>> 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. president obama says action against the islamic state will not be easy. it will be a long-term campaign. he spoke after meeting with top military officials in and allies with the united states. >> we are united in our goal to degrade industry iso--- i still -- isil.

this is not simply a military campaign like the meeting occurred after a coalition targets. against the world health organization says the new ebola cases may hit as many as 10,000 a week by december. the dallas nurse infected with the virus issues doing well. here is dr. tom is friedman. why some dot sure better than others. people who are healthy going into the infection are likely to come out of it. care canhat health make a big difference. at least double the likelihood a patient will survive. >> the nurse received a blood transfusion from dr. kent gramling who recovered from ebola. teaming up to ibm

form a new cloud partnership. -- noll allow -- deliver one sap will have a chance offer products lot having to build its own data center. is ending business in north america. the cost to market the service were astronomical. the ceo is leaving the company. they will retool to focus business on europe and asia. to our lead carried more signs that a rebound in the pc market intel, reporting gains in third quarter. sales rising 8%. that includes a 9% bump in the pc division and a 60% gain.

net income rose 12%. intel is late into the mobile market. our editor at large with me spoke with the cfo. what are the big takeaways? --what do i always say [indiscernible] that if everyone wrote it on is dead the pc. i say that all the time. the pc is continuing to be used at work and people in size. people went out and bought more pcs in the third quarter. use all growing pc business. -- you saw a growing pc business. imagine that. faster than the previous quarter. you see a consistent trend of intel taking share.

>> you were more optimistic earlier about mobile. the numbers don't look good. >> the data business, every time you save a picture on your iphone and shows at everybody those things get stored in the data cloud and those sales are fantastic for intel. 16% year-over-year growth. this is impressive for this company. that is where they are getting benefits. they are getting the benefit of all the data being created. as well as wearables and these other things. >> what did jc smith have to say? >> he talked about the internet of things. those were impressive as well. $2 billion in internet of things revenue, which is incredible. when i talk to smith, i talked

about those things. trish regan helped me out. listen. >> we are seeing, strengthening leading to nice demand patterns. you can see our strategy playing through in the results. we are growing the client market. we shipped over 100 million microprocessors in the first time in our history pre-that led to 30% margin growth. >> a really dramatic turn if you look over the last seven quarters were you can see the negative numbers get smaller in terms of year-over-year growth. you have done consecutive quarters of a percent year-over-year revenue growth on a big number. the pc business has been surprisingly strong. is that went to continue? we are predicting seasonal for the fourth quarter. q4you take the midpoint for

it would be up on the order of 6% or so versus the fourth quarter of last year. we are predicting we see another quarter of growth. in the pc segment what you're saying is that we are bringing right technology through our partners to the marketplace. it is giving is a great user experience at the higher end of extending but also our technology into lower price points. we are getting some share back from tablets. >> you guys have had a good report this quarter. let's face it. your competitors have not necessarily. in fact as a result of some of those competitor reports there has been concern about a falloff in demand in china. what are you seeing? seendon't think we have any of our competitors actually report. we will be watching that. in terms of demand patterns we

see, relative strength in mature markets, particularly the u.s. emerging markets continue to be weak. china, latin america are both those markets week for us now. >> what about the tablet market? you often talk about design wins. like maybe you're getting some traction. where is that happening? >> we had a goal this year to shift 40 million tablets. we have already shipped that. -- we have artie shipped 30 million tablets. you can see our technology out there. you can see people designing with that. you can see apps being written to take advantage of market abilities. we are leaves with where we are at. ceo jceal -- intel smith. new features to apple shopping

service. that is next. ♪

>> i'm emily chang great this is bloomberg west pre-google is upping its stakes in its rivalry with amazon. more than three dozen merchants are on board, including target, walgreens, staples. they have shortened the name from google shopping express to google express. cory johnson and i sat down with brad stone and the ceo. big lead.has a it has mine share. amazon is more expensive at $99 a year. have added an extra's.

they also have a model that is -- expressly for the purpose of online delivery. google is worth thing -- google is working with stores designed for in-store browse lang -- browsing. this is early. we will see if it can be a danger. >> why would google bother with this? >> that recognize they want a different revenue source. i think that they recognize fundamentally these companies have the same infrastructure minus the delivery part of it. google recognizes they can be in --ot of business and businesses amazon is in. ownon try to launch their search engine.

search technology great something that act away from great jeff bezos has always been with this idea of sorts -- of search. amazon is paying dearly for that. they recognize they are both in the same business. >> if i am buying something i start amazon. if i can't i go to google request that is a huge problem for google. it is part of google search and lucrative. if you are over backing you pay a lot to be there on google listing. it is trying to protect the search business. >> you have a relationship. with google. they use your data to improve the shopping spirit. what priorities does google have? what are they looking to improve? >> i can't speak to google specific agenda but we share the same mission in terms of giving customers transparency and information about where they can

go to get the best products and best experience. the way that we work with google is to provide intraday shannon -- intermediation -- intraday -- that is a win for the customer. if it is a win for the user they feel more comfortable on the w n web and everyone wins. teaming up with petsmart seems like the bubble. it blew up in the day. >> i used that. >> this is for a dollar $.50. it is a bad business model that people love. >> today it is about density. we have billions of people on the internet. we see in san francisco, this is shopping, ifor the

you can make 3-4 stops in one neighborhood on your morning run the math works. >> maybe it is not one to happen in rural cleveland. places in change in america. i was walking to church on anday and saw a mail truck on sunday. what is that truck doing? it was filled with amazon boxes. there is a fundamental change happening. >> i jumped for joy when i get an amazon box on sunday. >> i wonder if google is noodling around. >> they are trying to protect their core franchise which is search. they have moved to counter great amazon has invaded lots of google businesses. lots of thingsng with tablets.

the pop-up stores they been doing for several years pretty have a tablet, a phone, people want to hold those things. amazon is trying to show them to customers. >> do you see them as rivals? >> the biggest rivals intent. bezos wasn't either -- early google investor. they are now on a collision course. we have breaking news now. visitingerberg is samsung headquarters in south korea. he met with the vice chairman yesterday. he has been on a two-run of asia sia to connect the disconnected partnerships with samsung. we will be back. ♪

>> welcome back. starring zoeife saldana doesn't hit theaters until later this week but its companion mobile game is out now. an art with sgm to develop android game featuring the actor and art from the movie. it marks the first time the apartment with a major studio on a game. i am joined by the ceo. thank you for being here. out of this work out? >> we are seeing a big trend in the industry. ip holders are understanding the value of taking that content and integrating it into the game. a lot of time the revenues generated from the game could be 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 partnership's multi-marketing. the movie helps to promote the game, the game helps to promote the movie. we get this amazing animation, 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. who >> what about the money developing the game? how do you share costs? >> we get all of the ip from 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 candy

crushed. that is the big difference. gamers used to be 15 euros playing world of warcraft or more to come back. -- mortal kombat. now does everyone -- or mortal kombat. now it is everyone. >> your movie 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 traditionally download one of your games? do you think you can reach a greater swath of people because you have channing tatum and zoe saldana? >> more people will discover it. channing tatum has millions 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? >> right now our top game is cookie jam. it is one of the top grossing games in the world. we're putting a lot of effort behind that. international 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. >> once you find a hit game, is that where you put your eggs and her focus? and put your 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. the goes from 10 people, to 20 people, to 30 people, 240 people over a 3-4-year mark. and the moon will always have -- and then we will always have teams working on new games. >> allies zynga been doing? this is a perfect example of your business is a hit 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. they have more of a platform concentration issue, i feel they are regrouping now. it is currently quiet. they announced a deal with the nfl and tiger woods, which is a consul strategy, which is consistent with their new ceo background. we will see. we wish them good luck.

>> all right. thank you as always for stopping by. great to see you. the nba has a new tv deal. what does it mean for the future of the league? ♪ >> time for on the market. let's show you where stocks ended. there was a mixed session for the market. after three days, a drop of six points doesn't feel like much at the end of the day. the nasdaq ended up 13.5 points. there was industrial small caps and banks that led gains. ♪

>> welcome to "bloomberg west." just days 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 league? joining us, the washington wizards owner. cory johnson is with us as well. thank you for being here.

what does this deal mean for you as an owner? >> i think it just reinforces the value that the content from sports teams have for our media partners. it seems in this multichannel universe where there are three screens that the convener of big audiences in real time, it is 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 jerseys.ng available under z'

it has been happening a long time on european soccer jerseys. how it is executed, and how the 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. i am sure that will happen in pro sports. >> we are talking about finding more ways to squeeze the lemon that is the nba. with these big dollars and broadcasters, are there places where you can squeeze money? you know tech as well as anyone. where do you see media and technology combining to create opportunity for revenues for the league? >> i think every business is going through their business to 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. it really is the only tivo proof 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. the 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 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. i would 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. we need to be able to reach those people around the world that are not subscribing to television. an over-the-top kind of operating, led by espn, make sense. >> i spoke with the disney chairman last week announced

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? >> i think that is a very fair 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. they have a 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. >> new must be thrilled, that your former chairman paid for the clippers. >> i think steve is a very smart guy. he looked at 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. much of our revenue streams, 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. >> thank you ted leonsis, we will have more coming up with you talking about groupon and your tech investments. ♪

>> 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? >> i believed for a long time 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, and this local phenomenon, still 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. we have an 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. we have a quarter of a billion of 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. the losses are also kind of spiraling. groupon has lost over $150 million in the last 18 months. when d.c. that turning around? -- do you see that turning 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 business has scaled, and we do 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. >> google offered to buy groupon 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. if i was on air a year ago or 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 thousands of vendors and 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. 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. i wonder what your responses to the negative comments? >> he is a good executive, and we are good friends. certainly 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 converging, they have been 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. it depends on the time, but also the vision of using a digital platform with lots of customers and lots of technology to deliver these services was the right one, just poorly executed. >> thank you to ted leonsis for taking us down memory lane. "bottom line" begins at the top -- next we will talk to one company that may hold the key to the next big connected devices.

>> 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. one company bringing high-tech to your front door, a new smart lock launched today. joining us are the cofounders. how does it work? >> good day.

this is the smart lock. the way it works is it is a lock that allows you to access your home and 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 door, 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.

>> it was very important for us 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. or you can 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 solving? >> 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 dockworkers -- dog walkers 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?

>> $25 million. that is how much the zuckerberg's have donated to the centers for disease control nonprofit arm to aid in the fight against ebola. >> it is so interesting and 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. what is 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. >> thank you for watching. all of the latest headlines on your phone and tablet and that bloomberg.com.

we will see you later. ♪