. >> "bloomberg west." welcome to. i am emily chang. ahead this hour, meg whitman really turning around the company or just cutting costs? sales rose for the first time in 12 quarters. product hp that were banking on underperformed. we look into where the turnaround stands today. facebook and twitter are both playing powerful roles in major stories this summer from the protests in ferguson, missouri to the ice bucket challenge raising money and awareness for

als. also the big differences between the two companies and the roles, or lack thereof, in sparking social change. the future of mobile payments is up in the air. a new report that ebay may spin off paypal next year. this after amazon launched a new payment product. from square to paypal to amazon, who will the big winner in payments be? i'll ask. lead story of the day, hp chairman and ceo meg whitman says the silicon valley legend has become stronger through the adversity they faced in the ongoing turnaround. but the job is far from over. in his third quarter, hp posted the first quarterly sales growth since 2011, fueled by 12% gain in the pc units of the division supposed to be key to hp prosecutor like services and printers, software, saw sluggish sales. hp stock continues to rise. many asany cutting as

50,000 jobs. what is really going on? cory johnson is with me in the studio. and our bloomberg intelligence researcher is with us from new york. we spoke yesterday. you said this was not a step forward or backward, kind of a step sideways. cory, you have been doing some additional digging. were the results good or bad? >> the pc results were strong. 29% year-over-year drop in profits is just not good. for thein in sales first time in 12 quarters. ask if you break it out, there's a 12% gain in pc sales. the rest of the business was down 3%. the question is, is the company getting better or not? we have to look at the pc business and say, let's see what we see. meg whitman talked about this in the conference call. this was about the one time exploration of windows xp

support by microsoft, innate quote said, the winners xp didgeridoo to our growth but we now believe we are through with that benefit. what she is saying, very plainly, we have benefit because microsoft in this thing stop supporting something h and where through with that. while the market is very excited about the revenue gain, apparently, the business is not getting better and she even said so on the call. >> would you agree the business itself looking at the big picture isn't getting better? thisere are two parts to equation. one part is the pc business, which is significant in sales for hp is getting better. hp is a leader in that business and benefiting from that. we think the consumer segment from the pc business should continue if you look at, it's from other participants in the supply chain. now, x the pc business, hp still has difficulties, to put it

mildly. the enterprise business on the hardware side, the only up to was industry-standard servers, 9%. there is competition in that space. enterprise services, not so hot. software, not so hot. it is not big enough for them to matter. i agree with all parts of what has been set, which is that, yes, pc possibly doing ok and epcbenefited from it, but hp still has work to do. notou talked about software being good. she said it is about to get worse. there was a quote that jumped out at me when i was ready the transcript. she said no where shifting more of our focus to subscription-based offices which may create their term revenue headwinds. that is a flat-out warning that things are going to get worse and software. >> we're seeing this occur.

every time a company goes from licensed software model to a software service model, almost subscription-based model, companies take an initial is,nue hit but what happens you substitute it for higher visibility, higher-quality revenues that tend to be stickier over the long-term. how long and how much is it, etc. is still tbd. >> aside from these little things that are affecting the bottom line, what about the future? are they working on things that will be the future when so much of this business is based on legacy businesses like pcs and printers which are going away? >> there was a lot of talk about that in a conference call. the business their court about four years ago, new servers they say are really exciting. the numbers are really not showing that quite yet. i think when we talk about bottom line, it is really important to look at their cap

versus non-gap in the biggest thing is restructuring. they continue to take the supposedly extraordinary restructuring -- first of all, non-gap, give this chart a second look. where looking at the yellow line are the real earnings. the blue line or columns are there adjusted earnings. guess what? the adjusted earnings are big and getting bigger, but the real earnings are going down. that is a concern for this company, i think. it is obviously, not the number they want us to focus on or even the one they put at the top of their press release. but it is the truth. >> what about future products? a focus on 3-d printers, which at this point, is still a very small market? >> look, i'm not looking for hp to set the standard from a new server innovation standpoint or from pc innovation standpoint. cost cuts are part of the story. cash growth is part of the

story. growth fromevenue these other segments that we talked about, ask pc's are going to be part of the story. those are the things i want to see. as far as innovation, that is lower on my priority list from an expectation standpoint. the restructuring thing. no one seems to care about this on wall street. i care about it because i think it is ridiculous. this company has extraordinary restructuring charges that are now going on 15 years. it is virtually unprecedented in big business that this company continues to have extraordinary event every single year. it is legal, but i think when you look at the way they run their business, if they're going to continue to have restructuring, it is going to get to be a problem for this company. will keeply, we

watching ap. thank you both. could the controversy in ferguson surrounding the shooting of an unarmed teenager have been prevented if police were using wearable cameras? we will explore, next, on "bloomberg west." ♪

>> i am emily chang and this is "bloomberg west." ferguson, missouri bank outfit its officers with fest cameras as protests continue for shooting death of 18-year-old ago brown. if the police officer who shot down was wearing a camera, would it have made a difference? could it have prevented these mass protests? cory johnson is still with us and we also joined by doug wiley. police one is a news portal for officers. europe and covering wearable technologies for many years. realizingjust sort of

it exists. as far as we know, first of all, the officers and ferguson may be had access to a couple of cameras but were not using them yet. >> yes, it is my understanding beenferguson pd may have testing and evaluating some cameras. however, it is abundantly clear in a last couple of weeks that there's been no video evidence released. clearly, the officer in question at the time of the shooting was probably not wearing one of those cameras. >> you brought in a few things to demonstrate to us. what are the options available? >> there are many. five years ago, and were probably only handful and now commended0 companies not quite as 10, but a whole bunch of companies working on these. 10 companies, maybe not quite 10, but whole bunch of companies working on these. there are many options. this one would go on your body here and be held in a pocket. this camera would probably clip

on your pocket here and this --era, which i have lit up is it on? is like that. >> and that is not google glass? >> similar concept that predates google glass, to my knowledge. basically, you're capturing a live feed on a mobile phone that we are showing you. the critical piece of this is that live feed is not for life consumption. one of the things the live feed four is to adjust how your if youis capturing, like go like this, make sure you are squared away. another thing is, you can go back and review an incident on your mobile device after it has happened. it is really good for training. >> what are the numbers in terms of how that changes? some studies have suggested when police use these things, there are fewer incidences of using the gun --

>> questionable incidences. >> even fewer incidences of using firearms. >> probably two or three years ago, i reported on that. as part of his academic study, a chief decided to analyze the number of complaints by citizens for sustainable citizen complaints, against officers. if memory serves, i think in that time he was studying it around 12 months, 88% reduction in citizen complaints. >> the camera is on, so you're going to behave a little differently, right? so is the subject. the subject knows they're being videotaped. you hear people all the time, "officer, i'm videotaping you with my phone." am officer can say, "i taping you with my camera." it is not a secret anymore. >> if the officer who shot michael brown had been wearing one of these, how do you think rings would have indifferent? >> most notably, what you would

have probably seen as opposed to 22 or 20 for hours later, a press conference revealing practically nothing, you would have had one of two things happen. if the officer was indeed incorrect in that assessment of the threat against him and it was a bad shoot, there would have been the video evidence to that effect. the chief and others would have been able to say, here is what we're going to do and next some sort of statement. like we are taking action against this officer, what have you. no riots. the other thing is, if it was a good shoot, if it was a deadly threat against the officer, that would been compelling evidence on video. he was being beat up, got his eye socket blown out, in fear for his life. there is a large man coming at him like this -- >> we would know. >> there would event protest, but there would be compelling evidence sustaining that

officers perspective he was under threat. >> there's a question about how much this would help. first of all, the officer has to turn it on a chaotic moment and maybe you don't. maybe the officer is resistant to turning it on. >> i hate making broad generalizations, particularly police officers, but more often than not, the younger the officer the more likely they are to embrace the new technology. more technology savvy. they know more about technology. they are accustomed to filming the families and themselves with their phones. generally speaking, it is a generalization of -- generational thing. >> talk about this business. there's been such a cry about militarization about local police officers around the situation. what is the business behind this? who is selling this stuff? who is selling it and why are police officers embracing this expensive here -- gear.

least 10 or so companies, really good companies, making great products. >> but the sales process. >> people on the street, banging on doors at the police stations. >> are they buying? these are like $800? >> it depends which when you get. you can get a camera for $200 to the rendered dollars per officer. the elephant in the room is the data storage. once you have captured hundreds of hours, it has to get into the chain of custody and be stored somewhere. that is another piece of the puzzle. the gear itself, $1000 at the maximum for one piece for an officer -- >> for police force, it is expensive. >> for 60 officer department, it is not that big of an investment when you think about all of the frivolous lawsuits your settling out of court for $60,000. >> is is a rapidly growing business?

>> i think it can be. we're at the beginning of a steep hockey stick type of activity. there are roughly 15 or so percent of officers probably wearing these on the street. marketans there's an 85% for this to happen. new cameras, these things do break occasionally, you get into a fist fight. that might -- you might have to buy another one. >> these as protest continue weeks later in ferguson. thank you for sharing it with us. from raising awareness for als to broadcasting powerful images of protests in ferguson, we will take a look at how facebook and twitter have played such powerful roles in major stories this summer and what it all means. you can catch a streaming on your phone, tablet. bloomberg.com, apple tv and amazon fire tv. ♪

>> welcome back to "bloomberg west." in the last few weeks, we've seen how powerful a jewel social media can be from heartwarming videos of people talking about the ice bucket challenge, taking the ice bucket challenge image images of the protest and unrest in ferguson, missouri. what are the story saying about the role twitter and facebook play in society and social change? joining me now, brad stone who just wrote a piece on this. one thing you point out, these events are highlighting major differences between facebook and twitter. how so? >> anyone who is on social media this week probably recognized it pretty quickly. twitter was a very visceral minute by minute, blow-by-blow venue to follow what was going on in ferguson. great reports from mainstream

journalists -- >> the cofounder of twitter. >> to unknown journalists, basically filming his night every evening in ferguson. on the other hand, facebook, a lot less coverage. it filters what it's users see. viraln the vein of the videos and ice bucket challenge. both of those companies are trying to make their feeds more interesting and relevant. it was a week in which a lot of people said, twitter won the week terms of how interesting and relevant the feed was. >> at the same time, twitter was trying to suspend counts with images surrounding the execution of jim foley. twitter has been a place where all of this has been possible, but is it going to be that way in the future? >> it is interesting because they been making noises about trying to be more algorithmic, trying to extend the popularity to a broader user base.

not all weeks are is packed with news as this week. it was set on the conference call around earnings for the last few quarters, they're experimenting with filtering in the vein of facebook. i like the fact we have two social media windows that really compliment each other. >> is facebook -- mark zuckerberg wants to be a window to the world. paper.ted is facebook failing as becoming the portal or just a different kind of news? >> i think it highlights the challenge of being all things to all people. the algorithm is weighted toward what people want to read. there may be a reason that people -- the ice but challenges are doing well. people like them and are doing them. the ice bucket fill video i saw about five times. twitter probably did not offer that. if you have not seen it, look at it. it is hilarious.

they just offer something different. i think yes three or four buckets of water poured on his head. i was impressed. is this good for the businesses of the two companies that they are differentiating themselves, whether by design or by chance? >> absolutely. a week like this packed with news, good news, terrible news, it highlights how we have begun networkso the social to be our windows to the world. these are good problems to have. they're both trying to figure out how to coexist. the fact is, we turn to twitter and facebook first. >> when it comes to twitter suspending accounts with certain information, we saw something similar with the death of robin williams and graphic images his daughter received. is that a good thing? >> that is not a twitter problem, that is an internet problem. that is bench or of the internet since the early 1990's. -- that has been true of the

internet since the early 1990's. the gatekeeper of these companies. making sure that small minority doesn't soil the well for everyone else. >> we will be watching to see how things play out over the next two days and the weekend. redstone, thank you so much. will amazon local register mean the end of mobile payment company square? oo,speak to squares former cc next. ♪ >> bloomberg television is on the markets. it has been trading, but the s&p is once again trading at a new record high. some good news out of the jobs market this morning come assuring the weekly jobless claims fell more than forecast for helping sentiment overall. one-stop we want to show you is sears. it is a story we have heard for the last 30 quarters.

once again, sales falling at the retailer. the ceo and billionaire hedge fund manager eddie lambert calls the results "unacceptable." something we've heard before. we will be on the markets again in 30. ♪

>> you are watching "bloomberg west." we focus on innovation, technology, and the future of business. i'm emily chang. the race to dominate mobile payments is getting more intense. localeek amazon announced register will compete with paypal and intuit. paypal may not be a part of ebay for much longer, along 20 -- according to a report. ebay is telling potential candidates for the paypal ceo job that it may be spinning off the payments business early next year. joining me now, coastal ventures investment partner and former square ceo, also a member of the

paypal mafia. what do you know? is ebay telling people they will spin it off? >> i don't have unique information. i think it is a good idea. i think i have a better solution, which is to rebrand the company, change the logos, change the page in the t-shirts, and you get the same value. change ebay two p pal. just rename the company. in 24 hours. to hiret have investment bankers. you get all the benefits. the market cap will appreciate paypal. people will want the job. it is a simple solution. i think a lot of people are way too complicated about this. >> [indiscernible] >> i don't know about that. going to have to create an attractive role and set of responsibilities. i don't think most of the best

people on the planet really want to work as a subsidiary of a larger company. >> john donahoe battled it out publicly with carl icahn that these companies are staying together. reportedly they are telling ceo candidates that they are going to spin it off. >> i don't think there's any way long-term the company stay together. there is a reason why paypal has missed every window. the stripes, the squares, every level of innovation in the united states, they have missed and they will continue to miss as long as this is a subsidiary of ebay. paypal needs to have a different leadership, culture, and approach. the best way to do that is to rebrand the entity. you get all the market credit right now if you just rebranded the company. >> part of the problem is that ebay, in terms of payment volume, is becoming a smaller part of paypal. would rebranding really make that big of a difference? >> it would.

it would clarify the value proposition to the world. like it is afeels subsidiary of ebay. people still think of that internally. that is why they have missed all of the macro trends and innovation. they still think of themselves as hostage to the ebay marketplace, which is declining. >> who should be the new ceo of paypal? >> david would be a great choice. >> david sacks. >> david ran the operation. he is available, according to reports. fundamentally, david is incredibly talented. most of the best people are busy doing interesting things. max could do this job. he had better be focused on a firm. several other people would be very good at this. >> some members of the paypal mafia say there is a good argument for them to remain together. fundamentally

believes in partnerships more than the original paypal team. it is not surprising to me he has that position. leadershipformer team believe in spinning off the company. >> amazon launching its own credit card. 1.75% if youit at start now. square is a full percentage point higher. >> that is a gimmick. even amazon put a finite limit on the time that pricing applies. merchants are smart and savvy and they know the prices will be higher than that. amazon has already disclosed the prices will be significantly higher. >> but still lower than square. >> it's not clear what amazon's payment products in tale. do you have to have a credit check? square doesn't. it's the only company that allows anybody to get instantly approved without a credit check.

as well as fast settlement of money. merchants care about how fast they get the money. amazon's brand does not resonate well with local merchants. it is the antithesis of what local merchants are for. it is some fundamental difficulties that amazon has. it may be a successful product. amazon is a formidable company. they also make a lot of mistakes. amazon fire is going nowhere. i'm not totally sure this will go anywhere either. >> they also have the flexibility to push margins down, to get a new product going , which square does not necessarily have. a fairly already has finite set of margins. you can arguably say that amazon is interested in this market to raise their margin. this might be an attractive opportunity for amazon to make money.

fundamentally, i don't believe you can compete on the basis of price forever. people want an iphone. an iphone is more expensive than an android device. square has a premium product that has a lot of value around data and analytics. it has value in terms of fast settlement, has value in terms of integrated platform that allows appointments and scheduling and various other things. it is a completely different product. intuit had a product in the market before square even launched. it was ugly and expensive and required fica score and credit checks. thequare has the value of user experience. many merchants i interact with use square and it is a solid, beautiful user experience. square has been on the receiving end of a lot of bad pr lately. a profile came out, not flattering. they just launched a square capital to give loans to small and medium businesses.

they are buying a food delivery company. do you believe in this strategy? how does it fit together? >> square launched less than four years ago. generatingrobably over $1 billion in revenue. it has the second largest paying user base of local merchants, small businesses and anybody on the planet. square has more paying customers than anybody except intuit. square, like intuit, can build on that platform and provide valuable rights and services that local merchants crave. merchants want to grow. square provides some capital and can do it in a cost-effective way because it has proprietary adta. -- data. you have to provide them data. business, new new

customers. square appointments allows you to book appointments and generate new leads. >> can square be profitable? >> absolutely. square has margins of 34%, better than most of the companies you have on your show. it is better than most of the world. square can be profitable. square has ambitions on reinventing commerce, and that's very difficult. the fact that we are seeing the square halo has disappeared, at least momentarily. is that unfair? is that a phase? >> a lot of people want to compete with square and are annoyed they have not been successful. is disappointing to see journalists running with the stories. the "wall street journal" report was false, and they knew that. there's a lot of people who are frustrated with square's success. square ultimately is going to the same cycle every startup goes through.

everything is really successful. ultimately, people will look at the metrics. metrics will eventually be public and people will be happy with square's performance. >> will jack ever sell to google, or amazon or ebay? >> i would be shocked. square is an independent company. it has the metrics to support being an independent company. it has the value and the brand. if you talk to local businesses, they love square. you will see that enthusiasm that is genuine. those companies tend to be long-term companies. >> former square coo, keith rab ois. we will talk to you about your investments after this quick break. and the latest in the uber list feud. ♪

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

from list to strive to open door, keith rabois has his hand in many of silicon valley's up-and-coming companies. uber versuslk about lyft. lyft claiming that uber employees are canceling rides. uber claiming that lyft investors are pressuring uber to buy lyft. what is really happening? >> i don't really know. >> oh, come on. >> i invested many years ago. it is not as if i am the on the board of the company. i don't have the latest information. has aobvious that uber very aggressive culture, a very aggressive leader. >> is a crossing a line? >> i don't know that it is crossing a line. it is clearly a very aggressive culture. those cultures can work for a

while. microsoft went through this in the 1990's. occasionally people make a mistake and cultures like this. >> should uber by lyft? >> i would be surprised if lyft wants to be bought. >> why? >> lyft has a brand that is resonating with people. they are doing an effective job of creating supply and demand. generally i don't see a reason why they would sell. >> what companies are you most excited about the you have invested in recently? that is like asking, what is your favorite childhood -- i have a lot of different companies. from very early stage to later stage companies. i'm excited about the future of health care. pe have invested in health ta which allows you to connect live via hd video with doctors. will allow you instead of 2:00 a.m. running to the doctor

or when your kid has an ear infection and trying to be stressed about that, you can now connect to a doctor live in real time. you can actually get a prescription as well just through the doctor, 24 hours a day, from your phone. it's pretty amazing. we are interested in financial services and information. we have invested in interesting financial services companies that allow people to grow their businesses. that area is ripe for innovation. we invested in api. building on bitcoin has typically been difficult. byt developers don't have -- creating an api that makes it simple, we believe in developers right out of school will be able to take their creativity and bring to bear quickly on the bitcoin protocol. >> i know we will be talking about something you really want

to talk about. coming up, you will be with us for the "bloomberg west" bite. we will be talking about sports. what is comingat up at the top of the hour and bring in our "bottom line" anger , mark crumpton, from new york. >> the bank of america settlement with the u.s. government is front and center. nearly $17 billion settlement over mortgage bond sales. it is the harshest penalty yet related to the 2008 financial crisis. our colleague will help us understand the implications of that settlement. >> mark, i know you are continuing to follow the situation in iraq. we were speaking about twitter's handling of the execution of james foley. fluids is a very situation. our colleague willem marx has been in iraq this week and will give us an update from irbil. government forces are continuing their battle against islamic

fighters. that is coming up at the top of the hour. back to you in san francisco. >> mark crumpton, "bottom line," we will see you soon. coming up, we will be speaking with the housecall. ♪

>> welcome back to "bloomberg west." i'm emily chang. ever wish you could just call a doctor with a question about your health any time of day or night? i do. with health tap, you can. founded in 2010, health tap provides a question and answer service that connects patients and doctors across the country. last month the company rolled out a new service allowing text or video conference with a $99 a month. our editor-at-large, cory johnson, back with us. you spoke with a healthtap ceo. >> it is an interesting

business. this idea is not groundbreaking, but the execution is. >> it is a network of more than 62,000 physicians that will be available anytime, anywhere, on any mobile device to answer any question that you have, prescribe medication, provide checklists and help you feel good every day. >> in theory, a lot of medical practitioners on hmo [indiscernible] an e-mail consular something. there is an advice nurse available. why do we need what you guys are doing? any4/7, anywhere, from mobile device, from anywhere with a connection you can get in front of a doctor. you can do it on text, by voice, by video. it is not a nurse connection, it is a doctor connection. >> to quote tom petty, waiting is the hardest part. there is no waiting on a doctor now. >> no waiting room.

if not only the answer, but you need a prescription for medication or if you need the check list to get things done, the doctor can prescribe to you. every console begins with a smile and ends with a checklist that is actionable. this introduces a whole new complication in terms of knowing who the patients are, knowing their history, and knowing the technology, which doctors are not always good at. >> we have 62,000 physicians in good standing in our platform. they want to help people throughout the entire continuum of health. we provide to them software for the first time that enables them to answer questions, connect with patients -- >> why do they do that? >> they want to help people. we pay them. when a doctor answers your question, they can ask from anywhere. you can be in your home with a mobile device. we're the only health entity that has mobile apps for doctors to practice with patients at the convenience of your home or office or clinic, anywhere they

are in the world. it is convenient, it is easy, and very effective. >> what are the technological or legal hurdles you have had to overcome to make this happen? the technological ones are not great. what are the other hurdles i don't see, the legal hurdles i don't see? >> there are a lot of technology hurdles. application onan an iphone. there is a whole underlying technology that makes sure that a doctor is available to you at any given point in time 24/7. there is a whole medical record. every consult starts with a smile. we train the doctors to make sure they are confident in providing health care using the phone. >> how is it different? what do doctors not get inherently about that? >> the notion of interacting with a patient on the phone

starts with getting to know the patient well. because we have an electronic medical record in the background, a doctor can get to know you in seconds using artificial intelligence to understand the patient really well because we have the data. we have an understanding of other patients like this particular patient. even if they never saw you before, they know about you a lot immediately and can relate to you. >> you have a lot of users already. you have cobbled together a pretty good user. where are you at right now? 62,000ave more than u.s.-licensed physicians that serve people. we have a lot of users. cory johnson. >> it is an interesting company. they have sizable user numbers. keith, you are an investor in this. >> i am.

1000 doctors available at any time. >> it seems like an expensive service to me. >> you value your own time. imagine what happens if you have to take off work. you have to travel across the city. you have to park. you sit in a waiting room. doctors are never on time. then you get sick -- >> they don't value mine, that's for sure. >> this allows you to get instant access. i think this will -- a lot of people want to avoid taking time off work. >> it is time for the "bwest byte," which keith stuck around for, because we're talking about sports. >> i was looking for a good byte about this. , this girl pitching against boys in the little league world series. she went 2 1/3. very exciting. it is on the cover of "sports illustrated" this week. my kids are really excited about it. shes striking out boys --

had a very successful debut last week. i was listening to an interview with her on npr. what is throwing like a girl sound like? 70 miles per hour. >> she has this amazing command. she really does pitch like a major-league or. -- major lea guer. >> do they have a speedometer on pitchers? >> they are closer. it is little league. >> 3.4% amid the percentage of homes in the largest u.s. tv market that unit into watch her. >> she may pitch this saturday as well. we will be watching and the johnson household. >> get her on your rdar -- rad ar. >> absolutely. >> you are just thinking about stanford football. you will be tweeting from the sidelines. thanks, keith. thank you all for watching this

edition of "bloomberg west." ♪

>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a mainstream perspective. today, bank of america agrees to a multimillion dollar mortgage settlement. then kansas city fed president says the u.s. economy is strong enough for a rate hike. and get ready for 12 days and nights. ♪ to our viewers here in the united states and those of you joining us around the world, welcome. we have full coverage of the