♪ pier three in san francisco, welcome to "bloomberg west." i am emily chang. west" thisloombert hour, selling online, selling a tablet, and now selling smartphone. itson is set to reveal first smartphone tomorrow aiming at competitors like apple and google. at&t will be the exclusive carrier of the amazon phone according to "the wall street journal." is expanding everywhere from china to new jersey. the new jersey assembly has approved a bill that will allow customers to buy directly from the manufacturer. the else model is currently

banned in new jersey and the u.s. states. uber rioters get a chance to test drive tesla tomorrow. twitter's golden ticket. analyst say revenue could rise to 14% of the total by the year 2014. it currently makes up four percent very leadership questions and changes. to our lead story of the day, amazon is adding ready to add a new chapter in the world's largest e-commerce company is knowing to enter the ultracompetitive our phone business come unveiling its first smart on in seattle tomorrow. we that is what is happening. just the -- jeff bezos himself will host the event. amazon will get another way to touch its online door as well as a huge library of digital content. we learn the specifics of the phone tomorrow but is is to drop

by hand. he sent a copy of the children's book, mr. pines purple house, two members of the media, writing that the world is a better base when things are different area cory johnson is with me now in the studio along with redstone, author of the everything store, jeff asus and and the age of amazon. >> it is about a guy who lives hethe street and eventually turned his house -- vice's house purple. brad foss's is maybe better. >> rad, you may know him better than any journal out there. what clue does this give? >> it is a metaphor for how amazon wants to be viewed and how it views its competitors.

the phone these days look and work very much alike there he wants to do something different. the phone will have a 3-d screen, and watch of cameras were the purpose of bouncing infrared signals, protecting the image very we will see if it is enough to actually attract smartphone buyers eric >> can amazon do this well? >> amazon has a building in the headquarters there where they have been working on hardware rochester were quite a while. kindle in many arenas. different devices and a lot of different technology unique to the kindle. we have seen their attempt at television. they are also willing to accept that they might be the only business in the world really willing to do something with lower margins from others are phone carriers.

>> at his right. they are very patient. we have seen in all the categories the first urgent of a new category from amazon. they never knocked it out of the art. the first kindle fire did not get alert reviews. bezos has such control over the company, he can really invest without shareholders and there. what we will do tomorrow in the smart own category is the beginning but they will continue to reiterate. class can amazon's bottom line be changed by the phone question mark -- phone? >> they are investing heavily. if you get closer to the customer, you do not have to go through a google or an apple. you get the awesome or who owns the phone to buy more because they are maybe in stores taking pictures of products. perhaps over the long-term -- >> it could change the top line. the way a phone from amazon, which has so many customers already know what so many very part of mission or the customers

come the credit history of the customers, a big hurdle. it could be massive in the way people carry their phones around . the have not taken off in the same way eric s we were looking at the height phones in years past. from google, facebook first, , the hairy, google's nexus windows phone has not done very well, you could argue. who is to say this would be one of those? wesley will never know. amazon does not really disclose its hardware sales. they may sell through at&t stores, but rarely they will sell a lot of these phones themselves on their web i. >> he still do not know about candle. as long as that business has been so important to them, we still do not know the actual hard numbers and how that works. >> the smart phone market in the united it is saturating. the real growth is happening in

developing markets. i think that is one of amazon's core strengths, its willingness to go and sub that eyes the hardware else, to get very creative with data plans. they rolled out a music service earlier the month. they are trying to set up different services and the innovative on prices and asabilities. it is one way it was done in china, that amazon can really differentiate. class an issue that is orton -- important here, amazon is getting lower prices. what we know about customers using smartphones, those were left user conscious. iphone users spent more on lan -- online amazon users. amazon might go with a lower price phone, they might get customers who do not shop is much, when their goal is not just to drive revenue or a phone business, for what they do not get with a cheaper phone, with a

better phone they might get that. >> good or bad news for at&t? was not because they only wanted to be available through at&t. chipsare only so many they could design. >> we will see if at&t is selling the phones. amazon does not like to surrender that market. is a him he is following -- holding that in their stores, it is hotly good. >> redstone, off your he everything store. you will be in seattle tomorrow. all right. thank you both. a huge business opportunity in china. now we are taking on a chinese market together. he tells on them in net.

-- teaming up next. ♪

>> welcome back. president obama is announced they a new program and is for today to encourage manufacturing. the administration is giving access to more than $5 billion worth of equipment out of 700 federal reserve and development centers irrigating lose equipment like nasa wind tunnel that most inventors could not afford on their own. uber and tesla are part and -- partnering up to test drive tomorrow, offering a free trial for the model s. international -- still facing -- allowing tesla to sell cars directly to consumers and in new

york, governor sign a similar thing into law. bloomberg's matt miller is in co-authornd so is the -- so is the project director at georgetown university. thank you all. i will start with you. move the desk moves seen optimistic. seem optimistic. >> in new york, there are a lot of compromises here in still a lot of fighting -- compromises. still a lot of fighting. almost like one world one and it and then suddenly, when they broke apart, all of the fight came back 100 years later. that is what we are eating in the auto industry. >> yesterday, the governor released a suggestion that they

can keep their five stores -- >> but no more. >> and they can open up nose -- more stores. tesla does not want franchises and does not have franchises. it comes on the same day we understand they talked again in 2015. model x, suv >> go ahead. only selling 22 cars. how much could they make. that is one thing. another thing is this will change in the future. people want to buy cars this way. they vote and they will make it clear and the dealership unions and family groups, whatever they are, will not win the item in the end very lex here is why matt miller is wrong again. it might change in the future. there will not the a change in

new york state. the new york a will limit them. it is fine if you're going to sell 22,000 cars. if you want to compete with honda and ford in places like new york, tesla cannot get here. >> they do not compete with honda and ford yet. they recall millions of cars. tesla -- >> how popular are tesla on the east coast? anecdotally in the bay area, they seem to be everywhere. >> i see them all over the place. they are very popular for superrich people. you will see them, especially around new york and san francisco, where really they costs more than any the in middle america would actually believe, and people are willing to do more than $100,000 on a car. it is a pretty small market and can easily -- easily be met i four stores in new jersey and i stores in new york. sell in the next

five years more than 100,000 test was a year, even when you bring in the model x. they do not really need much more and the consumers that want to buy a car this way, who fairly were in a free country must should be able to buy a car this way and should get to. >> larry, you wrote a really interesting is in the washington post indicating it is not as old as it sounds. why not? defensess are filed or purposes. it is unlike the tesla will have offense of uses. of patent is an odd piece property and one day, it turns into public robbery overnight when the patent expires. 20 years or less when these are different ages. some of these are starting to age. the bigger story was about why

they are trying to do this. they are trying to do themselves as a company doing good and that is all about sustainability. because when you are selling a luxury, you want consumers on your side. that is the only way to win fights with regulators. >> let me tie those things together. democrats saying this is a green company and we want to support this green company. we will change our franchise in the case of new york, suggests and not change the laws because we want to support a company doing good things. yes, it is a car for millionaires but an electric car and closer to good than other millionaires. >> and made in america. more than any of the other american-made cars. >> i think the most interesting and as far as sharing patent, i thought it was interesting is far as insight into the way elon

ask feels about the ceo role agent. his concern was more about this test of electric cars in general than the success of tesla as an electric our producer. if i were a shareholder, that would really bother me. >> what do you think of this partnership in uber? it is a publicity stunt and they cannot really sell that many cars in shanghai anyway. they only have 10 dozen tesla's in there to begin with. it may be interesting if you get a 15 minute attempt at trying to drive a tesla around a super traffic jams up shanghai. i do not know. it would not be that great. let's would you rather have a kitten, is the street am aware tesla from over? >> a tough call. i will go with kitten. thank you all for joining us today here.

the prosthetics of the future. one of the top amputees pick up objects and open doors. they will also sync to your smart phone. a look at the first ionic hand on the market next. bionic hand on the market next. ♪

>> welcome back. facebook has officially released its mobile app. the app was released last week and then recalled. what is the story behind the app? is it a snapchat copycat? covering faith, is it like snapchat? likes there is one

catch. in order to receive a photo or a vertical -- video, you have to send one. within the face book employee community. other than that, this is first day, a first test. what do you think facebook is trying to adapt snapchat? is that the goal? >> mark zuckerberg says in retrospect, the pope was a joke e was a joke. employees at facebook decided this would be fun to build, and then it is a part of their creative labs they're not a big book now.ace -- it is no hit.

>> haber has fallen off the radar. any envelope -- any standalone apps i am missing? >> they were killed earlier this year after they have not been updated in a long time. they have instagram and they still have to prove they could goe users and do not have to acquire every in. >> can they continue to build? >> right. every couple of years we will have a multibillion-dollar acquisition. is that sustainable? we can try new things. some will work out and some will not. class i feel like you get a few days and you know. thank you so much for the update. we turn now to our wire in the

world juries. we are looking at how to technology is changing health care this week. options for prosthetics are very limited but now am a multiyear to chelating bionic hand is commercially available and they can even link up to your smart phone. you look behind the island. ♪ -- here is a look behind the island. ♪ >> i would say this is the most advanced. when you see the opening to the hand, you see the fingers curling and grass in the item i am holding onto. hand wave boarding back in 2006. i went to past the handle behind my back and there was slack in the road and i missed the handle completely. next thing i know, the handle unwraps one time. unfortunately, it was a blood

clot and ended up causing the blood flow to stop to my hand. myself there in my personal knowledge with prosthetics played a huge part. from the day i started looking across that if, they have changed to this day. that has only been eight years now. verynt from open to close, mechanically. not a large opening or anything ike that, to where we are now. ♪ it has got six motors and it so the thumb will move into position on all the fingers move very this is more substantial. as soon as you open it up, it syncs with the hand there is it has all of these different grips. i can click on one of those actors and it will move hand into that position and then i can open and close from their. there.

♪ people come up to me all the time and asked me if i am iron man and batman. he will come up and say, that is so cool. it is making my life easier with day-to-day stuff. when i walk i thought to a coffee shop, i can hold my dog in one hand. walking up to an atm, being able to hold my wallet, cut the card in, simple things that when you hear about them, anyone can do that, but not all amputees can. >> the island. we will be right back with more bloomberg west. ♪ >> it is 26 minutes past the hour. you are on the markets. we just passed the midway point in today's session. the skied you caught up with where stocks are trading now. higher across the board. just short of record highs. the dow at 17,000 points just over a week ago. we are still short of that.

yesterday, reserve inflation at two percent. whenhing to think about unemployment is driving lower. i will be back in about a minute on the market. ♪

>> you are watching "bloomberg west." systems more than $5 billion. the companies are in talks. looking to acquisition to improve growth. sales growth has been sluggish for the past quarter. the biggest acquisition since -- time now for the yahoo! chairman. he formerly served as the coo of ebay. he served -- currently sits on

the board of ebay along with yahoo!. a focus on how to find valuable employees early in the game. a company in the spotlight is twitter. four in recent months, including its coo. takenteps to twitter be -- taking? we asked. you were a coo. i'm curious to see what you have to say about the situation. like thisee annex i and the coo leave a company that just went public, what do you think? what is going on? >> first of all, i do not know exactly what is going on because i am not inside. but i would say a coo is an interesting role and wind differently in a lot of places. a lot ofase, operational background but a lot of coo's are more sales and marketing people who played to the strengths.

what is really important is for companies to identify what they need and make sure there is a andistry and a partnership a very strong bond. >> we were thinking of sex vessels the auto is. we thought of sheryl sandberg. tim cook used to be the coo of apple. there are times where it has not worked out. the coo can be a weird role. in some ways, it can be more difficult to succeed. it can be ambiguous. >> i was coo for years before he became the president of technology. there was a lot more definition about what you were supposed to do about -- as a cio or fo. if the fo is much more -- many companies do not have the auto is. a tandem thatally

goes to offset things the ceo does not want to focus on or needs help on. i had a beautiful partnership and relationship, and we were really a great pair. >> ben has written about being wary of shares and other investors said they will not invest in startups if you have a coo. do you think companies should avoid creating that position? >> it depends on the size you are and where you are and, frankly, most aol jobs that are so big that having a trusted lieutenant to do a lot of the angst they are not excited about doing is something that works well or maybe stronger and brought more of technology rotted pieces and operational pieces to ebay. it's on of strategy pieces and marketing. it was really him orton we have had carved out

coo's in general need to have an ego meeting, if you have a really high need, that could lead to issues. >> the cost is working on bringing in new talent, his new head of rotted. find good people to fill the very important roles? >> it is much easier at twitter then it probably is when you're getting started and trying to grout who to invest in. great you ofas a what he needs and he should be thinking about what he needs at least years from now heard when i hire, i always have tried to hire someone who would be willing to do today's job at the scale easy. when you're the size of twitter and you have got to figure out what you really need most, the reason i joined ebay's because he needed someone who could stay on their systems and was willing

to do the heavy lifting when a lot of people who got called for the job went away screaming, i do not want to do that. i thought it was pretty cool. class i was speaking with a twitter investor whose that once the culture of the company is set early on, it is difficult to change. twitter has had many management resell for. will it be to get the house in order truly? >> leadership transcends almost every in, in my opinion. had one culture, we implemented another culture tied much more to execution and making sure we made commitments and lived up to those. i am not at liberty to talk about yahoo!, but you can the and massive cultural transformation that is happen in a short time. it is all about leadership. you have to figure out what to

take with you, what to stop doing that used to work and does not and what to start doing now. >> when you advise companies, at the earlier stages, how do you suggest they find the best evil? it is obvious leave at her -- it is obviously better to make decisions. that's my best career decisions and hiring decisions have been people i promoted and they went way further than you might have ever imagined. wereof my worst decisions bringing in the rock with the pedigree from the outside. bet to promoter from within? person, andow the you should give them every opportunity to try to step up. at ebay, we find people stepping up in amazing ways. what i look for in investment companies is something that is street smart.

i mean not just a good you, but knows how to get it done. companies, exemplifies that. a scrappy guy who came from humble beginnings, got bored at school and started a company and now he is rocking and rolling. street smart is one. i also look for somebody with a bit of something to prove. the underdog kind of mentality. an entrepreneur from an early age who was out hawking papers and building a product, doing something when they were 10 or 12. that is a good riveter. finally, passion. think of mark bene hoffman, how the world told him he was crazy about the cloud and where it is now. it is all important. >> what happens when you make a mistake? >> fix it fast. everybody makes mistakes. if you ask people, do they wish they had fired anybody a lot

more slowly, most times, the answer is no. >> but you want to give that person a chance and you want to save face. >> yes. the first thing i would do is, is it fixable? if it is not, how do we treat them with dignity and respect on route to their next gig? higher -- a ms. higher -- a mistake and hire is not the employees fault. >> i love our office hours. i always learn so much from you. thank you so much. as google and apple expand health products, these companies collect your data. we look at why health apps could be the key to their success next. ♪

>> i am emily chang. this is "bloomberg west" on bloomberg television streaming on your phone, bloomberg.com, amazon tv, and amazon fire tv. -- in wiring the world our wiring the world series this week, help junkies. how can doctors and hospitals put this to use? our resident health junkie, cory johnson is with more. >> a twinkie junkie. i do not know. emily, so many in, these platforms that give a lot of data and gather a lot of data. now to talk toe me about the rowley's things have and the future of health tech. i do not use your apple but a lot of friends do. i am so thrilled you were doing this kind of work.

>> it is incredibly powerful. have lost over 150 million pounds combined. they are -- they have misplaced it and are out there looking for them what do you know? -- use?the typical use >> when you are as a guest we are, the demographics, 65 million users. the start to resemble population as a whole. we have a really broad set of users. a lot of people are bodybuilders, pro athletes, cyclists, people who have medical conditions, and a lot of people who have never exercised or four, just trying to lose weight and leave -- lead a healthier lifestyle. >> is the basic law of other note -- thermodynamics.

measures calories in and calories out. >> it is pretty similar. almost all diet, that is what they're trying to do, get you to complete the calories you eat. thannsume fewer calories you burn. if you do that, you will lose weight. that is how we try to help people. >> talking about how the case teasing me, i was tend to be concerned about my fitness and lately i run. i use the up tracker app to monitor my steps. what we start to understand about these products is it is geared toward fitness geeks and not people who would benefit. >> i do not know if that is the case with our population. we have a lot of everyday evil. as people get engaged with my fitness pal and have success with it, the kinds of things you wanted to get more sophisticated

about their exercise routines. it is not just about calories, but also the nutritional balance. are they getting enough nutrients? are there macro ratios correct? carbs, proteins, fat, how they keep those in balance. those are the kinds of things people start to do as they become more power users of our product. >> where is the money? >> there is a ton of different ways we think we can monetize our service. one is just this product has value to people. it is an incredible pinpoint for people. it affects their job prospects, social life, and so they are willing to pay. it is very clear if we make a premium product with value to users. >> look at jenny craig, look at weight watchers, look at the gym. a lot of money to be spent. the golden goose and all of this will be the insurance companies and employers who want employees

to be healthier. >> there is a change happening in medicine today. this movement toward accountable care is driving physicians to shift to well care. a lot of physicians will help people get ahead. >> are they writing the checks yet? >> there are early signs that is happening. it will definitely happen in the future. the idea of digital therapeutics. products and services that can have an impact on people's lives that clearly has value in terms of impacting health there cost us, in terms of impacting the company's bottom line. should belike ours able to capture that opportunity. >> my fitness pal, good work you are doing. we appreciate and thank you for your time. >> thank you. still ahead, why the founder of spring sir want to organize stories you see on twitter and facebook.

we talked about a social news aggregator next. ♪

>> welcome back here i am emily chang. our solution to information overload, um valley investors and so. recentlynews start up raised more money. the app makes it easy to see news stories shared by friends on twitter and. our senior west coast correspondent jon erlichman joins us now with more. tell us all about it. >> everyone is trying to crack the crowed -- the co--- crack the code. jonathan joins us now. for those who have not played around with it, give us an explanation of how it works.

five thank you for having me on the show. this is a website that shows you top news stories shared by her friends on facebook and twitter. >> that was less than 20 seconds and we have more time to talk. one of the things that was interesting is it gives you the numbers on how many of one particular story have been shared or passed around here it some people have seen value. >> it is a simple approach third we really count the votes. it will be at the top of your feed and it shows context so you can the, 10 stories, five stories, free votes, you can see when you are ahead of time and and stop looking. people still think something more complicated is knowing on. >> as we highlighted, a lot of people are trying to nail news aggregation, including face of itself. what does and does not

work? we may have lost jonathan. in the news aggregation world, what does and does not work? facebook would like to improve the overall experience for people and what they are finding in their newsfeed here it >> you're cutting in and out. >> we will have to check on that. jonathan, hang around. emily, i will send it to you. >> thank you. we will get more with jonathan after the show and bring it to you at a later time. we focus on one number that tells a whole lot. theou mentioned microsystem, a huge deal. i thought looking at these companies, micros systems never mentioned on this show ever in 3.5 years. >> they sell software to hotels

and restaurant. >> an interesting business. a lot of credit card data and data is exchanged. the software is used i hotels to capture data information in the context of an open price deal and now or can is doing a deal where you're getting connections and using the information. your understanding how people are using this. laster's revenues for micros systems were massive air you could take discharges. 1,268,000,000, 85 thousand dollars in revenues. justegg business, capturing data and running the charges for credit cards and doing that software. you go to random hotel sites and the website looks similar. >> why does the deal make sense for oracle at the price? this is the biggest acquisition

eventually since the microsystem. >> decides the acquisition, i think one of the things this does for oracle is it rot inside the place. only things, the that left oracle were database theyeers. they decided wanted software in all different kinds of verticals. if you run a factory on software, they wanted to run software. if you did human resource funding, they went out and did a you'd battle. they really acquired a lot of verticals in the places where people use software, and a lot frome angst that happened the end-user to the processing of data and all of the things in the middle. >> is it a red flag to you that oracle is trying to get growth through acquisition? >> it has changed from the old oracle but it is the thing we have seen over the last decade

from oracle. i think they have seen a lot of innovation name away from them. -- some of this, they throw out all these words out there, but fundamentally, software goes against everything oracle has done historically. oracle has historically said, we will work if you for the next three years and do a long-term implementation so this will be built on infrastructure of oracle payroll. >> software as a service is the direction of the industry? >> right. they are diametrically opposed, saying it is hard for them to code this. this is acquiring another service that really connects them. we are given a lot of information about the weight is being used at the retail

consumer base. it is about six and seven years as i recall. it has been very difficult for them. they get mad when i say it was a . they have mashed hardware and off where together. a lot of this business, they paired away. hewlett-packard, but the reconstruction has gone on and on. you can see them struggling with the -- theying, sell sales force will send you smaller and smaller and we will slow some in there and you can physically build as well as software builds. a very different approach. >> this is a deal we will continue to follow. close to buying is for $5 billion, their biggest acquisition and micros systems, which they bought for $5.7 billion. thank you for joining us on this

edition of "bloomberg west" and we will you later. ♪ .

♪ bloomberg world headquarters in new york, i am mark crumpton. the is "bottom line," intersection of business and economics with the main street perspective. deal toets closer to a buy micros systems, and the senate involve conflict of interest in high-frequency trading, and homebuilders great ground on one million comes up for a second month. welcome to our viewers here in the united states and those of you joining us from around the world. welcome. we have full coverage of the stocks and stories making coverage today.