mark: you are watching "bloomberg west." president obama today assembled the nation's top military and national security officials at the pentagon for a detailed rundown on the war against islamic state. at a news conference following the briefing, the president again warned the american public about what he considers the consequences of a donald trump presidency. a new cnn survey has the president's approval rate at 54%, the highest it has been since just before his second inauguration in 2013. brazil's senate impeachment committee is recommending putting the president on trial for illegal financial transactions.

the move paves the way for her permanent removal in a few months. the senate will now take up the matter. london's metropolitan police reports that the woman who died in last night's knife attack was an american. a 19-year-old norwegian man with somali roots has been arrested. turkey's state-run news agency said a court has issued a formal warrant for the arrest of gulan, accused of being the mastermind behind a failed coup by turkey's military. gulan has declared his innocence. "bloomberg west" is next. ♪

cory: this is "bloomberg west." tech earnings continues. zynga reporting earnings. we have their second-quarter results. lincoln banners second quarter prepares to join the microsoft family. we will break down the numbers. is life better when we are connected? bank of america thinks so. they are giving a billion dollars to financial technology. pokemon go may be high in the business. activision takes to commit zynga and the others -- the farmville maker's user base slipped again in the second quarter. the new ceo is struggling to secure the next big lead. take two posted stronger sales. grand theft auto. nba two and battle born, a new

game. activision rose 50% from a year ago thanks to a strong debut of a first shooter game. joining us now is christian. he is a cofounder of super cell. matt, let me start with you. from ea and activision, titles. or take two rather, and activision. why release new titles this time of year? matt: you don't want to be reliant on the holiday season. we are moving towards digital. what you are seeing is not only the full game sales up front but the ability to purchase in game content, that is the revenue driver. by pacing out your revenue and relaunches throughout the year,

you can take full advantage of that. christian: i would agree. overwatch is a competitive first person shooter. it is very much like counterstrike which has grown year over year for the last 10 years. the release date for these titles does not really matter nearly as much as getting the community behind it and beginning to grow it day after day, week after week. it is a long run up to the actual release. cory: is it as simple as looking at player reviews? to know if it will be a hit or not or is it more complicated? >> as your previous guest said, with digital releases, there are

constant updates coming. sometimes, the initial reviews are not excellent but over time if you add the right content, you can make a big difference. battle born, take two's battle born suffered a little bit because of the success of over watch. cory: how so? >> i think that take two's ceo said that it underperformed revenue wise from their perspective. i suspect that it is a similar game or base and a similar type of mechanic inside the game so i think that overwatch's strong entrance to the market probably absorbed some of the gamer base and revenue that might have otherwise gone to battle born. cory: when i went to google earlier, and did a search, one of the suggested searches was battle born. i think you are dead on there. let us look of these companies,

one by one. zynga was disappointed with the number of users that fell. what do you see? matt: what is really disappointing is the user decline. the new ceo just came in ahead of mobile. his story is to stabilize the user base and the revenue and cut costs. he delivered on the cost cuts. looks like they are almost done but the user base is still declining. that is what drives your topline and bottom line so they have to get the user base stabilized. cory: it strikes me also, that this constant turnover from a new ceo to an old one and back again and then a new one again, that cannot make it easy in terms of working there either for developers, people in sales, or anyone else. >> when a company is in turn around mode like this, it is inevitable with this much turnover at top that there will

be confusion and changes in priorities. it seems like zynga likes ea and they have brought on a number of executives from there so perhaps we will get more consistancy from that respect in the next year or so. >> i think you have to tie this more into the macro trend of the industry. from console base gaming to more mobile base teaming. zynga is trying to take advantage of that. even within mobile, there is a significant shift from a few minute experience to a more immersive, multi-style experience. pokemon go is an example. that new style of play has not been there just a few months ago. in that sense, to some degree, if you look at what zynga launched in the last quarter, they were the old styled games. even crc racing. a beautiful game but an older style game.

the real question is can they leap ahead the way that pokemon go did just now. cory: they also may want to make a profit someday. they were lucky to raise a ton of money with an ipo and with accounting treatments, they made the numbers look better than what they actually were. but eventually, they will have to sustain profits. >> they are in the middle of a platform transition. zynga was built on a platform and they are trying to reinvent themselves as a mobile game company. they need to not just catch up in the gaming industry, you have to leap ahead. do they have the right talents, strategies, to be able to put out a right title that puts them ahead of the pack? cory: who is the best hit maker? >> the big companies are still the best at it. i think what really matters when it comes to generating heads comes down to the ip, the intellectual property.

part of the reason pokemon is so successful is because it is pokemon, it is nostalgia. star wars is very popular. i think, you cannot beat good ip and the biggest companies have the best ip. cory: i would disagree, i think it is about gameplay at the end of the day. nintendo has had pokemon for a long time and they have not been able to make anything of it until this great gameplay showed up from pokemon. i have not played but i have watched my kids. it has kids and people literally out in the streets. >> ip does help. it can help you cut through to the users. today, it really is about building that player base and that ongoing business of engagement and micro-transactions. for that to work, ip only gets you through one day and not month one or month two which is ultimately what matters in the game industry. even the big launches are all

about that. and in mobile, increasingly, it is simpler than the pc market or the console market. cory: last word to you, lewis. does pokemon go affect change? new ideas are sort of hard to break into the game industry, it takes a long time. is that different now with pokemon go? >> i think it is at the start of deep growth curves so i am sure there will be a lot of copycat games coming out there. we will see derivative type ar games from a lot of different companies over the next year leveraging their ip. but i also agree that you have to have a great gameplay mechanic and a smart plan for operating those apps to keep users happy and while it's open.

cory: really interesting stuff. thank you for joining us. cyber security stacks. the company cutting full-year guidance, weaker sales results in the second quarter. they also plan to lay off between 300-400 employees. another company raised its full-year forecast. symantec is showing signs of transforming his legacy. with new products. cancel the old stuff, you better sell the new stuff. linked in. we will break down the numbers. ♪

cory: linked in's reported second-quarter numbers. coming up after a quarter where sales numbers were up 31%. a 76% greater loss than last year. this is linked in's last report before joining microsoft. that sale looks like it is set to close by the end of the year. sarah frier covers all things social media. and victor anthony joins us from axiom capital. victor, let me start with you. it is so important to get an idea of what this company is doing before microsoft can hide it under big microsoft.

how are they doing going into the transition? victor: if they were not being acquired by microsoft, the stock would be up. every single metric was up strongly. market solutions and other business lines, they all outperformed street estimates and came close to accelerating. their growth was significantly above street estimates. overall, i think the stock will be up. microsoft should be very happy about this acquisition. cory: sarah frier, what were they doing selling at such a low price? sarah: you have to look at it a number of ways. microsoft is paying in cash which they particularly wanted. they are getting a higher price. people thought it was an

extremely high price for microsoft to pay for linked in considering linked in's growth was not supposed to be so stellar this year but it looks like they have beaten those expectations. there are some questions now about whether they would be better served as an independent company but jeff weiner must know something we don't about the future and thought it would be faster growth joining with microsoft. cory: victor, will it be faster growth? victor: i think it certainly may be. with the balance sheet and the talent they have could accelerate the growth aspect. yes, i do think so, i think it was a wise acquisition by microsoft. cory: you see the numbers are really solid. we have some bloomberg charts. monthly active users, there was growth. it was not great.

we are looking at those numbers of how many monthly active users they had, they grew at a slow pace. look at the sequential growth numbers, quarter over quarter, and i think that is the right way to do it. those growth numbers are a lot less than last quarter. nearly as anemic as the quarter before that. victor: you are still up 18% year over year and it outperformed street expectations. cory: i could not agree with you more. sarah: the thing to look at though is -- is this is a company that may be in more of a twitter position where people are not too optimistic about its future and they will get critical? they will have some misses. and to trudge along like that is

not a phase that many companies want. cory: with linked in, we have a company that has had issues. sarah: a lot of people do not even understand their business. there are multiple business lines. they are often being restructured. cory: when we have the collapse of the stock in the spring, when they had a conference call, they seemed to be so confused. they were launching products. they were pulling products off that they had just launched. did they sound more organized for this conference call? sarah: they did not do a conference call. they will be part of the big zone now so they did not need to. cory: but the numbers were solid. was it across all three business units? victor: yes, across all three business lines. cory: with all due respect, i want to know how the business is working and did they see

substantial growth in all three business units? victor: yes. almost accelerating growth, the street always likes that. any business likes that. with respect to whether they will be publicly traded or not. things are moving in the right direction for linked in this particular quarter. they have had a few rough quarters in the past. miscommunications with the street. but this particular print and quarter were stellar. if the stock was not being acquired by microsoft, i think it would be up 20%-30%. cory: we are always glad to have you on. look, your dress matches my pocket square. we planned it.

payments company square came out looking stellar. we will have an exclusive interview with the cfo. it is hip to be square. this is bloomberg. ♪

cory: square, is seeing its biggest gain since its ipo. the shares were up more than 18%. they can do more than just serve small businesses. sales jumping 41% and it is showing that it can draw bigger businesses. we sat down with the cfo. we asked about square's big business relationships. sarah: larger businesses for us through 61% year over year comprising about 42% of our gdp.

why is that happening? large businesses want ease of use. they want a plug and play system that is fully integrated. square has brought them that cohesive hardware, software, and payments all working together. large companies want fast access to capital. they want that as well. the brand is also resonating. they see it out there, particularly our new readers, that can do chip reading. that word of mouth is a very powerful way that square grows. angie: where do you think square's sweet spot is? sarah: we have done a nice job i think that if a business is up to $20 million in revenue.

there is no magic but sometimes it is good to draw a line as to what you are targeting. it would probably have multi locations. for example the coffee shop that is in japan and the u.s. square can absolutely service a business up to that stage. we don't want to cut it off there because we do find even big multinationals often want to utilize square to bring more mobile into their environments. the container store for example. they are reorganizing your closet and they want to get paid while they are at your home. all of that resonates and pushes us into bigger businesses. angie: i want to ask about starbucks. a much bigger business then blue bottle. you are in talks to extend the relationship but there has been

debate about how good this relationship has been for square. sarah: starbucks specifically, the extension is for just a short timeframe. they would -- they assumed they were going to switch off of us by q3 but looks like it will take even longer. it comes back to -- we think our sweet spot is up to $20 million in revenue which is a big market opportunity. there is about $6.5 trillion in growth receipt just with businesses that are at $20 million. when we have 6.5 trillion dollars available, we do not need to go find new market opportunity. it is about how do we do more in the score market that we have. angie: was starbucks good or bad for square? sarah: it was good for us at the time. we were processing all of the electronic payments for starbucks and we have done that consistently and reliably for four plus years. it was good for us at the time.

it helped the company grow up. we learned a lot by doing it. we learned what we were good at. and we learned where we should cut off. cory: that was sarah frier. turning now to tech's revolving door, google's leader is leaving. stepping down. sergio is the first person marissa mayer hired from google. bank of america sees a billion dollars in savings banks to technology. we have an exclusive interview with the cfo brian monahan -- brian moynihan.

check us on the radio. check out the radio show i do daily. you can download the bloomberg radio app. or you can tune in. you have options. this is bloomberg. ♪

vanke shares getting a lift in hong kong. global news 24 hours a day, more than 2600 journalists in more than 120 countries. this is bloomberg. we are hanging onto a little bit of momentum. dave: lots to consider. this continues to add to what you mentioned in oil. we are hitting a little bit of a wall. some people have pointed to the rally the last few days.

tokyo is reopening from the lunch break. the strong and has really hit the corporate japan. sales operating process and net , cut sales byt quite a bit. they are looking at a ¥25 billion revision because of a strong currency. just to put that into context, just hitting corporate japan and not a lot of companies are this big. back to session lows, 101, consolidating at these levels for the past three or four days. it actually hit these low levels here.

let's have a look at some of these yields. record year gilts adjusting lower. the jobs data a little bit later on. cory johnson: i'm cory johnson in for emily chang.

fintech on the rise and the big names in banking are taking notice. they are all mounting a defense. the network thinks allows -- david west has the ups and downs. we asked about fintech's affect on the industry. >> it is nothing new. we have 3 million online banking customers. we have 20.5 million online mobile customers. what that has enabled us to do is create better services for the customer. at the same time making the company more efficient. in 2007, we had 6100 branches. we now have 4600 branches and 60,000 people and the customer base is up by 10% and deposits are up by 40%. a much bigger business. that has all been enabled by the "electronification" of the consumers. >> what about transfers and payment systems? >> if you go to person to person

-- we do about $2 billion a month through clear exchange. a collective of the banks. a group of banks -- they are trying to get clear exchange which operates today with a better product. the idea is to get that across the system. and give it to the smaller banks so everyone will have that. and make that ubiquitous as checks. that will be the way you pay. the goal is to make it secure, make the banks in the middle be able to settle it real-time. and get cash out of the system. cash costs us a billion dollars to move around the company in a year. if you think about that, it is more secure and more safe if people are not carrying cash. the methodology transfer has to be real-time and easy and that is what we are developing with clear exchange. >> put a size around that? >> i don't know exactly. what we do about $2 billion a month.

>> what will this do for employment in the banking industry as you go to " electronification." >> a lot fewer salespeople. this is the reality. fewer people. we have gone down to 211,000 people through applying technology to process over and over again. safer, secure. employment will continue to drift down on a relative basis. but we will be doing more for customers at the same time. cory: that was bank of america's cfo. another story we are watching, lending club and the asset management.

put together a fund with a million dollars in loans. it is a subsidiary of legg mason committing to purchasing a certain amount of the platforms loans each month. it has fallen more than 30% since the revelations. that some of the loans they sold were not what they were cracked up to be. hampton creek is under fire again. it is known for its egg free mayonnaise. it is said to have undertaken a large-scale operation to buy back its own product making it appear more successful than it actually was. more than 250 receipts and cash expenses all in review. they defended the product and the project.

we are joined with more details. this is crazy. >> we have here a silicon valley darling, hampton creek, a food tech company. we found after weeks of investigating that the company was paying contractors to purchase its own products. not only purchase them, but after purchasing them, the contractors were also instructed and paid to call stores picking different identities as customers, pretending they were customers and asking for the products. in order to stoke demand. cory: then it would increase demand and also make sales look like they were actual sales so the revenue numbers were inflated. >> we have not had a chance to look at hampton creek's actual

financials but we do not know how they put this on their books but we know it was not disclosed to investors in this way and we know that it was done in order to create the illusion of demand to the supermarkets. cory: how do you know they did this? >> a lot of investigating, talking to sources, and a ton of e-mails. i have been very busy. cory: josh tetrick, the ceo who has been with us many times. what is his response? >> he is extremely charismatic. a very charming personality. when we approached him with this story, he said the reason for the purchases had 100% to do with quality assurance. i want to be clear, he was very open with us about that quality assurance program. he invited us into their offices. we sat down with his people. he showed us a database that

went through every product that they had purchased for quality assurance. when we looked at that database, we triangulated it with the receipts we already had and the expense reports and cash advances and records and we found that none of the purchases that were done for the quality assurance program were the same purchases that had been done in terms of creating the illusion of demand. cory: there was a quality control database but the program you found was not in the database. >> yes. cory: i am sure he is really happy with the story. doesn't he suggest that they are still doing something like this? >> he said they are certainly doing the quality assurance program. what is normal for a quality assurance program that we found after talking to multiple experts is that there is quality

assurance where you take the product and test it, it happens before it goes to the consumers, the supermarkets. cory: you probably want to know if there is an issue when it comes off the line. >> you want to test that and how it sits on shelves and to do that, you work through the retailer. cory: it reminds me of tesla. a laudable notion. it is not what it seems. >> i guess so. cory: an amazing story. thank you very much. joe montana and snoop dogg -- new investors. don't forget to tune in this weekend, we will bring you the very best interviews. we also have the next new wave of m&a. this is bloomberg. ♪

cory: topping profit estimates. the number of hotel rooms booked through websites has gone up. shares have rallied as much as 6%. game on. mobile engagement platform for sports plans is the next big thing. raising $2 million and backed up by some of the biggest names in sports. we sat down with game on founder and the glove, gary payton. we asked them the problems that game on is trying to solve. >> we are the best way for fans to discuss sports. we are growing on other platforms. fans are on mobile and there were not a lot of great apps that served chat and content. cory: the experience of it when you are watching a game and a buddy hits you up which can ruin it if you are on delay. one friend is texting you and another is posting something on twitter. >> our world is going with this technology stuff. when they approached me, there are a lot of people that follow me. if i am on my couch and people hit me, they are keeping involved in the game and they are talking to me also. that is really cool. that is what it is all about

right now. they want to stay involved with you. it is fun. we are kids also. big old kids. >> let me jump in. let me ask about the business model. talk to me about how you are making money doing this. >> we started out by creating emojis. we give a lot away for free. we are interested in growing our fan base. we are also interested in making money and now we charge for the high-end emojis. we are seeing that our users are engaged and they are engaged in public and private chats. cory: what do the sponsors get? >> they get to be in the huddles. if you are in a private chat room with your friends and you're talking about the niners. 10 people within 20 miles of the game. sponsors can get in there as opposed to a facebook messenger where it would be weird for a sponsor to interject.

it would not be strange to sell them a niners jersey, tickets to a game, or have an existing sponsor come in and show them what they are up to. cory: you have followers on twitter. it is a fun medium for you. >> it is a fun thing. at first, i was not on twitter. now that i am with game on, it is fun because the people are coming back and i am tweeting more. i am trying to get involved with it. and now my tweet base will go up. it is going to be a lot of fun to do. a lot of us are trying to get into technology and we don't know anything about it but now with game on, they make it easier. once you know a basketball player or a football player, we are not trying to get into

technology but if it is easier for us to understand, we can just click and game on is just like that. cory: that was gary payton, one of my all-time favorites. and alex from an interview earlier today. indonesia's ridesharing program has raised more money. they provide motorcycle rides on demand. they use the funds to compete with uber and grab who also offer similar services on their own turf. coming up, another tech company is moving into the car industry. we will tell you everything you need to know, next. ♪

cory: friday's job day in the u.s.. we will bring you full coverage and reaction from bill gross. that will be 5:30 p.m. on the west coast. gentlemen, start your engines. samsung is the latest tech company making a push into the automobile industry. making advance talks with fiat chrysler. it could be over $3 billion. joining us right now, live from tokyo, peter elster. this is really interesting. you look at what google is doing with its vehicle efforts. what apple is doing with its apple car and apple play effort.

and you also have automakers trying to hold their connection to the customer through their electronics and now samsung wants a piece of this. peter: samsung has been wrestling with a general slowdown in the smart phone market. they sell their own smartphones but chips and other components to smart phone makers and now the vice chairman is looking to make a similar strategic play in the automobile industry where they are negotiating with fiat to buy this business giving them a poll position in providing components as cars become more technologically sophisticated. cory: it is interesting to me for a lot of reasons but it strikes me in the case of apple and google, where they are collecting users and finding out where they are and turning that data into commerce in some way. this is a hardware maker acquiring this stuff.

it makes me wonder if they want to be more like a delphi making in car electronics as a hardware unit sold to automobile makers. peter: samsung has a broad range of businesses. it is a very big conglomerate. this would allow them to do all sorts of things if they move into this area. the display business for them is quite big. the chip business is big. if they could integrate that with some of the parts that fiat is now making, they can move up the food chain and work with google and apple and other players that are trying to provide customers with more sophisticated technology within the car. it is also interesting for these guys -- an inherent conflict with the relationship with google and android and samsung hardware. occasionally, they will show up with something that competes with android hardware.

a deterrent to the power of android. is that the right context? peter: samsung has been navigating this conflict for a long time. they sell cell phones on one side and then they sell components to others in the market. it is a potential conflict of interest for them but they have been able to navigate this with other businesses and they will have to navigate this here also. this opens up a brand-new area for them in terms of supply. they will go beyond the traditional technology companies. they will be working more with automakers. this could be the beginning of a deeper relationship with fiat in particular which is trying to build up its carmaking business and clean up its balance sheet at the same time. they would like to build on their momentum and success in the u.s. with jeep. cory: it gives them more distance from their partner, the cooperation and competition with google. are there others?

peter: we have not heard of other bidders in the process. the reporters were able to break this news exclusively. a "for sale" flag on this and if there were other bidders interested, they can still come forward. the deal is not quite complete at this point. cory: the t is not crossed. an interesting acquisition target for samsung, to be sure. from the bloomberg tokyo office is our tech editor. right now, to a story that is trending. pokemon go -- characters showing up in real-world situations. a researcher from m.i.t. has taken this one step further. an interactive dynamic video which it actually enables you, the viewer, to reach in and interact with objects in the video.

perhaps, a glimpse into the next generation of augmented games. that is really weird. that will do it for this edition of "bloomberg west." that is all for now. i am cory johnson in san francisco. this is bloomberg. ♪

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it is noon here in hong kong. evergrande -- enjoying a lifting hong kong and shenzhen. australia on track to meet savings targets. oftas deferring delivery just saying it would struggle to cope -