>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover technology, innovation, and future of business. i'm emily chang. the federal trade commission has sued t-mobile, accusing them of adding bogus charges. t-mobile placed unauthorized third-party charges on bills dating back to 2009 in a practice known as cramming. the t-mobile ceo calls the complaint unfounded and without merit. google is boosting its music services. the service select songs for users based on a person's activities.

unlike other music sites like pandora, it is curated by humans rather than algorithms. terms of the deal were not disclosed. a single better has won the government did going auction am a purchasing the entire kaisha of almost 30,000 bitcoins. as part of a larger pool of the virtual currency seized from the website. the auction attracted 45 bidders. the lot of bitcoins was worth about $19 million at current prices. to our lead story of the day, for the second time in less than three weeks there is a major shakeup in twitter's top executive ranks as the company tries to boost future engagement. anthony noto has been named as the new cfo. he has a varied background including serving as cfo of the nfl.

he is also west point grad, spending time in that middle east fallen the army. the shuffle comes just weeks after the coo resigned amid reports of a power struggle between himself and ceo dick costolo. cory johnson is here with me in the studio, joining us from san diego are paul kedrosky and jon erlichman. tell us a little more about anthony noto. obviously is very well-known on wall street. why take this job? >> and not just an investment banker, before that he spent a lot of time as an analyst. this is somebody that the twitter executive dick costolo got to know very well. this is somebody who was already going through transition and already announced plans to join

the hedge fund. he was transitioning. twitter was looking for a little bit of wall street love. the frustration that some investors have had with the lack of user growth have left them in a tough spot. here we are with somebody who knows the company's story well who is now essentially going to be in a position to defend the company or better tell their story on wall street. >> weeks ago, he announced he would be going to this hedge fund, code two management, a big surprise to goldman sachs. what do you make of this happening now? >> it is a bit of a strange timing. i do not imagine that they are jumping up with elation unless they have some insider news. it did not make much sense to me, but in many ways, it is a smarter move financially and personally, then going to the hedge fund. this is what twitter needs. they had two quarters where they

thought they did the right thing by wall street, but wall street punished them for it. first quarter, they answered all the questions. second quarter, they delivered excellent ration in growth, and wall street did not like that either. now they need somebody that can speak twitter to wall street. >> a lot of the complaints on twitter have been about user growth and the product and engagement. cory, how much does this have to do with their business? when we look at their finances, things look good. >> fundamentally, because the user numbers are small compared to facebook, which has five times as many users, but the growth has really slowed down. we are talking about single digit growth. this company should have so much more runway. that is something the management team needs to fix and noto needs to communicate that with wall

street and executives. one of the problems that twitter faces is the stock is expensive for not growing fast. in some ways, that is noto's fault for pricing and where he did. >> we know there have been a lot of shakeups in the c suite, in twitter in general. dick costolo seems to be getting the house in order, but is it risky moving so many top managers at the same time? >> it is clearly happening at the same time, so we will conclude that there is something going on. whether these are individual stories that happened over time, that is the question. for example, as we highlighted, the relationship tween dick and their new cfo anthony noto. mike gupta, who had been the cfo, is not leaving the company but taking on a new role. is there bad blood there? hard to say. but he will be

doing something pretty interesting, running this new strategic investment area, which is not m&a, is not business development or partnerships, but it is kind of like google ventures, looking and where they can make some interesting moves with the cash they have from the ipo. >> what do you think dick costolo is thinking right now? why is he making all of these moves right now, at once? from a leadership perspective. >> he has been frustrated probably since their first financial quarter as a public company, partly that they did not execute the way he would've liked, but also feels as if wall street and investors did not see the company the way that he thought. often managers will say that and that is not because the shareholders are wrong but somehow because the manager is screwing up. dick firmly believes that there is a story to tell here, and if he has the right person in place until it, and on the other side, if they do better on the product

side, it will be a much better company than wall street perceives it to be. these are the changes he needs to make, take under control of the product and how the message goes out on the street. you can see, wall street likes it today. >> when facebook went public, it did not look great right away it took a few quarters to get mobile revenue. how much do you think this is dick costolo trying to get people he can trust in his corner? >> it's a huge part of it, but he is a pro. this is not his company. he was a manager brought in to smooth over the bumps. this is still the ongoing story, let's fix this and smooth everything over and put in all the pros in those positions. this was an inevitable move, as was taking more control over product.

these are things you would expect to see with management. >> how often do you see this with a new public company? >> he has been at this for a while. i have known him for 15 years. he has a lot of experience, and he is also getting paid a ton of money. over a million and a half shares, outright grant of stock, another 500,000 options. those options are already worth half $1 million. if he stays those four years, he's receiving stock worth $64 million in today's value. >> and that is more than goldman money? >> probably. it is serious cash. but he also has the requisite experience. he was cfo of a complicated, big media company, the nfl. managing all the different

aspects of that business. he has the right kind experience for this job, but fundamentally they have to find better ways to monetize this platform. the timeline growth, for example, the number of times people click on the time line. a very important metric. user growth slowed down. some other numbers looked better in terms of revenue per user, revenue per timeline view, so they are monetizing better, but growing slower. they need to turn that around and that will take all hands on deck. anthony noto is the kind of person you want to do that. >> we will be talking about this later on with a longtime twitter investor. where do you see this acquisition going, and the broader twitter commerce effort? they hired ahead of commerce, but have not done with it yet. >> commerce is probably still not the lion's share of where the business will be.

it is finding better ways to find effective ads in front of people. you could argue part of the acquisition they made will serve that. they have certainly been rolling out more at products. don't be surprised if twitter puts together a quarter that encourages people -- i think the world cup will also be a good way to engage overall engagement on twitter. a lot of people have been turning to twitter during the world cup. >> a big game today, we will all be watching. thank you. go usa! protesters gather outside facebook's london office demanding the social network give back or donate money it made running ads from a group promoting syria's embattled president bashar al-assad. ♪

>> welcome back to "bloomberg west." i'm emily chang. facebook is under pressure because of ads that it posted. cory johnson is in the newsroom with the story. >> this campaign is staging a protest at facebook offices asking that they disgorge the money they got from running those ads. the campaign director is with us from london. john, how was the protest? >> good, strong support from the public. even people in the offices in the facebook building who were opening windows and showing thumbs up. people are sympathetic to the question that we are asking facebook, which is, if you have done business that promotes such a terrible regime, the thing you should be doing is making it

right, and by making it right, we mean, give the profit you have made promoting an atrocious regime like this, give it back to the people who it belongs to, ordinary civilians who are in desperate need of assistance and food. there are a lot of aid agencies that could provide assistance with that money. >> we reached out to facebook and they said they took the ads down, do not really know who paid for the ads in the first place, but the money did not come from syria, so they felt they were not breaking any laws. >> anyone who knows anything about this regime knows that it's tentacles spread beyond the region and within the region. whether syrians lived in paris or london, they cannot be criticize the regime because it operates outside of their borders. it will not be a philanthropist who decides they want to buy facebook to promote the assad regime on facebook. it is an element of the syrian

regime. it is disingenuous for facebook to suggest the money does not come from an element of the regime in some way. >> it is fairly amazing that not only did you get the thumbs up from the offices, but it is amazing to me that this got 200,000 likes, that this campaign had some effectiveness to it. >> that is what is quite worrying. propaganda matters when it is a crisis and conflict of this scale. for many ordinary syrians, they believe the world has forgotten them and what has happened in syria, so the idea that facebook can do business that promotes a regime that has besieged entire cities and bombed their own people -- just because they took the ads down, we think this show solidarity for syrians.

we have not forgotten what happened in that country. this is unacceptable business. there is a very simple way of putting this right. >> what does this tell us about the assad regime, if in fact they were behind it? what does this tell us about them and their use of technology when the country is in the middle of a civil war and there is international condemnation of the syrian leadership? >> i think this was being done at the time of the sham elections, which assad was running. the ads were primarily outside of syria, so it was an attempt to legitimize the regime and the election. what is interesting is, if you look at the reporting on syria, the world is talking about isis and iraq. the assad regime is responsible for the majority of things that have unraveled in serial over

the last three years. if isis were advertising on facebook, there would be outrage, and rightly so. we are just astonished that there was not more are for that assad, who is responsible for what happened in syria, has been able to advertise, and facebook was able to advertise, make a profit, and hold onto it. >> i think it shows facebook's power in the world. we appreciate your time. thank you. >> coming up, how one winner of the 2014 apple design award is trying to change how we use the ipad. that is next. ♪

>> welcome back to "bloomberg west."

i'm emily chang. is the ipad merely a tool to consume content? if so, one company is trying to change that. storehouse is one of nine apps that won a prestigious designing award. joining me right now is the founder of storehouse, a former senior designer at apple. a storytelling app. what does that mean, how do you use it? >> storehouse allows people to share videos, pictures, and text. people wanted to tell stories that went beyond a single photo, but also did not want to write a blog post, so they can put photos and videos together and lay them out in an interesting way. >> is it like an extended version of imovie? >> it allows you to create something closer to a magazine article but allowing some video in there really as the

multimedia element to this. >> ipad sales are dropping. you are only on the ipad. is that a concern, will you expand beyond that? >> we are looking to expand to the other platforms. we do still think the ipad is a great device. when you look at how the younger generation adopted it, we are hopeful that it will open up creation for a lot of people. >> you have unique experience because you were a designer at apple and also a user experience evangelist, which means that you helped other companies develop apps for ios. >> that's right, one thing i did was really trying to help people take advantage of apple's unique technology and hardware to push the boundaries of software. thinking about what publishing could be on an ipad, thinking about the touchscreen, fast

graphics processor. >> people are using this in some unique ways. talk about that. >> we are seeing everything from a girls night out, take a lot of photos, weekend backpacking trips. also see how some professionals have adopted it. there are award-winning photojournalists using it, documenting expeditions, deep photojournalism stories, cooking recipes. that is the most exciting part, seeing the variety of stories that have been told so far. >> when it comes to the design, what do you think about ios 8 and where johnny ives has taken it? >> really excited. i think ios 7 set up a nice foundation and 8 will add some polish that perhaps 7 did not have. as a user, i am hoping that things will get better. >> you say some of the coolest features are not there yet. what are you thinking of? >> we see what is behind the

scenes at the developers conference. we have not seen the big unveiling of things at the consumer standpoint. since i am not at apple anymore, i do not really know, but i'm always excited about my former colleagues in what they are working on. >> there has been a lot of talk about the state of innovation at apple. how optimistic are you that they still have some more great, world-changing products in them that are coming soon? >> i am very optimistic. my friends at apple who i talk to are excited, they are quiet, which means they are working hard on a bunch of things. >> storehouse recently raised $7 million. how will use the money? >> we are looking to get a great team here in san francisco, we want to do more on the photos and on the web as well. >> who are your main competitors?

>> there are not a lot of folks working on the photo storytelling space. there are some working for writers, products on the web, but we do not see many other apps doing the same thing on the iphone or ipad with photo storytelling. >> we will keep our eyes on you. thank you for joining us. one of twitter's biggest challenges is reversing user growth trends. how can they do it? we ask a former executive next. and you can watch us streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire tv. >> time for on the markets. let's talk about where stocks ended the day. we did have a big rally which sent the s&p and the dow to new records. the dow did get within two

points of that psychologically important level. definitely a big day based on chinese and u.s. manufacturing data. ♪

>> you are watching "bloomberg west." i am emily chang. twitter has a new cfo. it is also making a new acquisition. it has reached a deal to acquire tapcommerce. for more on what this means for twitter's future is a former partner with red point ventures, previously with twitter. thank you for joining us. i have to ask you about anthony noto first. what do you think? >> he has had a great reputation, have heard so many great things.

he has a lot of fans inside twitter. i think about what it means for twitter, and one of its biggest rivals is being understood by the public market. anthony will help translate between those two worlds. >> what do you imagine is happening with these executive moves happening at once? the head of engineering left, lots of shakeups in the product department. what is going on? >> finding the right leaders at the right time to grow and build the company, to expand the opportunities they have. 300 million active users, i think they could be over a billion. they need the right people to get those spots. >> how is dick costolo seen by his employees? >> he is a wonderful manager, he is effective, is inspired by people who work for him. >> from a culture perspective, is there anything to worry about?

>> every company has its challenges and growing pains. twitter has thousands of employees and is now a public company. every phase along the way there will be growing pains, but it is a healthy thing overall. >> tapcommerce, biggest acquisition since mopub. why are they buying? >> twitter is doubling down on advertising. we have tons of company being built mobile only. for twitter to keep on doubling down on mobile advertising is part of them. tapcommerce works on retargeting. originally companies would try to get new users into the platform, but now that mobile has matured, tapcommerce builds advertising products that bring people back into products. if you are an ebay user, they can target one of their existing users with a product they think they want to buy and bring them into the mobile product. >> not long ago, twitter hired a head of commerce but nobody knew

what twitter was planning to do. do you have a better idea of where they are going with this? >> i think you saw some news today, about nathan hubbard, who they brought in from ticketmaster. he is incredible. i think he is the right guy to help them figure out what commerce is about. if you think about the evolution of what twitter is about, building stuff in stream, they are consuming something, and putting a buy now button next to products that people could buy instantly is the right path for them. >> you think that is what they will do? >> i saw some news and some testing for that earlier, so it may not be too far off base. >> how will this help user growth? >> what is most important is building cases for people to attach and learn how to use twitter. the more ways they can get twitter out there, instead of those current active users, means a lot to them.

if you think of their global reach, over a billion users. people are undercounting this reach that they have. one of the biggest networks out there. >> one of the things that dick costolo and other cofounders have said is it does not matter how many people are using twitter because you see tweets everywhere, on tv, in magazines. is that true, or do they need people to be signing up and using the product to make money? >> that is where the public market has misunderstood twitter, and the general tech press. it is not like facebook. it is not just about the monthly active. it is about the billion-plus users they can reach on a monthly basis. every webpage you go to, it is on tv more often. i think of it as bigger than facebook in many ways. you hear about it more on a daily basis. it is so pervasive. >> you have been at red point for a year? almost a year.

how is it going, what trends are you following, how has your twitter experience helped you pick and choose where you want to place your bets? >> it has been a big change, a change from operation. lots to learn still. the thing to learn is trying to find out what drives user behavior and what motivates people to engage with applications. the average user has 40 applications on their phone. what will get them to log back into yours? what is the behavior that you will attach around? for twitter, it is people opening up to see that new information. for me, it is figuring out which businesses can be the next twitter. >> so which businesses are looking like they would keep people coming back and opening their app everyday? >> the ones that can get the repeatable behavior. uber nailed it. people taking public transportation and they built an incredible experience around that. there are a lot of exciting

businesses around that. >> how are you affected by valuation? you mentioned what was happening in the broader environment. are these high valuations trickling down to where you are in the earlier stages? >> you have seen some fluctuations. enterprise has stayed a little bit higher, consumer has been a little depressed. it affects the valuations at an early stage but it is important for us to try to find the winners in those markets because they can really have outsized values, like we have seen with uber. >> thank you so much for joining us, partner at red point ventures. great to get your inside info. this year's world cup is more popular than ever in the united's dates, smashing ratings records and crashing espn's live stream. how technology is fueling soccer's rise. ♪

>> welcome back to "bloomberg west." i'm emily chang. yahoo! is the latest web company to make a new season of the canceled tv show. yahoo! will air the sixth season of the show "community." the show will begin in the fall. marissa mayer is betting on

original content to bring in ad dollars. return to the world cup and today's huge round of 16 match between the united states and belgium. the last two u.s. games have been so popular on espn's live stream that they caused server disruptions. the u.s.-portugal match was the highest rated u.s. match seen in history. now we have a special guest from surveymonkey. cory johnson is here as well. if i am watching the game, everyone is watching. i do not really watched sports. >> clearly people are watching. the survey we did is that soccer has seen more interest, it is actually ahead of golf now. that might be a little skewed by the fact that we are asking during the middle of a world cup -- >> and tiger woods is hurt, so golf is on the decline.

>> it is so fun to watch. >> it has a long way to go before it catches football and basketball. >> there was a huge spike in viewership compared to four years ago. >> every world cup has seen that. the numbers of the world cup have blown people away. it also goes to show, i think -- this was not in the survey results -- but great soccer with all the passion does excite americans. i do not know that the mls, which is what people generally answer, if they are watching soccer, does the same thing for people. that is part of the issue. we saw that soccer fans tend to watch more online. still, it's a small amount, about four percent versus two percent compared to other fans, but that is because they have to find the streaming manchester game early in the morning or

something like that the rent they have to search for it. >> i just got a number from nielsen on the ratings and they say 3.2 million -- the u.s. games -- english speaking networks, 3.2 million viewers up from 2010, a 46% increase. >> there is more streaming because the games are on during the day. it is not just the technology. it is the fact that i am at work. >> we are all trying to figure out how we will watch today. >> on the car, on the way home, on my tablet. the timing of it. we still found that most people watching sports on tv, unless they watch it live. because sports is on at night and weekends, you are at home and it is easier. if you think about your device, it is longform content, a lot of streaming, a lot of battery and data usage, so it is not mainstream yet.

>> use a more tech savvy, but how do they rely on television versus other technology? >> we did not get into that. i do not know that we know there is a significant difference, but like i said, i think it is more about having to find ways to get access to the soccer game they want to watch. >> you are a huge soccer fan, you have been to three world cups. at what point do you think soccer will become more mainstream in the u.s., where people really do watch it between world cup's? >> it is getting there. it will take time. if you look at kids, more and more are playing soccer. kids are playing less baseball. football, kids are playing less. >> that is a conversation we have been having since we were kids. >> what has not happened is getting the professional sports leagues are not at the level in the u.s. for soccer. think about it.

if lebron james and kobe bryant played soccer, we might have a different relationship with soccer. >> or colin kaepernick. we have football here, we have hockey. we have a lot of other sports. the skill level is affected by that. >> i would love to see chris paul out there on the soccer field. >> i would love to see him play anywhere but with the warriors. up next, a senior vice president at oracle talks about his second love in life, setting off fireworks. he even talks about his own factory and creates some of the largest displays in the country. ♪

>> welcome back to "bloomberg west." i'm emily chang. days after google glass became available in the united kingdom, theater owners banned wearing them inside movie theaters, citing piracy and privacy. the cinema exhibitors association tells us -- google fired back, telling us --

one thing you can certainly record with google glass is fireworks. while most of us only think about fireworks on the fourth of july, some people, like oracle's mike workman, thinks about them all day long. by day, he is the vice president of hardware and software at oracle, but by night, he is in his fireworks factory in the arizona desert creating some of his latest fireworks. he has even designed a special show for his boss larry ellison over the san francisco bay. take a look at this unusual hobby. >> my name is mike workman, senior vice president of hardware software development at oracle. when i'm not there, people can often find me here in the desert making fireworks, blowing things up. i started making fireworks when i was a kid. and you are 12, you cannot be serious about making fireworks because no one will let you.

as i got older, i could afford better equipment and chemicals, the right ingredients to make fireworks. there are a lot of parallels between developing a product and developing something that people like to see in the sky. audiences expect particular things, they like loud noises, different textures, colors, sparks, sometime different intensity. they like a lot of things going on at one time. when i explain to people that i make fireworks, they assume that i am nuts. it is partly true, it takes a lot of courage to make fireworks, they are dangerous, high energy materials. one thing that is fascinating about fireworks to me is it is a blend of art, chemistry, engineering, physics, the energy that you can control for a short period of time to make something pretty out of something that is very powerful. i think most people like watching fireworks.

it is kind of universal. some people actually get emotional. i, personally, get emotional. if you get great music with an artful display with the timing and colors, it really affects me. i like to see what i build and what i do in the sky have the same effect on others. >> that was oracle's mike workman on his explosive fireworks hobby. not even the fourth of july and they have started here in san francisco. every night i'm hearing it. >> i hope they were fireworks, not gunfire. he made a bloomberg thing of fireworks. it should have been boomberg. [laughter] >> now it is time to focus on one number that tells us a whole lot. cory johnson is here with me. jon erlichman is in l.a.

>> 46.8%, according to the controversial facebook mind control experimental study. they put out positive and negative post out to see whether people would post more positive or negative things. it was a secret experiment they performed on users but has since apologized for. they said 46.8% of the time, people would be positive in their posts. 22.4% of words were negative. they tested 155,000 people for one week in 2012 and found that showing people more negative things made them post more negative things. >> huge backlash against the study. jon, what is your take? >> facebook will have to deal with a bunch of stuff, we talked about the twitter model earlier. facebook will have to satisfy

users and privacy issues are always important. they also need to keep young people interested in using facebook. those findings, separate from what cory shared, are pretty interesting. the haters are hated. whether it is facebook or youtube, there are always negative comments, but maybe the positive comments will always win because the haters are not so liked. >> someone posts, i'm having a bad day. i will write, i'm sorry. their negative post has elicited -- i'm assuming sorry would be a negative response. >> i think there are some financial implications here. if facebook can figure out that certain words make you feel bad or fat, they can help you buy a weight-loss product. maybe you will buy more twinkies if you feel good. then they can help to sell more twinkies.

there are financial implications for their ability to control the mood of the viewer. when we think about facebook going into the news business, replacing newspapers, which is something that zuck talks about, there is an implication of having an emotional response to telling people something. >> that is the difficulty of what i have had with their news app. i cannot get beyond the fact that facebook is telling me what i should read. i don't know what you found about it, but i found it difficult to commit. >> it is really difficult and it implies that you will be spending a lot of time on facebook. i will say this. on fireworks, i will make a positive comment if the display is impressive. if the fireworks take off next to me, i will probably post a negative comment. [laughter] >> jon erlichman, cory johnson. happy almost fourth of july.

see you later. ♪

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg l.p., its affiliates or its employees. >> these statements have not been evaluated. thank you for watching. if you are suffering from joint