>> from pier three in san francisco, welcome to the best of "bloomberg west" where we focus on technology and the future of business. every weekend we will bring you the top interviews of the top players in global tech and media companies that are reshaping our world. to our top story. apple crushes top earnings for a pivotal time for the company.

despite a suite of new products and an ongoing executive shuffle, twitter is still having trouble jump-starting user growth. in the third quarter user growth was up 4.8% to 284 million monthly active users. it is slower than 6.3% growth in the previous quarter. also in the third quarter, revenue was up 114% year over year, but the net loss widened more than $175 million. i spoke with c.e.o. dick costolo and asked him what wall street is getting wrong about twitter? >> we take the long view about the business and trying to build a lasting enterprise. when we think about our aspirational goal to build the largest daily audience in the world, it is all about, certainly at its core, that audience is composed of our monthly active users that we reported last night. beyond that, there is also the hundreds of millions of people who come to twitter and do not log in and beyond that, there is the world of the syndicated audience. that audience we reach across the entirety of the web and in our mobile software development kit fabric we reach into the mobile application ecosystem. it is the combination of the core, our monthly active users who create a content we use across the entire system. the logged-out audience beyond that core of logged-in users and our syndicated audience. >> this logged-out audience, how do you measure that audience, how do you measure eyeballs internally, how do you know how much this audience is growing? >> we know and measure how many people come to our properties and do not login and what they do on the site and we have an

understanding of the reasons they come to the site and how they use the site and service. the same thing goes for the syndicated audience. we measure that and understand it and measure how it grows. >> can you give numbers on that? >> we have studied that this is one to two x. the size of our monthly active users. the 284 million users who come in the service and log in. that remains the case. >> how do monetize these eyeballs? >> so many of them come to the service through some expression of interest or intent. they have done a search for some hashtag or a particular user that has taken them to twitter so for those folks who represent a large number of the folks who come to twitter and do not log in, we have a very specific intent or interest they have expressed and we believe we can monetize that audience the way we monetize the login audience. >> is there a vision for promoting tweets everywhere beyond my feed when i log in? >> sure. i think that the acquisition, our mobile ad exchange, the way we think about monetizing the users beyond the logged-in audience is all about the scalability. >> let's talk about fabric, your push to developers. you are giving developers tools to build out the twitter ecosystem. how will you know in six months that it worked? what are you tracking? >> if fabric becomes part of foundation of the entire mobile application landscape because it is the best way to help developers build the best apps in the world across platforms,

that is how we will know that we are successful. if we are the solution developers go to from the moment they start developing their app to the day they launch their app in production to the day they monetize, if we become part of the fabric of the mobile application infrastructure, we will be successful. >> how does it drive growth? how does it change the business? how involved are developers in helping you bring more users into the twitter ecosystem? >> well, i think there are two ways to think about that. one is in the immediate term. in the immediate term, it helps us grow our syndicated audience. with fabric, developers can embed twitter content with one line of code. they do not have to write their own code around our api. they can embed tweets in their apps. it helps us grow our syndicated audience. over the long term, if we become part of the foundation of the ecosystem, around the world, then we'll have enormous opportunities. >> even when you beat, it seems like it is not good enough for investors. why not say we will not give

guidance like google? >> we have made a decision to give guidance. that we want to, you know, it is about credibility and helping your investors understand how you think about the business and i do not want to be hopping around on what, we do not like the way you are reacting to what we said we are going to do so we will take our ball and go home. i do not think that is appropriate. we are trying to build credibility over the long term with our investors and help them understand how we are thinking about the long-term viability and success of the company. >> lets talk about the medium term. in six to 12 months, where do you want twitter to be? you said you wanted to be moving faster. what are you changing to make that happen? >> three priorities. one is to strengthen the core. that group of 284 million monthly users who come to the service and log in. we want to continue the focus on growing that. that is priority number one. priority number two is reduce the barriers to consumption. and what it means by that is for the users who come to twitter and do not log in, make it easier to create quick, fast consumption experiences for them that do not force them to have to search for them.

they get them the moment they get there. they get high-value, high-quality timelines when they come to the site and thirdly it is adding new applications and services like fabric, like our investment and data platform gnip and beyond. >> when it comes to the user experience, i know you guys have been working on product tweets. what about something like the user name? it can be confusing. it can be difficult to search for people. i'm emily chang tv. i'm just emily chang. the emily chang. what about doing away with usernames? how big an obstacle are they to adoption? >> we have a set of existing priorities you want to focus on in the immediate and midterm to address what i have laid out as our priorities, and those when i talk about strengthening the core, it includes things like organizing content for new users. the moment they sign up, they get a great timeline without having to search around for the

kinds of things they are interested in. it includes making it easy to move fluidly between the public conversation on twitter and the private direct messaging channel and pull content and conversation from the public channel into the private channel. >> can you give us specifics about what demographics where you are seeing products that you like and what demographics where you would like to see more? >> in the countries where we're at scale, in the demographics of the platform mirror the demographics of the country. in the countries, in some of our high-growth emerging markets where we're getting started, you know, the population on twitter might index one way or the other, vis a vis the overall population. in the countries at scale, the demographics of users on the platform mirror the population. >> you mentioned emerging markets. china is a place you're blocked. i know you recently visited china. how optimistic are you that twitter will be unblocked one day in china? what is your china strategy?

>> we would love to be unblocked in china. of course our fabric is used by developers around the world. by application developers in the u.s., u.k. and china. there are lots of ways to think about the business that we are building and how we think about the way we work in china the on the bounds of just the product. >> when it comes to revenue, it is still half of facebook. you could turn the lever. you could show more promoted tweets if you wanted to. why not show more tweets or promoted tweets or ads sooner? >> we have been methodical and careful about the way we have grown the business. from the day we started. in april, 2010, when we first launched our advertising platform. we have been methodical and careful about the way we have grown the business and expanded it and we will continue to do that. i do not have any -- i do not feel any sense of needing to

change the way we approach that. >> you just raised the debt offering. you said you wanted twitter to be opportunistic about how you use it. how much financial flexibility does twitter have to make a billion or a multibillion dollar acquisition? >> anthony has talked about the cash we have. the debt funding enables us to be very opportunistic about m&a. what we said when we raise the money that we did not have a specific opportunity we were thinking about when we raised the funding. it will allow us to be even more opportunistic and that is the way we think about it. >> could you make a billion-dollar deal if you wanted to? >> i do not want to speculate about the size of any deal we might pursue. it enables us to be opportunistic and to compete for deals we want to be involved in. >> you reorganized the management team and brought in some new people like anthony. how confident are you that this regime is a lasting regime? >> i think that management teams grow and evolve and change and

that is always the case. i love the team we have in place. we have developed all sorts of tremendous leaders across the company. i could go on and on about the folks that are not on the front page of the media every day who haee grown as leaders within the company. i like the team we have got. >> what about when it comes to product? >> i like the team and the leadership we have got. we have a variety of leaders across product. we have daniel graff and kevin wheel, who is responsible for the very foundations of our revenue product and our platform, fabric. he is the guy that led the product side of the fabric launch and within the consumer product organization as i mentioned on the previous conference call. a host of emerging leaders. >> you said you are doing experimentation with the product. how much experimentation are you doing on a daily basis and how involved are you in that? >> i am very involved in the way

we think about the product and the way we take the product to market and the kinds of things we are trying in the product. i am very involved in that. >> my interview with twitter c.e.o. dick costolo. up next, t-mobile c.e.o. john legere joins us. we will be talking about the uncarrier's huge subscriber growth and whether it is still an acquisition target. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. t-mobile's uncarrier promotions are keeping the new customers coming. they added 1.4 million postpaid subscribers in the third quarter and boosted its full-year forcast. however they posted a $94

million loss as it doled out subsidies and price cuts to lure customers away from rivals like at&t, verizon and sprint. for more on the state of t-mobile, i spoke with c.e.o. john legere who just marked two years on the job. take a listen. >> it is two years since i have been here. from the day came and i had extremely high expectations for this company mainly because i saw the brand and i saw the people and i saw the competition, as inept as they are, and i knew there was a great possibility for the business. a couple of items you missed in your introduction. the big word that i was here with the team talking about today, record results. this was 2.35 million net adds, 1.8 million branded net adds and 1.4 postpaid nets. service revenue is also up 10.6% year-over-year and you used the word by aggressive price measures. that is not what we're about.

as you know, we made this uncarrier movement on a philosophy for changing the wireless industry and the brand is resonating with customers. we certainly had a great quarter but i can tell you, it continued right into october, and we maintained as you see by our guidance, keeping our guidance and raising the postpaid subscriber number from 4.3 to 4.7, which has annihilated the industry and we are all very happy about that. >> what about the outlook on further uncarrier moves? what more appetite do you have for price cuts? >> again, what's wrong with you today, emily? that's the second time you used the words "price cut." am i dressed in yellow? do i look like the guy who is in charge of price-cutting? >> what about the sacrifices and what point do you stop making them? >> listen, emily. we maintained our guidance on

ebitda. the profitability outlook for this company is better than it has ever been before. as you know, in the wireless industry anybody would forego short-term profitability for customer acquisition. to go from the beginning of the year with two to three million postpaid subscribers and now 4.3 to 4.7 and maintaining short-term profitability and a good cash profile, that pays back hugely especially when the churn is at all-time lows for the company. the outlook is fantastic for the company and i could not be more bullish on it. >> what do you think is the best thing for t-mobile's future, not merging with sprint, you're not getting bought out by iliad. what about charlie -- what do you think about him? >> you are so predictable. every time, the same things. two things. i shortened your other question. what to expect from us is more

moves to steer the course for the ones we have. what we want to do emily, and i think we are, we want to change the wireless industry for everybody and that is going to pay back. as far it is a future, i have said to you all along, step number one i am certain of, which is sustaining a standalone future for this company as a viable competitor and brand. a set of employees that are the envy of the industry. however, we have a tremendous amount of inorganic options for the company. you mentioned some of the ones that popped up externally, but the best way to think about it is is there a possibility to create greater shareholder value by expanding on the value chain or looking at other ways to use our capability and brand and distribution, possibly with some others? in the short term, all we know is that we can sustain a very profitable shareholder value creating future standalone and there are a number of options including the ones you have

talked about that we will continue to look at and see how shareholders think about them. >> quickly, we only have about 30 seconds left. what is your appetite for more un-carrier moves? will we see more of what we have seen over the past two years? i did not say price cut. >> absolutely yes. uncarrier moves. there are so many paying points, you and i are both on twitter. watch the feed and you will see what customers want and in that feed will be uncarrier 8 and 9 and the sustaining of one through seven. if you think the first seven were big, wait till you see what we have in store after this. >> my interview with t-mobile c.e.o. john legere. the man behind president obama's election victories is now trying to get uber leagalized around the world. we'll speak with david plouffe next about the ridesharing app big victory in washington. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. uber has run into trouble with regulators in nearly every market it expands to. but will a recent victory in washington put an end to all of this? the d.c. council passed a bill that legalizes services like uber and lyft in the city. but taxi drivers say it doesn't create a level playing field. i spoke about the developments with david plouffe, senior vice president of policy and strategy for uber and president obamas's former campaign manager. i started by asking david how his new job is going. >> it's an exciting and global company growing by leaps and bounds. it's a great group of people who are just brilliant. we try to improve cities and make the company grow, so i love it. >> a lot of regulatory challenges are ahead of you which you are especially skilled at potentially working out.

tell me about what happened in d.c. and why you think this is such a watershed moment. >> it really is -- i think the 13th municipality or state in the last few months, think about that. alifornia, colorado, oklahoma city, nashville -- so there is momentum. you could call it uber mentum. >> i like it. i hadn't heard that one yet. >> washington was the place where there was a lot of fights through this. we partnered with the local councilwoman so it's a creative standard. i think a lot of the debate is how you fit uber and the other ridesharing companies into existing regulatory frameworks that are 50-60 years old? they looked at those new to create a new standard. it is $1 million of insurance, seven-year state background checks for drivers, inspection requirements. this is a model so i think we will build the momentum we have already seen. many states and cities around the world are looking for a pathway forward because they see

the value that uber is bringing in terms of helping their cities with transportation needs and hassle-free transportation and cutting down on d.u.i. there are huge safety elements here. so you will see washington be something a lot of other cities look to. building on top of the progress people already made. >> what about new york? it's not the only one but how are you mapping out your strategy in places like new york and around the world. >> things are going great in new york. we are close with a taxi and limousine commission there to provide a pathway for uber. lyft is there as well. it's one of our fastest growing cities. you look at a city like london, which is a great example. it is a great taxicab tradition. it's a place that generally is thought to have a good transportation service. we came in there and have added to that, so people have to realize is this is not either/or. it grows jobs and the amount of people using ridesharing services and helps with

underserved neighborhoods. one out of three of our trips go to a small business. in cities where there is a public transportation grid, like metro rail, a lot of businesses not on that system suffer. uber expands the ability for people to travel in different parts of the city. you see a lot of welcoming, and paris is one of our fastest growing cities. we are in over 220 cities in 45 countries. we just entered vegas, for instance, and there is a huge pent-up demand for people pushing a button to get a ride. we all live our lives in a way we want information right away. we want to bank right away. we want to make a reservation for an airline right away. this should be no different. that transparency and accessibility is taking off. >> in the interest of transparency, i'm a huge uber customer. i couldn't live without it. i talk to many drivers who are not happy, but we are also seeing uber drivers protesting in different parts of the country. some of them say they are not making very much money especially with the launch of

uberx and free rides that have been offered in philadelphia. how are you keeping drivers happy and how do you respond to some of these people who say they are not making a living wage? >> you've got to look at the vast majority of drivers who are happy. we are adding thousands of drivers every week. every week. i think you've got people who are driving full-time, who are making a very, very good living and you've got a lot of people deciding to drive 10-15 hours per week. what they like about it is complete flexibility, whether you're full time or part time. you do not owe anybody money on a medallion or a car payment. it's your own car it's your own schedule. if you decide i want to three hours today, you just press a button and you drive. if you want to drive four hours tomorrow, you do that. flexibility is key. i think what you are seeing is more and more people use uber, the number of trips per hour -- these are small business people. they are entrepreneurs and many of them are sole proprietors and some of them have a fleet of

cars. it's working well for the cities and the drivers. i think it is something that is only going to grow as more and more people get exposed to it. there are many people in san francisco who don't know about uber, but even in some other cities there is people learning about the business. >> who comes first at uber? customers or drivers? >> well, the drivers are our customers. obviously uber does not work without great skilled drives who are passionate about what they're doing. they are the bedrock of the company. we obviously have riders, and one of the great things about uber is the riders and drivers have a relationship. they talk all the time about their lives in cities. it's a strong relationship and one we want to foster and help grow. >> david plouffe, senior vice president of policy and strategy for uber. next up, a orbital scientist rocket explodes right after launch. we'll look at how big a setback it is with the private space industry with two former commanders of the international space station.

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>> this is the best of "bloomberg west." an orbital rocket burst into flames after blast off. this was the scene. >> we have main engines at 108%. >> the $200 million rocket was headed to the international space station on a resupply

mission. the astronauts are in no danger of running out of supplies. cory johnson i spoke with former iss commanders. i asked how big of a setback this is. >> it is a setback, no question about it. this is not going to jeopardize the program. launching rockets, you've still got some complex piece of machinery and anytime you have to put that much energy into a vehicle to get into orbit, there are risks and mishaps like you saw yesterday. they are going to do a full investigation. they will find the root cause and learn lessons from that. that will lead to more robust rockets in the future. as you heard, there was no injuries on the ground.

the crew on board is in good shape. they have enough provisions and food and water and oxygen. the biggest impact is orbital. this has impacted the company quite a bit. they been doing this for several decades. they will bounce back. this is not a total surprise because in this industry, it is not routine. >> both of you are astronauts yourselves. i don't investigation is underway and it is very early at this point, any early ideas of what may have happened? >> we have both written different types of rockets. it is nice to have a chance to talk with you about it. listening to the person from orbital talking about it last night and watching the video, the big first stage engines worked and got it lifted off the pad and then just a few seconds

after it was off the launchpad, something significant failed. you can see the color of the flame changed as if the fuel changed. there was an instantaneous loss of power and thrust. it started to fall. if you look closely, it looked like something might've been coming up the side of the base of the rocket. it could indicate that the engine was coming apart. it is too soon to be conclusive. as lee stressed, the station is ok. the six people in orbit are okay and nobody was hurt. maybe it demonstrates the importance of an international space station. there was a russian launch this morning it. there is an american launch in december. it is good to have a big partnership when you are doing something as complicated and dangerous as flying in space.

>> let me ask you, it is my understanding that the engine used was made by russians in the 1960's. this is something that elon musk pointed out. these engines were literally made by the russians in the 1960's, mothballed until orbital bottom. is this the wrong technology to be using? >> you are correct paid they were made by the russians and the ukrainians many years ago. they were brought over and refurbished. they were supplied to orbital and other companies. other launch vehicles use kerosene engines. that is what the deal congress made it way back when in the mid-90's. the nine states was concerned

about russian engineers and scientists in the space industry as things were falling apart and going to work for countries that we did not want them to go to work for. we found ways to engage those engineers. one of the ways was to buy kerosene engines from them. we were facing those out of production. we were doing cryogenic engines. for a lot of technical reasons, you want to use them because they cause a lot of thrust. you can't signal out orbital for using russian engines. the only modern belt kerosene engines in the united states are being done by spacex now. is it right to do that? i think it makes sense. the russians have a lot of expense building care seen engines. you could bring up the issue about the possible impact of the

age of these engines that are used by other manufacturers. many are built new and age is not an issue. i want to stress that these engines were refurbished. the investigation will tell if that was fact or not. >> i want to talk a little bit more about spacex and elon musk. what does this mean for the private space community? people like richard branson and elon musk? >> the idea is who is the customer? in this case, the customer was the united states government. they are run or paid for by the government. the only one on your list is trying to do something private is richard branson. he is trying to change the customer from being the government to being an individual. he still hasn't flown one

passenger yet. he is getting close. whether he has the right chair of the market or not or if he has a viable business model remains to be seen. he is the only person brave enough to bank's business on private spaceflight. musk is trying to use government contracts to come up with technology that might lead to commercial spaceflight. we will learn a lot. >> we are going to have much more on elon musk of tesla coming up after the break. find out what venture capitalists think is next for muska. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. who are the most innovative minds in technology today? i pose that question to a man who knows a thing or two about innovation. he is the cofounder of netscape. he is a board member of facebook.

we talked and his comments are going to air my new show. what is the future of elon musk? >> obviously, he is going to build the iron man suit. i think that's obvious. [laughter] in the suit, he is going to fly to mars. he has some work to do. there are three guys who i think are really revolutionizing. we are lucky industry. we've got all of these people who are well-known in the build these amazing companies. it's peter thiel and elon musk and larry page. we talk to those three and you listen to what they say or

write, their ambitions and aspirations are another step up from the rest of us. the audacity -- just look at elon's career. he started an electric car company. the one thing you knew in 2005 that you should never start is a new car company. and you should never start a rocket ship company. he is just getting started. he is in his mid-40's. on earth, he's got a way to go. [applause] >> on twitter you said that your startup is not the next what's up. someone said to you, what is the next big thing? and you said something new. what is something new? >> we are trying our best to fight it. the big thing is just -- there

will never be another microsoft. there will not ever be another google. we have founders come in all the time. there will not be another whatsapp, but there will be new things. the new things will be viewed as completely crazy. the one thing we know is nobody is going to think that the next big thing. it is going to be something on the friends and considered bizarre. >> you can catch the full interview on "studio 1.0." it will be available anytime online at bloomberg.com. there is big buzz about a meeting between tim cook and jack ma. we explore the possibilities next. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. applebee pays off to a strong start. they had one million activations in the first two days a became available. avail partnered with major banks and retailers. tim cook may be eyeing another partner in china. in "the wall street journal," tim cook says he will talk with jack ma about working with alipay. i asked brian what a marriage between alibaba and apple might look like. >> let's assume we are talking about a hands-off marriage and not a full marriage. it would be a tremendous opportunity for both companies.

they have strong positions with the chinese consumer, they both have competitive headwinds in their face. for apple it is the high end of the phone market and for alibaba it is the increasing competition in the e-commerce market. vertical integration of the two where you have more of alibaba's payment options tied into your apple payment options and tied in to the iphone to be powerful for both sides. >> i get why apple is trying to sell more phones into china and is trailing in market share their, i get what they would get with working with alipay, but what would alibaba get out of it? >> apple is strong in china. there are samsung phones and have a higher market share. everybody carries an iphone.

the tie in to apple and the tie into apple's ecosystem and their consumer base and be very powerful. when you think about what is going on with alibaba right now, their greatest competition is tense and. it is much stronger on mobile than alibaba. if they can get more deeply integrated into leading mobile platforms, the better for them. >> they have just done some deals with retailers in the united states. they are the payment arm for companies like macy's. if they can detect that chinese shoppers are on the macy's website, they can give them an option to pay with alipay. how pivotal is that? >> the western retailers have a lot of challenges before they are going to be successful.

buying on the macy's website, they have to have a chinese language website. they have to be thinking that chinese merchandising. it is a helpful first up and it decreases the friction for those consumers to be able to buy. there is a market for chinese consumers shopping on western websites. it is a good opportunity for macy's because they have a long way to go. >> we are not talking about being able to use alipay at the short hills mall. >> they are looking at this as off-line integration as well prevent abroad plans what they are trying to do. alipay is almost like paypal in that you can use it off-line as well as online.

this is not about going to the short hills mall. it is about not going to the mall to visit saks fifth avenue. thanks for the call out. >> coming up, electronic arts may figure how to make money on it mobile gaming and not destroy its console business. we will hear from the ceo next. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. electronic arts is best known for its console games like a madden foot all is making inroads in mobile. active users have tripled. cory johnson sat down with the ceo and exclusive interview. they talked about the future. >> i am going to fast forward and think about the evolution of technology. interactive entertainment is more compelling because you are involved. in that world of more devices and more content, a company like electronic arts who has a work fully of content that maps across those devices and has of variety to the largest gaming population on the planet, we have unique position to help

them find what is meaningful to them at that moment in time. that delivers value a lot greater than just content. >> i am so fascinated by the way gamers and game developers create this content and create an immersive experience. managing that process and those creed of people must be a pain in the butt. >> for me, it is a lot of fun. getting the chemistry right and making them work and when multiple seasons and building that dynasty, that is value. what i am proud of is we have a leadership team and we have creative people who have really gelled any chemistry level and are doing and making things.

do we have off a type creative's? yes. do we have people who don't always agree? absolutely. when you put that together and you get that working, you have some amazing games coming out. that doesn't come from ordinary people. that comes from people who have a deep passion to deliver it amazing entertainment. >> when you look at what you have done in terms of cost control, they are pleased with what they are seeing. if do you measure yourself in those kinds of operating profitability? >> absently. it has to part of the recipe. is not the entire recipe. you can't cut growth and that is very important. it has to be part of what we do and how we do things.

cost control comes with focus. >> why do so many of the games have lousy ratings? all of those have some part ratings. is that related to too much cost control? >> nhl is a wonderful game. it is probably the best nhl game we have ever made. never consumer feedback scores represent is did you get it right for them on all levels? what we heard from the community and critics was this is an amazing game, but it is missing some things that are important to us. >> things were being reengineered for new internation. -- generation. what we had hoped would

understand how great the game was. we want all of that other stuff as well. what we have been doing is putting that back into the game, not as paid content but as a live service. that is a shift in our business from being a throw it over the fence and going vacation model. people are playing our games for much longer. the nhl audience has grown consistently since launch as we demonstrated a willingness and a readiness to continue to service their needs as a player base. they won't let you have anything you don't turn. i am proud of what the team has done. the game is really solid this year and it will get better next year. i am confident that it will be the premier basked ballgame on the market. >> digital help you do those things before.

>> or that half the revenue comes from digital. more than 80% of our playing bass is connected digitally. when i grew up making games, if it wasn't good you had to live with that for a year. there was nothing you could do if you got it wrong. it is different for every person. well we think we are good at finding the fun, sometimes you have a disconnect. >> that was cory johnson. that doesn't this addition of the best of "bloomberg west." you can catch us monday through friday. we will see you next week. ♪

>> tonight on "titans at the table," are you a history buff? >> not really. >> i will be chatting with retired chief executive bob benmosche. i traveled to spend time with this retired wall street titan where he owns a vineyard. >> we have a ways to go. >> and recounts how he turned around a company left for dead. >> i had a company with a value of zero. today it is almost $80 billion.