an update with the top stories. oil dropping 12%. below $30 a barrel. climb by more than $46. kong plunging in hong because china might impose restrictions on the buying. it is estimated to hit $1 trillion less year.

the deal is worth $43 billion. sources say that kevin china rising 4%. there are over 2400 journalists and the bureaus all over the world. is closing for lunch. singapore,icture tokyo, mumbai. slash and burn at yahoo cutting jobs, winding down legacy products, and addressing

strategic alternatives, but what does that mean? and we hear from oracle ceo mark hurd of what it takes to be a leader and what it takes to keep competitors at bay. we check out how mega cabs compare with the biggest companies over time -- mega caps compare with the biggest companies over time. but first, to our league -- yahoo! exploring alternatives for the core business. is that the company putting the for sale sign on the door? for the time being marissa mayer is cutting costs and exploring a spinoff of the web business rather than sell now because they feel it is kinder late --

it is currently undervalued. the search revenue is up 12%. but here is what chairman maynard webb added in a news release -- the board also believes that exporting additional strategic alternatives in parallel to the execution of the management plan is in the best interest of our shareholders. i want to bring in our bloomberg intelligence analyst to breakdown the numbers, but what does this mean? what exactly are they trying to say here? reporter: two things -- first, a spinoff will take nine to 12 months and the strategic options were with respect to the alibaba state and not the core business. emily: you are saying they are not saying we are going to sell. reporter: yes, and they talk about patent sales, corporate headcount reduction -- they are trying to simplify yahoo!

emily: what is mercer mayer here? is she saying she can turn it around? or is the ship going down? reporter: she is trying to basically simplify the company as much as try to focus on the division that has been growing and inspire growth. emily: mobile and video -- this is an acronym she made up. how well is the is maven business doing? is the growth enough to sustain this for the future? reporter: that is exactly what their needs to be more transparency on from yahoo!. what is the user activity? the business has grown from almost nothing to 34% of gap revenues in four years, but if you compare that to something

like a facebook, now they have 80% of their ad revenues coming from mobile advertising, and they were very low four or five years ago, too. on a relative scale, it's not growing as fast as competitors, but if you look at absolute numbers, yes, there has been strong growth. i think programmatic is doing well. emily: shares are down in after-hours trading, so of course we will be talking about how investors are looking at the announcements here, what they want -- if they still want to pursue a proxy fight. thank you for breaking it down for us. now we are going to get back to yahoo! in a few, but i want to turn to competition in the cloud -- where microsoft, amazon, and google has been gathering steam. our editor at large cory johnson is standing by at the headquarters of another cloud contender and that is oracle. he has an exclusive conversation with oracle ceo mark hurd. cory?

cory: thank you, emily chang and bloomberg tv, bloomberg radio as well. we're sitting down with mark hurd, ceo of oracle. thank you. you're going through an interesting time in oracle. you have gone through changes. you have gone through a ton of acquisitions. now we have this huge change, the move to the cloud. talk to me about what that looks like for oracle which has a strong footprint in on premise software. the development of cloud software has been targeted at oracle. what does that mean for the industry? mark: it is a big shift. i think you will see a majority i.t. shift to the cloud. for us, we look at this as an opportunity. we have such a strong on

premise-base, it will be important to make those worlds work together. and for us, building a whole new stack of capability through platforms, infrastructure that can work with that on premise base, that's a huge opportunity for us. cory: some of the contenders say they don't have to work together. throw out the baby with the bath water with the cloud software. why for newer companies, why are they not just starting with the slate clean? mark: vendors are interesting, but customers probably have a different answer. customers have a long set of applications on premise and they have to run their businesses every day. don't get me wrong. the bulk of work is moving to the cloud, but for a long time, you will have to get applications that work together. the ability to share information. i think it becomes a key advantage.

most of our competitors are either purely we on premise or -- purely on premise or purely on the cloud. cory: the cloud, the argument is it is so much cheaper. you guys also have a difference of the pricing strategies from what is going on. how you make that work? -- how do you make that work? mark: i do not know if i would call it cheaper. it is more variable. to be able to shut something off when you don't need it, to get a variable price -- i would not say that is cheaper. but it allows you to have better control of your costs. for us, we love the cloud world.

we love the on prem world. both business models are extremely attractive. we are about as agnostic as you can imagine. we are invested in driving our cloud stack and that is what we're focused on. that transition to the cloud. cory: your competitors like to talk about what you're not doing. s.a.p. in particular talking about how they are stronger, cloud growth, comparing it to what you guys are doing. how do you view s.a.p. as a competitor? mark: i dont think they are doing very much. to be very frank, they have acquired some properties. cory: do you mean things like concur? mark: concur, arriba is a property they bought. the core franchise is really erp. that is the core franchise that

the company is built on. they have not done any work from the bottom up to the architect -- re-architect to the club. -- for the cloud. long run customers want to move those rp's to the cloud. just to give you a quick view of our progress, we have sold -- i guess by the end of the year, we will probably be between 2000 and 2500 erp solutions in the cloud. it's a staggering number from zero a couple years ago. in terms of a pure erp solution -- cory: your colleagues have referred to their acquisition of -- what are we going to do next, buy dairy queen?

mark: i completely agree with her comments. strategically, it did not look interesting. we tend to have a strategy, and then buy and build to that strategy. it has to make sense to us. a dairy queen would make as much sense to us as buying concur. it did not align strategically where we saw the market going to where we thought was important for our customers. cory: do you think we will see oracle doing a serious acquisition sometime in the next year or two? mark: i know you know i'm not going to comment much on forward-looking -- cory: i just wonder your philosophy. how do you make those decisions question mark you guys are famous in the m&a world, giving answers. you do the diligence, given answer whether you are interested or not.

mark: we know what we are doing. we will do what we always do. something will have to make strategic sense for us to acquire it. it has to make financial sense. we have to be able to operate it. we are quite disciplined acquirers. we don't buy something just to buy it. cory: when you look at some of the fast software companies, those valuations, i would say, are really high right now? do you look at that? mark: they are high and they have been high for a long time. we have tended to be a first mover. we do not buy a company on the cheap. we buy the best property in that market because it's important. whether we build it or whether we buy it, we want to be the best.

cory: do you think it is the time to sit back and keep some powder dry in case some things go on sale? mark: it's always an advantage when that happens. it's always better when things cost less. if you look at our history, that has not driven every decision we have made. we make a decision based on the right thing to do at the right time that fits with our strategy and we made a lot of acquisitions back in -- these days may be wrong, but the end of 2010, 2011. we did taleo, a couple others. it was so important. our fusion product line was just now coming to market. we're buying multiple companies and learning so much about the business and taking leadership positions. cory: what you think you learned

from the sun acquisition? surely you tonight at the numbers to be as hard as they've been. mark: if you look at the sun acquisition, which predates me a little bit. i think you have java, the most popular programming tool and language in the world. just that asset in isolation was really important. on top of that you have solaris. you've got probably the best unix operating system in the world. you had an increase little -- incredible system that came with it. it was an acquisition that brought a lot of technology with a lot of customers.

cory: when i look across the world at your competitors, some are struggling, some aren't. if i had to pick which companies were in more trouble, sap, ibm -- which companies have the wrong strategy, wrong products, most wrong? mark: great question. i think i will stick with i would rather have our hand than any other hand in the industry area it is hard to make these transitions. there is a reason why every company does not get to the other side because it's hard. it's hard to do it in the public markets. look at the investments we have had to make. when i got to oracle, i think our r&d was $3.8 billion? we are probably only path to $5.2 billion this year. cory: huge numbers. mark: huge numbers, but we have had to invest. we have had to invested transition. we have to keep the capabilities and play at the same time we invest in new cloud capabilities.

think about this, cory. when you get into the cloud business we have to build data centers in 20 countries around the world. that's like building hotels before you can rent a room. we have had to invest in that capability. simultaneously we have had to build out a larger go to market organization and make all of those investments and if you are in the public markets doing all of those at the same time, it can be a challenge. there's a lot of companies and you have mentioned a few, that it is hard to get from here to there and i can tell you why. cory: mark hurd, ceo of oracle, thank you for your time. back to you guys. emily: our editor at large, cory johnson, thanks so much there, with mark hurd. still ahead, we've got to keep digging into the latest news from yahoo! as the company cut its workforce and explores alternatives for its investors.

will it come investors or trigger a proxy fight? ♪

emily: let's get straight back to yahoo!, shares ticking down in after-hours trading. marissa mayer planning to cut 15% of jobs, leaving yahoo! with about 9000 employees, and winding down a legacy of products, closing offices, and yes, looking at selling parts of the company. i want to bring in our deals reporter alex sherman and our guest eric. eric, i will start with you. how do you translate what they say about strategic alternatives? are they exploring as sale of this company? >> it was ambiguous at best.

at some point she did say that the board was going to explore the sale of strategic alternatives, which means the sale of the company. she was not very specific about it, and i understand from other reporters the board has said they will explore the sale of the business. the core business. emily: at least in after-hours, alex, investors are not reacting kindly to this. is she asking for a proxy fight? alex: it depends on what we see between now and april, i think, emily. if nothing goes forward with the sale of the company or perhaps sale of nonstrategic assets, i don't know that i fully believe -- we will see what happens with yahoo! -- i think the discussion

will probably be based around the entire company. if nothing moves forward with that between now and april, yeah, i think marissa mayer may be in for a proxy fight. i think the reason they included in that language and all you have to do is read our story from three weeks ago when we reported that the board was warming to the idea of selling the entire core business. that is the way to appease angry shareholders at this point. a think we have probably reached the end game when it comes to selling the entire business, and there's a lot of confusing language today and certainly marissa is going to move or word with a turnaround land because whether you sell the company or not -- turnaround plan because whether you sell the you're not, writing the ship is probably

good idea. i know my job is going to be trying to figure out who they are talking to and when they are talking to them and exactly what they are talking about, if in fact they are going to sell the entire business. how much money you they would give her that business? emily: alex, i will try to help you with that. doing the best i can. but we want to talk about where the business is now and what the business is doing. take a listen to what marissa mayer had to say about the mobile business. marissa mayer: we will continue to drive native through advertiser -- at the same time we will stabilize and slow declines in our legacy revenue. emily: when you look at the

mobile and video part of the business, how well is that doing? eric: not well. if you look at the waterfall that they offered to us during that call to show us where voice maven revenue is going to go from this year to the next, the maven revenue is only going to represent 200 million dollars. it's not doing well. this is not a credible plan. this is the turnaround of the turnaround, and it's a little ironic that today is groundhog day because it's groundhog day for yahoo! emily: deja vu all over again. ok, eric hippeau and our own alex sherman. as we head to break, uber is rebranding. many critics taking aim at the new logo on twitter, saying it looks like a doughnut, and basketball court, even a pokeball. ♪

emily: the european union and the u.s. have reached a deal on data sharing. the agreement replaces an earlier accord ruled illegal in the wake of edward snowden's revelations. the eu fear that personal data stored by u.s. companies might be exposed to spying. officials in the eu say that they can be sure that data is protected. coming up some of from a garage in menlo park to the world's biggest company by market cap, we look at alphabet. has passed apple. plus -- the biggest virtual reality funding round of all time. and if you like bloomberg news check us out on the radio. you can listen on the bloomberg radio at, bloomberg.com, and sirius xm. ♪

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>> an update with our top stories. in upsetting a demand for smart phones and pcs. these are just coming out. $300 million in the december quarter. here is a backdrop of sales falling 8%. to saveany is on track $650 million. have hadlity vehicles their best january sales in a decade. kia have haddai,

their best month. yahoo is on the way down. it is considering strategic cutting numbers by 15%. they will also develop more resources to its user engagement. rest the mayor is facing calls to step down. -- marissa mayer is facing calls is that down. 2500 journalists around the world. midday in some markets. leg.e entering the less it is looking like this.

it is a very bad day to be a equity investor. every single sector group is down. according to this index, they are lower. pick or guess some of the bigger losers you have oil and gas down 1213%. we have industrials led by japanese steelmakers. there are bleak earnings. we are doing away with dividends. across the entire steel space over in japan. bond yields, that is another story to follow closely. it is pushing towards extremely low levels now. seven basis points.

the five year pushing into negative terrain. 12 under zero. it will be interesting to see how this all plays out. a changing of the guard. this week we saw facebook surpass exxon mobile to become the fourth largest company by market cap in the world and apple cruised to become the number one spot. we look back to another age, 1993 for this week back in bloomberg and the rankings were much different. exxon was the world's biggest company followed by general electric. by the eve of the dot.com crash in 1999 exxon was replaced by

microsoft but companies like g. e. and microsoft still loomed large. what caused the change in the rankings? here to join us stock traders almanac editor and chief jeff hirsch. and paul, i'll start with you. as a formers equities analyst on wall street covering technology, are you concerned that so much value on wall street today is concentrated in the tech center? >> how can that be wrong? so yeah, it doesn't really, it's not particularly surprising. it's a sector that's seen more growth over the last 30 years, 40 years now, dating back to the semiconductor and it's seeing increasing market capitalization flowing in that direction and it is a bigger share and it shows up in the rankings you showed.

emily: tech companies comprised in 2004 on september 1, comprised 32% of the s&p. today they're more like 17.4% of the s&p so not nearly as much as it accounted for back then but still, four of the five most valuable companies in the world. jeff, what do you make of that? jeff: i think this is the beginning of the future here. back when i did the superboom book in 2011 our contention was that technology would be leading the future and here they are leading the stock market so i think it's very apropos and the beginning of the next superboom. we own apple at probabilities fund management but of the top four i would think that google and -- are much more entrenched. i think those are the kind of enabling paradigm technologies

they mentioned in the superboom book that is going to drive the economic impact individuals on an irreplaceable, irreversible manner and change the world. i'm not sure these companies are those but it's the beginning of technology leadership for the boom of the future. emily: paul -- go ahead. paul: technology is insinuating itself into non-technology parts of the economy. looking a is the tracking boom, -- fracking boom driven oil prices down to insanely low levels. in a large part it's the technology story. the technology leaking boo the broader economy, not just technology for technology's sake anymore. it's truly ubiquitous and that's the phenomenon we're seeing. paul: great point, jeff. emily: how long can alphabet

stay in the lead. gene saying when the apple phone comes out. it's going to change and go back top apple. >> i'm not sure. i do have an iphone and i use it but i find google much more important in my life for researching and tracking things down. they have a modem immersed in many more technologies. same thing were am. -- same thing with microsoft. they're deep in database and information technology. i could live would excel. -- live without excel. emily: the top companies then were cisco, and others. facebook is only four years old as a public company. can facebook stay up there? >> facebook i'm less optimistic about than google.

the way i look at it, you think of it in terms of market saturation in semiconductors, you had a rapidly emerging market that truly became competitive and same thing in smart phones, the phenomenon that apple is running up against. yet in google's advertising market, only about 8% have moved online and yet people spend 20%, 30%, 40% of their time staring at mobile devices. google is in a dominant position and there's an awful lot of room yet to grow. emily: this is the question i'm asked often about, microsoft in particular. what did they do except announce a new c.e.o.? >> i don't think the c.e.o. is the -- i think bill gates laid the groundwork there for a company that's going immerse itself in the services and software and things that drive the technology economy. they'll probably have microsoft

technology in fracking companies making sure that's done properly. i think facebook, like paul said could easily be dethroned much more than microsoft and everything that's entrenched in everything we use technologically in this world. emily: jeff hirsch, stock traders editor in chief and paul our bloomberg contributing editor. thank you both. possibly the largest sea round in internet history. the super secret start-up has raised more than $793 million in a new round led by alibaba. this leaves the company at $4.5 billion. it will speed up the project of bringing their first product to market.

magic leap is working on a headset that creates realties superimposed over real world views. google previously invested over half a billion dollars in the company in 2014. coming up, the video game disrupture that's shelling out serious cash for new games, even helping some pay their way through college. and up next, the official football of the nfl gets a high-tech upgrade. the next wilson x connected football coming up.

emily: today marks the first day in history that a polygraph was used in court. since the beginning of time, humans have tried to separate fact from fiction and catch liars in the act. before the 20th century, this usually meant torture and a lot of speculation but on this day in 1935 the first polygraphic device was used to convict a criminal in court. it's still under dispute as a valid form of technology but there's no doubt it's changed the lying game forever. wilson has provided the official nfl football for every super bowl in history and this year, the company is going high-tech, introducing the wilson x connected football. it includes a built-in sensor to measure speed, distance, and spiral efficiency. earlier i caught up with bob

thurman, v.p. of wilson lab and asked him to give me a quick demo of how it works. >> the ball is asleep. we want to wake it up. this is a beta version of the football they're working on now. if i spin it up in the air you'll see it captures the motion that a football being thrown. it will capture the speed. the amount of revolutions. a quarterback gets a tight spiral and butts a little spin on the ball. that's a little wobbly at 16%. not very good. every time you throw the football, it measures that. not only that, it opens game mechanics. now we can play a game in the backyard. you become the receiver and i can be the quarterback and we can march down the field without actually leaving the backyard.

>> could this be used to separate the best from the best? >> that's exactly how i see it. we want to measure arm strength, cognitive ability, the throwing quality and it's also a scouting tool. a tool that a quarterback can train to get better but also find that young quarterback in high school and find that next talent. >> who's the target audience? >> everybody that loves playing pass, everybody that loves getting out and throwing the football around. two kids in a backyard, two dads at a tailgate. >> wilson has been making the football used in the super bowl since the beginning. >> all of them. every point ever scored has been a wilson football. emily: how is it different from the ball that's going to be used this year? >> it's essentially the same but in this case we've inserted a sensor into the football to measure how hard somebody threw it, how hard they threw it, how much of a spiral they put on it. this gives you more information.

and it's synched into a mobile app, right? >> absolutely. the ball is connected seam li bluetooth synced to an app. emily: so what does tom brady think of this football? >> we're not sure. we hasn't tried it yet. emily: can it tell if it's been deflated. >> no, not yet. emily: you've been at wilson personally for 24 years. what was different about this challenge? what challenges did you run into? >> first of all we wanted to make sure nobody knows there's a sensor in here. second of all, we want it to be ready. it runs on a single charge, lasts for two years. it's always ready. turn it on, wake it up, throw the football and it's ready to go. emily: why did you guys decide to do this? were you compelled by companies like apple?

>> we didn't want to do it just for the sake of making the product. we wanted to do something special for kids who wanted to play. we want kids off the couch, being more active, learning to throw the football and having fun. it's healthy for us and then. -- and them. emily: the connective basketball came out first. do you see opportunities for connective tennis balls or volleyballs or golf balls? >> absolutely. we have a huge pipeline of things we started. it started with the basketball. every kid that's stood out in the driveway and done three, two, one, and shoots and scores. every kid that says hey, let's go deep. or every kid that says bases loaded, bottom of the ninth

strike out. emily: does this change the game at all? >> it does change the game. we're talking about bringing next-generation analytics to the sport. the trajectory, how low the quarterback threw it, the timing of the route. emily: bob thurman, v.p. of innovation at wilson labs. sticking with sports, to the battle lines drawn in ink from athletes' tattoos, take two has carved out a name in the video industry with astonishing graphics and stunning character models in its nba 2-k series that looks like real life players. their extraordinary attention to detail may cost them. turns out a tattoo company named solid oaks sketches ownss the rights to tattoos on several athletes, including kobe bryant and lebron. the tattoo artists claimed they signed copyright agreements with the nba players.

the company is suing for more than $1 million. coming up, the video game platform that's creating a new economy for developers and netting some teens six figures. that story next.

emily: it is time now for politeching where politics and tech merge. monday marks the start of primary season with the iowa caucus and seems the caucuses gave twitter somewhat of a competitive advantage. while facebook showed more interest in trump and sanders. twitter showed trump cruz and clinton as the winners. thin tendo -- nintendo sales have plunged 30% from a year ago

and sales of the wii u and ds players continue to shrink. gaming original content is a challenge for everybody but a start-up called roblox has created a new line. the company has paid out over $3.6 million so joining me roblox c.e.o. david baszucki, thank you very much. you've been doing this for a while but just now announcing a partnership with the xbox 1. >> thanks for having me on the show. emily: of course, a pleasure to have you. >> we're creating the future of entertainment at roblox and xbox is our latest thing we have announced.

the engagement is amazing. almost a million hours have already been played on xbox. emily: as i understand, there are teenagers creating games and some of them are pulling in six figures. >> absolutely. emily: how does this make sense for you? >> the roblox is a platform. over 23 million play every month. they range from hanging out with your friends at a pizza restaurant to surviving a tornado. over 300,000 developers every month are creating these games. they literally make money from the games they're creating. who are these people? amateur coders? experienced game developers? >> almost a star search or "american idol" for video games. take 20 million visitors every month, find the best to create games. the best of them rise to the top. this is college students, 12-year-olds, 18-year-olds. people paying for college, saving for college, people even

making small businesses on top of the platform. emily: wow. what's the most a single creator has made? >> as the number of people playing grows the amount they're earning is growing. we have developers making over $250,000 a year. some are making studios that run on top of the roblox platform. emily: this is a challenge for the traditional game makers. i was speaking with e.a.'s andrew wilson earlier this week. listen to what he had to say. >> they spend about 22 minutes in non-native apps but have an average of 26 apps. any company is fighting for less than a minute of time. if you don't have a great network, if you aren't able to connect hundreds of millions of players in the context of your games experiences, times are going to get really tough. emily: companies like king digital spending a lot of money.

what impact is this going to have on the broader market? >> it's what brings more people to our platform and it's the fastest growing number at roblox. we're getting literally over three million coming to the platform every month because they're doing it for free. you're hearing it from your friend. it's bringing them primarily virally to our platform. so ultimately who owns the game in the end? >> the developer owns the game. it runs on our platform. we share in the virtual economy with them and they make money. emily: what happens if a big company wants to buy it? >> some day there may be vision that is pop off the platform and become stand-alone games. emily: how do you see the sort of hierarchy shifting within the gaming industry, whether it's

mobile or social -- >> so we're -- what's cool about roblox, is everything you're seeing here is running on all platforms. play it on your phone, a tablet, a computer and now on xbox. user creative games need to run everywhere, we think so you need to be able to play them with your friends wherever you are. on your phone against your friend on xbox. mobile gaming and facebook gaming is pretty mature. virtual reality is what everyone is talking about. roblox is the ultimate platform for that. you're already with your friends. i think that's where a lot of the action will be. to be a kid today. when i was young it was just tetris and super mario brothers. thank you so much for joining us. >> thank you. emily: that does it for this edition of "bloomberg west." tomorrow on the show, a full breakdown of go pro earnings as the volatile stock continues to slide, now down 80% in the last

year. that's all today from san francisco.

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