mark: i'm mark crumpton. you are watching the "bloomberg west." we begin with a check of your first word news. president obama traveled. to dallas, texas today where he met with the families of the five officers killed in last week's ambush. he discussed the burdens placed on officers in the line of duty. president obama: from the moment you put on that uniform, you have answered a call that at any moment, even the briefest interaction may put your life in harm's way. >> the white house says they violence a hate

crime. bernie sanders has endorsed hillary clinton for president. the two former rivals appeared together in new hampshire today. theresa may has less than two days to build a team to rescue the u.k. from its worst little -- political crisis in more than a decade. she replaces david cameron as prime minister tomorrow. china is calling a landmark ruling on the south china sea null and void. the hague has ruled china has no rights to the resources within its borders. china claims territorial rights two more they can 80% of the south china sea. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. ♪ emily: i'm emily chang and this is "bloomberg west."

coming up amazon prime day -- a , couple of hiccups right back memories of last year's online reviews. did the e-commerce giant deliver on the much-height global sales bonanza? plus google underwater? linking organ to japan. it is not the only major cloud player looking to the seabed for faster service. we will dig deeper into the subsea cable industry. and the u.k. unplugged? britain's decision to checkout of the eu stokes fears of a major tech exodus? we will ask oracle ceo mark hurd for a prediction on the company's tech future. first to our lead. amazon prime day. new numbers on the lack of success on amazon prime day. sales were similar to last year. sales in u.k. are up 12%. shares of the everything stored

dipped earlier in the day on reports of lackluster numbers. the second annual one-day sale event also experienced a challenging start. shoppers had issues with their shopping carts amazon fixed the , issue but not #primedayfail circulated on social media. i should preface this by saying even though amazon prime day did not get great reviews last year, they say they still sold more then the black friday the year before. having worked at amazon in many different capacities, what is your take on the actually successive today? guest: i worked for them a little more than five years. i suspect it's a little bit more than revenue. there are three things to consider.

they are trying to push newer categories into the market. we are a retail analytics firm. we looked at more than 27,000 products being sold on the prime day and we found more than one in four items are apparel, which is not the case last year. so there is a new category. emily: there was also a lot more electronics stock of the range of deals, everything from a 55 inch samsung television to a toilet nightlight, which i didn't know existed until today. james how much impacted the , technical issues earlier in the day actually had? guest: it might have had some impact on sales but as far as executing on their mission statement, i think it was a success. i know that from last year, the conversion of prime members to actual paid members was on

track. that helps to drive more vendors and more growth in selection which yields and acceleration in the number of units sold which we have seen for the last four quarters. , 22, 26, 27. and possibly higher coming up. driving prime membership, there may be some pickups as far as converting from particular sales but i think the mission was a success. emily: amazon releases for a -- very little information from the company itself about how they truly performed. when it comes to expanding beyond physical products, getting them to use prime now getting them to try to , a grocery service or restaurant delivery service, how would you rate this success? it guest: it has in a pretty good success.

even testing the alex cap where you are getting $10 off if you are a first-time user of that and you are purchasing something for the first time. and more importantly, there is another agenda. think about it, we are about 90-100 days away from the massive holiday season where amazon and other retailers make a killing. this is a good way for amazon to really put the software system to a stress test and test it prime time.es on emily: i want to talk about other retailers but i want to talk about amazon echo because there were some specific deals related. we do not know how many they have actually sold, but i was andng about marc andreessen

take a listen to what he had to say. mark: it is clear that amazon has lapped everybody, at least this year and ago and alexa are fundamental breakthroughs. it's shocking for people in the field how well they are doing. what the consumer responses for echo from people who are not us is really spectacular. they've set a new benchmark for what it means to have interactive ai. i think apple, you know there's , going to be a certain amount of catch up happening. i think apple realizes that and they are going to try to catch up. emily: as an amazon echo owner, it is cool for knock knock jokes and getting the news, ordering things, but still, the capabilities are fairly limited. how much more potential do you see for the growth of the echo

plant form and what kind of growth do you see? -- echo platform and what kind of growth do see. guest: i'm an avid user and owner. we know they have sold millions of units so far and what they are trying to do is proliferate that across different third parties like automobiles and so forth. and these smart home in order to build an ecosystem around it. they are the first successful entry into the living room we have seen. so i am very bullish in that regard. the one caveat i tell investors is i would not be dismissive of google in the ua -- virtual assistant effort because they have superior language processing capabilities not just across english, but across you know, many languages around the world and at the same time also doing this to process more and structured data versus more structured collections -- sort of, you can't pull the

answers quickly. butot dismissive of google certainly very upbeat on what echo has become. emily: there were additional promotions this month. which retailers are doing well and who is not doing well when it comes to competing with amazon? guest: when we look at the data of how well amazon is doing against target or toys "r" us in the deals coming up on prime day, it is surprising it was much deeper discount than we expected and amazon was about 36% cheaper than walmart and what they were featuring on prime day. with target, they were about 29% deeper. so some pretty deep discounts. what this means is the shopper is winning. there are retailers who are winning the game. one of our customers, staples,

for instance, they have done a tremendous job focusing on a particular category, which is back to school, and they have come out with an aggressive program and in some situations of categories which are relevant to back to school. like folders or notebooks. cheaper -- they are 40%-70% cheaper. the point is if you focus on the right category and right customer, you can have a good and solid place. emily: a former amazon executive and an analyst, thank you both. we will see if we can get some more information later today. turning to tesla -- highway safety regulators are asking elon musk's electric car company to hand over information about their autopilot feature as they investigate whether the automated driving system is defective. it was in use when a model s car

crashed into a truck in florida, killing the driver. since that incident, two other crashes have been reported. officials are looking at the automatic braking system as well as other systems in use when the wreck happened. elon musk says he has no plans to disable autopilot. and other story we are watching -- hyperloop one is being sued by a cofounder over claims of mismanagement. cofounder and former cto filed a suit alleging the company's top executives engaged in financial misconduct, abuse and physical threats, marginalizing many employees and jeopardizing its future. hyperloop one issued the following statement in response "thesefiling stating employees try to stage a coup and failed. they knew that the company was aware of their actions and today's lawsuit is their primitive strike.

their claims appear nonsense and will be met with a swift and potent legal response." coming up, senator al franken is raising the alarm over pokemon go, citing privacy concerns over the latest hit mobile game. and a stock we are watching -- work day on the move, or percent on speculation it could be a takeover target. this is bloomberg. ♪

♪ emily: nintendo's new mobile game, pokemon go is still the talk of town, sending nintendo shares soaring as well. along with that success has come concern over privacy issues. senator al franken sent a letter voicing concerns about the extent to which nine and take may be collecting and using and sharing personal information without their appropriate consent.

my guest is a longtime mobile and gaming investor. and someone from bloomberg intelligence here with us as well. the privacy issue was initially when you signed up, the app got a lot of your google or gmail account information. they have released an update that they say fixes it, but given your experience, how serious do you think this issue is? guest: i think is serious when it includes children. pokemon is making mobile gaming accessible for very young children at to you are seeing out in the street that are not necessarily engaging with their parents for permission. this brings into question the children's online protection act concerns and i think that whether it was a mistake or not on behalf of of niantic, it needs to be remedied quickly. emily: what about safety and security issues? and maybe even legal issues.

guest: i think it calls into legal questions about possession, trespassing. do you own what is on your phone? people are clambering over fences to get access to certain pokemon's. does it raise questions about indemnification? questions like that come up as well. emily: you are very deep into this, you own equipment and play a lot of games. how it serious do you think these issues are? guest: isn't it fascinating to be talking about these implications a week after the game is launched estuary that is how successful adoption has been. nintendo probably makes a fraction of what niantic makes, but this whole location-based gaming is going to get bigger and a new avenues of monetization.

the intention they can get their mojo back to invent gaming back has gone up. emily: you mentioned augmented reality but you don't think this is an ar game? guest: absolutely not. it is much for a location-based game. my definition of what augmented reality is, being an investor in the space, is applications. you are seeing pokemon flying in the middle of space for example. there's no dynamic mapping of real-time around you. it is drawing upon google's data -- the fixed longitude and latitude data. the only dynamic mapping that seems to take place is what niantic is pushing. for example, if you might go to

a particular location and a new pokemon appears there. that is not necessarily representative of any real-time environmental mapping, though. emily: do you think it is ar? guest: the type of game is not but if you look at the location-based games but they did not have pokemon behind them and did not see as much. that need you to our mobile devices. also augmented multi-glasses of the future. it is going to be a mobile device way down the line and this experience will extend that. they are not native ar games per se, but niantic likes to call it real world gaming, so the genre is location-based. emily: killing your battery i assume can be resolved, but there are larger issues. can they keep up with them? keep up the momentum? guest: i think it is going to

last for a while. singleow we have a player mode, but eventually it will be 10 players. you cannot have layer versus player battles. you are doing it at locations. as player density increases and you can login and play against your friends, i think that will see a whole new leg of this game take off once the player base is robust enough. >> what about monetization? guest: mobile gaming is expected to be a $57 billion market. nintendo has a massive opportunity now to take a big piece and it has it out for a while and they are taking that by bringing mario on mobile and making these accessories that can support them and so forth. this genre might go beyond pokemon as well. right? so there are a lot of avenues , that have opened up. that are more visible to investors.

so that's the confidence you see , right now but as far as the financial impact, it is very dicey. emily: what are the implications for the rest of the gaming industry: guest: i'm not going to use it to discuss vr or a our gaming, but we are in a very mature phase in mobile right now. branded i.t. and celebrities, kim kardashian half game and a high cost of user acquisition, it's necessary to get people's attention in a crowded mobile market. so i think that to what this means is we saw the surge in the stock price for nintendo and i think people are excited about the they haveeasure trove developed. mario, etc., coming to mobile and finally embracing this platform and their licensing ip is helpful. emily: what does it mean for ar and vr? guest: i think it's better understood through snap chat facial filters.

you know, going back to ar when it was from qr codes, for example. ar is coming when magically been google tango phones are out there in the public and that is still a few years away. emily: thank you so much for joining us. thank you both. we will see what happens tomorrow. coming up, why one music streaming app has emerged as a major player in the political ad space. stay tuned. this is bloomberg.

♪ emily: turns out there was more behind that scheduling conflict last month that forced the cancellation of a planned meeting between donald trump any intel ceo. he said he had canceled the gathering at his home to discuss key issues but backed out when it turned into a fundraiser. he has not endorsed candidate

and says he will engage with both campaigns. the amount spent on digital ads is skyrocketing. hillary clinton's super pacs have begun making a push on one surprise platform in particular, pandora. why pandora? about a quarter of the app's listeners are latino and candidates are targeting young minority voters. bloombergs tim higgins joins us. from washington with more. first of all tim what are the , surprising trends you have seen when it comes to changing in digital ad space? and spent? tim: we are looking at a billion dollars in digital ad spend compared to less than 200 million just four years ago. emily: talk to me about pandora in particular and what has made it such a useful way to target potential voters. tim: you hit it on the head -- almost a quarter are latino and that is a demographic both

parties are trying to target this political season. one of the reasons pandora has emerged is they put a lot of resources into latino and hispanic music in the last three years, bringing in a lot of mexican, cumin and latin cuban and latin american music and also, they can target that community with. emily: i interviewed the founder of pandora who said last year that pandora can tell right away if you are a democrat or a republican based on what you are listening to. have they been targeting latinos specifically? tim: they have been able to talk about whether someone prefers spanish-language ads or other demographic information that is useful for when they want to target what kind of ads they are sending to people. we looked at ads from the pro-hillary clinton super pac targeting folks with that that talk about donald trump's payments about deportation, for

example. emily: radio has traditionally been one of the best ways to reach these folks. is streaming radio encroaching on that territory? tim: that may be the perfect marriage -- it may have been radio but if you look at demographic information, young latinos are more likely than the index to be using their mobile devices for a long time and so streaming radio becomes a very powerful tool to reach them and when you look at the potential over the latino voters, a lot of them are young people. emily: something we will continue to follow. a very important voting block for this election.

thank you so much. coming up we caught up with the , ceo of oracle for their next move. if you like us, you can listen to bloomberg on the radio. you can listen up on the app or in the u.s., on serious xm. this is bloomberg. ♪

♪ emily: this is bloomberg west, i met emily chang. back to brexit. in an exclusive interview, mark tells the is ready to whether brexit. fantastic market for us. to again take customers in that market and we will help them any way we possibly can. >> would you have to rethink

europe but of regulations? >> we are going to be very active in helping our customers and aggressively focused. would be on your radar before you determine operations in both markets. >> the things that could affect our decisions are availability, do we have access to quality people coming out of quality universities so we can build our workforce. we make decisions on where to house operations. the operationsg close to talent. madeof our decisions are around access to talent, markets, customers.

>> what about the issue of immigration? gap left?l the want to get into the issue of immigration but i will about talent. it is about telik, we have 140,000 people in our company. a large diverse workforce both in terms of skills and talents other things. we bringo promote, and people into the company out of school and we try to grow them in the company, promote them, train them inside of oracle. so it is very important for us to be able to get to talent and use that talent across companies. recent we saw microsoft a buying linkedin for $26 billion.

impact oracle in any way? >> final think linkedin is a company that is half consumer, half enterprise kind of play. we have had this strategy for a execute the transitional cloud we expect to lead in the cloud and we have done that with a lot of organic development. we changed almost everything in our company over the last couple years embracing the cloud. so you are not going to see a change in strategy. >> you are cash rich and we think of relations of companies right now, they look reason, reasonable. even cheap. what would make sense for oracle?

mark: we feel very good about what we have done both him and organic r&d perspective as well as what we have acquired. we just made a couple of acquisitions we announced in the april-may timeframe that closed in the early part of june and those are the kinds of acquisitions you have seen as we make in the last several years. these were cloud software services and acquisitions, dedicated to an industry application. it made a ton of strategic sense to us and valuations were i would say reasonable and we think we can actually ask cute -- execute them. emily: mark hurd there. now to another story we are following -- facebook and microsoft have an agreement with the social network announcing a plan to use microsoft 365 software service. employees will have this to the e-mail and calendar services but will be prohibited from yammer and skype.

due to competition with the social network's own offerings. facebook employees use its own internal service which does not have an option for e-mail. coming up, language app dual lingo is looking to capitalize on huge market. we will have an interview with the ceo, next. you can also catch bloomberg west on television and starting this fall, we will be live-streamed on twitter. twitter is also going to stream nfl games in the democratic and republican national conventions. this is bloomberg. ♪

♪ emily: the amount of revenue you to paid music rights holders was slashed in half last year despite a 132% increase in usage. other streaming site typically pay a minimum for streams regardless of revenue while youtube pays a share of revenue. at the mercy of the local at market. although youtube gave content owners a 15% raise, the number of streams on their sites skyrocketed 751 billion, potentially generating $755 million in revenue. the research comes as the music industry is in a standoff with youtube over copyright law. now to duolingo, the company backed by ashton picture and counts over 110 million users worldwide. kutcher and counts over 110 million users worldwide. caroline hyde caught up with the

ceo in berlin and asked about the challenges of scaling so quickly. >> one of the challenges is keeping the servers up. hopefully it is going to continue working well. >> are there any regions you want to focus on? any areas? chinese for example? >> we do not teach chinese yet. in terms of in the world, learning chinese is not as big. the one that is big for us is learning english for chinese speakers. the one that is really big for us is learning english for chinese speakers so we do have that app in china, in japan, and in all of asia. we want to concentrate -- our biggest markets are the u.s. and latin america. then comes europe and that is why i'm in berlin. we are trying to grow more in europe. about 30% of our traffic is in europe. we feel like it should be more like 40%. so we want to grow here. >> are you optimistic about the

growth potential at the moment here in europe? we are talking about the uae and england. are there any concerns you have? am optimistic about people wanting to learn other languages. so the last couple of weeks, i'm optimistic about the need to learn languages. particularly in the u.k., i mean there are so many countries speaking 70 different languages so close to each other, so it is very different. i mean compared to hear, in the united states, learning languages is a hobby whereas and here,es, it people needed for work. there are a lot of people from spain working in germany. >> what about talent. it's a scarce resource when you're building technology. how have you managed to find the best coders and developers?

>> it has actually worked out pretty well. i think the fact that we are a mission a-driven company has helped us out quite a bit. that was part of it. we are able to get better talent than if we did not have the mission. one of the problems we have in the united states is the visa situation. we have a few people working from spain who are europeans would like to get a u.s. visa but we have not been able to get them one. so that has been a problem. >> is that what you would call on for the next president come whichever candidate it might be? >> this is the kind of thing that when we presented duolingo to president obama and said we could use more resources, i think this is one of those things most politicians want to fix that it never gets fixed. >> and you have the worry that you have one candidate who is running on a ticket that he once to build walls. is that a concern? >> it is a real concern.

because we are language learning company, more than 50% of our people are from countries that are not the united states. so that is a -- in the office, people are quite concerned about that. >> talk about the funding environment. you are a serial entrepreneur and this is your third business. have you been knocking on your doors or have you been knocking on theirs? >> most of the time, we have had people knocking at our doors. we have been able to raise $83 million of funding. the last round was from google. so yeah, we have been very fortunate to get good investors. it's an interesting company to invest in because we are mission driven. - other companies, the goal seems to be to make a lot of any. -- money. when we get investors, i make it clear that we are going to remain free. we're going to try to make

money, but we are going to remain free. it's interesting to see who backs out of that and who continues in the running. fortunately, the ones we have are all very supportive of that. emily: that was the ceo of duolingo. with bloombergs caroline hyde. now to google taking a step toward ditching the world's wireless the work into one seamless blanket of coverage. the search giant one student take up with one of three of europe's biggest carriers so americans can use the wireless service in 135 companies and google is lifting the speed cap on its overseas service. what's more google is offering , this for a flat rate. gigabytevery downloaded. up next, we take a trip to the ocean floor and check out the undersea cable google just spent $300 million on. tomorrow, do not miss the global strategist of elian's global investors.

this is a bloomberg. ♪

♪ emily: google gets more time to answer european antitrust charges. the eu alleges the company wielded power over smartphones to crush competition for mobile apps. they do have until september 7 to respond to a statement of the junction. by sending the statement, the eu paves the way for potentially huge fines and radical changes to how the company operates. after months of political wrangling, the eu has agreed to an agreement between the eu and the united states. more than 4000 companies,

including all of the topic internet firms are part of the deal which was established after the european high court struck down a previous agreement, saying europeans were not specifically sufficiently protected. the agreement depends on having a privacy shield in place. today, we are geeking out about undersea internet cables. the power of the internet is running on the ocean floor. beenneral, they have maintained by consortiums of international companies, but they are getting into the game as well. google has just completed a transpacific cable while microsoft and facebook are due to start work on in atlantic cable it in august. : google has just switched on a new internet connection.

the engineers who made it are calling it faster. it links the u.s. and japan, sending links across the ocean at speeds of 60 terabits a second, 10 million times faster than your average cable modem. it stretches from oregon to japan, 9000 kilometers. it costs $300 million to install. google has not built this table alone. they teamed up of asia plus biggest telecom providers. but it will be a serious asset to google when the company opens a major data center this year. google is not the only big tech company in the game. they spoke and microsoft are working on an undersea cable -- google and microsoft are working on an undersea cable that could -- of their own. it could be even faster than google's cable. short of ang underwater arms race to own the internet's infrastructure.

: joining me for more on the business of the subsea cable industry is jonathan. jonathan, thank you so much for joining us. first of all, what do you think the significance is of this new google undersea cable and what advantages does it give to google over companies that do not have it? jonathan: it is significant in that we have not seen a lot of addicts like this. but it is not the first one undertaken by a content provider. google has been in this game for at least seven years, starting with the unity project, transpacific in 2010. said they have been involved in several subsea cables and other content providers have been on board as well. the advantage google gets from something like this is economies of scale. it has gotten to a point where a

handful of content providers like google, microsoft, and facebook have such incredibly huge demand for bandwidth that it makes more sense to provision it themselves -- then to rely on other carriers. emily: talk about the process of laying an undersea cable. how obligated is it? -- complicated is it? is the cable floating in the water or is it under the sand? jonathan: once you start the project, it can take a few months to completion but it begins with doing extensive mapping of the ocean floor, looking for optimal routes, avoiding seismic zones and heavily fished areas. actually, dredging operations from fishing fleets are a major source of cable breaks. so you want to avoid that.

but once you start laying the cable coming up specialized ships spooling it out along the path and just laying the cable right on the floor. there's a significant amount of armory protecting the cable but in reality, these systems lie on the ocean floor until you get about two miles to shore. at which point they began to trichet about two feet deep. emily: telik geography is forecasting a big surge in the submarine cable market. where do you think you will see the most growth? jonathan: we will see it across all of the route we track. over the past two years, it has been concentrated on one or two routes, but i would see in the few years we will see developments across all major routes. we will see major systems come online, southeast asia going through the red sea all the way to western europe.

more and transpacific systems. more trans atlantic systems, more latin american cables. emily: talk to me about the broader infrastructure. is there significant room for improvement? jonathan: well, they are improving all the time and what is interesting is that to as improvement becomes available, as technology changes, existing cable systems are able to take advantage of these improvements as well as new systems. so while you have many older systems still on operations, their capabilities are never stagnant because as new transmissions and capabilities come online, they are able to install those and that type of commitment and install and extend their own capacity significantly. emily: does that mean capability or capacity, we are not close to running out anytime soon? jonathan: absolutely not. the only way capacity would run out is if carriers decided to stop investing in their networks

and that's not going to happen. when it comes to these subsea systems, what is interesting is the utilization levels remain low. as they increase their capability to handle more capacity, that stays ahead of the actual capacity being added. these levels hover around 20%. emily: fascinating stuff. jonathan yen vote, senior analyst thank you for joining , us. in today's edition of out of this world, nasa released a picture of mars dunes that appear to have crazy similarities to morse code. these imprints are most likely formed from a and asteroid impact crater. the amazing picture was taken from the mars reconnaissance orbiter which has a high resolution camera. inyears on the plan and

march. that is it for this edition of the "number quest." tune in tomorrow. this is bloomberg. ♪

♪ yousef: crude behavior. opec forecast higher demand for oil next year. angie: tapping international markets. kuwait will sell stakes in the oil producer as it tries to improve efficiency. yousef: asian stocks near a 2016 high, led by japan where markets are in the best three-day run in six years.