>> welcome to "bloomberg west." focusing on innovation, future of business. i am cory johnson. senate minority leader harry reid says he will not seek reelection next year. the democrat is retiring after five terms in the senate including a stand as majority leader from 2007 until this year. he made the announcement in a youtube video. >> we have to make sure the democrats take control of the senate again. and i feel it is inappropriate for me to soak up all of those resources on me when i could be devoting those resources to the

caucus, and that is what i intend to do. cory: he's at his recent surgery on his face after an exercise accident left him with time to ponder and think about his future. the germanwings copilot to appear only crashed flight 9525 on purpose was suffering from an unspecified mental illness according to a person for late with the matter. investigators found a note in the duesseldorf flat of andreas lubitz saying he was unfit to fly on the day the crash. the lawyers say the films of the victims will build a seek a limited amount of settlement because of the apparent suicide. saudi arabia and sunni arab allies and shia rebels in yemen on the second day of airstrikes. numerous strikes reported around the yemen capital in a nearby airbase. rubble li iran is calling t - rebel ally iran is calling for

talks. when the right to sue google over the alleged misuse of privacy settings. they say they bypassed security. the appeals court rejected google's claim their was no cause to sue because the consumer suffered a financial harm. back in the u.s., google is driving deeper into medicine. the company teaming up with johnson & johnson to develop robotic surgical tools. they will explore ways to add a dance imaging and sensors to surgical tools. now to the lead in the fight over gay rights has moved indiana and there is a major business implication. the state is facing backlash from tech companies and others after the passage of a new so-called religious freedom law. it was signed by governorpence thursday morning. it allows businesses the right

to refuse service to gay people on religious grounds. the governor calls it a victory for religious liberty, upon essay it is legalizing discrimination. among the tech company speaking out, salesforce ceo says they will end worker traveled indiana and dramatically reduce his investment in the state. that is no small investment. they spent $2.4 billion to acquire indiana-based target just years ago. the videogame gencon considering moving out of indiana. joining us right now is travis katz and kyle anderson. professor, let me start with you. this is seen as big news in the tech community out here in san francisco on the west coast. is this big news in indiana? >> very big news. it is all over and there's a huge backlash among the business

community and a lot of people -- i think it is a much bigger story than the governor expected. cory: professor anderson, use a huge in the business community. is the business community concerned about their ability to get revenues from outside the state? >> absolutely. it is both convention business how much will people want to visit here host conventions, the ncaa coming here with the final four, worried about all that repeat? will they want to continue to bring business here? as well as company headquarters. . >> kyle, you're in the business of helping people really recommending travel and sharing travel ideas with your users. how does this affect you and what you tell users about going to indiana for vacation or business travel? >> gogobot is to help connect

people with great places for them and part of finding the right place is finding a place where you feel comfortable where you feel welcome. we felt it was very important for the 16 million people that use gogobot to research their travels to know about the new law that was passed into no they could, if they were planning a trip to indiana, potentially be denied service at a restaurant or a hotel. we figured that was important information for people to know. we added a disclaimer to alert users of gogobot about the new law and to make sure they knew the potential consequences. cory: travis, does this affect the way you guys do business? how do you divorce that from your personal feelings on the matter? >> this isn't about so much personal feelings. we have a big community -- as a company, we believe in everybody should have equal rights

regardless of their race, ethnicity, gender, sexual orientation. we have a very active dbt tried on gogobot with more than 30,000 members. we have a lot of people we support this issue. for us, it is not about picking the sides of an issue but providing people with the facts and making sure they are aware of what they're getting into. there would be nothing worse than planning a trip somewhere with your family and then being asked to leave a restaurant because of a law and not having known that beforehand. i think if that happened to one of our travelers, we would feel like we let them down. cory: kyl, you mentioned indiana, indianapolis looking forward to the final four the ncaa base. jason collins, interesting guy, former nba center, came out while he was still in the league as a gay man. he tweeted to governor pence saying, is it going to be legal for someone to discriminate me and others really come to the final four?

he is working for yahoo! covering this game he knows so well. he played basketball so wonderful when he was in stamford. obviously, i think everyone is going to continue to come to the ncaa tournament, but is that the -- his convention the only thing that will suffer or restaurants and hotels and other businesses going to suffer from this? >> i don't know there is going to be that big of a direct effect, especially right away when the law won't be in place next week when the final four festivities begin. i think there are very few restaurants that are actually going to take that kind of a stance. i don't think there's going to be a direct effect. i think it is much more just the perception and people viewing indiana in a way that is not progressive and not wanting to bring their business there. cory: kyle, let me -- first going ballistic on twitter and facebook talking about this

quite a bit. here is a tweet -- he is very much encouraging other tech leaders to do this. are you getting a sense travis, a lot of technology companies in particular are being very vocal about this? >> well, certainly, it is something that a lot of people in california have been talking about. i think mark benny as someone who has a high profile and i think a lot of people are listening to what he is saying. but i think generally, tech leaders in california have been very supportive of the equal rights movement. i think this is something that resonates with people here. cory: kyle, are we right to read is about gay marriage or would it allow a restaurant owner to decide not to serve jews --is

this a christian movement against, evangelical movement? i can't figure out where it is coming from. i wonder what your senses on the ground studying the political atmosphere of indiana? >> we talked about having a constitutional amendment prohibiting same-sex marriage and that kind of fell through last year. i think the governor really wanted to kind of shore up his right-wing constituency. i think he felt like there was some need to do something there to basically support his evangelical base. i really don't think he expected this to be as high profile a story as it has become. cory: but it really is about gay marriage. it is not about something else? >> everyone is saying it is something different. i'm not so sure it is about gay marriage but i think the forefront of the issue is in fact gay rights and kind of a

backlash to that that a certain constituency in our state and across the country really feel. cory: all right, certainly, if nothing else, it is a business story because a lot of money infected as well. travis katz and kyle anderson, thank you so much. we appreciate your time. we will be right back. ♪

cory: i am cory johnson and this is "bloomberg west." blackberry turnaround. is it working? the inside story of becoming steve jobs. federal reserve vice chairman stanley fischer says marvin jones is needed of the shadow banking system even though progress in overseeing it has been substantial. he spoke in frankfurt. >> if regulation is a cat and mouse game, so regulators job is

never done. you do something and the other guys aren't going to sit still. they will figure out what there is out to do and do more of that. cory: fischer did not suggest policymakers take any further revelatory steps beyond those already announced. brazilian oil giant touch her bra selling oil and natural gas fields in southern argentina. -- petrobras selling oil and natural gas fields in southern argentina. looking for asset sales to raise capital after it was locked out of the international credit market. major corruption scandal. dow chemical strikes a $5 billion deal to emerge -- merge most of its soaring business. the so-called reverse morris trust transaction will leave shareholders of dow 50.5% stake.

the houthis been looking to sell its low-margin business lines. it comes under pressure from activist investor dan loeb. his blackberry turnaround finally on track? fourth-quarter earnings, pleasant surprises for investors. the company sales were down 32% year-over-year, but the company did take and $28 million in profit, suggesting perhaps blackberry ceo is making some progress to stabilize his company. joining me now to talk about these results. crawford, some of these tumors look good and some look like stabilization, particularly, the software business -- some of these numbers look good in some look like stabilization particularly, the software business. >> 20% improvement in software has a couple of impacts to the company. it shows a new revenue growth engine. at a very small percentage of the overall revenue today.

however, they continue to grow off that base. it is a huge injection to the gross margin lines and their profit line because the system is much more profitable. it is where he is publicly stated he asked to go. you are seeing stabilization and some signs of life and what i will call the areas of growth and margin enrichment for the company. cory: it is interesting because the company continues to announce new products, which it would have to do but you still wonder about the long-term focus of those products and what the hardware means to this business going forward. >> it means a lot right now just because of the 40% of the revenue they drive from hardware. having said that i would have expected the gross margins would stabilize a little bit better because you have a set of customers that are showing the undying loyalty to this platform, which basically says

you probably test the level of price sensitivity for those customers. i was a just they can probably raise gross margins little bit more for those customers. the biggest question, can expand the pool of blackberry users over? time that will be very difficult for them to do. people buy into platforms. this is a platform people have been fleeing from in recent years. cory: when you look at the gross margin number declining to quarters in a row come a the euro for your decline a thing from -8% to -2%, what do you think is driving that? as their moving more upstream and away from the cheaper devices where there china get kids to use blackberries as -- where they're trying to get kids to use blackberries as a light feature phone, why would gross margins be going down? >> i would add, they're working more with foxconn. cory: they are not making this stuff. there should be better margins.

>> they're working more with odm's. when it comes down to it, yet to put incentive out there. if you're going to stay relevant, you have to be really price aggressive, at least initially, to keep people on that platform. there balancing this idea yet a loyal customer base, but also trying to attract people to the new touch-enabled library, -- blackberry, to the new product the leap. those products, you have to consent for. which is that's what p --squat product. cory: four years ago, blackberry was doing $15 billion in revenues. now it is $3 billion in revenue. when you try to imagine what

this is going to be going forward, if anything, is it a $3 billion company or a $2 billion company? it is amazing the pace of collapse. i wonder what is going to be left. >> i do think you have to model this as a stabilization slowly declining revenue business with an approving margin base. that is why i'm so focused on that margin profile and what it looks like. this business is going to be without a doubt smaller on the top line a year from now that it is today. but is it healthier if it improves margins on that smaller base? i think so. as they contribute more from software. trying to bring the software to other platforms. cory: all right, crawford del prete, thank you. we will be right back. ♪

cory: less than a month ago for the apple watch to hit stores and companies of all sizes are starting to think about what they're going to do. a real estate company will let you check listings on your wrist or watching round looking at houses -- while walking around looking at houses. the indiana story, really sweeping across the tech -- you are based in seattle. you do a lot of real estate listings in indiana? what does this mean to you? >> i think every ceo is thinking about what we are going to do in seo because we are appalled by the law. we have an open environment at redfin. most of the cultures that

produced great technology are the same. everybody woke up this morning and said, what in the world were they thinking and what am i going to do about it? we have to decide. we haven't decided yet, but nobody likes it. nobody likes it. cory: i don't mean to ambush you with the first question. switching gears massively, this watch is interesting. you have to decide what kind of assets -- how much money does your business -- why spend on a platform that has been users? >> they take platforms and make them beautiful. people have used them are worn for decades i've -- some in become sexy and cool. if you build software on the apple watch, it will make a believer out of you. it is an amazing platform. everything about it is so smooth, so apple. the api doesn't let you do everything, but what it does, it does perfectly.

we're just trying to address that voyeuristic need when you walk in a somebody's house and wonder what it is worth, when you're interested in a listing and wonder what the prices, if you even want to see it, people can do that at a glance. that is something that really appeals to our users. they want to know more about their involvement without having to dig out there -- their environment without having to dig out their phone. cory: for those who don't know redfin, you are essentially a realtor. listings and realtor tied into one. >> our idea is that we got all of these real estate agents who provide local service, but we also got the most amazing website for searching listings this mobile application that lets you tour them on demand. we put that together to say people thousands of dollars when they buy a house. to get them an agent who is on their side, to get them in the property quickly, and save them a time of money. cory: the way you compensate agents is completely different

than everything else in real estate. how does the watch drive business to redfin? >> all of our traffic is moving to mobile. we think it will move to the watch the way it did to the iphone and the android device. the reason our real estate agents are so efficient is because the world has beat a path to our door. that path goes through mobile. we don't in any money really advertising our service. we don't have our agents prospecting for business. we have consumers looking for information through the channels they want, which is the watch and phone and sometimes their browser. increasingly, these mobile devices. betting big on new mobile platforms has been great. cory: you're focused on getting closer to the consumer with the watch, because that is what is driving our business and what the consumer wants. >> yeah they want the information and will work with the people who give it to them. redfin has just had millions of people on our website, millions of people on our applications.

that is what has allowed our listers to focus on doing the right thing. they don't have to worry about making the next deal or their commission because they meet the customer to these channels. cory: thank you so much. we will be right back will stop ♪ . . .

cory: you are watching "bloomberg west" where we focus on innovation, technology, and the future of business. here's a check on top headlines. lawyers say they will be able to seek unlimited amounts in settlements because the pilot may have deliberately crashed the plane in the french alps. the montréal convention means crash victims' families are automatically entitled to about $139,000. but lawyers say germanwings will be insured, even if it is proved the copilot intentionally caused the crash.

the u.s. economy grew at a 2.2% pace in the fourth quarter. day-to-day -- data today showed consumer spending rising the fastest and eight years. it also showed corporate profits following in the last three months of the year capping the worst annual performance since the recession. tesla is showing further signs of weakness in china. demonstrations of the model s fell 45% in february compared to the month before. the research firm said tesla imported 63 of the all electric cars to china in february. the chinese news agency said tesla was misled believing demand was extremely high in china because people ordered cars and canceled orders. here is the chief holdings chairman. >> if you see speculators are buying your cars, you should get nervous and force them to put up more up front or whatever. i think you have to be

responsible for your own business. cory: must also said china is the only country that had excess inventory. rbs agreed to sell the private banking business to switzerland's union bank. a person with knowledge of the matter says rbs expects the sale price around $400 million. rbs is selling the international business to reverse seven consecutive annual losses. ford boosted the c.e.o.'s pay by 82% last year. he took home $18.6 million even though sales declined. they reached 91% of the targets set by the board for compensation packages. the movie the picks steve jobs as moody. a new book paints an interesting and more subtle picture of the

apple cofounder. "becoming steve jobs" is what it is called. it says his time outside the company helped him develop a careful management approach. they are looking at apple's history to better understand how steve jobs changed as a leader over time. the co-author joins us now from new york. great to see you. tell me about sitting down to write this book after our friend and colleague wrote an incredibly successful and seemingly comprehensive book about steve as well. >> my co-author knew steve for 25 years. he felt there has not been anything that showed steve's evolution appropriately. some portraits of steve had tended to be fairly static like he is half genius/hlalf

jerk from birth. in fact, he changed a lot. certain stereotypes that got set in place in the early 1980's stuck around for a long time because steve parceled out access carefully to the press. brent was one of three writers who had kind of unlimited access to steve over those years. the other two were john markoff of "the times" and stephen leavy. we felt we had a different kind of story to tell about him. cory: when i think about brent's work at "fortune," he kind of midcareer with writing the steve jobs'stories and have the

great relationship. steve would regularly call a lot of reporters in the early days and would not take our calls in the later days. >> he was difficult to work with. he was difficult for brent to work with. in some ways, he may have been more difficult for brent's editors to work with. for brent, they talked about things a lot both for stories and outside of stories. they would talk regularly. he was an incredibly difficult person to work with on stories. he was very demanding about photography. he really wanted to be pictured for the cover holding a device because it was all about selling the device. that is when he would give you access. and that was it. he was difficult, but he cared about -- he cared that the look

feel, and quality of the stories would be as good as the devices he was trying to sell. cory: that is the journalism inside -- side of that. the company is so interesting to everyone in the world of business who wants to find inspiration from the way steve jobs did thing and have the kind of success apple is having. i wonder when you look at the legend of steve jobs, what are the pieces you think are replicable? >> you know, it is interesting. there are so many books built around the idea you can learn shortcuts to success from steve jobs. that it is about simplicity or valuing design or being tough on your employees. the thing that struck me most

about steve's renaissance and the come back at apple is none of that is true. there are no shortstop -- no shortcuts. the only thing i can sort of advocate for out of steve's experience is the way he trusted himself. he learned from everywhere. he had enormous peripheral vision. that is what made it so possible for him to go into the music industry and the movie industry. he saw widely and brought all of that together inside him. he was an impresario that could take all of that and create something brand-new that was four steps better than anything created before. to me that is what stands out

about steve jobs an awareness, a willingness to learn. cory: let's talk about pixar. pixar is a business george lucas could not figure out, and this is a guy that does know something about telling stories and making movies. your book gives a lot of attention to that. it was so important. i wonder what steve jobs would bring to pixar. i wonder what steve jobs brought on an active level to pixar. >> jobs was incredibly lucky with pixar. it was a side bet he made shortly after getting exiled from apple. his original idea for the company was all off. he wanted pixar's technology to be the basis of its own computer

and to go along with next hardware he was developing at next. eventually, he became the negotiator and outside man for the company. those were critical roles. he was also -- he financed the company for a while. steve's main contribution, i think, to pixar was as this negotiator and outside man. he got them a deal with disney that led to "toy story." he renegotiated that deal so they could have -- they were set up for several more pictures. they were all could financed -- co-financed.

he is responsible for taking the company public and eventually finding a safe haven with disney. the disney deal, you can look at it as him sort of putting lassiter and camel under the wing of another guy who is really good at outside stuff bob iger. cory: understatement of the show on that one. i want to thank you for coming on the show and for your great book. thank you so much. "bloomberg west" will be right back. ♪

cory: next, smooth sailing at carnival cruise company. plus, putting a price on love. first, check of your bloomberg top headlines.

showing a profit benefiting from lower fuel costs. carnival also ordered nine new ships to join its fleet starting in 2019. carnival is recovering following the sinking of the costa control you and the fire on the shipping year later. quicksilver has hit some flat waves replacing its c.e.o. and c.f.o. and after making some errors recording a right down on a company. quicksilver sales have fallen $2 billion in 2012 to just $1.6 billion last year. chevron abandoning shale exploration in australia also selling a 50 presents fake --50% stake in australia's largest oil refiner as oil prices some. -- slump. there is the picasso, then van

gogh, and algorithms. some companies are starting to sell successful lines of code as artwork. were of the first such auctions taking place in new york. it is the vision of love, the very code that helps pair thousands of couples. the effort has been organized by the company helping to build a gallery. the cofounder joins me now from new york. benjamin i love this. it is so interesting to me that there is art in code. anyone who has written code knows there's different ways to express it. some more artful than others. can you see it when you look at it? >> thanks for having me. i appreciate it. we want to showcase the aesthetic beauty of the code and how technologists are crafting their code to express the beauty and power of it.

people talk about in my next or physics -- the mathematics or physics and people turn their brains off. if you talk about the power of the code, thousands of couples brought together, babies born, relationships made and broken. if you lead with the power and talk about the aesthetic beauty, people understand. cory: is that the magic? isn't the magic of code what it does, not what it looks like? >> code has a duality. there is an actual utility. it serves a purpose. if you have google's ranking algorithm, you control the internet. it also has aesthetic beauty as well. technologists know this. one of them in the auction has been talking about the principal for a long time. in his introductory computer course at m.i.t., he writes computer science on the board and crosses it out. he says this is a terrible name for the business.

we should call it something closer to magic or art. he has been talking about this for the past 30 years. it is something we wish to show in a wonderful platform like the smithsonian. cory: i read this great piece where he talked about -- started to think about this. he said so much of our modern history is written in code, the very details of our history are in the moments of code. they are disappearing and not being saved. it will be lost forever if we don't capture now and celebrate them. are they anything to look at? are they inspiring like art should be? >> algorithms are nothing new. we have one of the oldest in the world on loan from columbia. it is carved an old babylonian cuneiform tablet. it is beautiful. it describes how to calculate a square root. the babylonians did not see a distinction between these initial algorithms is underlying truths of the

universe and a deity. they saw this as something above us from a higher power. the algorithms have a wonderful power. the technologists that craft them on clay, in computer science, or optically, they make aesthetic choices creating code. so yes, i think it is an aesthetic pursuit. cory: is the presentation of this code a big part of this? is it just the code itself is magical? the way it is written, the paper it is written on, the shape of the pieces of art. >> i want to talk about the pure code, the d.n.a. of it. you can say a person is beautiful but the d.n.a. created the individual. instead of printing code and putting it on the wall i want to talk about why the technologist crafted it the way he did. i want to talk about the back story of the code. we do have some pieces expressed. "hello world" is a challenge

that welcomes all computer scientists may learn how to code -- when they learn how to code. they may not remember their first kiss but they remember the first "hello world." there is nostalgia that reminds people of where they came from. a lot of technologists will buy these archival algorithms printed on archival paper. there are also algorithms that are living. anthony has created an algorithm that converts others into music. when you purchase it, you get a full license. you can start a company. can do whatever you want with this code. cory: there is a company called braintree owned by ebay. it will be part of paypal. they have created their own font or typeface for all of their coders to use because they want the expense of writing code to be more beautiful. do you think your gallery show

is going to change the way code is written because the coders may better appreciate the beauty? >> i want to change the way people think about the beauty of code. technologists understand it is beautiful and there are design choices being made. the general population does not see these ephemeral algorithms. they live behind the scenes. i do not understand the power and influence. are showcasing the aesthetics of the code and talking about its power, i want to show the world it is an ascetic pursuit that is collectible in its own right. cory: i love this. i'm going to tweet the article about it. really cool stuff to think about. speaking of cool stuff "bottom line" with mark crumpton coming up. what have you got? mark there is the shakeup in the senate. majority leader harry reid announced he will not seek reelection next year and endorsed chuck schumer as his successor.

peter cook will join me with details. the u.s. economy expanded at a 2.2% annualized pace in the fourth quarter. it was led by the biggest gain in consumer spending in eight years. the chief u.s. economist for bloomberg intelligence will help us break down the numbers. i will see you in a few minutes. that to you in san francisco. cory: mark crumpton, thank you very much. "bloomberg west" will be right back. ♪

cory: this is "bloomberg west." i am cory johnson. one number tells a lot. the c.e.o. joins me with that. what have you got? >> 63%. cory: i understand that is more than 62 and less than 64%. what else? what is 63%? >> that is the percentage of major national advertisers planning to increase their budgets over the next 12 months. cory: what is native advertising?

>> it is advertising that looks and acts like the other content on the website. think of sponsored posts on facebook, promoted tweets on twitter. cory: they will be creating content to go into those places where people are reading content they will think is from friends ora are used to seeing in facebook or twitter posts. >> they are not only doing it. they are investing billions in it. brands are realizing to engage consumers, they have to create content. cory: how do they do that? they use your company. >> yes. they create content. cory: do they have journalists writing content that would relate to a company? >> we do not write the content. we do the distribution of the content. cory: 2/3 are going to spend more because they think it gives a bigger return. does it? >> definitely. we are seeing 10 to 30 times the

click rate of banner ads in 90 seconds of average engagement time. in today's world, that is a lot of time. cory: do you educate them so they know what will get the clicks and what things work best? your company just a distribution platform -- is your company just a distribution platform? >> it is not just that. we not only distribute the content. we can tell you what is working in what environment and can optimize the content in real-time. cory: do you think the growth rate will grow faster or is this the big shift we are seeing now? >> we are really just starting. is going to be a massive shift. in two to three years, advertising online is going to look very different than it does today. cory: it already does look so different. thank you. we appreciate that, the changing world of advertising. you can voice get the latest headlines on your phone and tablet and bloomberg radio. we will see with more "bloomberg

west" on monday. ♪

mark: from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers in the united states and those of you joining us from around the world welcome. we have full coverage of the stocks and stories making headlines on this friday. lisa abramowitz tells us why the jefferies group ceo is turning to california in search of an edge. peter cook