cory: live from pier three in san francisco, welcome to "bloomberg west." i am cory johnson. a check of your bloomberg top headlines. european union leaders are in brussels for an eu summit reaching a deal on the greek bailout the main topic of the meeting. here is the greek prime minister. >> the european union needs initiatives that respect both democracy and the treaties so that to leave behind crisis and move toward growth. cory: angela merkel vowed to

keep the euro in tact before heading to brussels, telling german lawmakers if the euro fails, europe fails. in switzerland, swiss national bank president thomas jordan pledging to keep interest rates low. he also promised continued intervention to keep switzerland from deflation. >> in a very short-term we have to accept inflation is below zero, negative. that will change. we expect inflation will be back in positive territory early 2017. cory: jordan says the swiss franc remains significantly overvalued. google and intel are teaming up with tag heuer to develop a smart watch. the watch will be unveiled sometime this fall. here is the tag heuer ceo at basel world, the world's biggest

watch and jewelry trade fair. >> we announce a huge partnership. silicon valley has met switzerland. by doing a partnership with the two giants from silicon valley, google and intel, google and intel will partner together in order to make the next tag heuer connected watch. cory: other swiss watchmakers are adding digital features to their products. go daddy has plans to sell 22 million shares priced between $17 and $19 appears -- apiece. go daddy's ipo comes three years after the company was taken private. they are hoping to get an uptick from that investment. go daddy posted a loss last year and revenues of $1.4 billion. the ncaa tournament kicks off in

minutes. 36 leaders from top corporations are taking part in a bloomberg's brackets for a cause. tech titans include eric schmidt, john chamberss. undefeated kentucky was the top tick -- pick of the 23 entries. now to the lead. tesla's ceo has a message for model 4s drivers he says. with the new software update, it will be impossible for a car to run out of a charge, released by accident. musk unveiled the software update earlier today. he says tesla will have charging stations in most of 50 states within the next year. elon musk: the charging network has grown dramatically over the past years to the point where virtually the entire u.s. and

canadian population is in range, as well as northern western europe. cory: he says the model x will hit the road this summer. will a software update suit fears with the car's battery ko nking out? joining me is a battery expert and author of a terrific book about the search and battle for a better battery. also, from new york, a senior analyst. peter i know you are very bullish on the company. what was the best news for tesla out of today's press conference? guest: about managing expectations when the gentry product comes out. i don't think customers with a model s have range anxiety. this is about managing the inside part of the experience and with a potentially smaller battery, range anxiety will be an issue in this will address it for them. cory: when did you expect the

car, and when do you expect it now? guest: by 17. -- 2017. when the giga factory is up and running, we will have the car. cory: what are the technological limitations to creating this car for the masses? the luxury tesla, they say the base price is $70,000. to sell a $30,000 car, what do they have to overcome technologically that they have not already? guest: i wanted to say something first. that was a follow-up to what mr. o'neill said. i got a different message from what elon said in his press conference because he stated that -- he said that 200 mile range is a passing grade for an electric car. he scorned the question regarded

gm's plans for a 200 mile car. he said, if you have 200 miles, that's only a passing grade and the sweet spot the tesla shoots for is 250 to 350 miles. i saw that as a signal that the model three is going to shoot for longer range, it's going to try to get into the 250 to 300 mile range. cory: the cheaper version of the model s is the one that starts at 70 and change, has the 200 mile range. the more expensive version has a range closer to 280, they say. guest: yes. he went on to say that even if you do have 200 miles and you get that passing grade, it has to be a real 200 miles. it can't be that you have your air conditioning off, you are crawling along at 40 miles an

hour, the weather is perfect. it has to be real driving conditions. i got the impression that he was setting the bar differently from how we until now have been looking at that race among the carmakers for the car, the 200-mile car in 2017 2018. i think he's saying at least there's going to be the option to go further than that. cory: theodore o'neill, elon musk often sets a high bar. last quarter they said they would sell 11,000 cars. they sold 9800. we think of that as his own aspirations, or the promise from a public company ceo? guest: he knows exactly what he's doing. if they can get jen three to get to 350 miles, i'm not sure where they would [indiscernible] what they talked about today in their press conference was software not necessarily about

the batteries but how to let the customer be comfortable with letting the car control the charging aspect, the planning aspect so you don't have to worry about running out of battery power. cory: to be fair, one might mock this it's a warning light coming on the dashboard. it does say, you are now about to drive beyond the range of the nearest charging station so if you don't turn around from the direction you're going right now i get to a charging station immediately, it's your own fault if you run out of juice, right? guest: what musk said today, in effect, is that range anxiety is a psychosomatic malady. it's totally mental. i'm going to give you bedside manner. i'm going to tell you when you're about to be sick if you

don't do something about it here and he said, my cars effectively go far enough. if i can put in a 500-mile battery -- but it would be dead weight in the car. what you need is that kind doctor. cory: do you think the competitive efforts to come up with a better battery might actually alleviate these worries of distance in a much bigger way, or is that too far off? guest: this still is the essential tension in the industry. the folks like gm and the rest of the industry that is trying to create the super battery and thinks that is where the tire hits the road, and then elon musk who thinks i'm going to engineer my way there, i'm going to create the mental framework for people to feel calm about

owning an electric car, and i'm going to build a gigantic lithium-ion battery that cuts the cost by 30%. cory: steve levine, author of a terrific book about the battery business. and peter o'neill, thank you very much. ♪

cory: coming up, one of the world's best-known cyber security experts told us what you think russian hackers have a strange advantage over the rest of the world. also, going to the dogs, rover or b&b for dogs has raised a big round. making fido's vacation easier than yours. the bank of new york mellon is close to settling allegations it defrauded clients in foreign exchange transactions. the bank will pay more than $700 million to settle the suit brought by both the feds and new

york state officials. some private lawsuits will also be settled. it can cost less for the pentagon to fly lucky martin f-35 fighter jets. it can cost $7.5 billion -- because of lower labor costs. they are now expected to spend $391 billion for a planned fleet of 2443 jets. eu leaders gathering in brussels. the cease-fire in eastern ukraine is tenuous. ukraine's prime minister says he must not let down his guard. >> we can talk about the rollover and how to scale up sanctions in case if russia is not eager to implement the deal. cory: leaders that expected to announce any new sanctions at the brussels meeting.

the most popular makers of the early cyber software in the world, the moscow-based firm generated $670 million in revenue in 2013. the software is loved by the best buy geek squad. the firm also has close ties to the russian government. american cyber security firms have similar issues. how does this impact the business these companies do? that story is featured in this week's issue of "businessweek." jordan robertson is in washington, d.c. this company is so fascinating. you have known it for a long time trade what have you learned in your story? jordan: it has been an object of fascination for a lot of us-based security folks for a long time, primarily because it's a moscow-based company, and the founder was once affiliated with the kgb. what we discovered through our

reporting is the ties go much deeper than that. one of the most interesting findings is that there is a man at the company who is their chief legal officer. until we started asking questions, he did not have a public i/o on the website -- bio on the website. it's essentially the point man for all requests for data from the fsb and other russian spy agencies and other government agencies very -- agencies. it's not unlike what many u.s. companies have. until now we have not had a clear picture of what that looks like. that was the point we try to make in the story, put names and faces to what the company's ties to russian government agencies looks like. there were some revealing findings in that. cory: i know the company best for the reports about illicit activity going on across the web, and weird reports that suggest the nsa but always stop

just short of those three important letters. what is the company's main business line? jordan: the main business line is the antivirus software that you will see on the shelf with best buy. if the big driver of revenue in the u.s. for them. it's really important that people buy it. the reports are basically pr for the company. it serves two purposes. one of the reasons we decided to do the study was because they came out with this report not so long ago about a hacking group called the equation group, essentially believed to be the nsa, really high-level sophisticated spying in other places where kaspersky is that the u.s. isn't. one of the reasons they're able to put out such reports is they are places where u.s. companies are not, but also there's a tendency at the company to focus

on those threats at the expense of russian based hacking attacks that u.s. companies like to focus on. as one analyst said, there's a cyber isolationism occurring within the industry but if you are a us-based company with ties to the nsa, you're going to report on chinese base tax. if you are a russian ebony you're going to face on -- focus on u.s.-based attacks. cory: we will have more from kaspersky soon. thank you for coming onto the show and writing the killer piece. stay with us. ♪

cory: i'm cory johnson. this is "bloomberg west." eugene kaspersky again his cyber career in 1989 after his computer was infected by a virus. the former kgb officer decided to launch what would become one of the world's most profitable security lebanese. -- companies. it now operates in 200 countries. here is what he had to say. mr. kaspersky: it's not the same that it was 5, 10, 15 years ago. the players are different. there is a revolution of the cyberspace. in the past, they were several bands of kids, students writing the computer viruses. then the cyber criminals came.

they were individuals. then the cyber criminal groups, they became organized informational, very professional. then we are facing the espionage company. now it's even different. traditional crime is coming to the cyberspace. they employ software engineers to support operational crime. [indiscernible] we are in a very interesting business which is not easy. it's hard to do our job but it's a cool place to be. cory: when you said traditional crime, what do you mean? mr. kaspersky: the hack computer stations the transportation

hubs. for example, they hacked the antwerp seaport to transport cocaine. in some of the containers they have cocaine planted in. they know which containers they have cocaine. they come to the system to unload containers with cocaine. or they hacked the petrol station to steal petrol, or they hacked the coal mine to steal coal. they report more coal, which is actually lower. they were arrested. that's why i know that. the company that was trading stolen coal. cory: you have been operating in the u.s. for 10 years. do you see this happening in the u.s. as well? where do you see it the most?

mr. kaspersky: i made a report about traditional crime in cyberspace. i'm pretty sure it is here as well. cyberspace doesn't have orders greg -- borders. they trade technologies. they speak many different languages. what is going on in the rest of the world is in the united states as well. cory: this may be very basic but why are there so many hackers in russia? mr. kaspersky: russia is very rich of engineers thanks to russian education. russian engineers are the best. it's not my words. condoleezza rice once told me that. russia's engineers are the best. but other side of the coin is

that russian cyber criminals are the best as well. i'm sorry. [laughter] cory: i won't give you the credit or blame you. i wonder what it's like running your very important anti-hacking organization in a nation filled with hackers. it must raise interesting challenges. mr. kaspersky: we have a very strong presence in many nations. being in the nations which runs the source of attacks, we benefit from that because we see their tracks before our competitors see that. we are first to find, analyze, and report the new types of attacks. cory: that was eugene kaspersky, ceo of kaspersky lab. how about an app that can transform your daily commute? ♪

cory: you are watching "bloomberg west." i'm cory johnson. let's check on some bloomberg top headlines. oil resumes its plunge, erasing gains from yesterday. traders focused on the supply glut. the u.s. dollar is strengthening following yesterday's selloff after the fed cut its estimates for industry -- interest rates. >> they need to see a turn upward in core prices first before they will raise rates. it's the faith versus proof factions on the committee that are fighting with each other those who have faith in their

outlook and will go on that and those who want to see proof in the data. it's not about the labor market at that point. it's about or prices. cory: jenny yellen says the fed wants to make sure the labor market is strong and inflation is approaching the 2% target. the world famous yellow cabs are now outnumbered by ubers. the city says -- there are 13,600 mendelian taxis. there are now 14,000 uber cars. phillips is planning an ipo for its lighting unit. that would allow the dutch company to focus on consumer health care. could be a $100 billion market . the competition has intensified in the industry as the industry is moving towards led. china cutting 200 to 300 jobs.

yahoo! does not offer local product experiences in china. marissa mayer is under pressure from activist shareholders to cut costs at the company. amazon expanding its same-day delivery service called prime now to baltimore, miami. prime services debuted in certain parts of manhattan. two-hour delivery is free. google and ebay also offer one-hour delivery services. what about traffic? are we all sick of traffic? a new app says it can transform your daily commute. urban engine analyzes data from trains, buses, tollways to improve traffic in the world's biggest cities. it is unveiled and app for consumers to navigate rush-hour.

joining me is the ceo and cofounder. great to see you. this is a fascinating use of the data. guest: we look at buses, cars trains, see where people are. we figure out how many people are stuck in platforms waiting for trains. cory: this is impossible dated together. for example, let's imagine -- guest: also from the smart cars they use in travel. cory: smart cars in singapore, in brazil. guest: and washington, d.c. cory: it seems like it would make sense. you can see it a bus slows down everyone's phone slows down. but then one bus jumps the other one or if i'm driving a car pool lane, does that mean i'm effecting the traffic flow of all the measurements being taken of everyone else? guest: to a certain extent, you

are, but it's very local. you need about 10% or 15%. it works in the aggregate. cory: the tipping point is 10% to 15%. you have got to have 10% to 15% of everyone on the road or on the bus. guest: from buses to buses on the same road that are available at the same time. people tend to jump in a bus that is coming at them. if you're waiting at a bus stop at nothing is coming your way for five minutes, you will jump on the next bus. what happens is the bus behind that crowded bus is usually reasonably empty. it is a snowball effect were the first guy picks up everybody and the guy behind him is less crowded. cory: is the notion here -- when

you're stuck in traffic when i'm waiting to get on the golden gate bridge or the bay bridge or whatever, and i suddenly see all the cars around me have four or five seats that are empty and everyone is single passenger you think if we were all just writing together, or writing at different times -- the city has tried different things over the years to get big corporations to shift their days later or earlier to help traffic flow in the city. guest: there are three things what all can do, try and change our motive travel, change the time at which you travel. motive travel -- mode of travel does not mean public transport. another is ride sharing. many people work at the same place but live reasonably close to each other as well. of course, change the roads on which we travel. moving people, shifting the main space, time, and mode. cory: how does the technology work?

what is happening behind the scenes here? why is this possible now and it wasn't before? guest: in terms of why it is possible now, the cloud is available and data can be obtained and shipped into the cloud. gps location of a bus it's very cheap to do so. you can understand where the supply of capacity is available right now for you, the commuter to get where you want to go quickly. what do we actually do? we work with the transit operators on the buses, trains to understand where are the bottlenecks. cory: don't the operators of the trains and buses know where the bottlenecks are? guest: in general, they do. but if you look at three trains can go within a 15 minute interval, usually at that level is the peak of the peak. it shifts during the course of a

week. cory: does it really? i know when the bart train will be crowded after the trading day ends, and 5:00 that is when it's crowded. guest: you are right. generically, that is true at some locations. what happens is the train going in the outbound in morning rush hour [indiscernible] the outbound are actually empty because no one is going the other way. people want to flip those trains around. they don't want to take the same train all the way back to the starting point. our platform allows them to understand which stations to you flip the trains at, how can you get the capacity of transport. cory: i read were you guys are going to start offering the service to regular joe's.

it struck me as a brilliant way to get more data on your platform. is that the goal? guest: the goal is to give information to the commuters. we give real-time information to commuters. guest: waze -- cory: waze is a life-changing app for me. outsourcing, crowd sensing. guest: our app has three features that really make it unique. it can go completely off-line. you don't need connectivity. this means you can look at the map, search the map while being disconnected from the network. this is useful for someone stuck in subway systems where connectivity is very poor. or if you are traveling and you don't want to pay data roaming charges.

we use augmented reality to help you understand where the bus and train stops are relative to where you are just using a camera view. it is really fast in terms of routing. this is what the app allows you to do, the computer, to find out how to get to any one of those. cory: thank you very much. really cool stuff. "bloomberg west" will be right back. ♪

cory: coming up, microsoft and salesforce. s.a.p. paying investors to keep the stock. rover can make your. us next vacation -- your dog's next vacation easier. the world's largest mobile carrier, china mobile, lost $9 billion in market cap. the company posted its largest

annual profit decline since 1999. china mobile has been more -- has been spending more to promote its 4g network. costs drag down yearly profits by nearly 10%. s.a.p. announced a $1.4 billion dividend two months after cutting its profit target. s.a.p. changes payoff policy, boosting portion of profit in returns to shareholders by more than 35%. the head of the secret service has reports of crashing the car into the white house barrier are overblown. the car entered the complex at speeds of 1 to 2 miles per hour before hitting a plastic barrel. the start of his brain together two of the biggest rivals in enterprise tech together i,nside

nsidesales.com raised $600 million in funding. it has competitors coming together. salesforce and microsoft working together. joining us to discuss this is the chairman and ceo. talk to me about this. it's like cats and dogs coming together. it's like the sharks and the jets. guest: it's an unusual round. it was exciting for us and it was surprisingly instigated by the two partners. we have been a longtime partner with salesforce.com and we suggested we were considering a strategic investment. we had been a partner with microsoft and they suggested it might be interesting to consider some other strategic investors.

they said, we would be particular if they were the right or wrong people. i said, we have a really good relationship with microsoft. they said, that would be fabulous. i went, awesome. let's do something. cory: you inked the deal. what is the pre-money valuation there? guest: well north of $1 billion. cory: that's not a number. sales man. come on. guest: sales has a fairly good in face of tactic at times. it was a good step up. our previous investors are pelaleased. this is about creating an ecosystem. there was a lot of demand well over the $60 million we ended up raising from crossover investors. for us this is about a key strategic investment and

aligning with the two largest ecosystems in the space. cory: you've achieved this billion dollar market cap because you solved what problem that has not been solved before? guest: sales have gone through a significant disruption. we are solving the challenges associated with the more traditional sales. companies are trying to lower cost. they are trying and inside sales technique to deliver a more efficient acquisition of revenue. we provided technology that delivers that typically 1/3 to 1/2 the cost. ours is a toolset that delivers that. we are doing this with the data. it's a massive crowd sourcing engine. we have over 2000 clients and they are helping each other be better. there's 45,000 salespeople on

the platform. using the data to provide recommendations that help everybody be smarter. cory: every company using some sort of crm software to run their sales organization is also acting as a senososor so that you can recognize trends using big data of what a real lead looks like, what will progress -- real progress looks like, and spent that back to them in real time? guest: we are looking at contextual data. if it is sunny in l.a. and rainy in phoenix, you should be selling in phoenix because contact rates are higher where it is raining. if regional gas prices are low purchase rates are higher. there is a euphoric effect and

people are buying in a much higher rate. we're looking at massive amounts of contextual data. cory: now i know why the bay area economy is booming. the warriors arewi winning. thank you very much. we appreciate your time. it has been dubbed the air b&b for dogs. details are next. who let those dogs out? who? ♪

cory: i'm cory johnson. it is time for the "bwest byte." that number is $25 million, that is how much money raised by rover. joining me is the ceo with some friends. who do we have here? guest: can you read the teleprompter? this is ginger and henry. these dogs are typical customers. we have dogs of all sizes, but labs and golden retriever's are always popular. cory: how does rover work? guest: you go to rover and type in your zip code or address.

you come up with a list of dog lovers in your neighborhood who will care for your dog while you're traveling. cory: it is like finding a babysitter, finding some stranger to take care of your dog. what is the biggest gating factor? guest: 65% of our customers are people who have otherwise never used a commercial service for dog sitting before. as a natural newness for people, but they get over it quickly and once they use the service, we become their primary go to service when they travel. cory: talk to us about growth rates. guest: we have quintupled year-over-year. the sitter base has doubled. cory: you are seeing more uptick of the sitters? guest: absolutely. in the last five months, dog owners come back about 40% more frequently than prior dog owners. customers are becoming

increasingly more loyal and use a service that much more often. cory: in terms of cities, do you pick regions and fill in? what is the right number of fill in dogs per capita? aaron: it varies by city. we have members in 10,000 cities, but san francisco and new york and seattle where you have a lot of density and a lot of dogs. cory: dog density, where are the biggest cities? aaron: san francisco and new york probably have more dogs per square mile than anywhere else. cory: what is the most effective marketing tool? is it word-of-mouth? aaron: 92% of our customers have referred someone else to rover. 40% have referred five or more people to rover. we can absolutely do marketing as well. cory: what kind of marketing?

one of the things of "bloomberg west" is that the methods of marketing is changing a lot more. knowing someone is a dog owner is a very big thing for marketers of all types. aaron: 90% of dog owners until rover did not use a commercial solution until they traveled. you have to look for those who do look for commercial solutions. google and yelp can be great. for those who don't look for commercial solutions, brand awareness marketing and word-of-mouth. cory: you raised $25 million. what kind of pre-money valuation was that? aaron: into nine figures. cory: do you want to keep that number low so your future rounds could see bigger appreciation? aaron: we have always wanted to be measured how we grow the

business. this business is never going to grow in the way that uber would because most of the owners currently don't search for solutions. we think it will ratchet up over time. cory: this dude is looking for a better contract, i think. [laughter] what is the biggest thing you feel like you could not have gotten to without the $25 million? aaron: educating the broad populace that this option exists is probably the most expensive most difficult thing to do cost-effectively. we're excited about being able to expand the customer base. cory: ginger henry? over here. dude. it's the gray hair on this dog. thank you for coming here. congratulations on the round. henry, ginger, appreciate your quality time as well. check us out online on your phone, on the radio. more "bloomberg west" tomorrow. ♪

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