cory:>> we are live in new york and from san francisco welcome to bloomberg west be cover innovation, technology and the future of business. i'm matt miller in for emily chang. japanese prime minister is at the white house for key meetings with president obama. the leaders say they are committed to strengthening their alliance and setting the

transpacific trade partnership despite political opposition to the trade deal. >> on the bilateral issues, significant progress was made. we will continue to cooperate to lead the talks to its last phase. matt: a state dinner is tonight with 300 guests in attendance. president obama also spoke about the riots in baltimore. he says while there have been struggling police interaction with black citizens across the country, there is no excuse for the violence. president obama: it is not a protest. it is not a statement. it is a handful of people taking advantage of the situation for their own purposes and they need to be treated as criminals. matt: meanwhile, the orioles canceled their games with the white sox for the second

straight night. they will play tomorrow but the game is closed to the public. the first time we recall there is ever been a private baseball game on the professional level. the fed is likely to delay its interest rate increase until september. that is the opinion of economists. policymakers are meeting today and tomorrow in washington where they will assess how much the labor market the strong dollar in harsh winter has affected the economy. gopro makes about half its money overseas now. they said sales rose 66% in europe and asia in the first quarter. they also announced they are buying a startup that creates 360 degree panoramas. terms of the deal were not released. shares of endurance international group plunged the most ever today. the internet-based services are sold by the company but got the research wrote today the products or suspect. endurance says gotham's claims

are not rooted in reality. twitter shares tumbled after financial information or provider solarity posted first earning numbers on twitter. twitter shares were halted on the new york stock exchange. the company posted a $162 million loss. they have 302 million monthly active users and they are partnering with google and buying a market company. soalarity says it found the information on twitters on website. they said there was no leak or hack. joining us to talk about all things twitter is cory johnson in san francisco and bloomberg news twitter reporter sarah frier. paul sweeney is here in new york as well.

sarah< let let me start with you. is this leak twitter's fault? how did solarity get the information? sarah: twitter is saying that nasdaq was actually in charge. they were in charge of the i.r. website. they put something up a little too soon. it came up around 3:07 p.m. and solarity saw it and was able to get the numbers. i went on the website as well but i could not find it. matt: if you want something done right, cory johnson? cory: ask a computer, i think. matt: do-it-yourself. why does twitter give this job to nasdaq? ccory: i think this caught twitter and the executives by

surprise. i think the real issue is how the numbers got out, but what was in the numbers. profits were better than expected as well as shares but what is worrisome to the company is this performance in terms of growing revenue and growing its user base. we know user base growth was a struggle, but the revenue growth we really thought they had a better key on, particularly after a very positive investors day when they met with analysts and said things were going like gangbusters and the chief financial officer and dick costolo giving a very upbeat presentation about what is going on in business. to see these results, i'll think it suggested at all they were not being upfront with of investors. they really cannot tell what advertiser intent is because of the nature of the business. that is disconcerting to people that expect predictability about twitter's growth.

the business is still growing and looking even more profitable. if these kinds of valuations for the stock, they want to know what is coming and twitter investors did not see it coming. matt: paul, while the leak may have been an embarrassment for twitter and maybe in embarrassment for nasdaq, it's tnonot the reason we saw the stock fall 20% when it started trading again. the problem is this company is not able to monetize, is not able to raise enough money from ad sales as it hoped, as analysts had hoped it would. paul: exactly. when you think about the twitter story it is very much in a relatively early stage from an investor's perspective. that means investors want to see sustained user growth and they had decent growth that came in line with expectations, but that has been slowing. they also want to see topline revenue growth. they want to see twitter like they want to see the other social media companies monetize

their growing user base is. it is one thing to attract users to your social website, but it is another thing to engage them for long periods of time so advertisers will pay good money. this disappointing earnings for the second quarter in terms of revenue outlook and for the full year really took investors by surprise. it brings back the question of how fast can we really expect this company to grow? matt: this is a company that was trading up 40% year-to-date. sarah, how does the company responded to disappointed investors? sarah: the company is telling it as it is. i think they are surprised as well. their advertising team is really highly regarded when talking to madison avenue executives. it is really surprising for people that they disappointed this quarter for the first time. and, the company is saying, ok this is a problem.

they especially had an issue with the direct response ads which are ads that have certain calls to action like something to buy or sign up for. they are not finding those work very well on twitter. so the word we heard a lot on the earnings call was eerie. they have to try new things again. they spent the last year focusing on this road issue and now they have to think about revenue as well. matt: tomorrow, we will hear from ed williams. i'm sure we will hear from twitter executives. cory, will they change a strategy? do they really need to iterate because of what happened in the stock market or do they need to ignore and focus more on the business of making money? cory: i don't believe every ceo should ignore the stock market and make their business awesome.

as it relates to the stock market, the chief financial officer, goldman sachs analysts goldman sachs banker if anybody knows how to manage expectations, he should know that. i think what this really points to is the business is a young business. it is unpredictable. it has never been tried before what they are trying to do. this notion of direct response with the connection with a user who they maybe don't know that well. they know from their tweets but not a lot about their identity. the operating in the dark unable to protect what is happening with her very own business. matt: thank you very much, cory johnson. sarah frier also in san francisco and paul sweeney here in new york. when i said tomorrow we will hear from ed williams, i met today. and williams will give us his take on twitter's troubles

today. that is coming up next. stay with us for that. ♪

matt: this is bloomberg west. let's get a check of bloomberg's top headlines -- the supreme court has heard arguments in the gay marriage case. supporters want the court to extend the rights to the 14 states that do not allow it currently saying it violates their constitutional rights. here is justice stephen breyer during the argan it's. arguments. justice breyer: there is one group of people that what open marriage to so they have no ability to participate in that fundamental liberty. that is people of the same sex that wish to marry. we ask why? the answer we get is well people have always done it. you could've answered that one the same way we talk about racial segregation.

matt: opponents say it is a decision that should be left to each state individually. tyson foods is a in the use of human antibiotics and its chicken. it is the largest seller of chicken in the nation and completes the change by 2017 expectedly. it is reduce its reliance on antibiotics 80% since 2011. the blogging site medium has attracted journalists, big-time brands and even the white house, but in stark contrast from twitter, williams has insisted on focusing on winning users. brad stone sat down with ev williams to discuss the secret to beautiful design. ev: everything about medium, we try to look at this what some people consider solving problems -- how do you publish text and

pictures on the web? we looked at it from a fresh perspective. how do you do that for today's world? very mobile focused. we have better browser technology. the content is on the apps and multiple places. we built from the ground up and it looked different from most the web does today. brad: was there any way in reaction to the designs you have created before -- twitter, for example? it behaves in a much different way than medium. ev: it is designed around the content. twitter is about real-time, very short blips of content of that was originally designed around sms. medium was not necessarily for long stuff but longer form stuff. we wanted to greet and create a better experience. brad: the white house is used medium so president obama can

talk to his constituents. was that surprising? ev: it was. we have been very fortunate with that and other high profile people who found medium to be the best place to share their ideas. we think people at the white house and other people are liking the idea that while there is lots of ways to publish online, there are very few where your words and ideas stand out above the chrome and navigation and the advertising that is crowding out the experience. brad: folks like president obama, elon musk, other professional writers go feel comfortable. what are you doing to make it more accessible to everyday folks who may feel self-conscious? ev: the original idea was always that medium was open to everybody. we knew not everyone had the inclination to publish anything longer than a tweet.

we really wanted to crate the best ways for those who did have that desire. to really lower the barrier in most respects. you don't have the overhead or commitment required to publish a blog which is pretty much the other alternative people have if they want to do something more substantial than social media. the point was really to create the easiest and simplest on-ramp for everybody. we have had a lot of high profile people and really professional content, but the vast majority of it comes from normal folks. a lot of people who were unknown have become really big on medium. we are really trying to -- our belief is the whole becomes greater than the parts. it is one of the few places where president obama write s. he wrote this message to millenial's and a millenial came on and wrote a response. a commmeent lives on the same

level on medium. brad: one of the other areas you are focusing on is the business side. it is moving from a more traditional model to focusing on what matters like time spent with an article. what kind of response you getting in the advertising community? ev: it is great so far. we are helping brands publish on the platform. instead of measuring just by reads and number of eyeballs -- we are measuring by the time people spend reading, which is not a perfect measurement at the value delivered, but we think it is a much closer proxy to whether or not people are really getting something out of the story than just whether or not they saw it or loaded in their web browser which could be for two seconds before they move on. brad: i want to ask you about twitter. you are a cofounder and still on the board of directors. today was not the best day for twitter's history based on the

financials and the decline of the stock. are you disappointed? ev: well, nobody likes to see a stock fall like that. honestly, i have the utmost faith in long-term business at twitter. the team and the business they are building right now -- i'm very optimistic about. brad: so many new products we are seeing are from twitter like an ap program released. is the team having success enlightening the appeal for twitter? ev: i think so. i'm excited about the roll the twitter team is on right now. they are releasing a lot of features we have talked about. they are just scratching the surface of what is possible. lots of other stuff that they are making rapid progress on.

it'll make the value of twitter more for our people. matt: that was twitter cofounder ev williams. do not miss our conversation with dick costolo tomorrow on "street smart." "bloomberg west" will be right back. ♪

mark: t-mobile's aggressive promotional tragedy appears to be paying off. the added more than one million new subscribers last quarter operating pacing its bigger rivals verizon and at&t. joining me now from san francisco is john ledger. welcome back to bloomberg west. good to see you. t-mobile is gaining subscribers share but not generating meaningful net income.

you have booked a net loss in six of the past eight quarters. what is your long-term plan and what changes you need to make to reach sustained profitability? john: we are right on track with what we have given as an outline of how this company becomes highly successful which started with aggressive customer growth which leads to revenue growth even profitability and cash flow. we headed 1.8 million customers this quarter which was the eighth quarter in a row over one million subscribers. revenue growth was 13% year over year and even grow 20%. we actually updated our guidance to have greater growth on the postpaid side between three and 3.5 million and cap firm our profitability guidance. even 6.8 and 7.2 billion. we will be profitable through the rest of the year and i think

our investors have been very pleased with the progress of this company. it is a good day. mark: do you have enough spectrum right now? what are your plans in per dissipating in future fcc spectrum auctions? john: we have more capacity per customer than any of our bigger rivals. the topic is one of the most important ones. it is scheduled so far in early 2016, broadcast options for 26 megahertz which is very important spectrum. we plan to participate and hope to get a nationwide squall of spectrum. everybody in the industry because of huge growth everybody needs more and that is what this is targeted at. mark: you talked about consolidation in the past. how have you changed your view on that in the wireless business now that the comcast-time warner merger is off? john: what i have always said is consolidation is inevitable. it is not a matter of i itf,

it is a matter of when and how and who. what people need to think about is entertainment and content and social are moving to the internet and the internet is mobile. amongst the players who will be looking to serve customers on a mobile basis they do include the cable players. google has just entered the wi-fi service business. i think you can think about these as potential coming together'ss in some fashion over the next five years in the u.s. mark: i only have about 20 seconds. you said cable companies would totally make sense as an eminent possibility. how likely is that? john: we will have to wait to see. they are an adjacent industry. they are playing and services that could become elementary to what we are doing. i think markets will find a way. mark: john, thank you for your time. john: thank you very much.

mark: still ahead we talk design with the man in charge with you are look of your android. plus, the iconic design behind beats by dre. ♪

'r emily chang. here are the top headlines -- nepal's reconstruction will be greater than $10 billion after the earthquake. they are government is still focused on rescue efforts. thousands may still be trap. the death toll is more than 4300. the prime minister of greece says they will alternately decide whether to agree with the

creditors which remain in limbo. here is the prime minister talking about his pledge to rollback austerity. prime minister tsipras: this mandate creates limitations for me. by having an agreement that puts me outside, of will have no -- i will have no other resort that people would decide. i want to make that clear. mark: he also last out of the european central bank and the eurogroup accusing them of treating greece unfairly and breaking promises. consumer confidence in the u.s. posted a surprise drop in april fallen to the lowest level in four months, according to the conference board. the homeownership rate fell to its lowest level since two decades. the census bureau says 63.7% of americans own their homes in the first quarter. the national football league is ending its tax-exempt status meeting the league central office will become a taxable

entity. commissioner roger goodell informed team owners of the decision saying he is eliminating what is a distraction. he says every dollar of income is earned by the teams and it is taxable in their own states. he says this will change -- this change will no longer make a material difference in the league's business. amazon sets its sights on the $1 trillion american businesses spend every year on supplies with a new service called amazon business. it will sell everything from tractor parts to paperclips that employees may need in factories, hospitals and offices. this expanded version of the supply service comes as studies show businesses do as much as 68% of their spending online. we turn back to the bloomberg businessweek design conference where we are bringing together the worlds top designers

in san francisco. editor at large cory johnson is that the event all day speaking to the leaders and technology and design. josh, the editor of bloomberg digital, is also at the conference. cory? cory: yes, he is. the head of design at google -- i want to start with what you do is so important. for example, design changes to google maps. that is what you doing a google really struck me because that changed dramatically within the last year or so. what were you trying to do with the design to change the way google maps -- it is assessed for product -- a successful product -- what are you trying to do with the product in changing it? >> we are trying to make things more beautiful. that is the velocity google approaches all of its products.

try to make something really wonderful for the user. the original search page is so simple and fast. cory: it is different now. design was not a focus of google. it is now. i wonder how you see that difference. matias: one of the things we have been dealing with is how important every detail the experience is. that is no different for google than any other company. josh: on that point, you are so huge now and have so many different regions and maps has become a product that is a court to the experience. even if you get an iphone, they use google maps. it's a better product. the slightest change can really throw off literally tens of millions, hundreds of millions of users. i don't know what the numbers are. i mean, how much are you

worrying about how this change will affect the users? matias: we agonize about that. design and google encompasses more than just designed for the products. we design android. we designed material designs that go beyond google products to the web. we take this responsibility of not just try to push a particular file orstyle, very seriously. we are trying to make sure everything we design is objectively as good as it can be and that requires both inspiration by getting the best designers and empowering them but also a lot of testing, monitoring. cory: everyone cares about their work is striving to do the very best they can and hating their results as well. matias: that is the curse of a designer. cory: that is the curse of work.

you always want to do better. i wonder when you look at android one of the reasons it is ubiquitous because it is so open. that are so many flavors of android. what do you think is the fullest android experience? matias: i think it is actually all of those different facets of and drug you can get. you can choose an android that is better suited for you. perhaps you like the customizations. josh can pick something else. he really wanted to be waterproof. josh: you say that but the reality is you guys have gotten tighter about control of how android looks and feels with your partners. if you look at the new galaxy s6, they are much closer to the core android experience then you look -- than a couple of years ago. matias: think about design as if

you are designing a car. you want to have everybody be able to choose what kind of car they have. some people want a cadillac. they wanted to be this 40spo rty coupe. other people want a station wagon or pickup truck, whatever it is. there is a lot of room for the functionality and the style you will have. there are some parts of it the need to work the same. it will have to have the steering wheel in front of you, make sure the brake pedal is on one side and the gas is on the other. if you don't confor to a common standard, it will be a mess. cory: used the word flexible versus atomic. can you describe what that means to you? matias: i'm not sure when i said that. josh: you confirm or deny? cory: some designs need to be complete in of it self? like the cars as opposed to

something flexible like something that some of the picks up. matias: we do things like cars or the structure and material design because we think these things are tools. they are like building blocks and we want all of those cool to be used at the right place and right time. cory: give me an example. matias: when you have a lot of different things they want to show you at the same time when it comes to a car. cory: like maps when you are getting results, you get it on the map and it shows you the phone number and a direction. matias: that is like an icon for the restaurant but it contains so much more information than a single picture could. that is atomic. what is great about it is in its little modular natural, you can take it to other places.

if you open up google now we can present that same format that same card. we can take that restaurant out of the contacts you saw before and transform it and put it somewhere new. you recognize the same thing. it is not a new thing you have to learn. josh: the way you work denies your apps, it is basically inside cards. is android moving towards the structure that everything is a card or a card that lives inside of the card? we don't think of things as apps anymore? the browser that opens up is a separate card in your multitask. does that become everything -- a little atomic unit? matias: i think this reflects the tension we all have with our digital world. we go to specific brands and specific apps to get one little beautiful piece of functionality. we need to find a way to

connect them so you are not locked in. you will talk to your friends about where you will go to dinner and look it up on yelp and get directions with google maps and maybe you will get a car with uber. each of those things are isolated. you need a mechanism to bring that together into one strand. cory: really interesting stuff. one of the most important designers of our time. matias: it is a team effort. cory: we will have more from the bloomberg week design week when "bloomberg west" continues. ♪

mark: this is bloomberg west. let's check some of the other top headlines. google's youtube is going to make movies featuring youtube stars. the films will be made in partnership with a service that

helps develop youtube stars. the first movies are expected in the fall and will appear on youtube first before being mistreat this distributed. google is spending money in europe. places like the financial times andare taking part. the eu has received at least 20 complaints from newsrooms who say google consistently ranks their websites with low results from its own sites such as youtube and google news. later this year, swiss luxury watchmaker will start making its own smart watch developed in partnership with google and intel. this watch will sell for about $1400, more expensive than apple sport. its battery lasts about 40 hours. thislet's head back to san

francisco with a bloomberg businessweek design conference is underway. cory johnson is standing by. cory: yes, i an. m. robert brunner is here from a firm called ammunition. the notion of the importance of design in business -- i wonder if you can talk about that. are business is being led by design as opposed to putting design on top of what is already being done? robert: the old model was designed by something that happened in the process. it was manufactured afterwards. today, it is more design is the topic of conversation from the very beginning as to what some they should be to how it is made. all of those things. all of that should be designed. the really great companies that understand -- cory: the conversation starts earlier?

if somebody says if i had a widget to solve the problem and it looks great or is it more looking great? robert: everything. when someone uses something, the experience everything about it. all of that is really important. it starts earlier and continues through. it is not just a moment in time. with technology companies realize, that technology is important but it is designed that makes it work in people's lives and attracts them to it. it has become at par with enabling technology. cory: i could do two years at school and not take a design class but i had to take three classes on accounting. robert: that is changing. you are seeing more and more design being integrated. the understanding of design and why it is important. it is not just for our schools. cory: beats a fascinating group of products.

i wonder where design fits into the evolution of that. where did the company come from? robert: when we thought about the headset -- it is a wearable technology. most headsets were complicated and mechanical prior to that. cory: the crummy ones. roberrt: they are driven by function, but they are things you wear. as smartphones became the primary way people got their music, what you wear and how it looks and feels becomes very important. cory: the notion that the product would be so much better because the design would be integral to it and that was missing as the design was slapped on top or was it a different pattern as opposed to something you thought about from the very beginning? robert: it is just thinking about it differently.

any time create something, you are designing, right? it is thinking about where you want to end up in how you want this to fit into people's lives which becomes important. beats was very focused on bringing a younger audience into high-quality sound. building products that understood that and understood what they were about was very important. cory: why do you think this focus of developing around design and adding on design -- why do you think that is happening now? what are the drivers of that of making design more essential? robert: it has a lot to do with success. everybody points to companies like apple. they are seeing -- cory: i wouldn't say companies are pointing at apple. robert: i don't know how many people come into our office and say we want to be like apple. you are not apple so we will work with the assets you happen make that great. -- you have and make that great.

people see design has not just from a business point of view but a customer loyal experience. all of these things that are traced back to the design. scuuccess like that have made businesses look at how are we designing and are we doing it to our vintage wood is putting -- to our advantage? cory: you are working on some home design. leo which you mentioned. robert: it is a nightlight that listens for smoke and co2 alarms and tells you if something goes off and tells your neighbors. it turns a simple thing into a more visible thing. everyone with this internet of things is looking to connect everything in your home. the question is does everything have to be connected and if so, what should it be like? cory: is that -- you think the

category gets bigger because it starts with design so it is more natural in some of theseeone's life? robert: everyday things is very embedded in our consciousness and how we live. when you start messing with them, it is very important to think about how they are designed and how they behave and what people understand about them. a lot of things are not successful because people try to shove too much functionality into it because they can and people do not know what it is any more. do i really need a smart -- cory: pro-spork or anti-spork? robert: i want a spoon and a fork. cory: really interesting conversation. we will have more as bloomberg west continues. ♪

cory: it is now time for the bwest byte, one number that tells us a whole lot. here is brad stone to tell us. when you're the bloomberg businessweek design conference -- brad: 26, the number of designers we had at today's conference. it is an incredible group. we have the architect of the new googleplex. we also have armani, a jewelry designer. the created aive director of detroit is hero. robot designers, app designers. ev williams earlier today from medium and twitter. cory: it is so interesting how apple is the company that is mentioned in the beginning of the conversation of building a company where beauty is the beginning of the product and

functionality is just as important. brad: that's right. apple started something with product design but it started in different areas of business like designing great workplace environments, designing strategies. this is our third year holding the conference and it is really about the way in which design has infected businesses. cory: i cannot help but think about -- we have a cadillac sitting behind us. you think about china and detroit and cadillac and how cars when we were kids were so cool like the muscle cars. that has come back. brad: i get it when i talked to architects and designers is that for many years, that is where it was lost. a settle the commodities product, not a lot of love when into it. everybody is trying to bring it back and build authenticity back into our lives. cory: brad stone, we appreciate.

i want to have fun in there, but we will be out here throughout the day. keep the tvs on. more bloomberg west later on today. we will have more from the design conference. bloomberg west will be back in its regular form tomorrow. mark: remember, you get the latest headlines all the time on your phone, tablet bloomberg.com and bloomberg radio. we will see you tomorrow. ♪

announcer: from our studios in new york, this is "charlie rose." charlie: a powerful earthquake struck nepal on saturday. the 7.8 tremor sent -- 40 miles west of kathmandu. the worst quick to hit the country more than 80 years. more than 4000 deaths and 600 500 -- 6500 injuries were confirmed. the quake also launched an avalanche on mount everest. 18 were killed and dozens more were injured. joining me now to talk about this ongoing story, sanjeev sherchan