emily: from pier three in san francisco, welcome to "bloomberg west" where we cover innovation, technology and the future of business. i'm emily chang. americans are feeling better about the economy. the university of michigan showed consumer confidence increased in april for the first time since 2007. strong sense of job security and upward momentum in wage growth is strengthening confidence. the fed left open the possibility that they will raise interest rates in the second half of the year as the economy gains strength. six baltimore officers have been charged in the death of freddie gray.

the charges include murder and manslaughter and all six officers are in custody. gray died after suffering a neck injury from being unrestrained in a police vehicle. the maryland state attorney held a press conference today. marilyn mosby: the officers failed to establish probable cause for mr. gray arrest as no crime was committed by him. lieutenant rice, officer miller and officer nero illegally arrested mr. gray. emily: the state attorney went on to say that gray requested medical help at least twice. salesforce held talks last year with sap about possibly joining forces, according to people familiar with the matter. one option discussed was sap buying salesforce. salesforce ceo marc benioff was said to have called sap chief bill mcdermott before sap reported its quarterly earnings last year. talks ensued.

the current status of any takeover is unclear. both companies declined to comment. earlier this week, bloomberg reported that salesforce is working with financial advisors to help field takeover offers after being approached by a potential buyer. a person familiar with the matter says this most recent is a company other than sap. we will update you as we learn more. to our lead -- elon musk has unveiled a battery that homes, businesses and utilities can use to store electricity. tesla's vision for batteries is expanding way beyond cars. the new offering is called the power wall, a slim, rechargeable lithium-ion battery with an interesting price tag. elon musk: it has all the integrated safety systems, the thermal controls, the d/c to d/c converter. it works very well with solar systems.

you can go off-grid. you can take your solar panels charge the battery pack and that is all you use. it gives you safety, security. it gives you a complete and affordable solution. the cost of this is $3500. emily: musk has a bigger product called the power pack which he wants to sell to big companies. a lot of electricity. this comes as california and new york are turning to storage to relieve the aging grid. i'm joined by bloomberg's david gura and jeff chamberlain, the executive director of energy storage research at the argonne national laboratory. thank you for joining us. jeff, we will start with you. there are home batteries on the market. they have yet to really take off. how is tesla's offering different? jeff: that is a really good question. the thing we are most excited about in the offering and the announcement that elon musk made is drawing attention to the

problem. the problem is electricity is an on-demand product. in a coal fire power plant or nuclear power plant, you turn knobs up and down to create electricity per the demand of the consumer. as we turn to wind and solar, we need to store that energy. the real beauty of the problem -- if we saw what is the first world problem, and it is a desire for all of us to drive teslas -- i assure you you want to, it is really beautiful. and, electricity from the sun and wind -- we want to have phones that last a long time. by solving this problem, we address the problem in developing countries. countries where the grid is either unstable or does not exist.

if you can couple inexpensive solar with this, we can change lives, hundreds of millions of lives around the world. emily: how are tesla's batteries any different or better than any of the batteries on the market? is it about the tesla brand? david: it is so integral to the car they created. they did not spend a lot of time perfecting the batteries in the cars. the sense i got from analysts is the technology here is not that radically different from what is out there. elon musk has spent many years trying to perfect his batteries and make them last long and run more efficient. he is presenting a product that is very well integrated. you can put one of these in your house, connect it to the solar panel on your roof and there you go. it is less coupling things together. emily: how many u.s. houses are actually using battery-powered at the moment? how many are considered using

battery power? what is the real potential? jeff: a very small fraction when you think of the united states. with the exception of hawaii and alaska. hawaii is an islanded grid. the cost is $.35 per kilohour. it has gone into 20% of houses and batteries are required. i want to echo what david said. the cost of this battery system is between $350 and $450 per kilohour. that is in line with other batteries in the market. emily: an average household spending $3000 to $4500 on a battery -- is that really realistic, david? david: the goal is to get the price to go down even more. right now, i think this will

appeal to a select part of the market. maybe people living in a place with a grid is less reliable maybe a place where there are more storms than others. the goal here, as articulated by elon musk, is to get the price of batteries down. first it was to take the price of solar panels down and now batteries have become the focus. yeah, i think it is a high burden for everyone. as we talk about how does somebody expand into the developing world, with the current price tag, that is prohibited. as it catches on, maybe that can change. emily: what does the battery market look like abroad? i know germany uses a lot of solar power. jeff: there is a real open market. micro-grids -- there are markets where there is a well-developed

grid. whether it be in north america or europe. but a real target for companies would be the places where the grid is either desperately in need for upgrade or does not exist. there's an enormous market in rural india and africa and china where there is a need for electricity, a raw need. if i may go back to something that david said -- although tesla's price point seems high it was nearly five years ago where the cost were over $1000 per kilohour. back then, it would have been over $10,000 to put the same battery into your garage. when you look at the u.s., in california, if you are going over a certain load, you are paying extra costs for electricity. there is a market in california today. if you could break into the market, the cost will drop down.

emily: right. we will be monitoring that. jeff chamberlain, thank you for joining us, as well as david gura of bloomberg television. coming up, a bump in the road for linkedin as the company reports first-quarter results. and later, circa may be seeking a buyer. is it the end of a company and a beginning of a trend? that is next. ♪

emily: this is "bloomberg west." i'm emily chang. an extraordinary earnings for linkedin and the film studio at the forefront of virtual reality -- that is coming up this hour. first, a on your headlines -- a former ally of new jersey governor chris christie has pled guilty in conspiring to close lanes near the george washington bridge to punish a local mayor. david wildstein, a former official at the port authority made the plea deal and can face two years in prison. two other allies, including the former deputy chief of staff were indicted for their roles. governor christie has not been publicly implicated in the case. an uber office in southern china

was raided on thursday it is suspected of operating without a license and engaging in illegal business activities. officials seized the mobile phones. in january, the transportation ministry banned private cars from offering unlicensed taxi rides via mobile app. charter communications posted a wider loss of $81 million in the first quarter as investors wait to see if the cable provider will try again to buy time warner cable or bright house networks. charter lost out to comcast more than a year ago, but last week comcast dropped its $45 billion plan to buy time warner. is linkedin in trouble? they reported sales that missed estimates and cut its guidance for annual revenue. revenue was up 35%, but growth slowed. losses widening to $43 million down 216% the news sent shares plunging. are the concerns overblown? joining me now is mark mahaney. it was incredible yesterday after earnings, within an hour we saw $8 billion wiped off their market cap.

what is going on here? is this because of the guidance or because of real weaknesses in the business? mark: probably both. this company does really good four out of five quarters. this was the fifth quarter. they hired him a lot of people. a huge ramp-up last year and it led to misallocations to accounts. so they had a slowdown in revenue growth. their advertising business and in their premium subscription business. they gave an outlook that was 20% below their prior guidance. the stock was taken down 20%. emily: let's talk about display advertising because we are seeing interesting trends. twitter reporting earlier that they had advertising problems as

well, but we are not seeing it so much with facebook. mark: traditional display online is in a world of hurt whether it is yahoo!, zillow, yelp, twitter -- to some extent -- and linkedin. these are going to other formats -- social, mobile, video. linkedin have a hedge against this. they have been building sponsored ads which are kind of like facebook ads. traditional display is still 50% of their ad revenue. they have to fill in that hole and it'll drag down their growth rate. emily: a lot of this advertising is experimental in social media. mark: except in two areas. google which is not experimental and then facebook. facebook has reached enough mass and scale with advertisers and consumers that they are a must-buy on the internet. their only two must-buys today -- facebook and google.

emily: how much has to do with the acquisition? they bought linda.com. and the strong dollar? mark: fx is an issue for any large company and this company did not escape that. it turned out to be more diluted near-term. that was part of the hit. emily: linkedin and twitter are down 20% this week. facebook, 3% or so. are we seeing a narrative of facebook and everyone else yet again? mark: i will still keep google in the mix, but we are seeing a story of concentration of ad dollars and market cap to a couple of names. twitter has not yet escaped experimental. i think linkedin will solve the problem. it is much more of an advertising play. linkedin is a recruiting play. facebook is right now -- if the single biggest trend is social mobile, the company best situated against that is

facebook. emily: do you see any management differences between jeff weiner and dick costolo and mark zuckerberg? mark: it is fair to say the best tested management teams in internet advertising amongst those three have to be facebook and linkedin. twitter, we've had so much turnover. whether this is the right management team or not -- i don't think that is in dispute at facebook or linkedin. emily: what do you think about dick costolo? mark: there are issues at the company. product development is not going the way they said it would go. advertiser outreach is not going the way the company said it would go. whether that is his fault or somebody else's, it's hard to tell. emily: does twitter have to be as big as facebook -- the comparison is always facebook. is that fair? are they just a niche product? mark: it is not fair except the company has gone out of the way saying they could be a global platform as big as anybody else.

they set their own bar and they are tripping over it. emily: mark, always great to have you here. we will see how these stocks open next week. thank you for joining us. coming up, news app circa may be putting itself up for sale after secret announces it is closing its doors we will talk about why it is so hard out there for content sharing. ♪

emily: welcome back to "bloomberg west." i'm emily chang. the news app circa may be putting itself up for sale after failing to raise venture capital money. it raised $45 million in 2012.

investors included several ventures. we reached out to circa, but they declined to comment. this comes after the messaging app secret announced it was shutting down. what are the challenges content app platforms are facing these days? sarah frier joins me now with more. the question everybody is asking -- is this the start of a trend? everybody has been screaming bubbles, so much money is chasing startups, but maybe there is not businesses to sustain them. sarah: i think that is exactly right. this is a moment where people are starting to say i have all these millions, but i am not going to deliver on what i promised. we saw secret shut down. we are seeing circa shut down. who knows if it is the business model? they just could not raise more money. emily: secret return all of its money it raised to investors.

sarah: we are also seeing companies like refinery 29 raise a lot of money. it is still there. i don't want to say specifically for those companies, but in general we are seeing a lot of venture capital being infused into these startups. this is a trend that started happening about a year or so ago. it does not take that long to figure out if you will not make it. emily: how much does this have to do with media and content sharing platforms? we saw giga close its doors recently. are people directing their interests elsewhere? are they getting eaten by facebook where we all consume a lot of content? sarah: all of them at once. we have been hearing that media is a dangerous industry to be in for the last 10 years or so. it seems some of the things that

are billed more like experiments or smaller organizations in a larger company like maybe what fusion is doing, those ones seem to be a little safer than the ones that giga went out and raised venture capital by themselves and tried to raise a business on their own. yes, facebook and twitter and even snapchat are building their own media platforms on top of their businesses. they are getting people to break news there. it is becoming a very competitive field. emily: what are investors telling you? i have heard a lot that things are expensive. they cannot afford to invest. perhaps you see a company like circa, who knows, maybe hit their upper limit of their valuation investors? sarah: investors were clamoring to get into secret last year. venture capitalists were saying we just missed that one.

sometimes it is more expensive to actually be the investor. emily: are investors concerned? sarah: investors -- i have heard of some people saying i will not take this field, i think it is too much. as we reported in the past, some of these higher valuation deals, the multibillion-dollar valuations you hear about, those deals have a lot of preferences into them by investors saying i will invest into this, but you have to make sure i will get my money back even if it is a lower valuation. emily: this is a conversation that will continue to go on as we see these startups continuing to raise or not. sarah frier, thank you so much for joining us. coming up, virtual reality heads to hollywood. how one company is bringing vr technology to entertainment.

later, one san francisco city employee speaks up about the danger of drones. all of that and more, coming up on "bloomberg west." ♪ . .

emily: welcome back to "bloomberg west" where we focus on innovation, technology, and the future of business. let's get a check of the headlines. u.s. manufacturing held up the weakest pace in nearly two years last month. the lack of improvement shows the effect of a stronger dollar and the lower oil prices linger on capital spending. today's report adds to weak readings for the u.k. and china as well. chevron profits fell more than 40% in the first quarter after falling crude prices took a bite out of energy earnings. just like exxon, it smashed analysts' estimates.

france's biggest bank bnp paribas was ordered to pay nearly $9 billion fine. part of the settlement with the u.s. for violation sanctions by processing transactions involving sudan, iran and cuba. they were ordered to serve five years of probation after a guilty plea today. apple may sell its first bonds in japanese yen, a move that would diversify fundraising currencies after selling debt in euros and swiss francs earlier this year. they hired goldman sachs and mitsubishi financial to arrange fixed-income investor calls. the company announced it was boosting its capital return program by $70 billion through march 2017. the oracle co-chief executive is positive on a salesforce acquisition as long as someone else is paying. in a q&a session at the headquarters, he said if it is acquired by somebody else, it is probably good for us. it will cause a lot of

disruption in the market. earlier this week, bloomberg reported sales force is working with financial advisors to help field offers. virtual reality is going to hollywood. vr company jaunt has announced its latest project, jaunt studios, to launch in hollywood. they've tapped a former lucas ctu to lead the studio. earlier, i spoke with the ceo to hear more about the plan. cliff: it is not the future, it is now. even in my film career, i have been fortunate to work on big milestone films from the early days of computer graphics like "jurassic park" and working with george lucas on pioneering digital cinema. what excited me about virtual reality is this new media that we will take people to new experiences.

emily: talk about your vision and how it fits into the studio in general. jens: we have spent basically two years working on the technology to deliver vr experiences to users. it involves a special camera that records in 360, audio and requires a lot of software which creates automatically the vr experience that are delivered. the key is content. it is developing quality content that people will enjoy when they first get their devices. that is the reason we decided to launch jaunt studios. emily: i recently had my first vr experience and it was amazing. i don't know if i could do it for three hours. i was only sitting there for five or 10 minutes. cliff: most of it is short-form content. a lot of what people are working on is a lot around gaming. we are doing full cg worlds.

we are focusing on cinematic virtual-reality. we can take you to places like the top of the mountain or courtside of a basketball game or to fashion events. we are hitting these verticals in sports, music, travel and adventure, and telling narrative stories. we think our goal is to keep the consumer more engaged with longer experiences. emily: when you say it is not the future, it is now, do you think this is how ultimately we will be watching everything? cliff: i would not say everything, but we will fight for the audience's time. we will be fighting for people to watch our content, not just in home, but as people are commuting to work or traveling on a plane. moments where we want to entertain you. emily: talk to us about some of the content we will see. some of your partners.

jens: one of the first pieces we did was with paul mccartney, where we recorded the final concert at candlestick park. we had our cameras on stage with paul and people were actually able to feel like they were with him. since then, we have done narrative pieces. we did a movie. we recently did a piece with north face where people are climbing. it feels like you are flying over moab while people are jumping off. these are experiences that are available today. you can download them through google play or through oculus. we recently released our first ios iphone app. emily: cliff, you were an early investor in oculus. what is your take on facebook buying them? cliff: it launched this vr movement that has been happening over the past year since the

announcement. i'm excited about it. emily: what do you see facebook getting out of this? cliff: i think mark zuckerberg has even said he sees this as the next platform. a lot of the content right now is very much an individual and immersive experience but the goal is to make it a more social experience that you can share with your friends and family. emily: who do you view as your competitors? because there are so many players out there creating original content. what about a netflix or an amazon? jens: there is a whole ecosystem that is being built in vr all the way from the hardware that is necessary, the cameras, to the software that is needed. it is less today about competition and more about partnering. the idea of the studio is to partner with the content creators, the creative community.

the studios in hollywood, the big media companies, the brands. there are a bunch of creative people that want to dive into vr and are not sure how to do it. we can help them create compelling experiences. emily: the president of the newly formed jaunt studios and the jaunt ceo. up next, drones at the golden gate bridge. they are becoming a big problem for local officials trying to sort the gadget geeks from real security threats. ♪

emily: welcome back. i'm emily chang. still to come, drones at the golden gate bridge. it's becoming a huge headache for local officials.

if you have a cool idea for a t-shirt, you can use this startup to make big money. we are talking to teespring later. first, a look at your headlines. new positions in yum brand according to a letter by investors. they say the kfc brand can evolve by updating its menu and adding more chicken sandwiches. yum rose the most in more than a year after the disclosure. warby parker is building up its physical presence, the e-commerce startup expanding into brick-and-mortar foundations with its new funding. they recently raised $100 million at a $1.2 billion valuation. it already has 12 retail locations in nine u.s. cities. disney's latest "avengers" sequel is on track to set all kinds of box office records. "age of ultron" took in $27 million on thursday night showings and is projected to make $221 million through the weekend, which would give it the record for biggest opening weekend of all time, beating the original "avengers" movie in 2012.

the golden gate bridge draws more than 10 million tourists every year, but san francisco's greatest destination is attracting a new type of visitor -- drones. they capture amazing footage of the bridge, but officials are concerned about the security risks the drones could pose. the bridge authority is calling for regulations that would allow it to cite drone operators for trespassing. the golden gate transportation district manager joins me now. the golden gate bridge should not be confused with the bay bridge, which is right behind me. first of all, there are no laws or rules? dennis: it is basically the wild west for drones right now. the technology is way ahead of the regulation and rules so it is time to catch up so there are appropriate safeguards. emily: how often is this happening? denis: several times a month. some of them are commercially operated drones and others are operated by inexperienced

hobbyists. emily: zero rules? denis: there are virtually no rules. hobbyists are unregulated for the most part. even the regulated ones have the draft rules -- it is a topic that is very near and dear to us. emily: there have been some potentially dangerous situations elsewhere. a drone almost hit a police helicopter in new york. have there been any close calls? denis: yes, we have areas of the bridge that are closed off to the public. if you go past those gates and taking photos, we will arrest you for trespassing and find out what your intent is. a drone is unregulated so it can go into the same space. it's a huge concern so we feel drones should be restricted from some security sensitive areas. emily: what are you concerned about? terrorism? denis: terrorism and protecting the bridge.

it is a symbol of our community so we are concerned about protecting it. we spent a lot of resources protecting it. drones allows a way for somebody to easily understand our security. emily: one of the biggest problems with drones is that regulation moves slow and has not caught up to technology. how quickly do you expect lawmakers to respond? historically, these kind of things could take years. denis: i think there has been some recent incidences with drones. we had a hobbyist crash into the freeway. somebody may have been hurt. there are a lot of safety concerns. i went to washington, d.c., and met with representatives. we submitted comments to the federal aviation folks. they are really focused on coming up with rules to allow this amazing technology to take off while protecting the public.

emily: some stadiums have anti-drone systems. is that something you can consider? denis: i don't know if there are any regulations that we could interfere or harm somebody's drone. there is no concept of trespass for drones as there is for a person. emily: i wounder if recreational drone users would not even know about rules around a bridge. denis: amazon now on a voluntary basis has common-sense tips for people. ideally, it would be mandatory for manufacturers to disclose information and allow people to understand better where they are allowed or not. emily: what has been the response from the senator's office? denis: senator feinstein has drafted legislation and will address our concerns with respect to public safety and security. emily: what do you want? no drones around the bridge ever? denis: no, there are two things. one is for drones that are operated by folks that are

knowledgeable and professional we don't want to restrict them the same way we don't a hobbyist. but an unlicensed hobbyist should be restricted from places that are busy. the licensed people can behind above the roadway so they don't distract motorists. right now, the faa does not have the authority to regulate the hobbyists. we believe they should not be allowed above busy roadways. emily: what about surveying the bridge? denis: we do have a drone that is great for inspection. certain parts of the bridge that are difficult to get to, we have to climb. we own a drone. we support the technology. we just think there needs to be appropriate regulations. if you build your own car, you

cannot drive it on the street. you have to have license insurance and it has to be certified to be safe. drones should be similar. if you are in an empty field knock yourself out. but if you're in a busy public space, the operator should have training and it should be certified safe. emily: that is fascinating. denis, thank you so much for sharing that story and please keep us updated as you pursue the regulation. up next, from a dorm room idea to $55 million in funding. it is the silicon valley dream but believe it or not, it is for a t-shirt startup using social media to make designers big bucks. ♪

emily: this is "bloomberg west." in just three years, a startup called teespring has become one of the top t-shirt makers in the country, printing and shipping more than 7 million t-shirts. the secret? social media advertising. it turns out that ads that target people's interest could translate into t-shirt sales. they have got big-name backers and raised $55 million. joining me now is the ceo and cofounder, walker williams. you guys started this business in your dorm room. t-shirts are popular, but this popular?

walker: teespring is a platform for entrepreneurs. our mission is to make it easy to bring a product to market. we removed traditional obstacles like manufacturing, logistics, customer service, and let users focus on great ideas and scaling them. emily: you have turned multiple entrepreneurs into millionaires. people are making millions of dollars, right? walker: last year, 20 people becames millionaires. thousands are making a living. emily: who are these people? walker: it ranges. it is online influencers youtubers, bloggers, people on twitch. emily: give me an example. who made $1 million? walker: a stay-at-home mom living in brooklyn developed a brand, had great ideas, and made $200,000 in the last year alone. emily: what kind of t-shirts is she making?

walker: i cannot reveal that. she has some great ideas. emily: talk to me about how you use social media and target interest. walker: what i would say is what we solve for people is completely taking the operations and supply chain out of it so they can come up with these great ideas. with platforms like facebook twitter, pinterest, you can get these very long-tailed niche ideas to the right person that matches the perfect product for. even 5, 8 years ago, that was impossible. teespring allows people to focus down on ideas that resonate versus having big generic brands. emily: facebook ad rates are picking up. does that impact you guys? walker: less than most because our products resonate so strongly with the end buyer. emily: what do you mean by that? your products are so good you don't have to pay attention to ad rates? walker: an example -- instead of

a surfing brand that targets surfers generically, it might be the palo alto surf club or, you know, when i'm not surfing, i'm rock climbing. it's a product for both. we go one level deeper than the generic surface level and allow the ads to resonate better. emily: how do you make sure your t-shirts are being produced ethically? walker: we have a safety team and try to work with only vendors that have a strong history of compliance. emily: where are they made? walker: we have a production facility in kentucky. over 300 people there by the end of the year. it is going to be a huge step forward. emily: you don't have t-shirts made in china? walker: they are manufactured in nicaragua. we do work with vendors who have a strong history of compliance. emily: i need to get into the t-shirt business clearly.

i will start designing my logo after this. walker williams, thank you for joining us. very interesting stuff you are doing. it is time for the bwest byte where we focus on one number that tells a whole lot. spencer is in the newsroom and covers amazon for us. what do you got? it is a high bar for the friday byte. spencer: 307,000 feet, the height reached by blue origin spacecraft in yesterday's test launch. it's the company owned by jeff bezos. emily: is that good? is that higher than previous launches? spencer: it is good. the test was partially successful, partially not. the key in the modern-day space race is not only getting into space but also salvaging the equipment used to get there. bezos and rival billionaire elon musk are both trying to travel

there, but salvaging the equipment so they can reuse it. they were not able to salvage some of the propulsion engines in this test. emily: the same thing happened with elon musk's spacex launch. it landed, but the equipment was not reasonable. -- not reusable. how would you say bezos and musk stack up right now? who is in the lead? spencer: musk got out of the gate first so time will tell. emily: nothing like a billionaire war in space. spencer, thank you so much for joining us and thank you all for watching this edition of "bloomberg west." you can get all the latest headlines on your phone, tablet, bloomberg.com, and bloomberg radio. have a wonderful weekend. we will see you on monday. ♪

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