>> live from pier three in san francisco, welcome to "bloomberg west." every week we bring you media companies, those companies that are, in fact, reshaping the world. time warner rejected the initial bid of more than $up 5 billion. murdoch has said to be willing to pay more in order to get the

owner, all that stuff. the deal was first brought to the attention of time warner chairman and c.e.o. by murdoch deputy over lunch in new york last month. but people familiar with the matter say he was concerned about a number of factors, including the plans, fox's share structure, and the future of cnn. for more, emily change spoke with jeff and neil, the managing director at general catalyst partners. kneel was previously at time warner investments, where he worked with various groups, and emily started by asking what he thinks of the proposed deal. >> i think this deal makes a lot of sense for fox, and what i think jeff has done over the last 10 years is shed poor assets and increase shareholder value for time warner. i think for fox, it makes sense, because they're buying a crown jewel asset.

for time warner, i can see why they think they created a lot of values, so they're pushing back on closing the deal at this pofpblete >> jeff, you've been reporting on this from the very beginning. you know how this started to come together. give us some of the details. >> it all starts with a friendly lunch in new york in early june. jeff gets together with chase cary, and chase drops the idea on him of a big merger. he raises three really big issues. one is, what's the plan for you? your contract is up in roughly 18 months. second, i think my share holders are going to have a concern about this dual-class voting structure that's in place. and third, what's the future of cnn? they don't get any feedback. fox doesn't get any feedback, and finally they is not a letter around june 24 from rupert murdoch addressing those concerns. we'll sell off cnn, that will be right upfront, get that done. second, we don't think your share holders will care that much about the structure, because most of your shareholders are shareholders.

third, they address some of those issues. still never really got much feedback from time warn when her they were told in a pretty terse, two-sentence reply, we're not interested, we want to go about our merry way on our stand-alone plan. >> so let's start with one of those things, and that is the future of cnn. a lot of potential buyers have been suggested, google, yahoo!, cbs, viacom, and disney/abc. neil, having worked within the company, you know, which of those seems most likely or realistic if this deal goes through? >> sure, cnn is a valuable as secretary, according to fox. of course, that's only roughly 10% of the value of the whole entity. the real crown jewels are hbo, its turner and warner brothers. if you think about the natural buyers for cnn, i actually think disney is a real natural buyer for a lot of reasons, mostly because they own some of the largest and most important

cable properties, like espn, etc., that exist today. adding to that set of properties gives them more leverage for agreements with m.s.o.'s cable prearts. i think it's interesting to talk about google and yahoo! and very possible. both seem stretches to me. of course, third base is the natural other buyer. >> jeff, what about the idea that is rupert murdoch doing this to fend off other potential suitors for time warner, like google, facebook, amazon? >> you know, i don't think rupert would do the deal just to fend off other people. i think this is large he feels like the timing is right. they're past the phone hacking scandals that have plagued them. there's this uncertainty environment in d.c., the antitrust situation between at&t and directv and comcast-time warner. i think he's seizing on a situation where he feels it's the right time. again, it's the right time if

you want to borrow money, which he's going to do, because interest rates remain so low. a lot of things have come together in the same period to make it a deal that makes sense for murdoch. >> some of these mega emergenciers don't have a great track record, oolool, time warner, one of they will going back to more than a deck ad ago. we mentioned some of the cultural differences, the rivalry between fox news and cnn. do you think that there would be cultural differences between time warner and 21st century fox, and could those be surmounted? >> i was actually at time warner during that difficult merger, and i can tell you that cultural fit was very difficult to overcome, but i understand the issues that could take place if a merger between fox and time warner happened. as for the news groups, i don't think they could stay as one company, so cnn would probably need to get sold if a transaction did happen, so i think culturally that is less of an issue.

as a larger company, you have very different cultures. you have different properties inside of the cable networks that would be difficult cultures. i think it's a really big question, and a merger would have to be done carefully, and sore a very significant time, keeping companies separate is the likely outcome. >> what about the relationship between bew kerr s and murdoch? you were talking about, will executives stick around? would jeff stick around? >> right, in the letter that rupert -- after they did not get a response from jeff, rupert sent a letter back and asked jeff, we would want to you stay on going forward, but it was also very clear that bewkes wouldn't run the company. they'd want him around, whether it was an advisory role, but clearly this is a murdoch and/or chase cary operation to be run going forward. >> neil, how do you think having worked inside this industry, how do you think a merger like this would reshape

the industry for better or worse? we know comcast at the same time is trying to buy time warner cable, at&t is trying to buy directv. you haven't seen a merger of context-focused players yet. >> sure. i think the distribution consolidation is on the way, and that's already started, and it's going to continue, which i think is very bad for consumers, very good for the companies. it's bad for consumers, there's pricing issues, and in terms of internet connectivity, etc., and that's a concern on this side. on the content side, it hasn't been to the same level and i think it's going to be necessary for it to happen. so this is a $150 billion company. it has significant leverage, given espn and other properties. some of these other companies, whether it be time warner,

recently just a few years ago, was trading in the $20 billion to $40 billion range. to have leverage with your distribution partners is probably going to be a necessity for these content owners to consolidate over time t. makes sense from a business standpoint. i'm just not sure it makes sense from a consumer standpoint. how do you expect this to play out? 20th century fox has suggested they're willing to pay more. time warner has said we won't to want consider this, while comcast and other potential suitors like at&t are busy dealing with other potential acquisitions. how do you expect it to go from here? >> the ball is in the court of the shareholders now. i think roughly 70% of the time holders are also holders in fox. that's where the came moves now. fox itself are going to be prevailing upon the large shareholders and saying to them, listen, only you can get time warner to move here. hue period of time is willing to up his offer, but that's not

going to happen unilaterally. that's contingent on being able to engage with time warner, get access to books and see if here's more synergy there. really, this is all about the black rocks and big institutional types. you know, if they start to weigh in, lean on time warner, then you see something happen. >> that was bloomberg news, jeff mccracken, and the managing director with emily change. in terms of the fox and time warner might just be the beginning of the battle. we're talking about some of the regulatory hurdle that has a potential deal could face. ♪

>> welcome back. one of the central road blocks to the merger between fox and time warner are potential regulatory concerns. if the two sides agree to a

deal, what are the issues that can prevent it from winning government approval? emily and i spoke with former f.c.c. commissioner, and we set about asking harold if there are issues other than cnn these companies need to be concerned ith. >> if the deal goes forward, a lot will depend on how the antitrust agencies define relevant markets. it will be everything from the cable d studios to the networks, to other assets that time warner and fox have, both in the united states and, frankly, around the world. >> talk about some of the legal frame work with which the f.c.c. will look at this. >> well, the f.c.c. will look at this candidly. i don't think they have any legal foundation to look at it at all, but that won't stop them. these are two entities that are heavily regulated by the f.c.c., so they're going to take a good, long, hard look at

it and see how they're going to e able to affect the deal. they'll do what's called a public interest standard, which is whatever the f.c.c. decides it, and they'll look very heavily at the cable programming and also look a lot at the bargaining power and negotiations between the cable programmers and distributors, which is really what's driving a lot of the recent memoriers, certainly comcast, time warner, at&t, directv is very much about seeing who can have a lot of bargaining power in the negotiations between distribution and content origination. >> they're already looking at comcast, at&t, directv. i want to bring in susan crawford, harvard law, author of "captive audience," joining from us new york. susan, first off, how does this

deal strike you from a regulatory perspective, aside from the issue of cnn, which presumably would be sold anyway? >> oh, he's exactly right. this is being driven by enormous concentration on the distribution side of the marketplace. the bottom line is hollywood is scared, seeing that comcast is likely to be able to merge with time warner cable. hollywood needs heft to drive this. >> it's not driven by cable? >> oh, absolutely. this is driven by the programming industry, wanting to make sure that they can reach people who love their programming without having to pay whatever they want them to pay in terms of tribute. they need to control their own destiny. if hbo can ever go over the top by itself, it needs to be able to be sure that it can reach subscribers, and that was only going to happen if they have nough power to make that true.

>> why do you think the f.b.i. shouldn't look at this? >> it's one of my personal views that the f.c.c. doesn't have the authority to review mergers. the public is served by two agencies, the department of justice and the federal trade commission. you have hundreds of hard-working civil servants who work at these agencies. they do a wonderful job at reviewing mergers. we don't need the f.c.c. to review it as well. >> how do you see this playing out? time warner has already said we don't want to consider this when other potential bidders are all tied up dealing with other acquisitions, also verizon potentially, over the next few months, how does this actually play out? >> well, look, jeff bewkes has to be nervous, because if this goes through, they're going to control about 70% of american householding, the only choice for high-speed data distribution to those households. bewkes has to worry about

eventually being acquired by comcast. he's going need some partner to give him some heft. maybe that's google, who knows who it is. there are only a few players left on the board with whom he an deal. >> why should or should not the f.c.c. be involved here? >> well, harold, when he was commissioner of the f.c.c., voted to approve all of the mega emergenciers that have occurred during his time, so he's presided over, in part, enormous consolidation in the industry. the f.c.c.'s broad public interest mandate allows it to look out for the future of american communications. that's very important. they see how all of these pieces fit together, and it's very relevant for them to get a chance to look at this deal. >> harold, how see this triggering a continuation of a spate of mega mergers?

>> oh, it's hard to predict the future. it's hard to know whether there are large mergers down the road. thank you to susan for noting my continue, but she didn't mention that i dissented on the grounds that i thought the c.c. had no authority to actually review the mergers at large. i do agree that the f.c.c. has the authority to review the transfer of licenses, just as it does for the hundreds of thousands of license transfers that happen routinely every year. >> susan, what are the issues that you think the f.c.c. specifically would address that the justice department doesn't? >> well, they can think about the future of over the top. right now they're looking at the issue of interconnection between the networks, the pipes and wires that networks uses to reach comcast subscribers,

having expertise in that issue is going to help them event whether time warner in the future as a programming company will have the freedom to reach subscribers. so it gets to look at the entire ecosystem of information and explore the deal through that lens. >> that was emily and i with author of "captive you'd convince, susan crawford, as well as the former f.c.c. commissioner. still ahead -- apple and i.b.m. have put aside some long-standing differences to form a new partnership. we've got details about the deal about the two tech giants together. ♪

>> welcome back to the "best of bloomberg west." apple and i.b.m. have been rivals since the dawn of the personal computing era, but the two companies have put their difference as side in the

interest of growing both businesses. apple and i.b.m. teaming up to developance on the iphone and ipad tailored to work with i.b.m.'s cloud services. emily and i spoke with the owner to talk about what this deal means for both companies, and we start by asking how big a deal this really is. >> first, it's how the tables have turned. i.b.m. used to be the company to accept the agenda for technology, and now apple will do that, so that is a really clear sign that we are seeing much weaker i.b.m. as a tech company. secondly, i read a lot of stories about this being a great move for apple. i think it's a defensive move by apple, because they were out of the market y android.

from that standpoint, this is a good combination for them. i tweeted this yesterday, i called it i.b.m. had just another channel partner for them. eventually, that's what it really is. instead of selling in the consumer market, they're using i.b.m. to go into the enterprise. from that standpoint, it's a net positive for them. but it's still a defensive move. it doesn't take away from the fact that android is more flexible for the enterprise. >> you wonder if i.b.m. can strike the same deal next. if every one of the fortune 500 companies sold additional ipads and iphones, it really wouldn't add to more than half the revenues for apple, but it really speaks to how big apple

is. i think it's a big deal because what it could mean is the holdout, the blackberry users, the corporations that just refuse to embrace any kind of apple products are no longer the holdouts, and that's -- the notion that i.b.m. and apple compete is a 30-year-old notion that's not as important right now, but it really does signify something different, that the last sort of boundaries of apple's reach have fallen. >> i think the shift to mobile computing has created a new class of volunteers. they are looking forward and becoming the people who set the agenda for enterprise computing. you see i.b.m., dell each week, these are the companies which , on the n behind wane, so to speak, and that's what it really is. from that standpoint, i think this is a positive for apple. let's just face it, right now,

i've had the better tablet in the market. >> but ipad's sales are slowing down. >> the new device is impressive that does a lot of things. >> i'm really impressed by tim cook's ability to strike a vital partnership and do out of the box things to make sure that the revenue stream keeps going, and i think it's very easy to forget that this is a company which they're trying to become big. >> apple is still trying to do something. it's the biggest company in the world. >> it needs to be bigger, because the market share is not that great. . ey need to make more money >> here's my question about apple. we see a check of deal, photos with dr. dre and jimmy iovine,

this sth a new apple that is more cooperative than steve jobs' apple? >> this is definitely a new apple. i think this is not, you know, tim cook's apple. you can see the clear comblints on the company already. i think this is more execution-oriented, more the dea of partnerships, more open , more willing to be adaptive to the new world. >> is it visionary? everybody looks to apple for new, great partnerships. >> it's smart to get the biggest retail neither world reselling your stuff no. one would be doing fanfare if they signed up with apple, but it would be a very big deal for these guys. it's a big deal to be out there hawking this gear. the notion that, you know, i.b.m. needs this badly. i.b.m. needs to have the best solution available, and when they weren't selling the ipads

to their corporate clients, i'm sure they were thinking, well, we'll get them somewhere else. i.b.m. has seen nine quarters where they haven't seen sales grow at all. they've boosted earnings per share as opposed to earning more money and performing better. so i.b.m. certainly needs this. >> right. and i think you talk about visionary, what apple does, which is visionary, is not seen very easy by the public. all the things they do, the phones, the tablets and the devices they make, all the technology, the materials, innovation, we don't see it. we just use it. and i think that's the new apple. that's what we have to get used to. like, you know, you might think about a bigger apple iphone as just a bigger iphone, where what happened underneath the screen is something which are not a lot of other people do. >> that was emily change and the founder of om. microsoft announced a big round of layoffs, but what's next for

the software giant? we're digging into the plans next. ♪

>> welcome back. microsoft has just announced the largest mass layoff in company history. the new c.e.o. tries to remake the company. they have as many as 18,000 jobs over the next year, and that amounts to roughly 14% of microsoft's workforce. but more than 12,000 cuts are coming from microsoft's newly acquired nokia unit. emily change and i spoke with the venture group about the layoffs, and we talked to him about what this could mean at the company.

>> we heard them redefine the strategy at a broad level, about platforms and productivity. we started to see a change in the culture, and we're really seeing that up here in seattle, too. 's competing, much richer, interacting with the community out there, including the open source community, and the thing about culture and listening is you need to be able to execute against that. this set of layoff social security really about simplifying and streamlining and helping the company execute now that they've got a shift? strategy. matter? -- does it this is proof that nokia is just a big acquisition. is that that, or is it more to he nokia cuts in particular? >> the types of jobs they have now cut. there were some announcements today, and they plan to cut. you're right, the nokia thing

is different. i think the nokia thing is more looking back to the platform and saying we really -- how much do we really need to be he handset manufacturer in that particular strategic focus we have going forward? i think what you're going to hear more about, maybe as soon as next week, there's going to be a greater and greater effort azur ime, technically the stack, but fast and increasely data in the role that data scombare data-absent services play over the next 10 years. >> we knew the layoffs were coming. but we've been talking about how more modern companies like facebook and google have built uge businesses on much smaller companies.

they make not just one hard choice, but many hard choices. if you give them another month, being give them a six-month review. i think we're going to see a lot of positive, early signs. this is a hard set of choices. no one wants to lay off one person, let alone 18,000, but it was necessary. >> matt, let me ask you this. you mentioned open stack, open -source software. what does that mean to you? >> what i think that means is, first of all, microsoft is shifting and saying we're going to listen to what's going on out there in the community. why are people using the software that are not microsoft software, and by the way, what are the challenges and how can we have a role as microsoft in it? so, for instance, i wouldn't be surprised at all for them to be embracing some of the emerging -- look, languages like python have been around for a long time, but are now merging into this world of data analytics.

what we've already seen with is background that they had yeah, we're going to run linux there. if you don't know what's going on, how can you be relevant as microsoft? that's the culture shift that's taking place five months in. >> there's a huge tech community in washington. describe what the impact, taking over, the ripple effect of these layoffs. how will that be felt throughout seattle and washington? >> i think we can look at it in the short term and long term. in the short term, you know, it's hard for people to be forced into this kind of a transition, but again, i think most people will have little trouble finding opportunities in our economy up here. i think in the long term, serve rooting for microsoft to be one of the big technology winners and survivors. i think five months in, people are very encouraged and cautiously optimistic that they're making some early good

moves, and he's trying to inspire through the focus on cultural transformation, now tructural chfings with steps lead to mike soft being there. >> come up -- if you watched and tweeted during the world cup final, you weren't alone. the tournament saw huge tv ratings, record tweets per minute. we're going to break down the numbers with twitter's vice president, next. ♪

>> welcome back. i'm cory john sofpble germany's 1-0 victory over argentina at the world cup final drew the third highest television rating

for a world cup match on espn or abc. the game was seen on nearly 10% of the homes in the u.s., but television was not the only winner. twitter set some records of its own. jon erlichman spoke with twitter's vice president of global strategy. what made the world cup such a big moment for twitter? >> if you look at the world cup as a whole, it's the one place where professionals, fans all came together to celebrate. it was celebrated on twitter, and it was a huge deal. you think about, what would you say is the biggest win this year so far? >> me, gosh, i don't know. >> maybe the ellen selfie. >> the ellen selfie. i don't know, donald sterling. big social media moment. lebron? >> lebron, yes, always a big social media thing. if you think about this feed, that was 254,000 tweets per minute. that happened almost every single match on the world cup.

the game yesterday was 1.5 times more tweets than the super bowl. if you think about the overall conversation around sporting events on twitter, yeah, the game, germany, and brazil broke all records, 35 million tweets. >> ok, so there were a lot of tweets, a lot of engagement, but what about new users? how many new users do you think you brought on? >> well, we don't have our financial earnings call for the second quarter, so i can't talk about the users or revenue, but what i can say is it was a really big deal for broadcasters. we worked with fifa and official broadcasters, so except for broadcasters, there's no other place where you can see comments, analysts, instant replays. we worked with espn, with itv in the u.k., with univision, and we had instant replay of what was happening on the world cup on twitter.

everyone was on twitter just to content. ficial >> what about on the advertiser side, the brands? if we think about brands that may have come to twitter because of the world cup and maybe will now stay, any sense of that? >> yeah, so when i think about brands that celebrated twitter, they came there because people want to connect with their passions, and brands want to connect with those people. what was really cool, they were doing it in the moment on twitter. you think about official sponsors like mcdonald's, they were able to execute and dream up the campaign. twitter is one of the only places in the world where you can do this. they did 57 countries in 15 different languages and celebrated the world cup with their fans on twitter. you also had people like budweiser who, for the first time ever, the man was match was actually determined with

voting on twitter, so official fifa and budweiser voting on twitter, you had people like adidas and visa, who actually connected to their tv campaigns by tweeting hash tags that you can then see the commercial. then there are moments you couldn't have predicted, snickers won the moment with a tweet that was more satisfying than italian. we're seeing brands of all kinds come to twitter. the world cup and, you know, every day event, they're celebrating on twitter. >> i'll let emily follow up. but just to clarify, when these big brands are focused on the world cup, are they basically shifting all of their focus to the world cup, or should we consider this almost like two campaigns for any of the big andans that are on twitter and planned to be there? if this added, in other words? >> yeah, that's a great question. i would definitely say this is additive. when we work with advertisers on twitter, they haven't always honored everyday strategy, which is, what are the topics

they care about every day? if you're someone like snickers, you care about being hungry, and every day you're talking about that on twitter and you're having fun with people actually selling product, and then a moment like this is their chance to comment on culture. so whether it's the world cup or the super bowl, that's really what they're doing, which is getting into the pace of culture and being relevant. >> so you mentioned the suarez moment, which was quite a oment, snickers seized it. you did see more engagement with twitter. but the world cup happens once every four years. these moments are rare. you don't know when they're going to happen so. how can you convince brands to focus on twitter only or twirs first over facebook? >> i don't think it's an either/or. it's just like with tv, it's not either/or. every platform has a strength. twitter is about what's happening right now. for every brand, whether it's the world cup or super bowl or tuesday, there are things that are happening that are really relevant to them.

it's about what's important to you and what's important to people and how can you connect that every day. when you think about twitter verse, television, it really is an additive part of the medium. >> that was emily and jon erlichman with global strategy. >> lebron james is heading back to cleveland. we're going to break down what it means for the nba, the tv networks, and lebron james' marketing potential. ♪

>> welcome back to the "best of bloomberg west." i'm cory johnson. lebron james is rrning to the cavaliers. james stands to make a lot more money as well. he already has endorsements with samsung and could become a prime target for brands looking to expand their roster of

stars. for more on his business smarts, emily and i spoke with the former espn vice president, as well as the style caster c.e.o. he's a former v.p. of business development for lebron james and a cleveland native. we started by asking ari, gven his personal experience of working with lebron, why he thinks lebron chose to go back to cleveland. >> he's not only such a special athlete, but a special person. dealing with the things he dealt with, even as a teenager, just wise beyond his years, and it's such a nice story. obviously dan gilbert is our lead investor, so i've always kind of felt connected to both of them. to see the way the story has played out, just as a kid from cleveland, it's the most phenomenal thing. but actually knowing both these guys, seeing them rebuild the city, two of the great entrepreneurs of our time, coming home, homecoming story, the same way that dan did in detroit, now teaming up with lebron. >> dan gilbert, the owner of

the cleveland cavaliers, and we talked about what lebron is doing off the court. he has the luxury of signing a deal, making a decision as a free agent. is he worth more on or off the court? >> so much more on the court, and here's why. he has now made the break on the lake for all of cleveland and ohio. think of the fact that right now, and i was just talking with some of the nba broadcasting folks, there are 25 national appearances coming towards the cleveland cavs they did not have this year. that's the maximum you can have. think about the fact that he eld up the signing of 10 players that then cascaded from his announcement on saturday. and think about the fact, you were talking about dan gilbert, ari, think about the fact that besides richard nixon, who has made such a comeback in terms

of perception from four years ago in cleveland from nixon in 1962 to 1968, i mean, now he's the king of ohio. i thought you were calling for a subsequent comeback from nixon, which didn't happen. i wonder -- i've covered basketball for a long time, and i didn't expect this job to be covering it again, but i wonder, in what ways do you see the valley created, the business opportunities changed media al media, by a new landscape, things we saw with the world cup. i'll take it from the media tandpoint first. the estimate for the cavs, if they have the kind of success that the heat had with four finals in a row.

that's just the beginning, the tip of the iceberg. but now cleveland and ohio have, in a sense, they can become boston, which has used s sports teams to push its commerce, it's tourism, and it's entire image. this is an ohio rising story, which i think has business implications far beyond the basketball court. >> now, ari, you know a little bit about lebron's inner circle, you know, previously it was a lot of his close friends that worked with him. do you know what that is? i know a lot of them were very upset when he left cleveland, and he probably learned a lot from that experience. >> yeah, the media attention is usually blown out of proportion. there's a lot of people that don't know the inner circle, everybody comments about the inner circle. but the truth of the matter is these guys are geniuses. they're good guys. they want to protect lebron. thee all known each other for

years. the loyalty is unbelievable. and again, even as len mentioned, this is a homecoming story. this was about something much greater than basketball, and it's amazing to see the story told. as a kid from cleveland, ohio, this is a town that's been down on its luck. as sports fan, we've seen the shot, the drive, the fumble. we saw the indians lose with two outs in the bottom of the ninth in game seven of the world series. we've seen this story before. what lebron is doing, what dan is doing, what these guys all game together to partner to do is something much greater than sports. lebron is talking about kids coming home. this is a town that had a serious, serious brain drain, and you're getting all these kids to come back. again, it's very similar to what dan gilbert is doing in detroit, and they need to be commended. it would be great to see all the haters come out and apologize and show some respect for the great things these guys are doing. >> he's no craig ehlo, but if you look at the way that lebron is -- you know, his criminals

unbelievable, fantastic player. i wonder if you can show his view on technology, so i wonder if that's different, not just because of who he is, but maybe the generation he comes from, but this is a generation. i don't think there's any debate about that. it's a credit to the work that donna s and maverick has longside lebron. you can only make so much $20 million a year as an nba player. your nike deal is only going to ring so much. it's about the other things you do, the other investments you make, and it's a very, very -- i mean, lebron might be the saveiest entertain sports athlete, businessman, maybe ever. they show the pictures of him rolling around with warren buff sandeth like, but this guy is a businessman. you even look at his nba contract while everybody else is signing max dollars, he's signing a two-year deal for a

very specific reason, because he knows the collective bargaining agreement is coming up. there's going to be more tv dollars at stake, and then he'll cash in again. these are very savvy guys. they understand technology. they're at the forefront of their generation and doing amazing things. >> that was emily change and i alking to len and ari. efforts to roll out the pink mustaches in brooklyn at a regulatory road block, something's working hard to launch in new york. what does it take to be a driver? ♪

>> welcome back. it's going to be a little while longer before the lyft cars hit new york step. the ride sharing service will delay its new york launch until "all the i's are dot and the t's are crossed."

it may take a little more t.l.c. before lyft gets into brooklyn and queens. what would it take to be a lyft driver? matt miller got a lesson from the lyft co-founder. >> lyft is trading in the hills of san francisco for the cobblestone streets of brooklyn. while the startup typically requires four-day cars, they made an exception to allow me to drive in style. why do you guys pick brooklyn and queens rather than, you know, manhattan, for example? >> the need for transportation s greater. ou have 95% happening. so people need affordable transportation here, and that's what we're all about. >> the company just received $250 million in defunding and is burning through some of that cash, offering the first two

weeks of rides for free. >> it's a true opportunity. what we're building is at the scale of building out an international highway system, an international railroad, and it's a massive opportunity. >> he says it's more of a social experience than a typical limo service and suggests you ride in front and give the driver a fist pump. what's the deal with the fist bump? >> all these things are suggestions. they're not required. but it's just ways to break the ice. i was talking to a driver last night. we had a driver event, and at first i did not get, it but then i just started meeting people, and it helped kind of smile from the start, break the ice, and have a good conversation. and if you want to, you know, be quiet, sit in the back, you're welcome to do that too. >> the company aims to disrupt modern taxi pricing, how much you pay depends on what you thought of the ride. >> cheaper than a taxi? >> yes.

>> cheaper than hoover? >> and the passenger decides if he wants to pay more or less? >> that's right. >> crazy. >> for now, the new york service must originate in brooklyn or queens. >> but people can say, i want to ride to manhattan and lyft will take them there? >> that's right. >> i mean, just to be clear, they're allowed to leave brooklyn and queens. >> oh, yeah, whenever we lanche a city like los angeles, we start in one area. we start in santa monica, then expand into coverage area, and we plan to do the same here in new york, with brooklyn and queens being places that need it the most. and, you know, there's a lot and ou know, culture interesting people. so when you get them together, we think it will serve new york really well. >> that was the matt mill we are the lyft co-founder. that does it for this edition of the "best of bloomberg

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