emily: samsung unveils its latest challenge to apple, but will a bigger screen and mobile payment system win over iphone users? ♪ emily: i'm emily chang, and this is "bloomberg west." tinder's twitter meltdown ends with a ceo swap, but will global leadership changes fix its pr nightmare? and tesla comes up with a plan to make investors happy. all of that ahead. first to our lead. samsung is doubling down on big screens, announcing two new phones today.

both have a 5.7-inch display, that's slightly bigger than the 5.5-inch display on the iphone 6 plus, and they work with a new mobile payment system, samsung day. -- samsung pay. will these products help samsung take on apple and rising chinese competitors? a strategy analytics director who covers smartphones joins us via skype from london and we upon -- visa's global head of innovation. visa is partnering with samsung on its mobile payment system. we also have visa's global head of innovation. he will be with me through the show. neal, i want to start with you. the phones are almost identical, except the edge has this wraparound screen. the note has a pen. what stands out to you? neil: the edge is a really nice

phone. what really stands out is the wraparound screen. it's almost two screens in one phone. you've got a big screen on the front and a smaller screen down the side. for the note device, what really stands out is the pen device, which you can use for functionality like writing directly onto pdfs in business use. two very differentiated phones. emily: big unveiling today from samsung. we heard from the head of mobile. take a look at what he had to say. >> bigger screens have gone from nice to have to must have, and a display, once called a gimmick, has now become the norm. emily: actually, that was the head of mobile products. but as he said, big screens are the new normal. what sets these apart? do you think people will buy these over the iphone? is this going to make people switch? >> the iphone user is the iphone

user. rarely does the iphone user go back to samsung or htc. samsung is doing a great job at putting out fantastic products, but the market share they are htc and motorola are losing. samsung needs to care more about putting htc and motorola to pasture and staving off people like lenovo and xiaomi as opposed to taking on apple. emily: i want to talk about samsung pay because it is different from apple pay. jim, i am so glad you are here. visa has partnered with samsung on this. how is visa pay different from apple pay? it's available in a lot more places. jim: the user interface is similar to what you with the on an apple pay device. but the major difference is they bought a company several weeks ago and incorporated the new that isgy in this phone unique to samsung. it will allow this phone to be used at virtually any terminal in the u.s. via the mag-stripe

reader. emily: what's interesting is samsung is not charging transaction fees for banks, though apple does. is this something that could lead to a renegotiation of visa's deal with apple? jim: i put it a little differently, we introduced a program that effectively says if someone wants to connect to visa banks, that there are no fees from visa or the third-party. we're taking a long view with internet of things on the horizon. with lots of digital experiences built around commerce and payment. our view was we just got to make it really simple from a contractual perspective for both parties, be it the banks as well as the platforms that are providing these services. it is really something we think is revolutionary with respect to driving the market forward. emily: it's a year after pay, but do you think samsung pay moves the needle?

guest: i think samsung needs to have applications -- samsung pay is another example of that -- that keeps people using the samsung phone. this is their attempt to do that. at the end of the day, samsung makes their money on the hardware. that is it. that is why they are able and willing to give away whatever margin and whatever revenue comes from a wallet. they make very little off of that. all their money and all of their margin off of the phone. same with apple. mark: neil, -- emily: neil, looking out at the smartphone landscape and knowing that samsung's global market share has been suffering and they've not been doing well in china, where apple and xiaomi are in the league -- in the lead, how well-positioned is samsung right now, given that we expect the new iphone will be unveiled in just a few weeks -- how well is samsung positioned right now? neil: good question. i think what is going to happen is samsung is essentially going to try to launch the s6 and the

note right before the new iphone comes through in september or october. they want to try to get as many volumes in as they can before apple comes. it is really a timing issue at this stage. emily: does it matter that they get a few weeks' head start? they do this every year. neil: they have accelerated the launch a little bit. typically, they come at the end of august or maybe into september, even some into october, so they have accelerated the launch a bit, and they are trying to get a jump on apple a bit. emily: jim, i want to talk about the mobile payments landscape a . android wallet is coming. how optimistic are you about these different services, and what do you see about the different value propositions? jim: i am actually very optimistic. for years, we've been talking about mobile payments and mobile

commerce, and the hype outweighed the reality. what has been great about the last several, really the last year or so since apple pay hatched is we are seeing a convergence in terms of the way these platforms -- and they are all very large platforms when you look at apple and android -- they are all consistent with respect to the user interfaces, the way the cards work, the way they interact at the terminal, and the way they have integrated into the payments ecosystem through visa and other payment networks. i think a lot of the confusion is coming out of the ecosystem, and people can focus on commerce and the consumer and the merchant experience. emily: what does this mean for the mobile companies you invest in? >> it means very little at this point. most transactions are going through the apple store or android store, and they are not using physical payment methods. at the end of the day, these payment methods that the hardware manufacturers are trying to put out -- it's

fantastic. the consumer adoption is what everybody is waiting for. if you look at apple pay as a stand-alone product, it has not been successful. maybe adding to the ecosystem like samsung is doing will help. i am skeptical. emily: how do you respond? that apple pay has not been that successful? look, i know a lot of people who have iphones and apple watches and do not use apple pay. jim: i think it goes back to what i said. to this point in time, it has been very confusing. even now, they have a great product and they control the whole stack -- the operating system, the application. the challenge has been acceptance. with samsung pay, you'll see that break down. nfc terminals are rolling out across the country. as consumers get the ability to use these experiences more -- i mean, wearables are coming this year -- i do think behaviors will change, but these things do take time. jim, neil, thank you for

joining us, and maha, you are sticking with me. tesla shares are getting a boost today. the electric carmaker filing to raise $500 million by selling 2.1 million shares. ceo elon musk is the money will -- says the money will be used to expand retail operations, charging networks, and energy storage business as well as helping to roll out new models. the tesla as uv is expected to come out next month. mosque -- musk already is one of the largest shareholders -- musk he will be one of the buyers as well. coming up, nasa is looking for a few good smartwatch designers. we'll explain. ♪ emily: now to a story we are

watching. and internal google startup has officially become google's first post alphabet spinoff, announcing it will function as its own independent company. the startup is the creator of an augmented mobile reality game that has been downloaded over 12 million times. they say the move will help them align more closely with investors in the entertainment arena. king digital shares are slumping despite beating on earnings. the problem -- a weaker forecast and a dip in monthly active users.

still here with me to discuss is with me tom -- discuss is maha. what's the problem? king digital shares way down right now. guest: i think it was slightly disappointing in the sense that some of their key franchises really did not shine this quarter. i think that was consistent with what we've seen over the past few years with the slipping of "candy crush saga," and not the case some of the newer titles have come in and pick up that slack. emily: as someone who has worked closely with a company like kabam, how difficult is it to come out with another hit you -- and another hit? candy crush saga has been around three years now. maha: it has been around a long time, and like a television show, eventually it reaches its endpoint, and that is certainly not where candy crush is right now. it has years and years of legs. in terms of new and may use --

maus coming on board, that will be their struggle. emily: are there any new games from king digital standing out? you have all the saugus, and there is paradise bay. -- sagas, and there is paradise bay. do any of these look like they could be a hit? lewis: i think it's a little early for paradise bay, but the fact that candy crush saga is going down is not necessarily a bad sign as long as other games pick up the slack. paradise bay debuted in the preceding quarter and is ranked about 35th as of today in terms of the growth charts on ios, -- grossing charts on ios, which i consider a good first step. the question will be over the coming months, does paradise bay, with the resource management game mechanic, move up a lot? to me, that would be a good sign that they have branched out into other successful game mechanics.

emily: it seems like a lot of these mobile game makers are struggling with coming up with hits. where's the opportunity for innovation in mobile gaming? maha: it is important to separate the kinds of mobile game companies. on the one hand, there is king and zynga, which are heavily dependent on casual gaming, and those are games with low average revenue per user, but tens of millions of people going into the game. once those companies start losing audience, they lose revenue very, very quickly. on the other hand, there's strategy game companies where the average revenue per user is very, very high, so they don't require tens of millions of players to be in the game. if you do get tens of millions of players in the game, you win big, like those companies have done. in the case of zynga or king, it is a leaky bucket. they need to continue to innovate and make sure those games have a much longer life than they do and add games on

top of them. lewis, when you were here last, we spoke about mid-core games, which is console or pc-quality games you can play on mobile. how is king doing? lewis: they are not there yet. i think resource management is a gamemore complex type of than is a match three puzzle game. there is room for more sophistication. if it really gets people sucked in and addicted to it like candy crush saga has done, but in a more complex way, there is the possibility of longer legs. what we have seen in games like clash of clans is that there is a lot of customization and ability to upgrade within the game, so that higher level of sophistication and multiplayer is really important over the long-term, and king really has not jumped on fully the multiplayer bandwagon, which is, to my mind, the crucial mechanic which gives games longer legs moving forward.

including mobile games. emily: lewis, thanks so much. maha, you are sticking with us. king digital still down after hours. nasa is calling all smartwatch app designers. the space agency posted a contest to freelancer.com requesting a smart watch up -- smartwatch app that could be used by astronauts in space. it needs to include an agenda view of the crew boss timeline crew's timeline and agenda, color-coded alerts, and warnings. communications that is between the international space station and earth and timers for astronauts to manage procedures and activities. participants do not actually have to make the app, just a visual presentation of the user experience. a reward of $1500 will be given to the winning design. that sounds a little low. whatever. left on its ceo

after just five months on the job. we will discuss why tinder is bringing back cofounder sean rad. and you are the mysterious fiber-optic cord cutters? the fbi gets involved after a series of internet infrastructure attacks in the bay area. ♪

♪ emily: it's time now for the daily byte, one number that tells a whole lot. today's number is $10,000, how much at&t is offering as a bounty for information about more than a dozen mystery fiber-optic cable cuts in the bay area.

the fbi is investigating, but so far they have no motive, suspects, or witnesses. they've affected everything from flight reservations to 911 calls, but experts say they are more vulnerable to attacks than other critical infrastructure. in this case, it looks like the suspect just lived in a manhole, -- lifted a manhole, climbed in, and nipped the cable. these kinds of malicious incidents are extremely rare. another day, another cofounder returns as ceo. in the past year alone, cofounders of twitter, reddit, and zynga have returned to run the companies they helped create, and today, we can add tinder founder sean rad to that list. reahe is reclaiming the compan's top spot. in a press release, a board member and benchmark partner said it's only been a few months, but there was mutual agreement that it was not the right long-term fit, and given

tinder's rapid growth thoughtry, the board rapid action was best for everyone. whitney is alex barinka, maha is still with me. -- with the is alex barinka. -- with me is alex barinka. this vanity fair incident is a little difficult to believe, but ok. why are they doing this? >> that's right. the company saying it's not related to what we were talking about yesterday regarding tinder, but but they say they are bringing sean in to help accelerate after chris was not really a great fit. you have to remember that tinder is in a position where they are trying to monetize. they introduced a premium package users can pay for in february, and they are trying to build out this product. sean was a product guy and was one of the original founders who was really focused on developing something's users will love.

when you think about where the company is in its lifecycle. it seems like that could be the -- could be behind the decision as to why to bring him back now that they have split from their latest ceo. emily: there was a sexual harassment lawsuit targeting the ceo at the time, who is no longer at the company. they thought a new ceo would help them move past that. maha, is this the right call? >> i love that you are asking an old married lady. we were investors in match. we are investors in zoosk right now. i will tell you that the dating landscape has transformed incredibly over the last 20 years. from what i'm told. i would not know. emily: me too, not firsthand. maha: it has moved on mobile, and it has moved online, and tinder and zoosk have been at the forefront of that. when you have management changes

that have happened so quickly at tinder, it could be that it simply was not a fit. if i'm on the board of the company and i feel like the management team i have put in place is not working, the best thing i can do is call a spade a spade and move on. that: been horowitz wrote founding ceo's naturally take a long view of their companies because it's their life's work, but when there are complicating factors like this, is it the right call? maha: i do not know about this specific one. i completely agree with what he is saying, and i try to make that the case in all my companies. when you extricate a founder, like was done in tinder or wherever, the heart of the company can sometimes go away, so you want to keep some emotional connection and some thrust and energy in the company that comes from that founding base. emily: at the same time that the heart may have changed, the valuation keeps going up and up. nobody knows how much tinder is

worth. alex, what do you know? alex: tinder is part of this match group that is a part of iac. barclays says match group is worth $5.7 billion, the whole group, while tinder alone might be worth $2 billion. match group plans to do on -- an ipo for less than 20% of the company later this year, so that might give us a little bit of a clue. one interesting thing about adult supervision, when they did move sean rad out of the position, that was some of the rationale earlier. now you also have greg black coming in as of today to take over as an executive chairman position at tinder as well. he's the chairman of the match group. he is the former ceo of iac and was the ceo of match.com a few years ago.

all of these factors coming into maybe assure the company has a little bit more guidance going forward. emily: so there will be adult supervision. maha, as an investor in match, do you know how much tinder is worth? maha: it is worth what people will pay. match brings the revenue, tender -- tinder brings the traffic. the exciting thing will be when both match and tinder can get that machine working so that the traffic tinder is bringing can be monetized. emily: what about the tweets? alex: 90 that it came from tinder, they have not backtracked on that at all, -- i know that it came from tinder, but it did make for some good nighttime twitter watching. emily: biggest unsolved mystery in addition to who will be ceo of twitter. thanks so much.

that does it for today. thanks so much for joining us. ♪

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