminds me of of the old days when people saw the first computer rendering in movies. imagine doing xbox like games on these devices? >> this is console quality graphics. you will see this this fall. christmas. flying up here, the guy in front airport was 4 in his a ps luggage. i had three times the capability to do games. he was waiting to get to a tv and i could play this on the plane. much.nk you very really cool stuff for the next chips.

we appreciate that. videos that can help your startup attract investors. that is next. ♪

back.come i'm cory johnson carried in the startup world, you have to be able to win clearly what your company does to get customers and investors. a lot of companies are choosing to do this with short, animated explainer videos from production houses like switch video. the companies produce hundreds of videos for startups and tech giants. joining us now to talk about this growing business is which switch video'ss ceo.

nothing like a picture describing a story. >> we have been doing this for quite a while and have dug into the brain science behind it. ,f you actually read the text people will only remember 10% of it. if you put that together with images and tell that story 60%ally, people will retain of the information. that is why those videos have been so effective and why patent troll, that it was really great. >> around startups, it's interesting that these startups don't have physical infrastructure. they don't have a physical product or a sales team. loomsd imagine the stuff really large for them try to get off the ground. >> the industry has taken off. when we started six years ago, there was no one else out there. now, there are summative people producing these videos and every single sort of has a video to help them launch. >> the animation is expensive.

animators are desperately needed with so many movies out now. a long time.takes tell me how your business works. >> my production team is in canada. animation lot of i infrastructure in toronto. we offer a but of jobs in a town north of toronto. that is where my production team is. hthat is how we are different. expensive is less than san francisco. book calledt understanding commerce -- he tried to explain what it is about cartoons and illustrations that resonate with people. simplifying something down way smiley face makes it more equal

so everyone has a similar interaction with that. is that the appeal of these drawings? >> yeah. recognizing people's working memory. we can only take in some much information. if you simplify things to the core messaging among whether a script or visual come up people can take the information in and it becomes long-term knowledge. at that is why going with a single script is helpful as well. >> what have you done to automate your process? explain at of how to confiscated thing is really tricky. >> it is. having produced 600 of these videos, we are now really good at it. we have been doing this for a long time. -- we have low turnover in this small town. we have an awesome core team. having that fine-tune processes his awesome. >> thank you very much.

now, it's time for the bwest byte. one number that tells us a whole lot. jon erlichman in los angeles with the bite. >> when a 5000. that thecently told us go pro devices are now sold in more than 25,000 retail locations in more than 100 countries. they told us a whole bunch of stuff. they unveiled their plans to go public. today, the company said that is joining go pro as president. >> very interesting. a fascinating company. i have to see where this business is. it seems to be popping up far beyond the surfboards and kite boarders. >> that is what they would hope. you were just talking about video.

this is a company that is trying to position itself as more of a media company than just a hardware manufacturer. it probably started because of the success of the youtube channel. you go on verge america -- virgin america flights and there is a go pro channel. he has been close to some young media companies that have gone large. he was on the board of youtube and worked on the board of love films. he is in that same frame of mind. >> i went snowboarding this winter and i could not believe how many people were writing wearing a go pro thing on the top of their helmets. riding wearing a go pro thing on the top of their helmets. >> a special bloomberg west tomorrow. to xiaomi. an in-depth look at xiaomi. check it out.

♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." today, the u.s. federal reserve releases its latest survey on the health of the american economy. president obama meets with other g-7 leaders in brussels. we will look at the growing number of female entrepreneurs. to our viewers here in united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines today. let's begin with breaking news