>> live from pier three in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i am emily chang. >> the banks have in essentially blank for everything bad except for global warming. legal, andharges on

the reserves for legal have exceeded loan losses for the last five years and it exceeds the tarp. there has to be a stop to th is. results were published three hours early thanks to a human error. sledgehammers to clear barricades from a major road in the city. urging leaders are protesters to remain in the blockade befor until the government agrees to talk. and speaking out about the $1.8 billion deal to buy th concur. companies have focused on streamlining their operations within their four walls.

but they have not necessarily focused on the transactions between companies. i believe strongly that the business network is the next frontier in computing. >> they will be working to globalize concur, which gets 80% of revenue from the united states. yahoo! is scaling back on its international operations. relocation will be operating -- .ffered to some employees it is trying to streamline its international business. google adds more fire to his rivalry with amazon which eric schmidt recently called its companies biggest rival in search. was testing out drones for delivery, and all the search giant is expanding its own same day delivery service. express delivery will be available in chicago, boston,

and washington dc in addition to san francisco, a lake, and new york. google has also official shortened -- officially shortened the name to google express. stone, andn, brad the ceo of a customer service and ratings company make our panel. threat of google express to amazon? >> i think the customer will gravitate toward the company that can provide the best experience and the fastest and most efficient way to get them the product. any company that comes out with a solution that will help get the customer the product easier and faster as we do be something they take notice off. cool ife shopping is they have what you want. but they do not have everything, and amazon does.

how big of a threat is google to amazon and vice versa? >> i think amazon has a big lead. share, amazon prime is a little bit more expensive, but they have added the extras like the movies and free books. they also have a model that is expressly for the purpose of online delivery. google is working with costco and staples and petco, these are stores that are meant for in-store browsing. selection is limited, which is why amazon had so much success before. >> why would google bother with this? >> they recognize that they need a different revenue source. recognize that fundamentally these companies have the same infrastructure minus delivery part of it. google recognizes that they can

be and a lot of businesses that amazon is in, and amazon has recognized the same about google. there was not that long ago that they tried to launch their own search engine. it was cutting-edge search technology, something that backed away from. jeff bezos has always been newly around the idea of search. if you search a lot of keywords in google, amazon results will come up on top because they are paying dearly for that. start at amazon, and cannot find it there, then i go to google. >> they are lucrative. you pay a lot to be there on the google listings. google express is to protect the search business. >> you actually have a relationship with google. they use your data to improve

the shopping experience. what priorities does google have? what are they looking to improve? googlennot spain to specific priorities and agendas. we give our customers transparency and data about where to go for buying best products. if this retailer is really good shipping, or customer service, that is a win for the customer. if it is a win for the user, people feel more comfortable on the web, and then everybody wins. >> the google partnership with petsmart strikes me as so reminiscent of the bubble. we've done food being delivered -- we have dog food being delivered to your front door. it is a bad business model that people love. >> today it is all about

density. on have billions of people the internet. we see in san francisco, which is ground zero for this e-commerce boom, the google shopping vans, the amazon truck. orif you could make three four stops in one neighborhood on your morning grown, the math does work. >> maybe it will not happen in cleveland, or the rural suburbs and there is a profound change america. i was walking to work and i saw a mail truck. these amazon with boxes. there is a fundamental change happening. anit is amazing when you get amazon box on sunday. protectare trying to their core franchise which is search.

lotsas amazon has invaded of google businesses, and is releasing all these devices. >> amazon now releasing brick-and-mortar stores. >> it looks like it will be a distribution and a cup center. the pop-up stores, they have a tablet, a phone, a step top box -- set top box, people want to see them. because bezos was an early google investor. and now they are on a collision course in every sector, including cloud. >> thank you both. the techkicking off earnings season today. has there been an actual surgeon surge in pc sales? ♪

>> this is "bloomberg west." streaming services are having a at tv and cable conferences. a caught up with the ceo of chinese company who is predict in a huge growth in the chinese digital market. sohu.com is serving 500 million video views her day. -- per day. in another two years will we row another five times. -- we will grow another fine ve times.

we think it will replace the television in china. he also sees a huge opportunity in streaming movies. today intel reports third-quarter results met and offers some surprises. my partner cory johnson. what are we expecting? >> we had hewlett-packard, less quarter until is that pc sales were great. on the conference call they told us it is because of this one time recovery because of microsoft ending pc support, so corporate executives went out to replace some pcs. is there a true improvement? ancy to grow with the economy?

we will get a really good clue about that today, it is a biggest and most important business for intel. their growth started to accelerate over the course of the last year or so where you , thate sales falling stops, and then the growth pace resumes. >> the last couple of years the story has been that intel intoot get its chips mobile phones. now we see this with amd. what is going on? >> they had some advantage of being in the xbox, but they have failed in the pc sector. shares ofse of the amd have been quite noticeable. they will report on the 16th. that is one we will be looking for. you will see if these companies continue to diverge. having someetly

success and tablets. it is one of those things we are looking for. it is like when you go to the ewstands, all of the other tablets are having success with these chips. we are going to ask the chief officer about these this afternoon. ught ael has taught wristband company, and is all about the devices no. w. but there chips are not inside it. it is owned by intel, but not with intelligence inside it. chips inside this.

they see this as a potentially huge market, they want to see the market with products, they will lose money with every sale, but they will learn a lot. it is jet turbines, or windmills, or watches, these will drive data through the cloud back the servers and those servers will have intel chips in them. >> you will be speaking with a young tell cf oh later today. do not miss it at 4:30 p.m. eastern. -- the intel cfo later today. the movie "the book of life," opens with an all-star cast and a new game. is this a new trend? ♪

>> welcome back. the animated movie "the book of life," does not hit theaters until later this week that a companion mobile game is out now. gn to makeered with stn two game that would go with the movie. >> we are seeing a trend where content owners are really understanding the value of taking that content and integrating it into the game. a lot of time the revenues could be from the game that of the original ip. what sort of -- how does this

improve marketing for the movie? how does this add to what they are trying to do and what you are trying to do? >> it is a perfect win-win situation. from our perspective the 's multi-marketing. the movie helps to promote the game, the game helps to promote the movie. animation, amazing the amazing audio. and of course all of the great talent that you just mentioned. there will be much higher conversions, and a high-quality game. >> what about the money developing the game? how do you share costs? from get all of the ip fox. all of the piece of audio, all of the piece of animation comes to us. that compresses the time it is with us. >> how involved are the stars?

>> very involved. they are in part of the character of the game, and what differentiates the game from other games in the market. >> we have seen kim kardashian's figure game which has done incredibly well. is that changing hollywood's approach to video games and marketing? will we see more of this? >> definitely. from our strategic perspective we're looking at a 30%-40% of our games involving some sort of ip. whether it be a talent, a celebrity, a movie, a television show. the other two thirds will be around independent ip. >> what audience does this reached that you would not normally reach with the traditional marketing campaign? >> our reach is everyone. >> i have not played it.

>> but you probably played kick candy crushed. gamers used to be 15 euros playing world of warcraft or more to come back. now does everyone -- or mortal kombat. now it is everyone. is going to be an afterthought in a few months. >> that is a good point. that is why we intentionally chose the movie the book of life, because we believe it will have an arc of at least three to four years, as are other games do. >> how is the audience different from the audience that would download oney of your games? do you think you can reach a greater swath of people because you have channing tatum and zoe saldana? has millionsatum

of twitter followers, and so does zoe saldana, and they have been playing the game. it also has a little bit of a latin thing, so it can become more global in nature especially in the latin speaking countries. >> where are you putting your resources in terms of other kinds of mobile games? isright now our top game cookie jam. it is one of the top grossing games in the world. we're putting a lot of effort behind that. expansion, japan is now the top market in the world. china will soon be the top market in the world, which will leave you the u.s. as number three. game, isou find a hit that where you put your eggs and her focus? >> it is a balancing act. once you have a hit, it is very different from a movie where you start out with five people, the

new kia are a couple hundred, and then it goes down to five marketing people. people, to 2010 people, to 30 people, 240 people over a 3-4-year mark. and the moon will always have 3-4 of our top teams working on new games. >> this is a perfect example of hit business is a driven business. if you do not have a hit you do not have a business. >> we are primarily a dominant force on face book, and then there's game concentration which is a whole other issue. of a platform concentration issue, i feel they are regrouping now. it is currently quiet. they announced a deal with the al and tiger woods, which is consul strategy, which is consistent with their new ceo background. thank you as always for

stopping by. great to see you. deal.a has a new tv what does it mean for the future of the league? ♪ >> 26 minutes past the hour which means that bloomberg television's on the markets. let's get you caught up on where stocks are trading as we head into the afternoon. indexes are bouncing back after a three-day selloff, the biggest since 2011. the dow up by 80 points, the nasdaq, about 41. russell 2000, the our benchmark of the 2000 small caps, up nearly 2%. it is off by 8% by the end of the year -- since the beginning

of the year. a treasurya look at market, yields continuing to come down as money pours into treasury, a play for safety. note down for the first time in a year. ♪

>> welcome to "bloomberg west." ago, turner broadcasting inc. day 24 billion dollar deal to broadcast nba games for the next nine years. how will this massive media deal impacts the leauggue? thank you for being here.

does this deal mean for you as an owner? >> i think it just reinforces that the content from sports teams have for our media partners. it seems in this multichannel universe where there are three convener of big it isces in real time, sports programming. we were able to do this extension with them two years early, and we will have a long relationship with them. i am sure it will be a profitable deal for the league, for the teams, and for espn and turner. >> will we see ads on players jerseys? the commissioner is saying that is inevitable. >> i think at some point that there will be some kind of ranting that is available on branding that is

available on jerseys. it has been happening a long time on european soccer jerseys. how thes executed, and revenues are split is something that is still sensitive and delicate. we all have to think long and hard about the right implementation. it is revenue that is out there, great training opportunity -- branding opportunity. >> we are talking about finding more ways to squeeze the lemon that is the nba. with these big dollars and placessters, are there where you can squeeze money? anyone. tech as well as where do you see media and technology combining to create opportunity for revenues for the league? >> i think every business is business toh their

see if it can be subscription eyes and if consumers will pay for it. we are seeing more and more on television that people will pay for sports programming. prooflly is the only tivo kind of programming that is out there. news you have to get in real time, and sports. it is counterintuitive. if we have had this conversation a dozen years ago people would have said that sports programming would be dis-intermediated by cable. we are seeing that through paid tv we can bring together that really big audience. president of turner talked about nine of the top 10 rated programs on their network were nba games. and the playoffs ring really big groups together. we're seeing this on frau broadcast network television, it

is this global phenomenon and this really matters. i think the programming is served so well because it is real time for twitter, for facebook them and the second screen really is adding pages and clicks through, and it is becoming more relevant to a younger audience. for the nba, that is very important. also note, that in our deal, we crafted to do an over-the-top type of experiment in business. that is because while there are hundreds of millions of people were subscribed in paid tv, there are 6 billion people around the world that are paying for and subscribing to some kind of mobile application and mobile subscription. to reacho be able those people around the world that are not subscribing to television. ofover-the-top kind operating, led by espn, make sense. what does this mean

for us, do we pay more when it comes to our cable bill, and he says to not make that jump just yet. what do you think? very fair that is a assessment. there is a lot of money that is spent on subscription television, and there is a lot of money that the big providers like espn pay for the fees. lot of revenue, and there is also advertising, e-commerce, and i do not think it is a fair assumption to say that all of these costs will get passed on to the consumer. , that must be thrilled your former chairman paid for the clippers. >> i think steve is a very smart guy. this business the way i have been looking at it, as a tech is this, as a platform business.

software service type of companies, companies that have reoccurring annual revenues, they get valued at eight to 10 times their top line. streams,ur revenue whether it be national television deals, local television deals, season tickets, sponsorship deals, those are on 5, 10, sometimes twenty-year contracts. >> but not without growth. we see them trading. our growth, because of the way the tv rights are increasing look like we are a growth business. i do not think he overpaid, and i think we are building value and ownership of these franchises. , wehank you ted leonsis will have more coming up with you talking about groupon and your tech investments.

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>> this is "bloomberg west." we have been talking about the media deal with the washington wizards owner ted leonsis. i want to change the focus from sports to the tech center, because you are also the chairman of groupon. it has been a bumpy ride. where do you see the actual future for groupon? the new ceo has said that the marketplace has not been quite working out. where do you see this going? timebelieved for a long

that this move to mobile would dramatically change the landscape and e-commerce, and frankly over the last 18 months, that switch really happened. groupon is well-positioned, more than half of its business and orders from around the world are being through mobile devices. we're seeing more and more .real-time commerce we have achieved to scale, we have the ability to do business in more than 700 companies, and -- 700 cities and 50 countries. the social shopping phenomenon, , stills local phenomenon today, 80% of our consumer spending is done within 20 miles of their home base. we are seeing that for millenial's, the services that groupon offers, and not just the

deal of the day, it is much more portal base. in his goods, travel, ticketing. we are offering a whole bunch of services to merchants 50 of the technology that's being embedded in active sale -- at point-of-sale. we are seeing a relentless march to that. the iphone and the android really changed everything. i'm seeing other categories that are really growing. investment in a very interesting company that is focused on returns, and reverse logistics, and that side of the business is booming at more people buy, there are more good the comeback returned. have a quarter of a billion --dollars growing for a year per year called custom ink.

everywhere we turn, e-commerce industries and businesses are being radically changed and transformed by mobile. >> i am more of a glass half empty guy, but the glass half full says you see big revenue increases, of over 20 percent year-over-year. also kind ofe spiraling. groupon has lost over $150 million in the last 18 months. when d.c. that turning around? -- do you see that turning off around? what is going to be the change in the business model that will make it a profitable business model instead of a losing business model? >> i think right now that the doiness has scaled, and we not have to spend as much money on marketing. i do not think we have to hire as many people, and we will see scaled economics eventually take

over in the business. buy grouponfered to 46 billion dollars. now they have a $9.6 million market cap. was it a mistake? scaling a global business is difficult, but the promise of being able to do business in 700 cities is really fantastic. ago ors on air a year two years ago, people would have said there are so many competitors, and there is no barrier to entry. i think what the company has proven is that there is an enormous barrier to entry, building the platform, building a huge marketplace that has hundreds and hundreds of andsands of vendors merchants that want to put information up on the network.

and they get hundreds and hundreds of millions of customers that invite you into their mailbox or their browser. that was a very expensive opposition. it built a big moat for the company. we really have emerged as one of the main players. get amazon, walmart.com, you look at ebay, and then you look a groupon. we have achieved scale in terms of revenues and the amount of customers that we have. >> in terms of those lessons learned, i do not want to dredge up the aged past, but just recently we were talking the time warner merger. your responses to the negative comments? >> he is a good executive, and we are good friends.

division and the strategy of convergence and looking at aol as a platform of lots of customers and lots of credit cards and being able to digitize, be it music, print, or video, was the right vision. the lesson i learned was that of culturally you're not aligned, and ale well was and all for one platform. we learned how to work with partners, but we opened up to be able to bring partners like ebay, or amazon or google onto our platform. and time order was a great company, but it was run as a separate p&l. and they could work with whoever they wanted. i find it interesting that basically what they ended up doing with time warner is breaking it up, trying to unlock

value that way. they have gone, instead of have been, they unlocking value by spinning out the print business and the cable businesses and the like. and now that cable business is looking to be acquired by comcast. a depends on the time, but also digitalon of using a platform with lots of customers and lots of technology to services was the right one, just poorly executed. to ted leonsis for taking us down memory lane. " begins at the top of the hour. you have a preview for us. look at going to take a the upcoming midterm elections here in the united states. -- aresident

president obama's coattails long enough to maintain democratic control of the senate, or will the republicans take control? i will see you at the top of the hour. >> thank you. we will be right back. ♪

>> welcome back. the so-called internet of things is a business area that many companies are trying to succeed in. the value that companies are putting on connected home companies. bringing high-tech to your front door, a new smart lock laun ched today. joining us are the cofounders. how does it work? >> good day.

the smart lock. the way it works is it is a lock that allows you to access your issue keys to people using your smartphone. you can see how it installs on the door. this has the regular lock on the inside, and then on the outside is the smart lock. if you're coming from the outside, as you approached the app authenticates you, and then unlocks the door for you without having to do anything. >> the design of this is very clean. tell me how this works from the design perspective. usit was very important for

from the very beginning that we do not design some tech tried for the home. a lot of products that exist currently for the smart home are very complex and very expensive . we wanted to make the product and application integrate into the house. it comes in four material finishes, very high-end mechanics, very high-end materials. a design that aims to fit in, not stand out. >> what happens if your phone dies? >> you can always use a key, as you do the traditional way. it is additive, we do not take away from your existing experience. borrow a friends phone, and you can login and unlock the door using their phone. >> i do not often give my keys to people. emily could come to my home any

time. but is this a solution in search of a problem, or is there a problem you're actually solv ing? >> there are 2 million people here in new york a gear that get locked out of their homes. a lot of us search for our keys constantly. i leave my keys behind, it happens. this is something, that when we talked to people for the last 2-3 years of working on this, they have clearly told us they hate their keys. they do not like to think about them. we think it is solving a real problem. in the world where people are having deliveries brought to their home, where there are walkersers -- gogod and cleaning ladies coming into your home, this is a safe way to issue keys for a short amount of

time or even a one-time access. and beautiful products that does not work very well is ugly. what is your approach to design? >> i completely agree. i have been involved at the very beginning of companies. the way it works, how it works, in this case it really has to work for everyone in the family. not just a techie that installed it, but every single family member that comes in and out. functionality, reliability, safety, these are prime concerns and are starting point. thank you so much. we will keep our eye on you guys. it is time for the bwest byte.

what do you have? dollars.lion that is how much the zuckerberg's have donated to the centers for disease control nonprofit arm to aid in the fight against ebola. andt is so interesting scary watching this whole ebola thing. we had a conversation about how technology can be used to help fight the spread. but at a base level, there is not a lot they can do. >> it is a terrible crisis, and it is affecting people. happening overseas is so tragic, affecting so many communities, and this money will be targeted to help centers for disease control expand their outreach in africa. watching.ou for

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♪ from bloomberg world headquarters in new york, i am mark crumpton. e," the "bottom lin intersection of business and economics with a mainstreet perspective. to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this tuesday. su keenan is tracking the falling price of crude oil, and