david: welcome to bloomberg businessweek on bloomberg television. the behind-the-scenes battle of solar energy. in one corner, elon musk, in the other, warren buffett. we will have the details on the clash of the titans. and we will tell you why he is facebook's secret weapon. whether you call it gif or gif, how it is winning the internet. another great issue of bloomberg businessweek.

♪ jessie juncker asking a provocative question, is the u.s. the new switzerland? for so long, the world's wealthy have stashed their money in switzerland and the cayman islands. now there are people putting their money in places like pierre, south dakota and reno, nevada. a great piece in the magazine. shannon writing about an interesting phenomenon. for such a long time, walmart has been coming into communities and putting mom-and-pop businesses out of business. now we are seeing walmart , because it is raising wages, beginning to pull out as well, so we see businesses like the one she profiles as not having a walmart. having to drive up to 50 miles for a grocery store. let's get started.

we begin with this week tossed cover story in a class of the titans, the battle between elon musk's solar company and the nevada utility company that happens to be owned by berkshire hathaway's owner warren buffett. us with the details. noah: thank you. david: talk about the incredible growth we have seen an energy. noah: first and foremost, the cost of solar panels has come down dramatically over the past couple of decades. and another big reason is that companies like solar city, the elon musk affiliated firm that you mentioned, have, 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 the solar panels that even after you pay solar city, your monthly overall power bill comes down. that has been a big reason for why solar has been booming. david: solar city is made in nevada. talk about how successful they were. they have a lot of people getting into their leasing program. getting solar panels on their roof. noah: nevada was not one of the first states. they only really set up shop there in 2014. they basically need the right government incentives in place and it took a while to get those in place in nevada. but once they set up shop, it went crazy. i mean, nevada is largely desert. it is a no-brainer. people do not even have that many trees in their yard. it is one of the big things in the northeast, people have a tree and send solar city and application and they cannot put

solar panels up because there is too much shade. nevada did not have problems like that, and there was incredible uptake. for most of last year, it was their fastest-growing market. what you saw happen as a result was the warren buffett-owned utility started flexing its muscle. it lobbied to keep a cap on the amount of people who could have solar on their roof and sell power back to the grid. it is a policy called net metering. an incentive a lot of people use. then they went through this regulatory process and in december, they got a ruling that was very favorable to the utility and makes it hard for solar city to do business in the state. david: it sounds like you have people that have solar panels that are not using them because of the regulatory ruling. let us take a step back and talk

about the kind of regulatory muscle that nv energy was able to flex. noah: like any utility, they are in a regulated industry. they have to stay close to policymakers, and i do not think we saw anything different than what utility would do or incumbent business would do here. they just did it very well, so they were able to persuade lawmakers and later regulators to come around to their side, their way of viewing things which is basically, people who put solar panels on their roof are not paying their fair share to upkeep the grid. as a result, they have new fees in place in nevada that make it more expensive to go solar. it is not that you cannot go solar, it is just much more expensive. david: this puts nevada in a funny position. on the one hand, they had encouraged people to get solar power and on the other hand, they are kind of rejecting that, siding with the utility and

keeping people from doing that perhaps as readily as they had before. noah: when you talk to people there, a common phrase that came up was "bait and switch." it is obviously a loaded term, and the solar industry is trying to politicize this whole thing, but a lot of people do feel like they were promised incentives and now the rules are being changed on them. david: we have talked about the lobbying on one hand. it sounds like you have a lot of people who are upset at these changes and the potential for changes, and they tried to protest this. how did that all play out? noah: about two weeks ago i was at a utility commission hearing. this is not the kind of event you would expect a lot of people to show up at, but there were hundreds of people there. mark ruffalo, the actor, showed up to basically say that the

state had erred in passing these new rates on to rooftop solar people. it is an interesting story because people are legitimately mad, but the solar industry and companies like solar city are definitely trying to promote that backlash because it is in their commercial interest to do so. write in your case that there are homeowners who feel like they have been undermined. noah: yes, definitely. i talked with one homeowner who refinanced his house before solar city showed up. it cost $48,000 to put panels on his roof, and he was basically, had treated this as 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 has basically told me he is waiting to see how these new rates shakeout because he does not want to retire until he has a good handle.

that may seem odd for folks who do not have steep power bills, but nevada in the summer, people can pay hundreds of dollars to run their air-conditioners and homes in the middle of the desert heat. david: what has this meant for solar city's business model? is it no longer practical or economical for them to do business in nevada? noah: they are not a profitable company. they are growing fast. they have about $350 million in annual revenue. they have said that these new rates make it so they cannot do business in nevada. they have stopped installations. they are in the process of laying off 550 workers who were involved in sales and installing panels in the state. so yes, they basically view these new rates as a complete hindrance to doing business in nevada. david: thank you so much, and you can read more about our cover story in their latest addition of bloomberg business.

available on newsstands and online at bloomberg.com. coming up, facebook is looking to the future and mark zuckerberg is turning to his secret weapon for results. we profile chris cox and his plans to move facebook forward. details when bloomberg businessweek returns. ♪

david: welcome back to "business week" on bloomberg television. he is facebook's secret weapon. his name is chris cox, promoted to chief products officer in may of 2014, joined facebook in 2005. he helped create the newsfeed.

facebook has remade the way that we like the world. sarah joins me from san francisco. sarah: thank you for having me. david: talk about with desktop about what chris cox will do. the like button reportedly is going away. sarah: it is getting companions. not going away. we have all gotten used to liking things on facebook. we use it for every kind of situation. what facebook is starting to realize is that people needed some options that were a little bit more empathetic, or spoke to the range of human emotion that people can express. you did not feel like you had to like a natural disaster or a terrorist attack or even a political story that maybe you could have a different reaction for. chris cox was at the forefront of coming up with the alternative to the like button. among them are angry and sad but

also wow and haha and love, some ways for people to express themselves on facebook that go beyond the thumbs up. david: you write about the genesis of this, that there should be companions to the like button. how did it go over when chris cox proposed it? sarah: people have been trying to battle this for while. facebook users have long called for a dislike button. but facebook thought that would make the situation to negative, like up voting and down voting. in this case, facebook, cox, who specializes in being empathetic and the voice of the use who has guided facebook to be a little bit more cautious about their product testing, to bring it to users earlier so that people are not surprised by things, to gradually introduce new products, had a wave approaching this that was a

little bit easier for people, or might be easier for people to understand. it only rolled out in a few countries. but soon, rolling out around the world. david: introduce us to chris cox. you mentioned his role within the company is to be the standardbearer for more empathy, to look at how innovations and changes might be greeted by people who use facebook. how does he fit into the management hierarchy? sarah: as mark zuckerberg expands his range of things he is dealing with, they have a big portfolio of things right now. there is oculus, messenger, internet.org using internet beaming drones that use lasers. to deliver coverage to people in remote parts around the world. zuckerberg is talking to foreign leaders around the world. 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 and respect to be zuckerberg's right-hand man and to be the voice of the user, coming up with how to tweak the products on a regular basis. david: listening to you mention all those facets of facebook, a lot of what you talk about are complementary. they are not part of facebook proper. this is the company that has tried to innovate before. a long time in silicon valley terms. it has not always been successful, and chris cox has been behind some of those changes that have not worked out. sarah: there was the redesign of the newsfeed that got canned. over the last couple of years, even though it caused them to use facebook more, over the past couple of years, what chris cox has brought to the table as chief products 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 in their homes about how they use facebook. they have product testing sites on campus, where they observe people using apps. it is very different than what you think of with facebook. it is much more research now. they are very careful with what they decide to release, and how they think about rolling it out. they are not having grand presentations about their new products the way they used to. instead, they are doing it in a very scientific, measured way. cox'sat is a lot of chris contribution. david: you cover twitter as well, and i know twitter recently changed the way you could, it is not -- not called liking, but favor something on twitter. is it the same amount of interest and eagerness that went to test this out at twitter? sarah: i think twitter is under

a very different kind of pressure, whereas facebook may feel beholden to its users. not wanting to alienate them. but with the 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. so twitter has a time pressure with a lot of their product changes, including the hearts versus favorites. the change you mentioned. but they are also trying to make it easier to sign up for twitter, make it easier to find out what is going on, on the site, some basic things that would just help them get up to the level where facebook already is. david: what would be the metric of success here? there are more complementary things you can use instead of just the like button. what would be the mark of that succeeding for facebook? sarah: it is always about whether people use the products more. right now, people use facebook

and its companion apps more than 40 minutes a day on their mobile phone. it is really quite incredible. if that time spent goes up or down, chris and his team will know if they have a great success on their hands or a great mistake. and of course, if it reduces time on facebook, they might have to roll the change, but we will see. david: sara, thank you so much. coming, we go to the back of the book's's for this week etc. session. highlighting the rise of giphy, and the two guys that made it happen. details, when bloomberg continues. ♪

david: welcome back to business week on bloomberg television. i am david gura.

there was a lot of off-season turnover in the league of legends championship series, the world's most competitive league of video games. team owners are imposing changes. many of the execs come from the pro sports industry. joshua bruce is here to explain what happens when real sports money move into videogame sports. and what are these sports? joshua: it is competitive video games were you compete against your friends. then you compete against strangers for money. and you have a leak when you league where-- a you play against strangers for money. david: and people are watching this. there is money and people watching this. joshua: absolutely, the league of legends championship is played in front of a live audience. it is a popular thing streamed online. people watch on platforms like twitch tv.

which is owned by amazon. david: you mentioned we are in a very early stage of development. how long have people been doing this? playing games professionally? joshua: i think it was even in the 1980's, there was a movie starring fred savage about the nintendo world championships. that was over 25 years ago, so it has been around for a while, but has taken off in the past couple of years, largely because these large online audiences can watch. people are kind of used to live streaming things, and that is taken off from there. david: how useful is the parallel to professional sports? is there a lot of fanfare, excitement surrounding these games? how do you get them to pay attention to one watching them being played? joshua: there is an obvious parallel in that these are events that happen regularly, they do have fans, some people are very into certain players, and there are seasons. as a business, it has been funny to watch them struggle with

this -- it is not an exact metaphor. but there is an obvious parallel that they find themselves dealing with, should we do with the nfl has done on a small scale or find another way to deal with it? david: take us to one of these competitions. what does the play look like? joshua: sure. it is basically, there are teams of five guys. they are usually skinny young men wearing t-shirts. david: i was going to ask how old. joshua: they are young men. it is a young man's sport. usually there is a coach with them who wears a suit. it looks like one of his first suits. they sit down at a row of computers and pretty much just kind of quietly play video games. they have headsets on so they are talking to one another. above them is a large screen showing what is happening, so the fans are mostly reacting to what they see on the screen. but the guys are there in front of them. david: how long do these games last? is it like a cricket match where

it will go on for days at a time? joshua: no. it is less than a cricket match. there was most recently in the series a game that was the quickest in history, lasted about 18 minutes. it normally goes longer than that. a day of competition is stacked the a number of games happening back-to-back. you can bring your food and stay all day. david: now it is time to take a look at the et cetera part of the magazine. the back of the book stories. let's begin with the cover story. settle a debate here. gif?do you say -- brett: the majority says gif, and a company is adant that it is pronounced giffee. not jiffy like the peanut butter. the founder also uses gif.

david: tell me a bit about this company that you mentioned. brett: they are essentially a library for gifs. they are an indispensable resource if you need to find one to text your friend, that perfect gif that will sum up your emotions better than any word scam. that is essentially what they do. they also work with companies like subway, the nba, hbo, and victoria's secret, helping these businesses use the gif as they communicate. david: it is a format for photos. it is an old technology that has been reborn. brett: it is a second long video loop. it is really nothing more than that. 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, that a lot of news sites, like buzzfeed, have been using it to tell stories and popularizing it again.

david: are they making these images, scouring the web to find them? brett: it is doing both. actually, it does make them. so tv producers and movie studios are making sure their movies are, i guess gif-able. but they are also just scouring the internet to make sure these things fall within their index, and spend a lot of time to make sure that no nudity gets on the site. that is a large part of the job. david: what has giphy hit on? brett: i think the ability to tell a story very quickly or to sum up a feeling, in the same way you might text someone and emoji. it is like next level enoji. david: you mentioned there are companies working with giphy to make gifs. is there a lot of money in it? is it profitable?

brett: they have more than $20 million in funding. they were given $1 million by a company that was heavily involved in kickstarter, but they are focused on growth, not revenue so much. they could put ads on pages if you are searching for a cat gif. they could show you cat food. but they have decided not to do that right now because they know that users are pretty fickle, and do not want them to be turned off. david: thank you so much, brett. brett: my pleasure. david: that does it, i'm david gura. a reminder, the latest issue of "bloomberg businessweek" is available online and on newsstands. we will see you again next week. right here, on bloomberg television. ♪

♪ hans: coming up on "bloomberg best," interviews from the davos economics forum. thinkers and powerful leaders bring their insight to bloomber television. >> we are continuing to invest in the downturn. >> do we think the world is falling apart? 8 all over again?ei >> 2008, we are repeating it. >> a unique perspective on the most pressing economic questions from the biggest names in business. join us now on "bloomberg best."