emily: lightbank from tier three in san francisco, welcome to "bloomberg west," where we focus on innovation, technology, and the future of business. i am emily chang. retail sales and much rose just over 1%. it came in below estimates, as u.s. consumers remain cautious even as the weather turned better. the report showed a major change in the way americans eat. march sales at restaurants and bars over to spending and grocery stores for the first time ever. jp morgan chase reports of 12% gain in first-quarter profits.

trading revenue was very strong in the quarter as higher volatility boosted volume. meantime, wells fargo reported a 1.5% drop in first quarter profits, but ceo john stumpf remains positive. john: i believe the underlying economic expansion that is approaching its six anniversary remains largely on track. i am optimistic that the improving u.s. economy will continue to provide wells fargo with many opportunities to better serve our customers, our communities, and reward our shareholders. emily: wells fargo also saw its lending margins dip below 3% for the first time since the 1990's. tennessee senator bob corker is aiming for a vote in the senate foreign relations committee today on a bill that would give congress some oversight on the iran nuclear deal. his bill would give congress 52 days to review and iran deal before any sanctions are lifted. he tells bloombergtv this will not interfere with the iran negotiations. senator corker: most of the

negotiators of the table felt that congress was ultimately going to play a role. we know that strengthens the administration's hand, it strengthens the negotiators from the west's hands. so absolutely not. this puts in place a process -- the administration is fully free to complete its negotiations. emily: president obama has vowed to veto the legislation should it pass congress. signs that the cease-fire is cracking in eastern ukraine. six ukrainian troops were killed in the last day, the deadliest day for ukrainian troops in at least two months. foreign ministers from france germany, russia, and ukraine met in berlin and called for both ukrainian troops and pro-russian rebels to withdraw their heavy weapons. french president francois hollande is meeting with the ceo's of and alcatel lucent today as considered as a purchase of the french company. such a deal would be the largest acquisition in nokia history and

would create the world's biggest maker of wireless equipment. we will talk about this, coming up. annual takes aim at google and facebook with new advertising technology. aol unveiled an open programmatic and platform designed to help advertisers figure out how to spend their dollars best. the technology takes all of aol's ad tech and puts it into a one-stop shopping ad platform could they will allow brands to measure the effectiveness of their adsd on all platforms from desktop to television. should google and facebook be worried? cory: they should be concerned about what aol is doing. they're providing not just for their own network but for the web writ large on all devices and even in this case for television. really interesting development. i talked to tim armstrong about that about what they are doing

and what aol one is. >>tim: what is happening today is the biggest pivot point in media from the way traditional media was done until the way internet media is going to be done programmatic advertising, which is the automation and the targeting of advertising in a much deeper level across mobile, internet ogt. -- ott.our launch of one by aol is the forefront of the next duration of advertising systems -- next generation of advertising systems. it is the most powerful time period for marketplaces in the world and aol stepping out in the most futuristic marketplace for advertising -- it has been five years of work, and very exciting externally, but our teams internally are even more excited because we know the power of this product. cory: your m&a team, you guys have done so many acquisitions of companies. is this the stitching together a follows companies in a single

platform? tim: we started as a team making really large bets before other people did. one was in a video, one was an programmatic advertising, one was in global content brands. when you think of these three areas overall, we have knitted together aol's's stork platform together with the exciting acquisitions in. today when you take a step back aol is of hockey player and video, top player and most just a bit of content on facebook for content use with the huffington post the newsroom behind me for social, and today for the programmatic platforms, nobody has a more advanced system that touches ott all the way through mobile than aol does. the stitching together of our strategy is what has been really, really important. we haven't changed in five years, and it is a 20-, 30-year strategy in front of us. cory: ott -- when i think about this, i think of what clever marketers do. i had the ceo of carl's jr. on a bunch of times around the super

bowl. they didn't buy a super bowl ad but they went to the markets where they thought they had the most impact. they realize they will never be mcdonald's so they want to go for a particular type of added with a particular young male customer. they were clever about targeting individual tv markets and markets on the web -- sometimes social media -- going after that demographic. it sounds like we are talking about the shift from demographically focused advertising to results-focused. is it a combination of the two? tell me how that might work in a real case example. tim: cory the easiest way to think about it, if you are into it, they are taking advantage of a very singular trend, which is media was built in bulk and sent to consumers in bulk. now it is being built on a single basis in many cases. as an advertiser like intouit, we are intact season super bowl

right now. -- in tax season super bowl whenever right now. multi formats can talk individually to consumers and when you think about it, the future of connecting with people is going to be on a similar basis. it is my social networking is important, why people doing individual searching is important. our platform is the first platform to take advantage going to singapore consumers. -- singular consumers. when you look at the recent tv statistics, the fact that human beings in this country are walking around with machines in their pockets that are essentially as popular as the cable to -- powerful as a cable box, all of our systems are built to deliver high-quality content and high-quality advertising in a singular way into everyone's pocket. that is going to be a very significant shift for the entire year and internet business for the next two or three decades. cory: there is a technological

problem there because smartphones don't accept cookies. how can you track the efficacy of an ad when you can't get that feedback from the cookie? tim: mobile is really about device targeting and for us we have 100 million devices in the united states that we mechanize and understand and cross-link between a mobile device and a desktop and ott. that creates a very powerful union. if you think about the way the consumers consume media -- newspaper, a broadcast tv network, or maybe on digital -- and today with aol's new system we can cross format target you in general. it actually makes what cookie targeting was in a much more powerful way because it is cross device. when you think about advertising in the future, a lot of people think technology is going to deflate ad places overtime. i would make to bets with advertising -- one is that it is going to get better and more creative for consumers, and number two is you get ad prices

go up. a $600 billion industry where there is a lot of ads for you don't know how they work and people spend $600 billion. imagine how much they will spend when you know how much each ad to each individual consumer works. emily: aol ceo tim armstrong there. corey, is this something he has been plotting for a long time? it seems like a lot of things led up to this point. cory: they spent hundreds of millions in acquisitions to get to this point. what is interesting is not this way it provides efficacy for advertising and huffington post or even other parts of the web, but the notion that this goes cross-platform to television smartphones aol's and others' sites on the web. this could truly be transformative for aol. emily: aol could be telling them where to put their dollars. this is, let's be honest, relatively archaic media organization. cory: what they have been really clever about -- he doesn't take

a rocket scientist, but they recognize they have this great cash flowing but slowly declining business of internet access provided by aol. they knew they had a certain number of years as that bleeds its way out. but using that cash to create a network of places to run in and now a machine to run ads across all networks, it is very clever, and it becomes a very new and different kind of company going forward because of this one announcement today. ily: new aol. cory: why not emily: marco rubio, the oakland a's of presidential politics? we will talk about his moneyball strategy to win the white house, next will. ♪

emily: i am emily chang and this is "bloomberg west." still to come, senator marco rubio's moneyball campaign. how he is using the data to woo

donors. and a major telecom's possible alcatel lucent deal. the imf is keeping its global growth forecast at 3.5% for this year. the imf predicts that the strong u.s. dollar will boost europe and japan and cause some softness in the u.s. here is chief economist olivier blanchard on europe. olivier: this is leading us to have a higher forecast for the eurozone for this year than last year. the main risk that we saw last year was the risk of recession in the eurozone. that seems -- hasn't disappeared but it is much smaller than it used to be. emily: as for greece, he says the greek exit from the eurozone would be extremely painful, but he says the rest of the euro is in a better position to deal with it. real estate website zillow gives

an update on its integration of arrival website it purchased earlier this year. zillow says the long ftc approval process has caused hurdles in the transition and will lead to lower than forecast revenue for the year. zillow paid $2.5 billion for trulia including stock-based compensation. the 2016 presidential candidates are already sparring through twitter and youtube, but when it comes to tech and politics it is not just about social media. campaigns are now investing in big data come up big time to learn more about voters and their competitors. florida senator marco rubio announced his campaign yesterday and fundraisers are already calling him the moneyball candidate. to take on cash heavy republican rivals like jeb bush, rubio is turning to data analytics and digital strategy to run a leaner operation. the optimizer ceo has seen the effect first entered you with

ahead of analytic -- you were the head of analytics for president obama's 2008 campaign. what is rubio right about the other candidates doing wrong or not doing at all? >> i think his approach is really clever because he is going against opponents with a huge amount of fundraising behind them using the strategies of his father and brother raising hundreds of millions of dollars through traditional means. rubio's strategies about investing in areas where they can have a big impact in terms of efficiency. that is where i think using data to make better decisions is critical. emily: areas like what? dan: particularly around fundraising. that is the strength of data-driven decision-making right now. if you can think about where the campaigns can spend their time, as a candidate, and doing traditional fundraisers through hotels will bring some money in, but if they are able to use optimization and testing to improve the effectiveness of their website and online presence, that can raise a lot of donations from any small

donors. emily: what is more powerful, big data or big money? who would you rather be? dan: big data is potentially a way to become big money. if you look at the history of the hillary campaign versus obama in the primaries of 2007 the first quarter of the fundraising race, hillary used traditional means to raise slightly more than obama but the following quarters, through many small donations, obama is able to beat the traditional tactic of traditional fundraising. emily: i understand hillary this time around is very much investing in a good data. whose strategy is better? dan: hillary might have the best of both worlds where she has connections to raise big money from the donors but also the grassroots support for data-driven decision-making to raise money from many more voters. emily: how big does the big data team needs to be effective and how much does this cost? dan: in 2008 the team was small about eight people. both of the obama campaign and

the romney campaign in 2012 invested heavily in optimization and testing and we saw dozens of people focus every day on using experimentation to help make better decisions. emily: are you basically just paying for the manpower? what else are you paying for? dan: i believe the real value comes from having the person on the campaign do what they are great at -- coming up with ideas to test. and have the technology do what it is great at, statistical inference, and figuring out what actually works. the marriage of both, the creativity and technology, that's an biosis is where you have great impact. -- that sin biosis is where you have great impact. emily: give me a sense of how this works. how quickly can you access the information and what does it lead to? dan: it is in real time and it comes down to using the data that the campaign has about somebody to give them a better asked. it can be -- a better experience. it can be as simple as coming to the website and realizing you

have donated before. if you donated $10 before, the message and experience you get should be different from if you donated thousands of dollars before. in that case you should be asked to come to a hotel ballroom or to meet the candidate over dinner. if you donated $10 before, that is not quite as effective. emily: what types of companies will these candidates be turning to? are there startups out there that are particularly efficient? dan: i happen to know one. [laughter] over the last few election cycles, several companies have emerged from the opportunities to use data to make better decisions, both from the right and left side of the aisle. emily: do you think it just pushes to the change -- jeb bush is hip to the change? dan: it will take one quarter of the fundraising where rubio became for him to consider any strategy. emily: thank you for joining us, former director of analytics for obama's 2008 race. nokia is in talks for its biggest acquisition yet to what will its potential tire with

alcatel-lucent mean for the telecom business?

emily: i am emily chang and this is "bloomberg west." nokia is in advanced talks to buy french company alcatel-lucent. talks are so serious that the ceo's of both our meeting with french president francois hollande it today. such a deal would be nokia's largest acquisition ever and could fall the past erickson as the largest maker of wireless network equipment. here to break it down is editor at large for johnson. nokia is into the company it once used to be. -- isn't the company once used to be. and alcatel-lucent is a

different company as well. cory: back in the dot-com bubble, there is no bigger deal than alcatel-lucent in the world of networking. the french companies, alcatel and the former at&t labs, bell labs, later called lucent technology, when they came together it seemed like it would be the dominant network business in the world. what happened was it is hard to run a business in france. it is hard to make changes to business in france and the business struggled mightily. but literally -- but lately alcatel-lucent is killing it. the number one networking business perio out there, top five in all theat it serves. as my friend tim savage likes to say, it is really luce nt-alcatel now rather than alcatel-lucent because the

lucent business is the very best in the world and they are getting that benefit from market and they really finally put this long, slow slug of our merger behind them and are doing quite well. emily: this could create a rival to ericsson and cisco. but is bigger necessarily better? cory: i think it is a fair question. the quality of their products the core of people who buy their products, whether it is verizon or at&t or any number of telephone companies around the world, is top-notch. cisco is having problems selling in china in part because the u.s. government products are not widely wanted because of nsa issues. and their products aren't widely sold here because of concerns over chinese spying. you can see it in the results and the revenue -- the revenue has been shrieking on an annual basis as they have gotten rid of crummy businesses, and they had struggles along the way. you have recently seen a turnaround in the profits of

this business. the profits in the last six years, the profits in the last six quarters have started to look a little bit better. still losing money, but last year losing only $118 million. that is a significant turnaround. while sales have come down a little bit, losing less money selling a little less and losing a lot less money is a significant improvement with us coming. emily: could the proposed time warner-comcast merger impact this at all? cory: yes. they will spend less and are in important customer in this arena. it is worse for all the competitors, certainly nokia -alcatel-lucent. cory: what emily: what does this mean for nokia? cory: it is a very big deal for them. emily: cory johnson, editor at large. we will keep watching to see how the talks unfold. ibm makes a big bet on health

tech. how supercomputer watson is moving health care to the cloud. ♪

emily: this is "bloomberg west." i'm emily chang. let's get a check of some top headlines. j.p. morgan chase reports a 12% increase in first-quarter profits, beating estimates. trading revenue rose in the first quarter for the first time in five years. he is jamie dimon. jamie dimon: the making system is much stronger to start with. every bank is much stronger. we look at it -- what i worry about more is what happens in a stress environment.

people pay attention to what's going on in the markets. there has to be changes down the road. emily: in his annual letter, he says the bank valuation is hurt by uncertainty about future legal costs. tencent's ma sold his shares. shares of surged 62% over the last year, boosted by the rally in chinese stocks. they operate a number of internet platforms in china, including the we chat messaging service. dr. is the latest member of the $1 billion valuation club doc ker raised $95 million in a round led by insight venture partners. it's a platform for building, shipping and running apps. the notebook -- alan turing has

just sold for over $1 million. he wrote from 1942-1944 while leading the team that cracked the nazi's enigma code. a major shift in the way americans are eating. sales at restaurants and bars overtook sales at grocery stores in march. that's according to data from the commerce department. the report hints at a generational shift. older americans are less willing to spend at restaurants and bars while younger americans are. watson, ibm's supercomputer best known for his appearance on jeopardy, is bringing health care to the cloud. ibm has established the watson health unit an open platform for doctors, researchers and other companies focused on health. the group announced strategic partnerships with apple, johnson & johnson and the acquisitions

of explorers and fight tel -- watson can do some much more than when jeopardy these days. what specifically can watson help do that united health or mayo clinic can't? >> we spent the last year working on the knowledge side of medicine. now, what we're doing with the new health cloud is bringing together all the structure information, the data that comes from the devices the medical devices. as we start to pull that in a together, the amount of information we as humans are going to collect through our lifetime is reaching the point where it's equivalent to 1100 terabytes of data or 300 million books about each and every one of us. this is an enormous amount of information and requires serious horsepower to deal with an

watson will provide that. we will deal with the knowledge of research, the big data around all of our individual health bringing those together in a new cloud environment. emily: give me some examples. what could watson do for me as a patient? if you are using your apple device, you might be collecting your information. you will have the option to share that information with your doctor said they can keep track of the information about you, about your care. what if your blood pressure was being checked all the time. that would be a real-time system with real-world evidence to help your doctor provide better care for you. emily: what about privacy? great point. one of the great things about the watson health cloud is we have the ability to anonymized information to secure the environment that will enable us to store that information in a

safe way for researchers. you can share your information with your doctor. you will have the choice to share it via research kit. today's new generation really likes this idea of sharing for the greater good and being able to share your health information with researchers is a way to do that. emily: the gathering of this information takes time. these big data initiatives take time. how long until we see actionable results? >> one of the important things about yesterday's announcement was the acquisitions. we have data access to over 9 million lives. emily: how do you monetize this? as you look at the watson health cloud, we are targeting this idea of patient centered health, reaching out to start involve people more in their own health care. we can start to monitor the data

on insulin pumps or provide coaching that enables people to be ready for operations and manage them through or coach them through the therapy required. it's a great way for us to take the value of the data, monetize it through applications to the end-users. the same data can be used by researchers to look for patterns in the data to develop new drugs and new therapies. all of this information is available back to our provider. we start to bring together the continuum care. emily: in terms of your partnership with apple what has been the reception from apple customers to these products? how are they using them? >> health kit is reasonably new.

apple has done a good job of managing the privacy of that information making sure it is the choice of the consumer as to whether they want to share that information or not. research kit is a brand-new initiative that just learned earlier this year. that will appeal to a lot of millennials who believe life is more than just themselves, it's about contributing to the greater good, making them part of the environment for future health care. emily: not many people using them just yet? i have colleagues running around checking their vital signs on their apple health care now. we are connecting that in a back to the health system and that is the next big step here. emily: interesting stuff. thank you so much for joining us. after the break, we talked to be visa. that is next. ♪

emily: this is "bloomberg west." i'm emily chang. visa fights back against identity that with new geolocation technology. snapchat shares numbers on user engagement to first come a check of bloomberg top headlines. activision blizzard reviving guitar hero after a five-year hiatus. it's the company's latest attempt to take advantage of the fastest-growing segment of the videogame industry. the new product costs $99 and will go on sale later this year. general electric developing a science themed documentary series that will air on the national geographic channel this fall. it is called breakthrough and will feature ge employees exploring topics like alternative energy and aging. a handful of hollywood heavyweights will direct.

hbo's game of thrones attracted 8 million viewers for the premiere of its sick season -- a sixth season on sunday. the shows were downloaded more than 100,000 times. have you ever had your credit card blocked while he been on vacation? that may soon be a thing of the past. cory johnson back with more. the last thing i want to do is a member to call my credit card company to tell them i'm traveling. cory: right, you need extra time to write me postcards. this is an interesting thing. it's called mobile location confirmation. the track your phone and see that you are with your phone.

mark nelson joins me to explain it. why is this so important? mark: it's important because we look at the authorization data and we see a lot of declines when people travel. we don't like declines at all. there's tens of millions of declines we can reverse by taking advantage of the cell phone technology to save this phone is where my card is being used. i can confidently approve that transaction. cory: some ukrainian gangster has not taken my card. mark: there are a lot of data breaches happening. people have more confidence if i can match my location with where i'm using my card, there is a lot more confidence. cory: i may be more likely to lose my card than my cell phone.

mark: as soon as you lose your phone, you are first to call and say i lost my phone. we can use the technology to better predict fraud. cory: why is this technologically hard? mark: the timing we have to evaluate a transaction. we have less than one millisecond to look at 500 different data points to determine if this is you. just getting the speed of processing is get difficult. as soon as you turn on your phone and you and in paris, estimates you turn on your phone, that can send information to visa so that i already know you are in paris. i can now have access to that data. cory: exactly 500? mark: up to. cory: what kind of things do you look at? mark: velocity.

how many times you use your card in a day, what is your average spent per day, the difference between merchants. if i have a transaction today in san francisco and an hour later i see a transaction in new york city, that is a bit suspicious. there's a lot of general characteristic's we look at. cory: vacation velocity might be different than home velocity. is that a matter of having so much data? mark: yes. we process to 6 billion transactions last year. -- processed 66 billion transactions last year. we have access to a lot data we can use to analyze and determine if there's a problem. cory: this data you get from phones is one data source. there is a lot of information.

the nsa is tracking similar information to what kind of things did you learn about location? mark: it can be some really good source to determine if this is a genuine transaction. we know in general when you are traveling, we can compare that to the merchant's location. cory: how long does it take you to understand the individual or do you have certain types of people? do you have a handful of prototypes? mark: we have a profile for every visa card in the system. we create a profile of what's normal for that account number and that's how we calculate the score. cory: when i first had kids, i

got a lot of dings because i started buying diapers. mark: we are causally looking at your spending behavior and modifying the profiles are your card. -- for your card. cory: do you recognize people at certain stages in life? mark: a little bit here from a front perspective, were looking at patterns of fraud. where are we seeing fraud hotspots. as we see your patterns become unusual is when we start to determine is this the genuine consumer or not. cory: what is the predominant type of credit card fraud today? mark: the predominant fraud today is from large data breaches, well organized crime rings that give access to tens of millions -- if the criminal activity gets access to this

large group of card numbers. our chip technology will be placed a lot of -- displays a lot of fraud. cory: really cool stuff. thanks a lot. emily: bottom line coming up at the top of the hour. mark is in new york with the preview. arc: republicans and democrats on the senate foreign relations committee have agreed on a bill that would give congress the ability to review any nuclear deal with iran before sanctions could be lifted. is it enough to override a threatened veto by president obama who has warned congress that interference could undermine a final accord with iran? peter cook will have highlights of his exclusive interview with the chairman of the senate foreign relations committee, bob corker of tennessee. we will get analysis from bill cohen. i will see you in a few minutes. emily: see you soon.

over 40 million music fans watch ed snapchat's video over the weekend. what does it mean for advertisers? ♪

emily: snapchat doesn't share a lot of information about user engagement and growth numbers but the ceo let out a little tidbit yesterday in a tweet saying more than 40 million users watched the coachella story on the social media app over the weekend. more than double the number of viewers who tuned in for the masters golf tournament. how massive of a platform could this be for brands looking to advertise on snapchat? you were at coachella. you saw the video. it disappeared after 24 hours. what was so special about it? >> the difference between what

you get on a our story and the other things you can view -- coachella was widely covered. it was all over the place. on the live video you get on our story it was a very different experience, a much more intimate experience. people videotaping their friends dancing at the shows some crazy things that people found on the festival grounds like an adult ball pit. it was a different perspective. they have an editorial team that weaves together for consumption. emily: do they have permission to do this? >> people can decide if they want to share it. emily: we don't have a lot of context from snapchat. how do we know this is good? >> this is more people than

watched the olympics opening ceremony last year. emily: what about other social networks? >> facebook says it has a super bowl sized audience every day. for snapchat advertisers have to consider that all of this disappears and it's not something that can have a long life like something on youtube can. in makes it more special, more invested in the moment for those people watching it live. emily: huge potential for advertisers here. >> advertisers have told us that on discover, snap chats tv live product, they can get about one million live viewers a day. they sometimes have sponsored content. that will get the full 30 million or 40 million. emily: our advertisers interested? >> ads are much more expensive

than some of the other leading video at providers. sometimes as much as double you would pay for blue or youtube. -- hulu or youtube. it is all millennial viewers the kinds of people who went to coachella or the kinds of people on snapchat. emily: thank you so much. it is time for the bwest byte. one number that tells a whole lot. cojo in the newsroom with more. cory: 957 thousand. not heard 57,000 apple watches were sold over the weekend in the u.s. -- 957,000 apple watches were sold over the weekend in the u.s. if you imagine what they sold

across the globe, you can get to a number of 2.3 million watches sold right off the bat. a tremendous success for apple. attitude that the average selling price is pretty high because of those cold watches. -- gold watches. it was a good weekend for this new device. emily: a big weight if you want one of those watches already. -- wait if you want one of those watches already. cory: we are going to see a lot more apps coming to the watch now that we know what the install base is going to look like. developers will see that and think i will write to this device because my device is more likely to get used. emily: cory johnson, thank you. thank you all for watching this edition of "bloomberg west."

all the latest headlines on bloomberg.com and bloomberg radio. see you later. ♪

mark: from bloomberg world had court is new york, i mark richt in. -- 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 in stories making headlines on this tuesday. su keenan has details on u.s. oil production growth. laura reports on the $74 million stock award.