Skip to main content

tv   Bloomberg West  Bloomberg  May 8, 2015 1:00pm-2:01pm EDT

1:00 pm
emily: live from pier three in san francisco, welcome to "bloomberg west" were we focus on innovation, technology, and the future of business. i'm emily chang. the u.s. added 223,000 jobs in april as hiring rebounds. unemployment fell to 5.4%, the lowest since may 2008 but wage growth is still stuck with an average hourly earnings climbing just .1%. construction and health services posted some of the biggest gains in employment. conservatives have won an unexpected majority in the u.k. elections. the tories won a majority of the
1:01 pm
seats. here is david cameron. >> we will govern as a party of one united kingdom. that means insuring this recovery reaches all parts of our country, from north to south, from east to west, and indeed, means rebalancing our economy, building that northern powerhouse. emily: cameron has already appointed george osborne as the exchequer. the extra cash would give teva the ability to increase its offer. last one, mylan rejected the takeover offer. a federal court says broadcasters will not have to
1:02 pm
turn oversensitive documents to the fcc as part of the government's review of the at&t directv deal. the court ruled the fcc did not deem it necessary to the process. aol shares are rising the most in 16 months. the company reported a 7% gain in first-quarter sales and turned a profit of $7 million. they have shifted their focus to digital advertising and sales. now to the lead. hoover is willing to spend billions to buy one of the world's largest digital mapping services. uber has submitted a bid of up to $3 billion for new kia's -- nokia's mapping business. uber's bid is competing with
1:03 pm
another one from a group of german automakers including bmw, audi, and mercedes-benz. they are also teaming up with baidu on their offer. joining us is cory johnson. with me in the studio is the mapping expert,. i am so glad you are here today because we are all wondering what is so special about nokia m aps? >> since they announced, there have been a flurry of rumors on who may buy them. the map data is key. there are not many companies that own that around the world. there are only four. google has their own. nokia as theirs. there is a company in amsterdam and then an open street map open community. so it is scarce but super
1:04 pm
important. emily: so all the digital maps we see are from one of those four companies? >> basically. there are some regional providers but most of the ones that you see on your phone or car comes from one of those four places. emily: uber already uses these already, so why would they want to buy them? >> that is the interesting piece. uber is building a huge logistics presence. if they can understand how people move around better than their competitors, they have a competitive advantage. that would be the rationale for them. for others, it is different which makes this interesting to watch. cory: is the kind of data that these maps have, does that change the conversation? i wonder if the data itself is different? >> that is an important part of this.
1:05 pm
the needs are breaking into two different groups. you have the general mobile internet guys who are looking at local search. they want maps to show where people are, find places. on the other hand, the automotive guys are trying to move beyond navigation that you may have in your car today to really high precision navigation wherein they are looking -- where they are looking at things like what lane you are at and could eventually lead into autonomous driving vehicles. so you have the automotive guys with their requirements and you have the mobile internet guys. one way to look at this is what you get if you buy. the other way to look at it is what you lose if somebody else gets it. they are likely to invest in the technology that you want. cory: you did not mention apple, why not? >> apple has built a huge
1:06 pm
mapping effort since they stumbled a couple years ago. they are hiring a lot. right now, apple is built on tom-tom maps. there is a lot of speculation that apple is building their own mapping data. it is a huge task. google did it, surprised everyone, a very big task, but apple certainly has the resources to do it if they want. emily: how long does that take it apple is coming from so many years behind? >> years and years. google started their project in about 2007, 2008. you can argue they are still building it out. that becomes an issue for companies that have not started in this, to start from scratch and build your own is a long process. emily: talk about the specificity you were talking about. there is a difference in knowing what street you are on and what
1:07 pm
lane you are in. who is farthest ahead in that way? >> think about this plane that's when you are looking for something, where it is. the next level is the data that allows you to navigate. you can take a left turn here. that stuff is fairly common in most data sets. the highest level are these things called hd maps and that is going to automotive systems. google is working on that and no kia. if they go to someone in the internet mobile business, that may put the automotive guys in a real issue. emily: why would companies want that data? i understand self driving cars. beyond that? >> the services are getting more complex. the car is really the last unconnected device out there.
1:08 pm
they see that changing dramatically in the next two years. the question is who will control that. the better user experience will control that and the pressure is coming from google, put on the automotive guys. as cars start to speak to each other, you get into traffic-related issues, so there is a big push on that, but it's hard to do. cory: what about the future of gps and innovation there that will give us better data? >> the gps is one of many technologies that deal with positioning. there are a number of other ones , even in the mobile world, to position yourself. understanding with precision where you are is key. there are things happening in
1:09 pm
the u.s. pg ps is a you a system, other systems in europe and russia. as those involved, accuracy will be improving to get information on the actual location. emily: why with the german automakers want to partner with baidu? >> the german automakers are interested in high definition maps. by do is interesting. baidu is one of the major map properties in china. very successful and very good. i thinkbaidu as a strong interest and you could see them becoming a big buyer in this. although their maps are good, it is in china. nokia has maps outside of china. what would seem to make more sense is to help baidu get out of china and go to a more worldwide market. emily: how do you expect this to play out? >> if i were looking at who
1:10 pm
should buy them, the automotive guys have a huge amount at risk if they do not secure some position. having said that, the advantage of the mobile internet companies have is they are growing so fast, they can think about the company they will be in two years. that could be a bigger company and may justify an investment that the automotive companies are not willing to make. emily: let's say uber, who i would think is the underdog in this situation, what about them? >> i don't know if i would put them in the leading position. emily: would owning the maps make uber more scary? >> it gives them the ability to understand how people around -- move around in the world. now it is all about the backhaul on data, where people are moving to. uber launched a service where
1:11 pm
they wanted to pick up multiple people on a ride. knowingly trends is a key part of data. emily: you are the mapping guy. i have learned so much just in the last five minutes. mark below, we will see how this plays out. thank you for joining us. coming up the clock is ticking for the u.s. to change over to chip and pin technology. what are the roadblocks? ♪
1:12 pm
1:13 pm
1:14 pm
emily: this is "bloomberg west." i'm emily chang. coming up next, we take a look at these of's plan or chip and pin technology in the u.s. and we talked to the 23-year-old
1:15 pm
who took on united airlines. shares of bojangles are popping today as the fried chicken and biscuits chains goes public. they raised 140 $7 million in the offering, climbing 47% today. he joins other chains like potbelly and shake shack in going public. the illinois supreme court has said the law which sought to cut costs of living increases and boost the retirement age violated the state's constitution. the state argued it could enforce the law because it was in a fiscal emergency. october 20 15 is the fast approaching deadline for visa and mastercard to adopt emv technology otherwise known as chip and pin across the u.s.. but what are the potential roadblocks? cory johnson has more. i just got some new credit cards
1:16 pm
and they had chip and pin technology embedded so it seems the shift is happening. cory: so i guess we can go shopping? maybe when i come back next week. this is a fascinating change going on in america. the visa risked public chairman is with me. i think people don't realize how big of a deal this is that all merchants in the u.s. will now have liability if they do not accept this chip and pin technology at the point-of-sale? >> they are in the process right now of rolling out those terminals. if you look around, you will see a little slot where you can put your card in about one third of the terminals in the marketplace today. not all of them are activated when you can start looking for them today. merchants will be in a position to offer a secure payment experience to their cardholders. cory: why has this taken so long
1:17 pm
in the u.s.? one of our colleagues from across the pond have said, why has it taken so long to adopt this? >> a lot of people have. about 15 years ago, the u.s. and europe adopted different hats for controlling product. the u.s. has been the most advanced country in the world with predictive analytics to prevent fraud at the point-of-sale. you are familiar with that, where your bank will call you because they know a suspicious transaction. meanwhile, europe decided to attack this technology. what we're seeing now is the two are converging. europe is going with predictive analytics on top of chip and u.s. is adding chip on top of analytics. cory: so what is pushing the change along? >> we set up the structure in 2011 with the incentive that the party with a weaker technology would bear the risk of fraud. if the issuer has not issued a chip card, the issuing bank will
1:18 pm
be the one who pays for the fraud. if the issuer has and the merchant does not have a terminal, then it is the merchant. we set up that structure in 2011 and is going into place on october 2015. importantly, we are investing time and resources into educating consumers and merchants on how to use the card, how to implement the technology, and that is when we are kicking off for small businesses this month during small business month. cory: this will lead to a big boom in spending from merchants buying your terminals. >> i suppose that is right. for a few years, the manufacturers have been sending out the terminals anyway with the chip technology enabled and it is more about the backend, the message processing, environment that they have to invest in now. luckily for small merchants, they can get terminals that are
1:19 pm
plug-and-play, available for less than $100. cory: is this a way for visa to gain even more market share as the change takes place? >> not really, the whole industry is a line behind this initiative. large banks and other merchant initiatives are moving in lockstep in getting this done. we all believe security is paramount for the payment system. cory: really interesting. vice president of risk and public policy. thank you. emily: coming up next, why did united airlines sue a 23-year-old? we take a look at the secrets of how airlines price of their flights. ♪
1:20 pm
1:21 pm
1:22 pm
1:23 pm
emily: this is "bloomberg west." i'm emily chang. united airline sued a 23-year-old who started a website that helps people find cheap flights. how does it work? a lot of airlines use what is called a hub and spoke model for planning lights. plain layover in regional health before going off to regional destinations, but one of your real destination is the layover city? skiplagged helps you to get there cheaper. the founder is with me now from new york. you are the 23-year-old that they sued. i imagine it is good to have united not on your back. are the legal troubles over? >> as of right now there is no lawsuit, but i'm cynical. we will have to see what happens next.
1:24 pm
i don't think it is that easy. emily: how does the strategy for finding flights work? >> hidden city is where your destination is for other layovers. from new york let's say you want to get to miami. it might be cheaper to go to tap out a stopover in miami. so you just get the flight you need and skip the rest after. emily: this idea is not new, it sort of makes sense, but why are airlines so against it? why are the flights more expensive to go straight to san francisco rather than to layover incident and cisco? >> it has to do with market competition. the airline may have a stronghold on new york to san francisco whereas they may not have a stronghold on san francisco to burbank. so they can charge whatever they want for new york to san francisco and then charge less
1:25 pm
for the burbank flight. this just has to do with how the markets work. they want to maximize their profits. exposing this to the world is sort of a weakness to how their pricing model works. emily: the vast majority of travelers think that this is a perfectly legitimate way to travel even though the airlines don't. i'm curious about the technology you built. how difficult is this to do, is this something that any of us can do without using skiplagged? >> the way savvy travelers would do it before they would put in a destination on other websites. in my new york to miami example, they would search for new york to tampa it would be a tedious
1:26 pm
process. on skiplagged you can just search new york to miami, and you can get results in a couple of seconds. this is why airlines are against it. emily: any other tricks that you have found to find cheaper tickets? >> yes, i also noticed that it can be cheaper to book 21 ways rather than a round-trip. sometimes booking the departing and returning flight can be cheaper if you do them separately. there are also things like not booking in groups. airlines will sometimes mark up the prices if they see that you want to travel with family.
1:27 pm
emily: they do not let us off easy. they have let you off for now. we will check back in to see how everything is going. we will be right back. ♪
1:28 pm
1:29 pm
1:30 pm
emily: this is "bloomberg west" where we focus on innovation, technology, and the future of business i'm emily chang. president obama pushes for a transpacific trade deal. here he is speaking earlier today from nike headquarters. >> if we do not write the rules for trade around the world guess what? china will. and they will write those rules in a way that gives chinese workers and chinese businesses the upper hand and locks american-made goods out. emily: many congressional democrats are opposed to the trade deal.
1:31 pm
the baltimore police department is now under investigation by the justice department. here is attorney general loretta lynch. >> today the department of justice is opening an investigation into whether the baltimore police department has engaged in a pattern or practice of violations of the constitution or federal law. this investigation will begin immediately and will focus on allegations that baltimore police department officers used excessive force including deadly force, conduct unlawful searches, seizures, and the rest , and engage in discriminatory policing. emily: the city's mayor had requested the probe. riots broke out in baltimore last week following the death of freddie gray in police custody. espn will not renew the contract of bill simmons. in a statement, the espn president said it was time to move on. espn says it remains committed to grant land, the website
1:32 pm
founded by simmons. erickson has sued apple in three more countries, germany, the u.k., and the netherlands. they accuse apple of using the technology in apple products without a licensing agreement. they have been payroll tees to erickson before the expiration. while apple and ericsson that'll let out in court over patent legislation, there is a new effort to reform the current u.s. patent system, which is, by many accounts, broken. i spoke with the head of the u.s. patent and trademark office , michelle lee, who has been spending a lot of time here in silicon valley. take a listen to why the director is focused on input from the tech community. >> i am here to meet with many of the companies. recently, congress has
1:33 pm
introduced some legislation related to patent reform so it's critically important we get the feedback from our innovating companies to ensure we arrive at a piece of legislation that is balanced meaningful, and consensus building. emily: you were deputy counsel at google for a long time. what does a company like google want on patent reform? >> i cannot speak on the specifics of what they're looking for, but i hear from many companies in the silicon valley and there seemed to be a desire to curtail abusive patent litigation to create the incentives so that if you are a defendant or plaintiff in a lawsuit, there are incentives to behave reasonably, to streamline some of the discovery, and to create a level playing field or all innovators. emily: patent trolls are responsible for 67% of all patent lawsuit filed. is that true? >> i don't know if that is the
1:34 pm
precise number but they are certainly involved in a number of lawsuits filed in the country. emily: if that is even closer to that means the majority of lawsuits come from people who do not have anything. that sounds like a big problem. how big of a problem are trolls? >> i do not like to use that term, i like to focus on abusive litigation. the administration is focused on curtailing abusive litigation. abusive patent litigation is the assertion of a patent against an operating company with virtually no information on the reasons for infringement, asking the company who is receiving the threat, do not look at the patent so hard, but the cost of defending the lawsuit will be far more than what i'm asking for, so just cut me a check for less than the cost of defense and we will call it a day. emily: has the patent office
1:35 pm
been too easy on people getting patents? >> i don't think so. the u.s. pto has done a good job issuing quality passions -- patents, examiners work very hard. innovation and technology changes by the day, so it is a difficult job. that said, one of my main initiatives as director was to announce an enhanced patent quality initiative. with all the conversations going on about abusive litigation and now that we are also in a firmer financial situation due to the fact that we have our own fee-setting authority, and haven't been a user of the system, i recognize a need to really issue the very best quality patents possible. emily: would you call it a legal loophole, the fact that a majority of patents may be filed by abusers? >> i would not say it is the
1:36 pm
majority. i don't know the statistic because it is hard to define what is an abuser or not. most of our patents, many of them, are filed by hard-working, innovative companies who want to recoup the cost of their investment. they invest time and money into developing technology, they want to bring a product to the marketplace and the patent gives them the right to regain some of that money back. emily: so you do not think that trolls are holding back innovation at companies apply for legitimate patents? >> abusive litigation has a cost on societies. it means they are spending money on patent litigation when they could be spending on research and development. it is particularly concerning
1:37 pm
when the companies are small start up companies with a limited amount of venture capital funding, they are trying to get off the ground, trying to get products to market place. if you have to spend a million dollars in a patent litigation defense, that is money they do not have to spend, and that is the focus of this administration's support of legislation that we hope to get on the president desk this year. emily: you said recently the patent office is not financially secure. does that mean you have the money to hire the examiners you need and get the resources you need to stop these abusers? >> the u.s. pto's primary goal is to issue comes an issue trademarks. in some sense, the abuse is happening in courts. we advise the administration on intellectual property policy related to patent litigation.
1:38 pm
i will not say we are in a secure position but a sounder position helps. we are able to focus on initiatives such as the enhanced patent quality initiative. we also have proceedings at the patent office that allows the public to bring back patents that have already been issued and allow a panel of three to reevaluate the validity to see if a patent should have been issued. so we have the ability to take away some patents from the system if they should not have been issued. emily: i understand some patents have been invalidated. if the apple and samsung case for going to back to trial, samsung could win. these in validations could have big implications. >> they can. if you have a patent that is against your company and you can invalidate it at the u.s. patent and trademark office, the cause of action is gone. it was designed that way by
1:39 pm
congress, providing a faster more cost efficient means, an alternative to district court litigation for the agency to evaluate. it does have broad business implications. emily: would samsung have one? >> i don't know, there were so many patents involved in that case. emily: that was u.s. pto director michelle lee. up next, we will hear more from her on her push for more women in the stem field. and we will talk about small businesses.
1:40 pm
1:41 pm
1:42 pm
emily: this is "bloomberg west." i'm emily chang.
1:43 pm
coming up, we continue our conversation with u.s. pto head michelle wie on getting women into technology, and facebook talks about their relationship with small businesses. nintendo is delaying the introduction of a new console focused on emerging markets. the gaming giant is hoping to offer more smartphone titles. these gains could come out this year. tesla has already taken orders worth $800 million in potential revenue for its new storage battery for homes and businesses which were announced last week. that is nearly as much as the company took him from car sales in the entire first quarter of this year. toshiba has withdrawn its earnings forecast from last year and will not pay a year and dividend after it found improper accounting on infrastructure projects. toshiba is also setting up a third party committee to further investigate the matter.
1:44 pm
now i'd like to turn back to my interview with the first female director of the u.s. patent and trademark office michelle le e. after being the deputy counsel of google, she focused her efforts on improving the patent system. now the u.s. pto is encouraging more women to enter the s.t.e.m. fields. here why she is focusing on the issue. >> i was born and raised in the silicon valley my dad was an electrical engineer. all the dads on my block were engineers. they invented things, filed for patents, and started companies. some of the companies succeeded and some did not. or those that did, they revolutionize the world. i also built a radio with my dad in the living room together and i went to m.i.t. to study electrical engineering and computer science, so i've always had innovation and entrepreneurship in my background. when i entered m.i.t., women
1:45 pm
were certainly in the minority. when i went to grad school at the m.i.t. artificial intelligence lab the numbers were even lower. so there are definitely fewer number of women and girls entering the science technology, engineering, and math fields. as you move up through the ranks, young women tend not to stay in the numbers, perhaps that they should. emily: why are there so few people at a young age who are playing with the radios with their dead? >> not many young girls building radio sets. one initiative i have underway at the u.s. pto is to really encourage men, women and children, boys and girls, to enter the s.t.e.m. profession. we have a summer camp where we have a bunch of kids show up, they are given a pile of junk and they are asked to create something. sketch out the basics of a
1:46 pm
patent. it is a priority for the pto to increase those numbers. emily: what do you think about the elln pau trial? >> i hope it increases an awareness of the scarcity of women in technology, in corporations and law firms. i hope we all work together to try to increase those numbers, and i think it is a benefit to society. we cannot afford to leave behind any inventor or roger federer. i was thrown in on the stage of sxsw, i have the privilege of being the first woman director of the united states patent and trademark office. i would say 15 years into the 21st century i am honored to have this position, delighted that president obama selected me for this role, but there can be more women in roles like mine and in the tech sector.
1:47 pm
i asked the attendees at sxsw the innovators, creators entrepreneurs disruptors commit with me and make a pledge to increase the number of girls entering the s.t.e.m. professions and four networks and mentor young women in their careers in science, technology engineering, and math, and join me in the commitment. they are all leaders in their companies, they make hiring decisions, and they create corporate culture. they are in the position to influence and improve the current situation. emily: so important. that was u.s. pto director michelle lee sharing her thoughts on getting more women into technology. "bottom line" starts at the top of the hour. what do you have for us today? >> employment in the u.s. fell to 5.4% in april. the drop came after job gains in march or revised lower.
1:48 pm
michelle gerard will help us go through the numbers. the global markets are keeping a watchful eye on event in washington to athens to tehran. the director of geopolitics for stratford will have an analysis. i will see you at the top of the hour. emily: 80 percent of facebook users are connected to a small business, so what is the social network doing to keep these companies happy and buying ads? ♪
1:49 pm
1:50 pm
1:51 pm
emily: this is "bloomberg west." i'm emily chang. 40 million small businesses using facebook could play a big role in boosting its ad revenue. the company is investing in its small business audience by
1:52 pm
launching special support features like live chat and setting up meeting reads in major cities throughout the u.s. we caught up with the small business vp to find out more about their strategy for engaging local businesses. >> small businesses are really important to facebook. 80% of people are connected to at least one small business something a lot of people don't understand. it matters to the people on facebook so we have been investing a lot in the products but also for national small business week. we recently announced our program, an expansion of what we've been doing for a long time, getting out from behind the computers and going to see small businesses in their towns and communities. the key element is a face to face education with a spoke experts in more than a dozen cities across the u.s. emily: how has that changed engagement between small business and facebook? >> we are seeing great momentum in facebook. in the last year we have seen growth from 30 million pages to
1:53 pm
more than 40 million small businesses now active. one of the things we learned is as great is our online tools are, and we will continue to build the best being able to meet with small businesses face to face, providing greater support, has been a huge help. obviously, we cannot meet all of them, so we have rolled out a series of videos and live chat. emily: how do small businesses use facebook? >> lots of different ways. one of the ways that we are seeing more engagement with small businesses is they realize it is not just about likes and driving attention but using our mobile tools, autoplay video and other things to tell their marketing story the way they may have done it on traditional media a few years ago. they now realize facebook is the way to reach consumers on mobile devices. emily: how popular is video among small businesses? >> this was a surprising statistic.
1:54 pm
more than a million small businesses have posted videos to their page. a lot of folks when they think about videos, they think about big, branded super bowl commercials. with the advent of smartphones, we can produce and cut videos pretty quickly. there was a good example we saw last week, an independent watchmaker started rolling out short videos of people using their watches. it turned out to be a good marketing campaign for them on facebook. emily: on that note, mark zuckerberg said he is paying more attention to the quality ads on facebook. how does that affect small businesses, can they produce something of the same quality that a big rant can? >> we think small businesses are important to driving quality. we have a huge choice of which adds we can show to people and we know that people want to see ads targeted toward them. so when you can see an ad from a local business or if you are
1:55 pm
interested in watches from a watchmaker, rather than a national campaign, you might find that more engaging. emily: it is time for the bwest byte where we focus on one number that tells a whole lot. it is friday, tgif, right, cory? cory: absolutely. you can still the finish line. 10,409,000 fitbit devices were sold in 2014. the company is on pace to sell more than a billion dollars worth of these things in the current calendar year. we learn these numbers from their filings, they filed an ipo last night. it looks like it will be a monster deal because business is growing superfast and is very profitable. emily: i'm so curious as to whether 10 million people are actually wearing their fit hits. cory: half of them are in washing machines. emily: mine is in my desk
1:56 pm
drawer. how about you? cory: my jawbone is on my arm as always. emily: we have something else to talk about. you will be spending more time on the radio. cory: bloomberg advantage, three hours of radio with carol massar. 7:00 a.m. on the west coast. we will be doing that every day. it will be great working with carol. drive times in the bay area will be fantastic but we are on in new york, boston. on sirius satellite radio as well. emily: i listen to you as well. we also have something to announce, this show will be moving to 4:30 p.m. eastern time. i hope everybody will tune in den to catch us at our new time. thanks so much. thank you for watching this edition of the show. have a wonderful weekend.
1:57 pm
check us out at our new time next week. ♪
1:58 pm
1:59 pm
2:00 pm
mark: from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this friday. first let's get you to the top stories we are following. the labor market bounced back last month. employers added 223,000 jobs in april, just

94 Views

info Stream Only

Uploaded by TV Archive on