>> live from pier three in san francisco, welcome to "bloomberg west." i'm cory johnson. here is a check of your top headlines. recovery from the worst levels of the day. dow was down by as much as 349 points. they came back after a crude oil rally. wti gained more than 5%. bitcoin prices are in a freefall. the price of the currency is falling 32% in the past two days. $184, the lowest it has been since october 2013.

there is no direct news causing the decline, although russia has been starting to ban bitcoin-related websites. apple and ericsson suing each other over wireless technology. apple claims that ericsson patents are not essential and that -- meanwhile ericsson is asking a federal court in texas to determine whether it's licensing terms are fair. now to the lead, blackberry shares spiked earlier today on a report that samsung made an offer to buy the company for as much as $7.5 billion. now shares in after-hours are moving in the other direction, down. a statement from the company saying it is not in talks with samsung. for more details, the bloomberg news reporter who covers this so well. alex, from new york. the reuters story looks like it was wrong, at least that is what blackberry is saying. what do we know? >> they said blackberry is not engaging in discussions.

you can read between the lines. if you look at what reuters did lay out, $7.1 billion would actually value blackberry about 24 times, which would be how much the company was valued at back when it was the smartphone king before the iphone came in. if this were to be a deal that they would be in talks for, it would be a pretty nice valuation. we'll see if they are actually having these conversations at this point. >> i took the time to look at the filings from the last quarter of blackberry. it was a pretty good quarter. free cash flow positive. it looked like inventory really straightened out. it does look like things are not terrible at blackberry. >> right. that is correct. but the criticism has been their sales missed estimates by a wide berth last quarter.

they are about 46% hardware. but software, which makes up 8% of the business, is where john chen has tried to reinvigorate the company. when he came in november of 2013 he has taken this hardware company and started to pivot it into a peddler of software and security services. that is where investors are really going to be paying attention as to what they are doing with services, software for governments and companies, what they are doing with connected device software and those kinds of things. >> they have also fixed gross margins, it seems they have had a big uptick there, continuing to burn off the crummy inventory on the shelves. that will help those margins get better, 51.7% last quarter. >> they have outsourced a lot of their hardware production to foxconn. it was one of the first things that john chen did when he came into blackberry. the only hardware they're still peddling will be the classics, some of these newer blackberry devices, but growing that margin will help them in terms of

getting business back on track. john chen talked to emily chang in december after earnings saying he is 99% sure this turnaround is going to happen. he has been heads down with his business and really pushing into new areas where he thinks that blackberry, and the the technology blackberry has and the patent tropes blackberry has can be successful. >> it is notable that 27% of the shares is sold short. the stock market move is certainly a whipsaw. alex barinka, blackberry reporter, thank you very much. another big mover, tesla -- shares closed down 6%. elon musk said the company will not be profitable until 2020. after it delivers about a half a million cars or year. -- her ear. --per year. tesla facing issues

as the world's largest auto market, china. here is elon musk speaking to automotive news world congress in detroit. >> things were a little weaker in china, but just because of some communications issues we had fixed, most important live run charging. people have a misperception that charging is difficult in china. we have got to work to correct that misperception. >> those darn consumers, they don't know how great the car is. we spoke with ben callow. he is a senior research analyst. i asked him about tesla's china problems. >> tesla entered china with high expectations. i think they're learning the market is more difficult than they originally thought, infrastructure wise and education-wise, around electric vehicles as well. >> isn't it true of any product out there, those customers don't know they need to buy more of this stuff? it is their fault. he was saying that we need to fix their perception. i wonder if after 9 months in

this market, sales have fallen maybe the market for this luxury electric car with certain limitations isn't huge. >> there's a short operating period there with lumpy sales. there have been two different heads of china. i think bringing in someone else is one step in the right direction. increasing infrastructure is another step in the right direction. >> in december they got rid of the person that ran their chinese -- >> they did. it was because of this misstep in the infrastructure build out. one thing to remember is this also happened in germany. they entered germany thinking it would be a big splash in high demand. in the first two months they had a similar infrastructure problems where they had a similar uptick in demand. -- did not see a similar uptick in demand. i think it is something they can correct over the course of the year. it is important to note they did say they could meet their targets. in the future they do need the chinese --

>> let's talk about the gentry. the promise of this company was, we're going to create an electric vehicle for the masses. they got a lot of money from the government to do this, loans they have since paid back thanks to the kind shareholders who bought into the tesla story. they have not created a low-cost car. now they are saying that low-cost car is many years away. >> there were some erroneous reports yesterday. they did stick by their 2017 target. it was early to late 2016 at one point. there has been a slip there. we saw the announcement from chevy about the volt. if you look at the car, it's pretty ugly. it's going to be the same price point as tesla model 3. >> let's talk about competition. you have audi's talking about an electric car now, another bolt volt, a bunch of competition coming at that price point that will get there before tesla.

>> it comes around the same time or later than tesla. audi is probably the leader right now. you also have toyota, that is pushing forward on the hydrogen side. there's a big infrastructure bill require for that as well. >> is an infrastructure build good news for tesla? >> the infrastructure build is good news for tesla. the more charging stations, the more cars out there -- elon said as much yesterday in his commentary, they would like to see more entrances to the market. i do not think it is just lip service. i think they would rather be a number three player in a major part of the market share than a number one in a niche market. >> i'm sure they would. but right now i think what we are seeing from this market is significant limitations, sales in the u.s. falling, sales in china after nine months falling. rather than imagined a future where things are different for tesla, can we look at what they're doing and saying maybe

there is limited demand for the product they make? >> last year they finished with 20,000 sales, 22,000 sales. in the world. this year they will finish around 30,000, maybe slightly less. that is demand growth. in his commentary yesterday he did indicate they have seen demand accelerate in europe as well as north america. >> the european numbers were better. i look at this very expensive, limited car. stock valuation aside -- it is a neato vehicle. beauty is in the eye of the beholder. some people like the way the car looks. some people think it looks like a honda accord. i don't have a problem with it. i wonder if this is a product that has gotten a lot of hype that will not be as big a company as people once hoped. >> the number one argument is demand, and it has been from day one. tesla so far has proven otherwise.

demand has come up front and center. for the second time in germany. i think next up is earnings which is early february, where they will be able to clarify this in greater detail. >> that was ben kallo, senior research analyst at robert w baird. still ahead, the online marketplace for all things homemade. etsy money to go public. it begs the question, why do an ipo at all? we will discuss. ♪

>> i'm cory johnson. this is "bloomberg west." silicon alley strikes back. etsy is crafting an ipo. it could be the biggest tech ipo

to come out of new york since 1999. it is a website where people sell handmade crafts and vintage items. they're looking to raise $300 million. from her perspective, i am joined by the ceo of an online shopping community. an interesting business in itself, a social shopping site with 20 million products posted, 350,000 stores, including etsy. how do you look at etsy's business? how do you describe it? >> at seaetsy speaks to the god to the incredible growth we are seeing an independent commerce. our team has done an inventory of independent stores out there and we found that we can calculate or confirm over 2

million independent stores present online. shopify, etc. if you look five years ago, we only had about 150,000. that was from 150,000 to over 2 million independent stores. etsy is part of that explosive growth. >> i was so anxious to see the etsy filing. what kind of things would you like to know better about the etsy business that we might learn from this ipo filing? >> it would be really interesting to see metrics around how much revenue is driven by sales versus listing fees. that is something i'm curious about. i know that just a couple of years ago, only 20% of etsy-listed products were actually getting sales. that is still millions of products. metrics like that would be interesting to hear. >> that probably doesn't help support the ecosystem if most of the people making stuff to sell on etsy don't sell it. >> when you have a cut from that

-- when you have a platform that is so broad, the platform that is so broad, the good thing is to expose all the content. when the barrier to entry is low, it makes sense i can open a store tomorrow and start selling. the real question is how does this platform help a really good seller get discovered. that is a big focus of what we are working on at wanelo. >> last we knew, etsy was profitable. over a billion dollars in annual merchandise sales. that raises the question why do an ipo at all, what might they need the money for other than to pay back their venture capitalists? >> i think the opportunity with independent commerce is really very early. i have shared with you some of the numbers we're seeing in terms of explosive growth, with the sheer number of stores and sellers online. i would not be surprised if etsy has really ambitious plans. i hope they do. i'm sure they can put this money

to good use. >> i also wonder when they look at this business if there are other categories they want to break out. it's interesting they have empowered this broader ecosystem of people making neato stuff. >> it is fascinating. a lot of attention has to go to discovery. when you have a platform with that many products, 26 million how do you find that right piece of jewelry you're looking for? discovery is the biggest challenge there. >> what is the last thing you bought on etsy? >> a necklace. [laughter] >> ok. wanelo ceo, deena varshavskaya. thank you very much. a mirror that sends you information about the clothes you are trying on -- we will look at how intel is investing in the future of retail, next. ♪

>> i'm cory johnson. intel has set its sights on the internet of things for a long time. it has taken this technology to retailers. picture shopping bags that since the clothes inside of them or -- that sense the clothing inside of them or kegs that digitally order fresh beer when they are running low. sounds good. >> we have been there for years. -- over five years. we are trying to engage the retailers and understand her challenges. every year we bring new things

to the show. obviously the industry is transitioning to a high-tech direction. >> what is the coolest thing? >> from our booth there's a lot of excitement around the digital mirror, but we have a steady served keg solution, which is bringing the internet of things to life. it is taking your dumb beer keg and turning it into an intelligent device. >> an intelligent device that turns college students dumb. i know how kegs work. tell me about the mirror. this is really intriguing. >> the digital mirror, once a consumer has put on clothing in a dressing room, they come out to the public area where the mirror is at. they can do a 360 and see what they would look like in that outfit and get a view of all the different perspectives. while they're doing that, the digital mirror is recording a brief two-second video they can

share in social media via their own cell phone device. they can put it on facebook or instagram or pinterest. that enables them to get votes or likes from friends that are afar and have that impact on their clothing decision-making. >> that's really interesting. i would imagine that they challenge retailers have isn't so much getting people to buy the stuff they have on the shelves, but managing inventory, managing the checkout, getting people from intent to actually closing the sale. are you working on a lot of those kinds of solutions? how is that technology changed? >> absolutely. in our booth we gave every person coming in the door an intel bag. it has an rfid tag on it. it shows them by the end of the booth tour that they can see their dots traveling through the booth and give them real-time information and mock demonstrate what a retailer can see if a tag

was on every piece of clothing. by tracking the clothing retailers learn a lot more almost like a cookie tracking, which is available in online shopping, and they can analyze things like looking at what clothing gets put on 20 times in a dressing room but never gets purchased or what types of items get purchased together. by tracking the clothing, we kind of stay away from the privacy laws of the individual and we are just using the movement of the clothing as a way to see the behaviors of what is happening in the store. >> that is really cool. you mentioned privacy. this bumps up against so many of those issues. how do you start to imagine dealing with those problems as you create these new technologies? >> what we're doing is privacy by design, really trying to think up front of the business problems we are trying to solve and think how do we go about that anyway where we preserve

-- in a way where we preserve the privacy of the individual. in this case with the rfid tracking the product and not the person. in addition, we know retailers want to know about consumers, in particular by name who they are, because they want to give them that great new experience. we think if consumers will opt in to enabling that type of the spirits with their key retailers they feel close with, we launched a product in october called the intel data protection technologies for transactions. that enables the retailer to be in control and now secure and encrypt the data that is related to that consumer so it is not accidentally stolen or used by malware crooks to steal your identity, which is a big problem. >> these are very front-end solutions. is this a business that intel wants to be in? or is this showing off what is possible? >> intel is very serious about

the internet of things group. it is one of our biggest growth areas for the company. retail solutions division is on -- one of the biggest sectors we are focused on right now. it's a very large business and growing. we have had over 30 years of sales into this space at the silicon level. we are just now adding new products at the solution level so that we can bring more value to that network and help the innovation happen quicker on intel. >> that was michelle tinsley. "bloomberg west" will be right back. ♪

>> you're watching "bloomberg west." i'm cory johnson. mark zuckerberg is in columbia --colombia, the nationstate meeting with president santos. he is holding his first international townhall on his internet.org initiative, the project aiming to bring internet to users all over the world. why colombia? i am joined by brad stone and paul regale in chicago. paul is a member of the colombian olympic ski team and a tech advisor to the colombian

government. we have got to talk ski team. do you want to tell us the story really quick? >> about two years ago i decided to drop everything and when to -- wanted to pursue one of my childhood dreams to make the olympics. i stopped everything in the silicon valley world and started training skiing. one problem was i was american. the colombian government was nice enough to make me a citizen. >> talk about your involvement in technology. what is the state of the internet in colombia today? >> they have made huge leaps. a couple years ago no one thought of colombia and startups. in the last few years there has been a lot going on. there are some small funds coming out. the government has had a really big role. they started an organization focusing on entrepreneurship. when zuckerberg is meeting with president santos, it is coming from him. there has been a lot happening.

>> brad, is this truly a charitable effort or a way to create more facebook users? >> a little bit of both. facebook, one and a quarter billion users right now. 7 billion people in the world. there's a lot of folks who live in countries where the networks don't support modern applications, smart phone. what they are trying to do is re-tailor the internet for those countries. i think it is slightly philanthropic. those countries don't support vibrant ad ecosystem's, but it is a mission that inspires the company that makes facebook stand for more than just relevant ads. it's a little bit of both. >> it is interesting when you look at this growth statistic about what is happening where for facebook. their growth outside the u.s. is a much smaller business when you compare it to the u.s. or canada. they don't even break out in latin america, but it's growing at a much faster pace. >> absolutely. facebook's business in north america and europe is just getting started.

that user growth, the markets are saturated. facebook has to look elsewhere. if you look at how mark is spending his time right now, it is visiting countries like colombia and mexico and china. trying to open up new markets. >> what you think is the biggest impediment to opening up internet usage more broadly in colombia? >> in the main cities it is very penetrated. the problem with latin american countries is they tend to be very bifurcated. the well -- the very wealthy at the top and the large masses. the cities and large capitals already have it -- >> sounds like america. even more so. >> in brazil, there is a rich and poor. there is a very big gap. here there is actually a large middle class. a lot of these latin american countries don't have a middle-class, or they have a very small one. the biggest part is looking out to those really rural parts. i have seen trends like this happen in southeast asia. the gap closes fast.

they moved to smartphones. colombia is way ahead of that when it comes to latin america. >> i think about the use cases if facebook is the use case or if there will be other sorts of uses. for a lot of people in this part of the world, their initial experience or only experience will be on the phone, never on a laptop, never even a tablet. >> almost everybody is only going mobile first, avoiding the laptop. facebook has done things like -- here in the united states you sign up with e-mail and stuff. in latin america you are signing , up with your mobile phone. you're going directly in three mobile experience. >> and then there is the drones. >> you're a drone man. >> google very famously with its project, floating balloons over developing countries, and now

facebook, where it's lab is getting into this space. nobody wants to be blocked out from these new markets. getting into the space. mark is talking about lasers and drones. he bought a drone company last year. bringing the internet to these corners of the world that have these cell phone networks. >> i wonder if it's a completely different app, completely sort of different business use case that will emerge out of these countries to drive this kind of adoption. >> sure, look. one of the very admirable things zuckerberg is doing with internet.org is not just access to facebook. it is wikipedia, google search family planning information, government services. they're taking a broad view and try to help these communities. you have seen it for the first time. >> what do you think of the venture opportunities in technology in places like

colombia and latin america? >> all these markets are growing really quickly. a lot of parts in the united states are pre-saturated. you want to look for growth that is where you go. i go to places like africa. you see amazing young guys and girls. they are building companies there as well. the world becoming smaller, everyone having access to technology and access in the same kind of blogs, you will see startups coming out of everywhere. it is unwise to not look at these places. >> paul is definitely not out over his skis. thank you very much. it's not just other countries that have challenge is getting people online. broadband internet access is commonplace in america's cities. it's a different story in the heartland. we will talk about president obama's plan to connect rural america next. ♪

>> i'm cory johnson. this is "bloomberg west." the selfie stick is reaching new heights in popularity. the technology gadget which is all kinds of hot allows users to take a better selfie. he was dubbed one of the

must-have holiday gifts of 2014. i headed to the streets of san francisco with my own selfie stick. you thought the selfie was this -- >> let me take a selfie. >> but that song was just the beginning. the stick is, well, extending. >> i have seen a lot of them since i been traveling. >> no. >> yes. >> we have seen them everywhere. i would not get one myself, but what about you? >> didn't god give us arms? >> or friends who can take them for you. >> 478 years people have been bringing their fancy equipment here. to take pictures of themselves at the golden gate bridge. but these days, people take a selfie stick. >> you can actually get a lot more people in the picture with the phone further away from you. >> got confiscated at the

airport, his first one. the second one, they did not understand what it was for, but he bought another one and i thought it was stupid at first. >> the selfie stick clicks the phone's camera with a bluetooth connection. this monopod now has nicknames. all for the greater glory of the duckface. >> what is that? >> show him the duckface. >> that is the duckface. >> that is a duckfaced selfie right there. >> your arms may be too short to box with god, which is perfect for the selfie stick. i finally see why you need one. i'm joined by brad stone of bloomberg businessweek. narciss-stick, you like that one? i stole that one. >> it is fitting. >> this boom in the narcissistic moment in technology all coming together to create the stupid

business of this thing -- >> but everyone is carrying them now. every retailer has them. >> san francisco bay behind us -- we see tourists walking up and down the embarcadero with the things all the time. the guy in the cab told me every day he has people with his selfie sticks. taking pictures of themselves. >> i am against the selfie sticks. what was bringing the social fabric together was the fact that people needed to confront strangers to take pictures of them. in front of landmarks like the golden gate bridge. we have all disappeared into our phones, but that need kept people connected. we now no longer need to talk to strangers ever again. >> i have talked to strangers. it is an unpleasant experience. [laughter] >> your package gave me a little bit of hope that maybe there is some sort of communal gathering around the selfie stick, maybe

it allows -- the point was made , allows groups to come together. >> i was hoping photoshop would eliminate the need to talk to people or be near people at all in any way. >> i love how you can go to a monument and everyone would be there taking pictures of each other. that was a nice moment we are going to lose out on now. >> one of the people on the "bloomberg west" team this morning informed us that she refuses to take selfies. it is way too nice assisted it -- narcissistic. or she's the witness protection program. >> i thought it had in -- that non--- the phenomenon was telling off, but it looks like the selfie stick has given it -- >> thanks to the brilliant technology, like a selfie on a stick, it is back. "bottom-line" with mark crumpton begins at the top of the hour. mark is in new york with a preview. probably shooting a selfie right now. >> mark was trying to put his contact lenses in. thank you.

we are going to be talking about the fed. it will be released at the top of the hour, 2:00 p.m. washington hour. that anecdotal reporting from businesses in the fed's 12 regional districts. we will be talking more politics. our chief washington correspondent peter cook will be joining us at the top of the hour, bringing a set beige book report, and a lot more coming up at the top of the hour. i will see you then. back to you in san francisco. >> i'm try to take a selfie of the two of us right now. i don't know if it will work here. stephanie ruhle is the queen of the onset selfie, but, you know. we are getting there. >> is that one of those selfie sticks. >> this is a special one. [laughter] >> somebody just said in my ear, i'm so hip. >> yes, you are. mark crumpton and "bottom line," thank you so much. >> president obama wants to improve broadband speeds for rural america. state laws are holding some of these back.

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>> i'm cory johnson and this is "bloomberg west." remember the days of dial-up? internet speeds have come a long way since then. president obama wants to help make the internet faster and cheaper. >> you know what it feels like when you don't have a good internet connection. everything is buffering, you're trying to download a video, you have that circle thing that goes

around and around, it's really aggravating, but that may mean money if you're trying to do a business deal or you may lose a customer if they are not able to see you respond quickly. if you are a student and you're trying to study for an exam and you're supposed download some information and it doesn't come that's a problem for you. there are real-world consequences to this, and it makes us less economically competitive. >> the president is in cedar falls, iowa today, try to push the fcc to [indiscernible] -- eliminate laws in states that restrict rod then levels. one city has petitioned the fcc to override a law after building its own publicly run high-speed internet. the chattanooga power electric board is with us. talk about what chattanooga has built and where that money came from? >> we have built a fiber

network, to serve a 600 square mile area, about 175,000 homes and businesses. the money came from two places. most of the money came from the electric system as an interdivisional loan to allow the communications company to be built. after they had been building on it for two years, we received a very nice grant to build out our smart grid. both the electric system, smart grid, and fiber system have been completed and are working very well. >> what is the business impact? earlier in the show we were talking about this company etsy, which has two million people are creating items, handcrafted items. it seems like just the kind of business that can be empowered by strong internet and can't work without a strong internet. >> the business impact has been twofold. one is that we are seeing more industries come here, particularly those that are

high-tech or highly dependent on communications. the other thing we are seeing a , lot of bright, young, entrepreneurial folks coming into town. we are at the point where our young people stay here if they want to because they have their opportunity to work and live in chattanooga and don't have to move away. >> and probably a bit cheaper than other places where they might have moved to. what was the initial objective of the laws that prohibited publicly run broadband? >> i think the objectives and laws are primarily anti-competitive. they are framed under the rubric of saving the communities from themselves, keeping communities from doing things -- failures that will cost them economically. the reality is if a community gets into this trying to build a communication system, if anything goes wrong, only that community will bear the burden of it. that is the absolute definition of a decision that should be

made locally. >> if you want to have that problem, you should want to be able to have that problem. i visited utah about a year ago. they have seen a much higher speed internet than we have here in the heart of technology in san francisco. a lot of big businesses have been built in those cities. but most people in the u.s. have , really slow internet connections compared to seoul and tokyo and paris and chattanooga. >> there is something fundamentally strange about chattanooga having the best internet than you have there. bigger cities ought to have the same speeds and capabilities we can build in these small towns. we think if there is a lesson to be learned, we can do it here, it can be done anywhere. >> but can you stay on top of the latest, greatest cutting-edge technology as a municipality government who is

really slow to do big, important, fast things? >> actually, that's pretty easy to do. the technology we are using is basically computers. every year, computers are bigger and faster and cheaper every --. we are currently testing equipment that is 10 gig and 40 gig capability. it's not that difficult to keep up with technology. >> harold, the president and ceo of the electric power board in chattanooga, thank you for your time. we really appreciate it. the "bwest byte," brad stone is back with me. >> $415 million, the settlement being proposed by google, apple, adobe, and other companies to try to sell that embarrassing -- settled that embarrassing lawsuit that accused them of colluding to not hire each other's employees. you probably remember, steve jobs was the ringleader of that that started in about 2005.

it's suppressed opportunities for engineers in silicon valley. >> wasn't there a proposed settlement? >> there was, $325 million last year. a federal judge said they were getting off too easy and the companies had to go back and this was the latest proposal. if it doesn't work, the case goes to trial later in the year. >> if for all the notions that silicon valley is the lead of -- land of opportunity for the smart and brave, it is an amazing thing that these big companies were keeping people from getting jobs. >> it was really about steve jobs' forceful personality and the fact that he hated losing people at apple. he strong-armed a lot of the companies in his orbit, like adobe and google, to not hire apple employees. >> it was interesting to see -- he has always been lionized, he has created this great image for himself. but there were some things he was doing that were so interestingly anti-competitive whether it was the book deal and try to take over the book business or take it away from amazon through price-fixing, and

now this. >> the testimony is embarrassing. we have seen how google's then-ceo eric schmidt was bending over backwards to not alienate jobs. companies don't want anymore of that. >> he was on the board at the time. >> yes. >> who will get that settlement? >> that will be spread through tens of thousands of -- the lawyers get a quarter of it, then these tens of thousands of engineers part of the class-action. >> the lawyers get a quarter of it? $100 million and then some. brad stone, thank you very much. we should take a selfie, don't you think? our first selfie. there we go. we will figure it out. brad, thank you very much. if the latest headlines all the -- you can always get the latest headlines all the time on your phone, your tablet, bloomberg.com, and on bloomberg radio. ♪