>> live from pier three in san francisco, welcome to "bloomberg west" where we cover innovation and the future of technology. ahead, zillow and truly a have helped thousands of people by and sell homes. now the two sides are combining. zillow strikes a deal to buy its smaller rival for $3.5 billion in stock. we will look at what it means for both companies. to meackberry ceo talks about the troubled smartphone maker's future. right now, they say they have no buyout options on the table and are focused on turning the business around independently.

he says the chances of success are greater than 80/20. former republican vice presidential candidate sarah palin is launching her own online tv news channel backed by venture tap. it will cost about $10 a month and offer news, video chats and behind the scenes videos. the former alaska of honor bills it as an alternative to mainstream news media. to our lead story of the day -- online real estate rivals zillow and trulia are joining forces. they have agreed to acquire trulia for an all stock transaction in a deal expected to close next year. the sites will continue to operate under their current names will stop they're not combining brands. both sites allow people to find homes and generate revenues as selling ads to real estate agencies. are soaring ona

the news and shareholders of zillow are not reacting as positively. cory johnson is in new york as is alex sherman who helps -- to help to break the story last week. that this isnow officially happening, what are we hearing from both companies about how this is going to work? >> this is a huge premium on this deal. the deal terms are little deal -- are little different than we reported last week. this is a deal for 3.5 billion total. if you back it out before our scoop last week, it's about a 74% premium that zillow is paying for trulia. that's an enormous rhenium in terms of two high-growth companies like this. is why we see zillow stock backing up a bit and trulia stock rising more than the 30 or 40 that arose last week. trulia and zillow will continue

to run independently but over the long-term, we may start to site operate independently and see how they come together over the long term. the synergies are coming from op -- from operating expenditure savings. two companies independent, if you are growing, yet to spend money on app development or market -- marketing development. as one company, you can cut out some of those duplicate costs. >> we will be hearing from the zillow ceo in a moment, but when you look at the numbers, who is the winner at who is the loser? >> zillow is paying a lot of money and that's why the stock is down so much. is revenue growth for trulia so much better then zillow's. it's a younger company but also a money-losing company. shareholders of trulia are the big winners here because the stock is up so much. the real losers are going to be the realtors and advertisers who do not benefit from this consolidation of all.

that is the reason they are probably heaping these brands separate. if you are a realtor and want your advertisement to be seen by people hunting for houses and have people using both trulia and zillow, you'll have to advertise on both if you want the impact from those ads and zillow is figuring that out. plusning these 2 -- one one equals something less than two. if they keep them separate, they may benefit from twice as many ads out there. >> this is the first company zillow has acquired. what do you know about the strategy here? it seems to be becoming a portfolio of real estate assets. >> that's right. this is not the first time a company like zillow in the sense that you're a large online company that makes most of your money from advertising has gone this route. , whichht with expedia owns hotels.com and a few other travel websites all stop and other portfolio company.

that is what zillow is trying to do, seeing the theoretical value could be owning a number of sites, not shutting them down, operating them independently. even though they are the number two and number one real estate website, they do different things. zillow is a website for anyone who wants information about homes will stop current homeowners use zillow to see how much is my housework. trulia caters to people interested in buying houses. it to different audiences and that's part of the reason these websites will operate separately. helped rakeman who the story and cory johnson in new york. and tom stephanie ruhle keene spoke with the zillow ceo about this deal. they started by asking him [audio difficulties]

>> they spent only four of that on them combined. we have a long way to go to achieve what we perceive to be our ambition, which is to sell more media. >> aren't the two of you already dominating and capturing the online advertising dollars? -- >> the real estate advertising online tends to go to a long tail of local real estate sites, including tens of thousands of real estate sites in any given city. that in the aggregate aggregates a lot of consumer audiences. so they are probably the best-known national brands but it's a very fragmented space, especially at the local level.

>> what is your ultimate goal? we heard that you do want to as twollow and trulia separate entities. why not combine them? >> i think it's very important to have multiple brands in the consumer minds eye. other online companies have done this effectively. the weather company operates several and expedia operates several. having multiple brands allows different rants to appeal to different consumers and allows you to expand your overall reach. today, the consumer overlap between the two is quite small. usershan half of trulia's visit zillow and about two thirds of zillow visitors do not go to trulia. there's not much consumer overlap. monday, do you open yourself up to acquisition?

with the convenience of this merger, does someone go after you? we like our chances as a combined company. of successng a lot as independent companies but we thought by combining forces we could be more successful. zillow shareholders will own about two thirds of the company. from my perspective as a fiduciary and board member, i'm extremely excited about owning two thirds of the combined company. it's a better bet for shareholders and owning 100% of standalone. they felt the same way that owning a third of the company was advantageous. it is very early in this category. the merger is exciting, but we have a long way ahead and this is going to play out over many, many,ears will stop >> --

many years. john next, blackberry ceo chen talks about the future of the struggling smartphone maker. i ask him some key questions. will he sell it company? can he turn around by himself? ♪

>> i'm emily chang and this is " bloomberg west." blackberry has had its share of struggles over the past few years. one research firm says its market share peak in 2009 at 21%. today, that number is less than 1%. what does a very ceo john chen have to say about the company's future? i asked him just that. old south base to sap. are you going to sell blackberry also? >> there is a standard answer for public company officers.

>> give me the nonstandard. >> i would prefer to give a lot of values before i even contemplate that. >> as the ceo, you have shareholders to consider. >> absolutely. it's only fair. >> there has been a lot of speculation -- what kind of offers have come across your desk customer but offers as far as personally? >> offers to buy blackberry. >> i don't have any offers on my desk. people like to talk. but talk is not an option. >> would you sell to a chinese company? >> the answer is probably unable to do that. we have one of our biggest install bases in the government. governments where share intelligence and in the g7 . i think there be a lot of regulatory issues and concerns

and i appreciate that. >> what do you give your own chances for success? >> if you are talking about being able to create value, i think i can do that. >> 100%? >> everybody likes to talk about that. i will say better than 80/20. i'm comfortable where the company is today, with how we manage our technology, our thenesses, the margins, distribution channel, all the new product coming out, the strategy that it's into communicating a secure manner of all stuff over time. i think there's enough runway here for us and we scale our expenses to a level that allow us to stay back, invest, and make money. generatingable with more value. whether it's going to be good enough to be iconic again. that's something i need to chew on.

barry'sore on like future, i want to bring in a former equity analyst partner at s k ventures. our editor at large is back from us. johnrote back and said chen is lying. he does have offers on the table. why don't you believe him? >> he almost tipped it off himself when you asked the chinese questions. he started considering in its that i can't do that. even at the levels of offers he broader question is does he have offers at all. just not the offers he wants. it's offers for pieces of the business. it would surprise me if he did not have an offer on the table which is why he trumpets that part of the business and talks

about enterprise and secure messaging. he would like to get that sold and have competitive officers full -- have competitive offers. maybe somebody who can pick it up. build it up as if it's a business and sell it off in pieces. >> that's what he did before he sold to sap. i thought it was interesting at the end when he admitted he doesn't know if this can ever be an iconic company again. he thinks his chances of adding value are good. haver all the people who abandoned blackberries, they may be wondering what the heck is left. if you look at unit sales of like barry's, it's the biggest part of their business and they are still selling tons of them. they sold 13 million last year. that is a lot less than what they were selling in their heyday. some of that is a self-inflicted retrenchment. i looked at the numbers of units they've sold and said we are not

going to sell super low end because we are not gaining market share benefits. but if you look at what has happened over the last six years or so, you can see the pursuit is fall in hardware sales. hardware is still 51% of the revenue for this company, so selling this stuff is the principle that brings dollars in the door. the question is how much are they willing to write that up and what is left? ?o you toss it out the window >> we talked in depth about the future of the blackberry and the handset and why he decided he was going to continue to make smartphones will stop take a listen to that portion of the conversation. >> history has been cruel to phone makers. nokia, motorola, palm. what makes you think you can change history? >> by not following the same play. if you look at what we are

trying to do right now, we are trying to broaden ourselves beyond just a phone. i don't sit there and think i can make another great phone and somehow everything will be well. >> but you did valid to keep making phones will stop >> of course. it's part of our strategy of end to end mobile computing for the enterprise. i do need to make them. >> he did say if he stops making money on phones he will stop making phones but what do you make of that? he says smartphones are still an entry point into the enterprise. >> i agree. but there are a lot of codewords in there. you are talking about enterprise and secure messaging. even building a framework or fabric that they can potentially sell to someone else. it's not because they are going to do that -- it isn't ecosystem

that has been largely abandoned by the development marketplace. when he is saying is this is a great framework if you want secure messaging in the enterprise. dog whistle to security vendors to say we have what you need here. >> what is your take given the recent partnership between apple and ibm? >> that is the -- the kind of thing that can do rapid damage to blackberry. if ibm was only able to provide blackberry to their customers until the day they sign an agreement with apple. suddenly there's a competition within the sales channel that was ibm. you start to look at the pieces of business that stop making sense of hardware is clearly not one. >> our editor at large in new york and are bloomberg contributing editor, thank you. there will be a full length airing of my sit down with john studio 1.0.up on

time warner has big plans to expand their internet presence, but will it be enough to fend off rupert murdoch's takeover bid? ♪

>> welcome back. i'm emily chang. time warner is looking to hbo for user growth that is counting on the internet to help deliver it. the ceo is evaluating new models were hbo service as the network aims to expand its audience while maintaining its ties to cable providers. so what is time warner testing right now and how does it relate to the recent fox takeover bid? jon erlichman joins us from l.a. with more on that. warner testing?

>> this company has so much to think about right now. obviously the fox bit is front and center but they have to think about how people are going to be consuming their content down the road. in the case of hbo, you've got a business that while incredibly -- falls inside the traditional role of cable. we've heard the story of young people in need their internet, .either broadband access a land and cable package, not so much. i'm not going to give away names but i was talking to them are young producers who revealed to me she is using someone else's hbo password to access hbo go in conjunction with her broadband. so hbo thinks how are we going to get young people to stay in this world of cable which has been financially good for us? one thing they have been testing is a lower-priced all in cable

package where you get some cable, not everything, you get internet and then get your hbo that way. you might see them be more aggressive on that run in conjunction with pay-tv players. >> young audiences prefer to access content through an over-the-top surveys like netflix. could this happen through hbo? cant doesn't feel like it easily happen because of the financial ties between the cable companies and hbo. to be able to do something that matches exactly what netflix is an over-the-top and having netflix goto them and accessing all devices doesn't seem like short term but what it seems like hbo might be pushing toward is the ability to go to the cable company, get your broadband and hbo and maybe have less cable and no traditional

cable. that would help them hold on to some of the views. thank you so much. former vice residential candidate, sarah palin, is launching her own online news channel. we'll talk to two of the people who made that happen, next. ♪ >> it is 26 minutes after the hour and a means bloomberg is on the markets. let's look at where stocks are trading. a decline throughout the society -- throughout the session continues here. has just turned positive by about 6.5 points as investors await earnings and negative data on home sales. two stocks to watch today include it a deal -- not just zillow and trulia. dollar tree is buying family dollar for $74.50 a share, a 23%

premium to friday's closing price. activist investors have been pushing for a sale of family dollar and now they are succeeding. more "bloomberg west" after the break. ♪

>> i'm emily chang and this is "bloomberg west" on bloomberg

television, streaming on your phone, tablet and bloomberg.com. from power rangers to potential candidates for president, my guess has backed big ideas for decades. introduced the x-men and the power rangers to american tv viewers. our bloomberg senior west coast correspondent went to him and l.a. and spoke to him. we were just talking about time warner -- what did he have to say about that? >> he had some helpful context. you are talking about someone here who has a strong relationship already with rupert murdoch. you talked about the power rangers, which brought a lot of success along with other kids programming which ended up as part of a joint venturer with fox that ended up being sold to disney and became abc family. it made him a leader and he certainly watching this dory

closely. but he did set the stage of a media universe where you have companies like disney that have been big acquirers of content and fox wants to continue down that road, versus the business of time warner, where they have shed off some of their assets. here's some more of what he had to say. >> i was not surprised because i , the ceo of time warner, has trimmed the company to a point where he is paired for a takeover. continued going to be discussion around all kinds of media assets. he and a group of investors acquired in 2006. there've been a lot of discussions over the years, a possible ipo on that business as well. but he just launched his own

venture. what about that project? to bes is going interesting to bloomberg west viewers because of the fact you have new movie distributors in hollywood recognizing the fact that movies can be successful in theaters and also be successful on demand. tothey are committed acquiring up to 10 films over its first 10 months. video're watching the come you are seeing video from "the helmsman." this is a tommy lee jones film which will debut in november in theaters but they might end up laying with the theatrical window. that might suggest it's on demand sooner than you would normally think. they will also be teaming up with a large studio on their films and in terms of why he's had so much media exposure over the years and didn't get into the film business earlier,

here's his answer to my question why now? >> to the best of my knowledge, this business and that kind of business plan is not one that existed i would say 15 or 20 years ago. >> there has been a successful summer box office dory. "no peers are" has been in theaters for a month and then was available on demand. don't know you will see a dissimilar strategy from the films.t savon >> he's also one of hillary clinton's biggest backers. she just did a big tour of silicon valley and tech companies here. why is he supporting her? someone who he's feels very passionate about the middle east and a huge supporter of israel. he has always seen her as being someone who is well-equipped to

address the issues of the middle east. asked him personally what kind of financial commitment he would be willing to make to see her become president, here's what he had to say. be greatk she would for the country and break the world. -- great for the world. , i think i care about she is ready plus plus and i hope she makes the right decision. >> there you go. a big decision certainly. >> jon erlichman, thank you very much. company could be sending people to mars in as little as 10 years. how realistic is elon musk hoss goal your? we will discuss next on open --

?lon musk's goal here we will discuss next on "bloomberg west." ♪

>> welcome back to "bloomberg west." i'm emily chang. it has been a challenging time for ebay in the company's traditional marketplace businesses. there was the massive data breach and google changed its search algorithms, ranking some ebay results lower. president was on "in the loop" this morning. eddie lew asked if ebay has lost customers due to that password breach. >> we have not seen that yet. we have not seen any evidence we have lost a substantial amount of people. we have not seen any evidence data has been used religiously. that's the good news. getbad news is anytime you 150 million people to turn over their password, you are going to

disrupt her business in the short run and we did that consciously, knowing it would impact our quarter. but we are happy it is increasingly in the rearview mirror. ask how do you make sure you completely regain the trust of your customers? >> just getting it right knowing forward. andt product experience having the overwhelming majority of transactions on ebay go well, which they have for decades. constantly adding right for buyers and sellers in the marketplace. still going to sell over $80 billion of goods. it is an enormous marketplace and i think the majority, almost all of our customers know the multiple layers of protection we have, so it was an unfortunate incident stop a good news is we see customers coming back, so i believe they trust us. >> do you know why the data hasn't been used maliciously yet? is why resetting the password was safe but not a

necessary maneuver. passwords were encrypted. we don't know if they were unencrypted. we haven't seen the level of fraud increase. >> there was another challenge you experienced earlier this year, which was google changed their algorithm so they were diverting or funneling less traffic to your website. and you anticipate this was going to happen? >> we don't anticipate because google controls their search algorithm. it is our job to adapt to the changes google makes and we're doing that. google makes changes in the way their algorithm is calculated periodically and our job is to change the way we do our marketing to adapt to that of stop we are in a process of doing that and have a great relationship with google. we are working on bringing some of that traffic back. but how would you do that question mark can you give me an

example of how you try to offset that? >> it works on a bunch of different factors. to make changes to the type of changes if they search for an item like luxury watch. we want them to come to ebay because we of the best selection of luxury watches in the world. how that page might look, where it might be ranked is deep in the mystery and magic of the ebay and google algorithms. the next few weeks, we will be watching the ali baba ipo. what they do at the money they raise and how they will expand in the u.s. -- what about ebay? a mobile company and have the largest chinese export business in the world. great is this.

their numbers are stunning. i suspect the next couple of ofrs are going to be a story big e-commerce companies further globalizing. russia,rities have been latin america, all the emerging markets are growing rapidly. >> even russia given all the contention? >> it continues to be and china will be in our focus over the next few years. when alibaba moves out from china around the world, we will be moving hopefully into china. >> that was ebay markets president there with bloomberg's eddie lew. coming up, the technology between sarah palin bosnia media platform. that is next. ♪

>> welcome back to "bloomberg west." i'm emily chang. sarah alaska governor palin became a household name which was the 2008 5 pence -- vice presidential nominee. her stances on issues have won her many fans and many critics. now she will have a new platform to speak about her views -- her own online news network. >> hello and welcome to a new project. is ais a news channel that lot more than news. this is a community where we will be able to share ideas and discuss the issues of the day. we're going to find solutions. are you tired of the media filters? i am. i always have been will stop we are going to do something about it. >> the sarah palin channel launched last night. it is a subscription-based,

starting at just under $10 a month. it's backed by taft, and -- by cap, and online media venture. longtime former nbc executive and john is a former cnn executive. thank you for joining us. upnow you guys were overnight launching this thing, but what are we going to see on the sarah palin channel? >> you are going to see a lot of material broadcast rectally from sarah palin's home or we have cameras planted all over the lace. also mobile cameras so she can shoot on the fly. she will be posting material every day and it will be arranged from her commentary on events from the day. she's going to throw some events out there to show start conversations, footage of their life up there and she's going to be responding to the material her members post to the channel. challenge toa

members to post their own videos and really make it a conversation. >> tell us where this stands between something like bloomberg, c-span or youtube -- bloomberg, cnn him or youtube. >> this fits comfortably in between. she makes the editorial decisions. this is not a typical news news fromon gathering all over the world and trying to give you the best of what they can in the time they have. directlyarah talking to her fans and having a conversation with people who think and believe in a lot of what she believes. understand you guys are just beginning this new venture cap and she's just the start. to ande are you talking what kind of personalities are

you looking for? >> there's no limit to the kind of person who can succeed in this arena. oversized's got an personality, something to say, and they rabid fan base dying to hear what you have to say can do pretty well. we are looking at a whole range of categories, anything from sports to lifestyle to cooking food, entertainment, music can be big. no limit. think about the person you idolize and who you would like to hear more from on a one to one direct channel. that is something digital video delivery can accomplish that traditional media cannot. you are not going to find onividual peoples channel mtv or comcast, but you will on tapp. >> these channels don't have to

appeal to everybody, gesture fan base. you can have a much more direct conversation with them and you don't have to worry about the other filters you have to think about because you are broadcasting to a wide group of people. people and these are your fans and they want to hear more from you. >> glenn beck seems to be pretty well during his own online network of sorts will stop are you looking for people who are polarizing or biased us to mark can you give me anything more specific about who your dream guest star? >> no one feels they are biased because they truly believe the things they're talking about. and they're super fans don't believe there is bias either. peoplejust looking for who have something to say that's resonating with an audience that wants to hear more of it will stop they don't have to necessarily be controversial. you could be a great newsagent who delights tens of thousands of people around the world in concert arenas. those people might want to be able to touch your world and have access into your life and

why you wrote the songs the way you did and what you are performing and what guitar you play. ofre is no end to the type content. you could be a wine connoisseur and want to turn on your own or tablet when you are on the go and learn more about your passion. criticizealin used to cnn when you were there. i'm wondering what those negotiations were like. he's -- >> she's a fantastic person. she's an amazing moose chili could by the way. i've eaten it up in alaska and she's determined to have this direct connection to her audience. moose chili? i can only imagine. let's talk about the rent share. and will9.95 a month

cost more if you want additional personality. what is the benefit to tapp here? >> we don't discuss the financials, especially individual relationships. we can talk about the subscription model in general. superior to the advertiser model online because the amount of traffic we need to generate to generate enough revenue to become profitable is much smaller than the amount of traffic you need to become profitable when you are advertiser supported all stop -- advertiser supported. you need hits to generate millions of dollars year. you need a fraction to generate $5 million in the subscription model. basically you need 50,000 subscribers and you are

generating $5 million a year. so 50,000 subscribers. is that what you are aiming to get? >> we don't have any particular goals. this is a new model for everybody and we are testing it will stop our goal is to andrate enough money anything above that becomes profit for all parties involved. the primary goal is to talk directly to fans and have a community we provide for those fans. we will see how it goes from there. >> thank you so much for joining us. is time now for the bwest byte, where we focused on one number that tells a whole lot. cory johnson is in new york. what have you got for us? >> a very specific number -- the bwest right today is dozens.

said in their conference call today that they had dozens of multiple listing services that provide listings directly to trulia. zillow has none of these. the ability to show every house for sale in a given neighborhood has been troubling for zillow. you can be in a neighborhood standing in front of house for sale, looking at zillow and not see it. but by biting -- five by eating , they getg trulia access to that. >> what does the mega merger to other players in this space customer they all do slightly different things but companies -- what does it mean for them? >> red tin is a broker and not a listing service. they don't pretend to show you every listing out there. and zillow pretend to

show you every listing and attendance -- it's an interesting notion that it collective of media properties like condé nast or time warner where you have lots of different races were the same advertisers have to buy ads, that is what this renovation is. they are talking about $100 million in cost cuts over the next two years but they also get the benefit of having a lot of market share. >> what does it need for users? -- what does it mean for users? the users of these two sites is very different. >> it was ready clear from the conference call that they don't know how they are going to differentiate these. but it could become greater. you could imagine trulia becoming higher and and zillow more of a mass-market product for renters, buyers, sellers and so on. >> cory johnson, our editor at large in new york. thank you all for watching this edition of "bloomberg west."

all the latest headlines all the time on your tablet, phone and on bloomberg.com. ♪

>> from bloomberg world headquarters in your, i am betty liu in for mark crumpton. ottom line."o today late -- we look at the deal for veterans. then john kerry calls for hamas to disarm to resolve the crisis in gaza. the business behind famous artwork. to our viewers in the united states and those of you joining from around the world, welcome. full coverage of the