>> welcome to "bloomberg businessweek." the behind-the-scenes battle oversold her energy. in one corner is elon musk and in the other is warren buffett. this clash of the titans. we will meet chris cox and tell you why these facebook's secret weapon. gif,her you call it gif or how it's winning the internet. the latest issue of businessweek right here on bloomberg television. ♪

>> another great issue of bloomberg businessweek. a provocative question. maybe even a surviving -- surprising question. is the u.s. the new switzerland? it turns out there is a huge market for people putting their money in places like pierre, south dakota and reno, nevada. shannon is writing about really interesting phenomenon. walmart has come into communities and put mom-and-pop businesses out of business. now we are seeing walmart with its concerns of its own beginning to pull out as well. you were seen communities by guangxi profiles not having a mom-and-pop store and walmart and people driving 50 miles to go to a grocery store or pharmacy. let's get started. we begin with this week's cover

story. a clash of the titans behind-the-scenes. solarle between elon musk company and a nevada utility owned by berkshire hathaway's warren buffett. joining us on the phone is no up. --noah. set the scene for us. talk about the incredible growth we have seen in solar energy over the last decade and why? noah: it's been because of a couple of reasons. the cost of solar panels has come down dramatically over the past couple of decades. another big reason is that companies like solar city, the elon musk affiliated firm you mentioned, have come up with innovative ways to help homeowners finance solar panels. they have leasing arrangements where for no money down they will come out and put some

panels on your roof. usually you are saving enough on your utility bill with a solar panels that even after you pay solar city your monthly overall power bill comes down. that is a big reason for why solar has been booming. >> elon musk's company has made inroads in nevada. talk about how successful they were. they had a lot of people getting into their leasing program and getting solar panels on the roots. -- roofs. >> they only really set up shop in 2014. they needed the right government incentives in place and it took a while to get those in place. once they set up shop it went crazy. in nevada is largely desert. it's a no-brainer. people don't even have that many trees in their yards. it's a big thing in the northeast. and they sendtree a solar city an application and

the like we can do it because there is too much shade. in nevada you don't have problems like that. you saw this incredible uptake. year, for most of last their fastest-growing market. what you saw happen as a result was the warren buffett-owned utility started flexing its muscles. it lobbied to keep a caps on the amount of people who could have solar on their roofs and sell power back to the grid. it's an incentive a lot of people use. they went through this regulatory process. in december they got a ruling that was very favorable to the utility and make it hard for solar city to do business in the state. >> it sounds like you had people who had solar panels on the roofs but now they are not used. let's step back inside by the kind of muscle, the kind of regulatory muscle they were able

to flex. they had a big lobbying campaign. noah: they are in a regulated industry. they have to stay close to policymakers. i don't think we saw anything different than what the utility would do and a common business would do here. they just did it very well. they were able to persuade lawmakers and later regulators to come around to their side of their way of viewing things. people who put solar panels on the roof's are paying their fair share to keep the grid. as a result they have these new fees in place in nevada that make it more expensive to go solar. it's not that you can't in nevada, it's just much more expensive now. >> this puts nevada and i funny position. it encouraged all these people to get solar power, and on the other hand they are rejecting that. they are siding with this

utility in keeping people from wanting to do it as much as before. people an you talk to common phrase that came up when i was in las vegas was "bait and switch." term andously a loaded the solar industry is trying to politicize this whole thing. a lot of people do feel like they were promised incentives and now the rules are being changed. >> we talked about lobbying. it sounds like you had a lot of people who are upset about these changes and the potential for changes and they try to protest this. how did that all play out? >> about two weeks ago in the middle of january i was at it utility commission hearing. not the kind of event you expect a lot of people to show up at. there were hundreds of people there. mark ruffalo showed up to basically say the state was -- they had erred.

it's interesting story. some people are legitimately mad. the solar industry and companies like solar city are definitely trying to promote that backlash. it is in their commercial interests to do so. >> you write there are homeowners it feel undermined. noah: definitely. i talked with one homeowner who refinanced his house before solar city showed up. a cost of $48,000 to put panels on his roof. treating thisly like an investment for his retirement. he knew it would bring down his power bills and he would have more certainty about the energy he was consuming and the cost of it. he basically told me he is waiting to see how this new -- the new rates shakeout and he doesn't want to retire until he has a good handle.

that may seem odd for folks that don't have released the power bills, but in nevada in the summer sometimes people can pay hundreds of dollars to run their air conditioners and homes in the middle of the desert heat. >> what does this mean for solar city's business model? is it no longer economical for them to do business in nevada? >> first off they are not a profitable company. they are going fast and have about $350 million in annual revenue. they said the new rates make it so they cannot do business in nevada. they have stopped installation. they are in the process of laying off 550 workers who were involved in sales and installing panels in the state. yes, they basically view these new rates as a complete hundreds to doing business in nevada -- hindrance to doing business in nevada. >> the latest edition of

bloomberg businessweek is available online and on newsstands. facebook is looking to the future in mark zuckerberg is turning to his secret weapon for results. coxf product officer chris and his plans to move facebook forward. ♪

♪ to "bloombergk businessweek." he is facebook's secret weapon. his name is chris cox. he was promoted to chief product officer in 2014. he helped create the newsfeed. facebook has remade the way we like the world. sarah prior tells us that is all about the change.

he joins us from san francisco. sarah: thank you for having me. david: let's talk about what he wants to do. the like button. it's reportedly going away? sarah: it's just getting some companions. we've all become very used to like things on facebook. we use it for every kind of situation. what facebook is starting to realize is that as people share a diversity of things on facebook, sad news included, they needed some options around little bit more empathetic or so to the range of human emotion that people can express. you didn't feel like you had to like a paris attack or a natural disaster or a political story you have a different reaction for. chris cox has been at the forefront of coming up with the new options. there are angry and sad, and

also wow and ha ha and love. ways for people to express themselves that goes beyond the thumbs-up sign. david: you write about the genesis of this. there should be companions to the like button. how did it go over and chris cox proposed it? sarah: people have been trying to battle this for a while. facebook users have long called for a dish -- a dislike button. they thought that kind of solution would make it will negative. cox, whoase facebook's specializes in being empathetic to the user, who has guided facebook to be a little bit more cautious about their product testing, to bring it to use earlier so people are not surprised by things and gradually introducing products. he had a way of approaching this that was a little bit easier for

people -- or might be easier for people to understand. it's only rolled out in a few countries but soon will be rolling out around the world. david: introduce us to chris cox. his role is to be the standardbearer for more empathy and look at how innovations and changes might be greeted by people who use facebook. tell us about how he fits into the management hierarchy. sarah: as mark zuckerberg expands his range of things that he is dealing with they have a big portfolio of stuff. there is oculus, whatsapp, messenger, internet.org, the service that includes internet beaning drones to deliver coverage to people in other parts of the world. zuckerberg is talking to foreign leaders and barack obama. chris cox is the guy dealing with facebook on a day-to-day basis. he is basically running the big blue app. he has gotten a lot of power

lately and respect from people around him. to also be the voice of the user, the person coming up with how to tweak the product. david: listening to you mention all those facets of facebook, a lot of what you talk about our complimentary things. they are not part of facebook proper. this is a company trying to change what it has done for a long time. it's not always been successful. chris cox has been behind some of the changes that have not worked out. redesign of was the the newsfeed they got canned. newsfeed's introduction itself that you didn't seem to care for readily even of a caused us to use facebook more. over the last couple of years with he has brought to the table as a product officer is a way of testing products that they have a panel of 1000 users around the

u.s. that rate their newsfeed stories every day. they go on trips around the world and interview people about how they use facebook. they have product testing sites on campus where they observe people using apps. it's different than what you think of whether break things fast mentality. it's much more researched now. they are careful with what they decide to release and how they think about rolling it out. they are not having grand presentations about the new products of any used to. instead they are doing it in a very scientific, measured way. that is chris cox's contribution. david: i know twitter recently changed the way you could favorite something on twitter. interestme amount of and eagerness to test this out when it's a that over twitter? sarah: i think twitter is under

a very different kind of pressure. veryas facebook may feel beholden to its users and not to alienate them with change, twitter is in a position where it needs to attract many new users in order to satisfy its investors who are hungry for growth. time pressure with a lot of product changes, including the hearts versus favorites. they are also trying to make it easier to sign up for twitter. to make it easier to find out what is going on on the site. some really basic things that would just help them get up to the level where facebook already is. david: what is the metric of success? there are some complementary things you can do instead of the like button. what would be the market that succeeding for facebook? sarah: it's all about whether people use the product more. right now people use facebook and its companion app more than

40 minutes a day on their mobile phone. it's quite incredible. if that -- if that time spent goes up or down, chris and his team will know whether they have a great success on their hands or great mistake. if it reduces time on facebook, they might have to roll back the change. we will see. david:. thank you so much coming up we go to the back of the book for this week's etc. section. the rise of giffy on the internet and the two gif guys that made it happen. "bloomberg markets

♪ david: welcome back to "bloomberg businessweek." there were a lot of off-season

turnover in the league of legends championship series. that's the world's most prominent lead for competitive video gaming. team owners are imposing changes and many execs come from the pro sports industry. what happens when real sports money moves into video games sports? and for the action -- uninitiated, what is it exactly? josh: it's essentially what you said. competitive video games. it's sort of developed into a thing we play against strangers. you play against strangers for money. then you make a league. david: and people are watching this? there is money getting people to watch these games being played? josh: the league of legends championship series is played in front of a live audience. it's also a pretty popular thing to stream online. people watch the platforms like twitter stevie on by amazon -- twitchtv. owned by amazon

david: how long the people that play professionally? 1980's think in the there was a movie about the nintendo world championships. it's been around for a while. it's taken up the last couple of years. largely because of these large online audiences. people are used to live streaming things. how useful is the parallel to professional sports? is there a lot of fanfare and excitement surrounding these? had to get the people watching it at a attention? josh: i think there is a pretty obvious parallel in the fact that these are events that happen regularly. they do have fans. people are really in a certain players. there are seasons and things like that. as a business it's been funny to watch them struggle with this. it's not an exact metaphor but

there are obvious parallels they find themselves dealing with problems like should we do exactly what the nfl has done on a small scale? david: take us to one of these competitions. what does it look like? what does the play would like? josh: it's basically in legal legends there are teams of five guys. they are usually skinny young men wearing t-shirts. they are young. it's a young man's sport. usually there is a coach who wears a suit. it looks like it's what if this first suits. they sit down in a row computers and pretty much quietly play video games. they have headphones and talking to one another. above them is a large screen showing what is happening. the fans are mostly reacting to that, what they see on the screen. david: how long do these games last? as a live that will go on for days at a time?

josh: it's less than a cricket match. in the most recent series one game, one of the quickest a history lesson about 18 minutes. they normally go longer than that. a day of competition is stacked with a number of games happening active back. guys will go. you can bring your own food and stay all day. david: let's take a look at the etc. part of the magazine. we bring in bright begin -- brett. let's settle a little debate. "gif" vs "gif." gif.he majority says the company said they were pronounced "giffy." usesounder of the gif also "jif." i think your fun getaway -- fine either way.

their bread-and-butter is they are essentially a library for gifs. they are an indispensable resource if you need to find one to text your friend the perfect gif you know will some of your emotions better than any word can. that's essentially their function. they also work with companies. there are a lot of big-name brands like subway, and the nba, and hbo, and victoria's secret. essentially helping these businesses. use it as a communication tool david: a gif is a format for photo? it's an old technology that has been reborn in the internet age. loop.a second-long video it was popularized around the time when people were building myspace pages. it was a way to personalize your myspace page. it's sort of died off when myspace died off. but a lot of news sites like buzz feed have been using the gif to tell stories. they've been popularized again.

david: is giffy making these? how is it getting these? >> it does make some gifs. tv producers and movie studios will make sure their movies are gif-able. they are scouring the internet looking for these things to make sure they fall within their index. they also spent a lot of time making sure there is no nudity. that's a large part of the job. david: what have they hit on? gif what makes a good? >> did the ability to tell a story really quickly. the same way you might text someone and emerging -- emo ji. david: there are come is working with giphy to make gifs and put their products in gif. is there a lot of money? >> they have a lot of funding

right now. they have more than $20 million in funding. they were given $1 million for a company that was heavily involved in kickstarter. they are focused right now on growth, not revenue so much. it is certainly put ads on pages if you were searching for a cash gif --cat gif. they had decided not to do that right now. they know that users are pretty fickle and they don't want people to be turned off by that. david: they do so much. that is a for the six edition of "bloomberg businessweek" on television. the latest issue featuring the cover story on elon musk and warren buffett's solar power battle is online and on newsstands. see you next week right here on bloomberg television. ♪ the only way to get better is to challenge yourself,

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