♪ >> live from san francisco, welcome to "bloomberg west" where we cover innovation, technology and the future of business. i'm emily chang. first a look at the headlines. canadian police say the gunman who killed a soldier outside parliament recently apply forward passport to travel to syria. here's stephen harper, the prime minister, talking about extremism. >> let there be no misunderstanding, we will not be intimidated. canada will never be intimidated. in fact, this will lead us to strengthen our resolve and redouble our efforts, and those of our national security agency. >> harper and the rest of parliament observed a miami of -- moment of silence today.

drug maker pfizer has just authorized a new $11 billion share buyback program in addition to the $1 billion remaining on the company's buyback plan. their sales have been declining since 2011. they blame generic drugs for stealing sales from block busters like lipitor and viagra. streaming radio service pandora said sales rose and revenue from mobile grew 52%. listener hours were up and the company's active listener base grew more than 5%. still, their forecast for the current quarter is short of estimates. that has shares trading down. facebook launched a new ios app called rooms. it comes from facebook's creative labs and is the company's latest attempt to build standalone apps independent of the social network.

now to our lede. looks like amazon investors will have to wait more before it starts turning a profit. amazon posted a wider loss of $437 million on revenue of more than $20 billion. the c.e.o. is still spending, opening up everything from the pending $1 billion purchase of twitch, the new kindle fire, and drones and original programming. forecast for the holiday quarter revenue were disappointing for investors. how long does he have before investors demand profits? joining me is cory johnson, brad stone, author of "the everything store," a book about amazon. and piper jaffray senior analyst gene munster. amazon never turns a significant profit but today's loss was bigger than usual. what's your takeaway on why this happened? >> they're spending more on

same-day, building on the infrastructure for sunday delivery. it's just classic amazon spending at a greater rate and i think a lot of it is more infrastructure related than ever. there are also some other wild cards around fx and a big writedown on that fire phone that nobody bought. i think the big picture is that. amazon still thinks about their business in terms of decades, investors think in terms of quarters, and that mismatch is causing the stock to be under pressure. >> over the last decade, investors have given amazon a pass, right? we always ask, how long will investors put up with this but is there a better question to be asked? it seems like the answer is indefinitely. >> this year, amazon's stock is down 20%. patience isn't limitless. i think the better question to ask is how much patience to employees have? amazon employees are compensated with stock, you know, it's a grueling work environment. the prospect of stock rewards is

a big part of why they stay there. bezos and his management team don't care about the stock price but when employees start leave, -- leaving that's when maybe , they'll start to throttle back on some of the new investments gene is talking -- about, geographic expansion, category expansion, new devices. >> the phone didn't do very well. eyes onabout the black the earnings report. >> the phone is obvious. if you don't expect profits, let's do "bloomberg west" instead of stock market tv, where we look at what's happening in the business not how investors will react to it. to that, you know, we care about both but what's going on in the , business is interesting. most interesting is aws, the amazon web service, created a -- grew at a 99% clip year-over-year. we don't know what the numbers are, probably close to $2 billion, growing 90%, leading the internet, we could be in a situation where, with jeff bezos

thinking five years out, 10 years out, much of the web is run on amazon and they've got a different kind of business than what we think of today as the guys that bring us boxes and throw them on the front step. >> should they be bothering with things like the grocery buy, where you can scan stuff in your house, should they be focusing on set top boxs? should they be focusing on phones? >> absolutely. the media business is their first business a huge part of the brand. if they don't innovate in those categories they'll find the apples and googles of the world standing between them and their customers. >> gene, how about you? >> maybe a slightly different page. i think if they can create great apps, they could focus less on the retail side and i think that a lot of the blue sky stuff they do, i'm totally onboard with it, some of the stuff on the hardware i'm not as supportive. >> all right. gene muenster and brad stone,

thanks so much. while tablet sales be shrinking may for many device makers, p.c. demands is making a comeback at microsoft. sales jumped in the first quarter to $23 billion, rising 25%. microsoft's sales boost comes after the largest round of layoffs in the company's history and the acquisition of nokia's mobile phone operations. what do the results reveal about their strategy? i want to bring in matt mcill -- matt mcilwain, who sold a company to microsoft. matt what do you think this nadellas about satya and the work he has done so far? >> i think that he's off to a good start. a big part of it is that he is having the company think more outside in and listening to what customers want and also being much more open to the ecosystem. that's showing up more in cloud

than in p.c. sales. i think they're fortunate in the secular trend on p.c. sales. i would note actually that on the application side, the office 365 numbers are very impressive. >> would you agree, corey? is he off to a great start? >> a lot of the numbers look good. including some things that were troubled, gross numbers in the phone margins were better when you didn't think they could get better. but he's got a lot to deal with, wrestling with the acquisition chief among nokia them. but also chaining the culture of microsoft to be more collaborative. it's interesting, the messaging about products was so much about collaboration and software to help you get things done which is a knock on people working on microsoft that they don't collaborate enough. he's thinking about how that works internally as well as externally. >> let's talk about collaboration. that company that's grown so much over the years yet there was a big round of layoffs recently.

how is morale? how is culture at microsoft? and does he have the support of the troops? >> i think counterintuitively, the layoffs made things more efficient. look, it's hard to have friends of yours you've worked with for years no longer be with with the company. but i think there's streamlining and efficiency there. add to that a significant boost in the stock price this year and good, solid results, and i think you've got a little bit of swagger going on at microsoft. not to the point, you north -- not to the point of excess ego, because that's inconsistent with the personal of satya nadella and the culture he's trying to create but a confidence that they can be relevant across a number of categories. cloud, enterprise mobility, enterprise journey to the cloud. those are big areas for the next decade.

if microsoft can win in a few of those areas, they can be very relevant and successful for a long time to come. >> to matt's point, we talked about amazon and what they're doing in the cloud, we don't know what the numbers are, they won't tell us. but microsoft telling us their azure business, their crud -- cloud business is doing $4.4 billion in revenue. they didn't raise that. maybe it is maybe the growth is not as crazy as it is at amazon but that's some big business. especially from a standing start two years ago. >> microsoft facing so many trends, shrinking tablet sales, p.c. sales that are not shrinking but not amazing either, the flight to the cloud and trying to land grab there, how are they managing the different trends? >> i think the way satya messaged this, it's all one trend. a trend of collaboration across lots of different types of computing. mobile to desktop to what's on the cloud all tied together. so they want to be in all places

at all times. looming of course outside of that is the xbox and while there's integration with a lot of other microsoft platforms, this is a different business for them and remains so. if they don't continue to have this kind of success, the drum beat to get rid of xbox or spin it off separately might get hit again. >> coming up, the secret is out on who will play steve jobs in the highly anticipated film on his life. i'll speak with the writer -- screen writer of the upcoming film for more. ♪

>> i'm emily chang and this is "bloomberg west." academy award-winning actor christian bale is set to play steve jobs in the highly anticipated biopic.

danny boyle is involved with longtime hollywood screenwriter aaron sorkin. it's based on walter isaacson's best-selling book. i spoke with sorkin, the man behind titles like "a few good men." check out what he told me about the film. >> what we needed was the best actor. it's like the nfl draft, there are some people who make a science out of exactly, we need to draft a middle inside linebacker who can do this. other teams say who is the best athlete on the board. we needed the best actor on the board in a certain age range and that's chris bale. >> so you're exithed about him? >> couldn't be more excited. >> why? >> he really is a phenomenal actor. >> tell me about the audition. how good was he? >> he didn't have to audition. it was, a meeting. the role is an extremely difficult role. he has many words to say in this

movie than most people have in three movies combined. there isn't a scene or a frame that he's not in and there's a tremendous amount of language. so it's an extremely difficult part and he's going to crush it. >> do not miss my full interview with aaron sorkin coming this november on "studio 1.0." and tonight, i'll be sitting down with justin bieber's discoverer scooter braun. don't miss it. turning to ebola, a worker in new york is being tested for ebola after volunteering to fight the virus in west africa. and sported him to bellevue hospital.

he was in good health since returning, even taking an uber ride to a local bowling alley. the white house exploring the use of robots to fight ebola but how much can robots help at this point? i spoke with the author of "the naked future" and asked him what can robots do. >> the thing about ebola, we know it's passed via fluids, it's passed by surfaces that may contain it and people interacting with them. if you can bring in a robotic system to limit the -- how quickly it's spread from one person to another you decrease a spreading verdictor and that -- vector, and that could be a huge factor, particularly in africa where they're worried about hospital conditions, about sanitation and all the different infrastructure things they don't have and that plays a big role in how quickly this is spreading. so there isn't a particular robot to do this particular job at this moment. but the white house is teaming up with researchers from texas a&m university and some others from around the country to talk

about what are some of the things that a robot that could be put into this position could do? we have robots that are very good, for instance, at removing the explosive parts from bombs and keeping them from going off. robots that can deliver supplies, we have robot, a bunch of them that work in hospitals and there's a remote controlled robot that zaps rooms with ultra violate radiation 25,000 times more powerful than the ultra ultraviolet radiation we get from the sun which can kill d.n.a., which means it can kill ebola. >> what about something like diagnosis, is it possible that robots could help diagnose people with ebola? >> to diagnose ebola what we really want is get better r.n.a. screening technology. roboticizing that could happen. a robotic arm takes a blood

sample, turns it, and after an hour it can output a result. the difficulty isn't getting a robotic arm to interact with the person. it is just making sure the best, fastest and most accurate screening technologies are in the most number of places. so roboticizing that isn't necessarily too hard but the weird thing is we know how to screen for ebola. we had a big rush to put more rapid r.n.a. screeners out there into airports and to hospitals and places like that. and also certainly in west africa where they could be a real lifesaver. but because of f.d.a. and c.d.c. guidelines there's a lot of discrepancy in where and which screeners are used in which locations. so there's a lot of bureaucracy that stands in the way of of us using tech to the full extent in this area. >> author of "the naked future" patrick tucker. coming up, alibaba's founder.

making moves into hollywood. what does it mean? we will discuss. ♪

>> welcome back, i'm emily chang. mark zuckerberg is making efforts to connect with the chinese population, two prominent asian billionaires are setting their sights on hollywood. alibaba group chairman jack ma is meeting with hollywood exec -- studio executives from disney, paramount, and others in coming days. we spoke with gordon chang, author of "the coming collapse of china" about the meetings. we asked, what could they get out of a possible deal with hollywood studios. >> in the near-term, ali baba has a set top box and they have a j.v. relationship with lions

gate allowing home to stream content to their customers in china. but this is more than the near term, i think. by going to more studios, they can get more content and offer it in a variety of different services with ali baba. over the long term, i wouldn't be surprised if ali baba decided to invest directly in u.s. companies like we've seen from softbank. alibaba's strategy has been to take small stakes in companies. we'll have to see if that continues to be the strategy or make a larger invest meant in a u.s. film studio. >> now, gordon, anyone who has lived in china, including myself, knows you can buy pirated d.v.d.'s, pirated material for less than $1, you can get movies before they come out in the united states. why would alibaba be bothering with this? >> i think this is important for

alibaba. if you look at consumption in china, and look at not the retail sales number from the government which includes government procurement and unsold inventory but if you look at the actual retail sales, you can see they're flat. though alibaba's ecommerce business will take a bigger share of retail sales, nonetheless, it's going to be limited by the long-term potential of consumption in china which i think is in real trouble. this is very important for ali ba because it's getting into a whole new line of business where there is amazing potential. so that's the most important thing for him. one thing he has to worry about is government regulations. they are trying to limit the number of foreign tv shows and movies streamed in china. there was a regulation recently dropping the requirement to 30% of shows that can be seen as foreign. >> corey, what do you see as more valuable to ali baba, the right to distribute the content in china or investing in u.s. studios directly, potentially? >> it's hard to say.

the growth of movies in china, the theatrical film business is huge. it's over 30% this year. think of it another way. the revenues and movies this year in china are already equal to last year. we are only in >> it's hard to october. get a ticket to a popular u.s. movie in china. it's hard. >> that is the second line. the biggest movies in china are u.s. movies. the biggest was "transformers." the most recent "x-men" movie was the number three this year. you see u.s. studios creating contest that's really hot. 30% year over year growth is the kind of number that attracts them. there's not a lot of competition in streaming market, the officially sanctioned streaming site, m-1905, in china. that's the biggest distribution platform online. one wonders if ali baba with its close relationship with government in china might be able to offer a competitor. >> ali baba has a set top box. do you know about the success of that?

>> it's early days. they got that july deal with lionsgate which is going to help because "hunger games" and "mad men" are popular. they have a long way to go in china. any deal they do going forward is really going to be very important because jack ma doesn't do something unless he think he is can get approvals for it back in china. this may be an indication that the television censors are going to loosen up. and that would be very good news for hollywood and for jack ma. >> editor at large corey johnson and gordon chang author of "the coming collapse of china." twitter ceo dick costolo is making a shift from the company's core products while doing so -- details "request." ♪

>> he has built some of the world's biggest pop stars. justin bieber, ariana grande and carly rae jepsen. it started when scooter braun stumbled across a youtube video of a kid in a canadian talent show. that kid was justin bieber. braun is the manager who catapulted him to superstardom. but as the music industry goes through dramatic transformations, ron is reinventing his own empire, producing movies and tv shows, investing in tech companies like