peter three in san francisco, welcome to bloomberg west. i am in for emily chang. on a headlines. , theook's market value first time ever making facebook the 22nd most valuable company in the way of -- world. ahead of toyota. stocks rise with mobile sales accounting for 62 percent of all ad sales in the second quarter. ahead of tomorrow's apple

announcement, amazon slashing prices of the new firefox. $.99 with a contract rather than $200 it cost recently. amazon does not release the price -- it comes six weeks after the fire loan was released. and bitcoin. they will work with coinbase to enable payments. it will open a possibility of virtual currency being used in millions of transactions. our lead story, 800 investors packed the room in numeral x famous waldorf astoria to hear jack ma. vice-chairman were hit with a number of questions regarding ordinance issues, profit margins, and alibaba's relationship with all the pain.

this according to people in the meeting. executivesing -- from the e-commerce company are all around the world, bloomberg news reported and without the waldorf a story at covering the story. heard after the meeting was underway. >> i was not able to go inside. thee are closed meetings to press. when i heard from investors who came out of the meetings if they got questions answered regarding corporate governance and margins. one big thing they did not hear much about was international expansion. the executive touched a little india andon and it indonesia. bloomberg curious about how alibaba can be not just a chinese internet company, but an internet company based in china. an internet company with global proportions. if it is gone to be compared to amazon and ebay, how will it be

in other places besides china? they look at this and see there is some risk associated with the chinese government. the chinese government has tremendous control over companies that have become this large. they want them to diversify outside of china, to quell those risks. >> certainly, having a bigger business locally -- globally would be better for them. certainly they are looking for a bigger shareholder base. it is interesting that a company has to go for -- through they want to sell this much stock. san francisco, london, hong kong, that is quite a trip. >> when you think about it, you're talking to fund managers and thinking, i have $21 billion shares to sell. you can take a 750 million dollar allocation and that may be ok, if it turns out that the man supports that. if you were a fund manager come

on the other hand, you want that exposure with management before taking a plunge, before investing that much money into one company that would ultimately become one of your top holdings. as we have discussed in the past, this is a company that is largely requiring investors to trust their management. structure allows them to have a majority control, investors need to meet these executives face-to-face to have that comfort. >> it is all about selling with confidence. there.ou for going that is good insight. we appreciate it. for more than -- about what happens at the roadshow meetings, specifically when investors are looking for when this meeting, we have an analytics firm and bloomberg reported. the reporter has been covering the technology world for some time and has great insight.

>> number one, of course, a record-breaking ipo in the united states. than thebe more so agricultural bank in 2010. it can type better 23 billion dollars if you include the overallotment. number two, this could be the third-largest tech company trading in the united states after google and facebook. thirdly, i am interested in who's going to be selling the shares. not everyone will be. the largest shareholder, softbank at 30% ownership, not unlikeg on selling yahoo!, of course, that is looking to reap billion dollars. bache -- theloor four-page letter from jack ma talking about how customers are

first, employees or second, investors are number three. he talked about how he expects controversy to arise, but he hopes the controversy creates constructive dialogue. that is interesting. let's face it, let leslie will have beenight now, i speaking to investors and people on the street, the retail guys are not there. it is a tepid, muted response. you need some guys who can take a lot of shovels worth. deal,ou look at this specifically the letter, the press focuses on the letter from the ceo. it is a new trend in ipo offerings. what you make of the letter? >> it does not factor into the calculating of the financial health rating. case, it is a 71.

extremely strong. the letter is interesting because it is trying to engage the potential shareholder. not focus on the company are prospects long-term, but it is a good effort that alibaba is making to engage in shareholders, or potential shareholders. >> is it? they have moved the lead of the new trend further down. that suggests to me evidence that it is a sales effort, not an informative i'm doing this because i care about you think, but i am trying to sell something. >> in the next week or two and half weeks, we'll see it as an ambassadorial effort. ali baba is going to be the flag-bearer. this is a piece of that, as is

everything that will happen in each one of these roadshow stops. i was going to caution that this should not be considered for the chinese economy. we do not look at ebay and think prospect for the economy. it gives you a good glimpse on how china e-commerce is doing. we're talking about a rising middle class that by 2070 could be 20% of the entire population of china, which currently is at 1.3 4 billion people. the shows you how things evolve in china, but it is in no sense representative of all the companies in china. as an investor looking at this, you're betting on the chinese economy to grow, you are betting on the ali baba model. you are betting on one man approaching her, who is jack ma. >> when i was a professional investor, i attended many meetings. you have probably attended many

more. i am wondering, all the chinese ipos, the reverse mortgages, the worst of businesses practices in china, does that not raise investor concern, g think they will look at this as a clean slate? >> somewhere in between. investors are cognizant of problems. it will lead to a variety of questions. i'm sure the alibaba executive staff has been coached to head this off so they do not overtake the bread a message that ali baba needs to convey. that is, how are they going to use the cash they have been stock ipo?ing pre- execute their communication strategy? how will they ultimately integrate all of that into an entity that can continue on the growth plan that ali baba has had? how will they have return capitals -- returns on capital and become as efficient as they

can be? those of the things they need to focus on. the investor community wants to hear that story. they will ask the questions to try to tease that story out of them. ratings ceorapid and bloomberg news reporter. we will explain twitter and "bloomberg west" continues. ♪

>> twitter is taking its first is step into e-commerce by creating a buy button. it is working with artists like eminem and brands like or barry. i spoke with nathan hubbard earlier today. i asked him how the buy button would work.

we see a lot of conversation already between brands and consumers. and a lot of those conversations are in service of a transaction. such as, we have a new product coming out and today we may post a link and six clicks. maybe a consumer will make it all the way through the attrition, maybe they will not. were looking at a way to know that cap. taking a consumer from interest in purchase to the end of a checkout, notably noaa in terms of the percentages of waysidehat fall by the before they get to the final checkup? >> is huge. i used to be at ticketmaster. even their conversion rates are single digit. the challenges on a mobile canvas, how to move people from discovery to awareness all the weight of the funnel. we think there is something so unique that will help us to that. there are three things about twitter there are different.

they are focused on key trends. the first are algorithmic generation. we get rate interest. great interest. essentially, what you're saying is you can find the interest. you have the divining rod to say this person is interested in this stuff. >> that is right. we can listen and in for four demand. andsecond is human interest influence her. there are these influences there. is a lot that can come from the one-to-one relationship. >> kanye west have this conversation with my colleagues. he said if it is a brand-new product, i will not let attention my hand unless they are paying me. >> he recognizes that he is the ultimate brand-influencer, he thinks.

people come to twitter. to have those conversations directly with fans. want to sayd checkup is clearly much i am wearing. he will get a piece of the action if he puts me buy button on his street? >> the way he participates is up to him and the partner to figure out. we just give them the tools. >> given the tools to the advertiser of the brand, not necessarily to the individual. they steer you towards the purchase. >> right now we're focused accurately on the optimizing for the user experience. meditation will come -- monetization will come later. if you are trying to reach people outside your follower base, and there is a fairly well-established affiliate model which you know about. >> amazon has largely played back from that. >> there is a pretty good model for publishers to take a fee.

were not focused on that. if we know of that connection between sellers and users, we can build a business on that. late, i wonder about twitter today. it has been too many shifts. people try a lot of ideas, throw it against the wall. this can be great. the lewis like that. amazon is like that. if it does not work, we will try this. there is no good answer. >> for commerce, we think about businesstional he as a that can be a stand-alone proposition for twitter. on its own. that it can parallel the business that adam mcbain has built today. it took me almost the better part of one year to come over to twitter from ticketmaster. to get comfortable with that. this is the place where big ideas can be pursued and where we can be patient.

now that i am here, it feels fabulous. about every merchant in monroe being on the platform, having these conversations, and i think about users who are engaged with them. when i think about our mobile services businesses, which extends across the mobile platform so we can reach our active base of people who are impacted by tweets, that feels like a good opportunity. >> i am sure some merchants want to get into this. why throw charity in there? to make you feel better? >> because there is a lot of conversation on the platform right now. later wants to do good and all kinds of ways. it is rife rest to measure across all the price signs and put a close. how big consumer wants to interact with us. because theing slow

trust of our users is everything. how were you choose which way to go and have fast to go? what kind of things will you measure? >> conversion. where in the purchase the user engages or potentially falls out. will look at price points and promotions. urgency that makes a difference, was it like our advertising business which across all kinds. we're going to sit back and watch. head ofwas twitter's commerce, nathan hubbard. mark zuckerberg says facebook millionsd thousands -- to bring customers to connect to the world. that is next.

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>> i am cory johnson and this is --loomberg must be a co- west."erg >> facebook announces nearly 100 million users in africa. many of them connected via mobile. i spoke with the author of "the facebook effect." mean zuckerberg is getting even more ambitious? this idea of connecting everyone has really been in the

back of his mind, the ultimate purpose of facebook since late 2000 four. in the last couple years, it began to be an actual fair each -- an actual possibility that facebook could connect people in every country in every economic segment. that is a very high priority for him now. >> that changes the total addressable market. >> in his getting bigger. >> add more people. the next thing will be reducing the world's supply of both control. >> that is not something i've heard him mention. he really does feel that this idea of connecting people with one another is a globally transforming social, political, economic and that he has a unique opportunity to contribute to. facebook has a unique

opportunity. it is amazing to me how much he is decided in the last year to devote a considerable portion of the company resources to this project. initiative herg announced in january and talked about in february a great length is the central strategy were he has partnered with ericsson and samsung and other companies in the mobile space. it is all based on mobile. is a keyon of whatsapp element. quotem going to read a from mark. it is interesting. even if they have to spend billions of dollars making this happen, i believe about that one it would be a good thing for us and for the world. most, icerns me the know i should be caring about people in the road and ask us the internet, but is this a business decision? or is it driven by a moral notion of what is possible when

people without an internet get one? >> the interesting thing about zuckerberg is that those two things are not necessarily separate in his mind. he believes facebook's long-term interests of the business is and tiled with the economic social betterment for the planet. you can disagree with him on that, but that is what he thinks. it is a long-term view. as investors, some people who hold the stock might not really want him to be spending as much time and money as he clearly seems willing to do on a very long-term project. on the other hand, if you are a buy and hold investor, he could be in the position to serve in a targeted way, even more people and more countries as those economies come up. it could be a really big business in the long run. author of the facebook effect, david kurt beck jerk. thank you very much.

going ahead, one day to before the new iphone. coming up next. ♪

>> you are watching "bloomberg west." i am cory johnson, for emily chang. we talked to tesla about the battery factory. >> what we're trying to overcome in the next few years is battery cell construction. we need factory production to go live. we're expecting that the giga

be toy outlet will third for tesla vehicles, and one third for other vehicles and stationary storage. >> panasonic paid for a 30-40% of the financing for the data factory. factory. apple phone, one of the top apple mobile investors. privy to the latest. the iphone 6 new irs from new york. the os is not getting a lot of attention here. and that might be one of the biggest changes of all. >> absolutely. a lot of feature updates, making the phone a lot smarter.

updates across the board. new processors. iri.nces within so you name it. user interface fundamentally different? >>'s it will not change much. it is on the back end. if you put an movie tickets and you want to search a specific type in thell spotlight the specific movie so you do not have to go digging into the phone. it will bubble up to the top. >> what does this mean for developers of apps? i suspect a lot of apt developers have put their resources away from fixing bugs to work on the new os and get rid of bugs that might be there. but we see a lot of new apps? >> there are extensions.

able to build are apps with than apps, so we can enhance our functionality within apps that are out there. >> explain that. >> basically, taking a narcotic and -- taking a work-management app and if you want to do canthing and run app, you work on another app within. it will do a deep link cap to app. -- cap to app. app to app. >> is that hard to do? >> yes. integration is within, but we will be able to integrations,

called extensions. >> i would imagine you have got the developers super-busy. what kind of resources does it take? a big company like opentable or october? they have a big user base. but they must get ready for the big change. ios 8 sinced spring. it is not new to us. what will be no will be the final hardware spec from apple. new will be the final hardware spec from apple. the other big issue is the screen size. we have to figure out what kind of app. will it be for the tablet size or font size. that is really have to figure out. have some notion with the

phone might be. in a perfect world, what will the new features of the new phone contain? >> i would love for them to introduce wireless charge. that is a big thing missing. especially with iwatch. all the devices i carry around. not being able to have an easier solution to dock the device and charge it. that is one of my main concerns. is your access to pairing. easier access to pairing. tactile keyboard. there are some companies that are allowing you to tap on the keyboard and feel resistance or something would pop out of the screen on the device. that is on my wish list. more tactile interaction with the device.

tomorrow we find out what we're going to get. do you expect this is what will have for the next two years? that has been apple's process in the past. samsung has a shorter development cycle. tomorrow for the because this is what you will have a two years? >> it has been more about innovating and creating evolutionary aspect updates. they have not introduced anything revolutionary. maybe it will be the iwatch. tim cookve criticized about that. samsung strategy has been creating device after device. quick product cycles. they do not care about refinement as much. apple takes their time with different things. will have to wait and see tomorrow.

>> a lot of different clients out there, and a lot of apps to be written. you ready? are the apps ready? >> one thing we tell clients. we'll wait until the new hardware comes out. to go.re good part of our job as app developers is to predict what is trends.ut and forecast all of the apps will build right now will be able to connect. we'll take advantage of some of the hardware, but we have to wait until the hardware comes out to test and make sure it will run properly. >> founder of appetizer mobile. thank you. >> doesn't make sense for all of these accessories for iphones? we'll take you to the mad scramble one company goes through. next. ♪

>> i am cory johnson and this is "bloomberg west." never releases information before hand. it is a mad scramble for partners to figure out what the new iphone is going to be. look at what they had to do last year to deal with this. ♪ ustoday you will see gathered around the tv. whatever be watching the announcement, hopefully live, on apple tv. >> thank you. thank you for joining us. good morning. a very good job of being secretive and holding information close to the fest. -- invest.

apple does not give us a heads up. that does not happen. new devices are announced, people go out and accessorize them. that is where we come in. when you have got to start running pretty fast. they are're saying is going to have microphones. what that means is, our cases need to accommodate a mic. now i can start editing. but they are taking off. they are not leaving because they are bored, there going to do what they need to do. i do 2-d design. everyone is listening for their information at the announcement, and they will act accordingly. >> were going to start prototyping and growing for the new ipad. this is starting right now. 3-d center.od everybody keeps asking me where

my ferrari is. i'd tell them, i do not have a ferrari. it is this thing, right here. from an inventory position, we have a lamp things will continue selling. and brand-new that will start selling. we are a busy warehouse. reason we are the best at it. we're fast. will be on shelves before other deeper. >> imagine all of this partners trying to do with us. they have to take it up a notch. the recently signed a deal with kate spain. we're now checking on headlines outside the world of technology. steele.ng in alix is still called? x no. they are usually but they are ok now.

russian president the vladimir putin has been talking about winning piece to the ukraine. there will continue dialogue. ukraine says the four-day cease-fire is holding despite scattered fighting. a security incident at london's airport a home to is a jet. up a suspicious package found in a security area. ce blew up a suspicious package found in a secured area. fallinget prices are for the u.s. open men's final. by 26%prices are down over last year. they averaged $390. >> thank you very much. software developer around the

world is a $20 billion market. a similar market be used to improve education. when you look at a company trying to do that next on "bloomberg west." ♪

>> welcome back to bloomberg west. i am cory johnson. salesforce's notion of software sold as a service. of the big questions and software, whether or not you need industry-specific software. you needed in education? education, you do. in the case of our management, crm's do not really do the trick. less salesforce is as follow someone through the sales cycle. interact with the customer, whatever. sexy got it. the problem with education is that when you're using a crm to track relationships with customers, it is about me

tracking my relationship. it is not about me making sure they have the appropriate relationship. when we envision that. if the list wants to be successful, if this group wants the student to be successful, you have got to make sure they have mentors. strong new relations. there is no debate about whether or not that help students be successful. they need to build an entire relationship blair on top to allow this students to use it. it is a new category of product. >> have much is already in place? how much of it is monitoring how strong the relationship is? >> you would be shocked. there is nothing. the jury is out. the jury is out on whether students needed to be successful. and if you are across ireland education right now and ask any administrative best things matter, they'll say yes. if you ask them which students have strong mentors, strong

objectives, stronger relationships on campus, who knows a professor, there are literally with a blank stare, realizing they have no way to know whether which students have it or not. and workingriage with students to make sure that happens pretty much impossible. customers arerly highly him state university, american public university, brown university. -- universities i recognized have recognized they have to approach the relationship aspect of education as well as the content. education is about content, relationship, and purpose. so much innovation goes into content to the exclusion of relationships. at about the innovation of offering what is there to run her audiences? >> absolutely. successful organizations, these

companies have taken a bundled package. they are not just tricking out content to the exclusion of relationship and purpose. theracking the success or environment for success. the content that might be successful is not there. i spent a lot of time working on the for-profit education sector. it has been a disaster. you mentioned content and relationships. you did not mention enrollment. for this business, the entire enrollment. john oliver picked up one of my sessions. that emotion of enrollment as a focus, is that changing. enrollment screws? >> i have seen in the late 1990's to early two thousand and late to thousands, all of the effort was put into regeneration. the internet as a road to find a

students. >> using tuition dollars to spend on marketing to buy new students. >> you are spending 30-50% of money on marketing. now, as a result of a couple things that have led to it, the bottom line is almost all schools, including the not-for-profit, are focused on graduation and success. that the placement and companies on the back end. as in any situation, some for-profit schools are doing a good job. some of doing a decent job. i allowed a doing a pro job. that goes for nonprofits as well. at the end of the day, there's a new approach of students to help them be successful in addition to just providing a curriculum to decide if they succeed or fail. >> rise so this is a service? why not just sell it as a big software installation to the square of? >> it makes it more convenient.

they can decide. were you selling it to people who have 3 million-5 million dollars crm. trying to take the crm and change it into a learning relationship management, lrm .nstead we tell them to give it a try for a year. arehey get the impact they looking for, we can blow it up and take it to the entire organization. it allows them to blow it up quickly and then expanded to the entire university. >> always a pleasure to see you. thank you. >> now, one number that tells you a whole lot. what have you got? >> 28. musicthe number of artists and nonprofits that are getting to use twitter's bio button. the new button that are allowing

people to purchase directly from tweets. purchaseletting people on credit cards. >> that is a big deal for this company. a revenue source that have not used to it. people have been rooting for them to find a way to monetize even greater. >> it is a good revenue source. they are not prioritizing revenue right now. only 28 people can use it. it is starting out small. they are trying to get people used to the idea of purchasing through twitter. >> interesting that they are doing it with musicians. buy the musician. you can buy the music and the gear? >> they wanted to be purchases in the moment. i musician controlled about an upcoming concert. location-based targeting is saying here come by this ticket to a concert and they are on

sale right now exclusive to twitter for 20 minutes, ever they want to do it. x this could be interesting. whether they are trying out a lot of stuff like this, or is this a serious long-term focus? hired nathan a hubbard from ticket master. they have been working on this for almost one year. this is the first strategic announcement. this is what the buy button looks like, this is what we're doing. trying a buy button as well. it is interesting to see how the two social networks have suddenly decided to do e-commerce. >> you can get bloomberg all the time streaming. we will see you tomorrow.

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