it is 8:00 a.m. here at the code conference. 11:00 a.m. back on the east coast and "squawk alley" is live. ♪ welcome back to "squawk alley" as we continue our

coverage from the code conference in california. joining us this morning liz gains and our own jon fortt as we continue our exclusive coverage of the code conference. the big news from code everyone is talking about and that of course is apple buying beets high fashion head phones, a streaming service and two important employees. here are the best hits of beets co-founder discussing that deal. >> we met the guys at apple and what we realized is that they get it. they know what we do and they respect what we do. they respect copyright and the higher food chain. that's why apple, we said and since then i always wanted to work with them. >> you have been working with apple -- >> why didn't you go in the first place. >> i asked them every day for ten years. it wasn't in the cards then. by the way these guys are not ease easy to do things.

they make deals ike they make products. you know. >> i bet there was a moment -- >> yeah, there's a moment. absolutely. >> can you tell it to me. >> i'm at apple now. i can't say anything. [ laughter ] >> we just looked at this as this is a great opportunity for us to partner and do some great things with beats and make some incredible products together. >> you need curation. to have 20 million songs out there, give me a credit card and good luck won't work. there's a simple problem which is the album is going away. music is made in bite size pieces. but you need about an hour to really have an activity or do something or just an hour's worth of music. these guys are making media, technology that plays media, media centers. that's what the phones are. they are ear buds. >> yeah, but, he makes those ear

buds. apple makes those ear buds. >> they make them to see if the machine works. [ laughter ] >> keep going down the path we're going of building great, great products, and, you know, later this year we've got, you know, the best product pipeline that i've seen in apple in my 25 years at apple. >> that's product pipeline in 25 years we'll talk more about that in a minute. one thing for sure covering apple got a whole lot more interesting because of jimmy. >> so quotable. >> what do you make of this deal? >> i think the point that he makes there and he made throughout the course of the interview, i know music, you know technology, you need me to teach you about music and it sounds like he's been giving the pitch for the last ten years. he goes to apple once a month to give them the pitch and finally apple is bringing them on the team to be the music guy. >> you're critical of the deal? >> yeah. >> why don't you like it? >> first of all, is music really

the battle of 2014. even if you win streaming music there might be a collective so what. apple won that battle. they need from text their flank because you have others trying to come in. isn't it about video, wearable, other thing. dollars 3 million not a lot for apple. it seems like -- what do you get once you're in music. for apple they have ipod and all that revenue. today if you went streaming what do you get that's extra. i don't know. there's that. is music the right battle even if they win you can see there we saw last night he brings a different kind of energy. tim cook has to manage that. he didn't manage it with scott forestall. did they get content deals three years from now that they couldn't have gotten otherwise are the key executives still around and has beats found its place with the apple brand in a way that makes both look better

than they do today. it's a tall order. we'll see if they do it. >> it's described as an internal advisory role, what they shot down was the idea that jimmy was going to come in and do something interesting like bring on music or push new directions or become a record label. he said he's done with acrecord p -- being a record producer. now he's a technology guy. as of the interview the deal was four hours old so we'll see. >> we just talked -- netflix said his takeaway was the product pipeline was the best he's seen in 25 years. is that sales talk or does he mean it? >> it's sales talks. it's the type of thing tim cook says. what i think is critical because they've done this deal what they say gets scrutinized more than ever. now they can't get away with

making the sales talk. people will say really? have you lost credibility because you're doing things now that you said you would never do. . >> check out this photo. this is cook with dray and the beats team. it does bring us to this morning's squawk on the tweet question. give this photo a caption. we'll get your responses later. in the meantime other speakers making news. this is soft bank ceo with some candid comments on alibaba and evaluation. >> amazon, all you know, e-bay. okay. both of them are great company. i admire them, both of them very much. if you just look at the past last year, the volume of the e commerce transaction of product sales over their platform,

amazon and e-bay added together compared to alibaba alone. alibaba surpassed. okay. the combined profit by amazon and e-bay versus alibaba -- e-bay and amazon versus alibaba. alibaba again surpassed. both trending volume, and profit and gross rate is much, much higher. and the combining those two companies of amazon and e-bay is $200 billion in market cap. so, you put the price tag on alibaba by yourself. >> talk about an executive who has an economy of words, liz. what was the takeaway from what he said not just about alibaba but evaluations in general. >> and he was fun speaker.

he talked how he's pro net neutrality. alluded a lot to interest of buying. he made a compelling case, i think, for the value of that business and auth message that isn't always communicated so directly by somebody who is involved. >> his statement, jon, was something the evaluations are big but the profits are big too and people have gotten smarter. >> he's a boss. let's face it. i got a chance to talk to him a little bit outside of the conference. he'll make tens of billions of dollars most likely out of this transaction and his ambitions are big for this market here not just in wireless but in wired broadband. he's a part of this whole conversation that we're having, comcast, netflix, competition in broadband. that's important. and maybe even competition in e commerce down the line for the likes of alibaba and others in

their filings they are talking about focusing on china but that's not forever. >> and he was asked about their would be aspirations outside of china and harsh words for the state of broadband in this country. he compared broadband in the u.s. to breathing the air in beijing where the people in beijing they don't realize how bad it is because they breathe it every day. >> he has a good point, in japan the broadband is cheaper and better. >> he changed it. he changed it after ntt had a stranglehold on that country. >> the population is denser. people closer in japan. easier to wire for broadband. >> fascinating. the whole bit was fascinating. liz thank you so much. when we come back he's on the board of uber, gurley and rock

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driverless car and his new partnership with at&t. >> we're excited about self-driving automobiles. uber it's not our plans to manufacture cars. somebody has got to do that. and, you know, google sort of leading the charge on that. is a really good thing. the sooner self-driving vehicles become a reality the sooner transportation cities just fundamentally changes and definitely for the better. transportation is a thing and it's something you do every day and that should be part of the core that you get when you get an at&t phone. that's the sort of breadth of the relationship we have. what we're looking at is 50 million phones a year going out with essentially uber as part of the core sort of app base that is on the phone. >> bill gurley is on the board of uber among others. he's general partner of benchmark capital.

he joins us here outside of the conference. great to see you again. >> thanks for having me. >> valuation was the big question going into the conference. you said in every situation there's the magnitude of success and probability of success and uber is an example of people betting on big magnitude. >> yep. yep. absolutely. look, one of the true joys of being a venture capitalist is getting to work with people like travis and a lot of time what starts as something that looks like it may be, you know, contained to a certain size, when you get the right entrepreneur against the right model, you know that expands. great example right now is kind of anecdotal, uber is getting photographs where people have a check from selling their car. when uber started replacing car ownership wasn't the mandate. when we talked to early investors what's the tam of the black car market. what's the tam of the car market

is a totally different thing. >> how big of a google deal is. google is a big investor in uber. is this a game changer? >> i threw cold water on that. i think the large companies, you know, with their driverless cars and drones have done a good job of distracting the media from the tougher questions that you guys ought to be asking them about. >> i'm a fanny self of saying that. >> exactly. one day but not any time soon. >> i'm wondering about regulation. i want seems every time we get big leaps in technology, steve jobs had to corral the recording industry, tesla wrestling with the dealerships and government around getting into certain markets. uber has its issues. air b and b. what different tactics do these companies and entrepreneurs need beyond the initial bravado to get the growth done. >> as these business models in silicone valley start moving

backing up against more traditional businesses this regulation keeps popping up. one of the conversations we've had is the unfortunate situation of patent reform where so much momentum was under way then harry reid comes in at the last minute and puts the kabash on it. my hope is that the tools that we're using with companies with yelp that provide for crowdsourcing and transparency can shine a light where it hasn't been before and that we can expose some of these things. >> it's motivating voters to get out there and be vocal the way to get through it? >> i don't know if there's another way. right now there's clearly a lot of, you know, i'll give you a great example. like the ber juuber is releasin statistics that it's having great benefit on dyi.

there's three or four mayors who are making sure this service is available to their constituents. it's a better product. it's cheaper. helps stop dui. what's the objection? >> on valuations in general, you've talked about when capital is readily available and cheap, right, businesses out here will spend. they won't think twice about it. are we looking at some of these business models through a distorted len. >> i've often said silicon valley is kind of creating product that then is consumed by the public markets and if the public markets will take on riskier and riskier companies then silicon valley will produce more of them for them. one thing we saw is the acceptable amount of losses kept going up and up and up. is it okay to have 120% of revenue in sales and marketing. they will justify it all day long. we saw this whole retrenchment in q1. i think it's healthy and i think

odds that ipo window will stay open longer is better if we don't take it too far. >> how do you advise the ceos of your private companies like travis and uber about how to approach is going public or selling? >> it's difficult when the capital becomes this easy and the late stage capital availability has just been like shocking to me for almost four years now. and if your competitor will raise a bunch of money, you have to make a decision will i get into that game or not especially if there's a way that money can be competed on the field. it's one of the more difficult decisions and difficult conversations you have. >> i was talking to mike mccue of flip board who told me about raising capital versus spending it. he has experience being very careful about actually spending that capital. the money is easy right now. what your telling the start ups in your portfolio about how much they should be burning through that at this point? >> mike has it dead on. one of the things i try to ask our entrepreneurs to do in all

the financial statements you have the monthly burn, the cash and divide the two and you have months of cash available at the current expense rate. i would love to see that number north of 18 to 24 months. >> you mentioned q1 and valuations coming in. some people want to argue it was in part due to david saying it's nervous timg. >> i didn't hear that being a driving factor. we respond to the public market so the by side on what they are willing to buy and sell has a much higher impact on anything anybody said. >> you announced an interesting investment called hacker one. it's an unusual company. temple us what it is and why it could be a game changer. >> so, you know, you read a lot about the heartbleed bug, the target situation where you had a ceo taken down because of a vulnerability in their website.

hacker one is a solution for that problem that leverages a lot of the work we've done in marketplaces. so at some of the larger companies there's something called bug bounty programs where companies put out rewards and then the hackers and researchers of the world instead of, you know, doing bad thing actually can do good things and get financially rewarded for discovering these financially vulnerabilities. what hacker one has done is create a website where all those people can come in together. now it's not just microsoft or google, anybody can. >> we would love to talk more but we have to go home and sell our cars. >> that's fantastic. >> see you next time. when we come back netflix ceo reed hastings and why he fears the post office of the internet and why he's rooting for a failure at netflix in a moment.

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markets, the s&p hitting a new intraday high. there's the ten year. awfully close to hitting a two-three handle. now at 2.408 is the key story. meend time at the code conference we spoke with reed hastings in the past hour. we asked him about the risk of launching new content and the challenge of avoiding backfiring and overspending on those originals. take a listen. >> i think if we don't have a big original failure we're not trying hard enough. i keep pushing our team they are doing bolder and bolder things. i'm sure at some point they will jump the shark and i'll regret it. i think we should try new things and be bold >> he has concerns about a potential comcast time warner merger. we asked about brian roberts saying netflix wants to move costs away from its own business motel. here's hastings response. >> comcast seems would love to be the post office and, you

know, have a national monopoly and collect on everything. that's not the way the internet works. the way internet works free connectivity between these difference sources. third of the internet is customers using netflix so maybe we should get a third of the comcast revenue. if they want to give us a third of the revenue we'll pay a third of the cost because the revenue is so much larger than the cost. they want to charge the consumers 70, 80 bucks a month and charge the providers on our side and that's what we're trying to stop. >> interesting conversation. especially the dynamic between him and roberts. he says they are friends but a huge disagreement over a very large transaction. >> they have a partnership. they recently made a partnership to help the streaming be higher quality for netflix for comcast subscribers. what was interesting he said, i asked him what plan b was if they can't improve those net neutrality conditions and he said there's no plan b. >> does he need a plan b. he has the netflix users who

love netflix. comcast subscribers, we've seen the numbers they don't love comcast as much. when he's motivating his base to go out and be vocal on his behalf that's definitely something for comcast to have to deal with and the rest of the cable industry as well. >> you asked him valuation of netflix stock. he said some days it seems too low, some days too high. >> the last time i asked him that question when the stock was nearing that all time high he was much more definitive. the fact that there's a question, ceos defer and say it's up to markets. if i were an investor i would prefer more confidence in that stock price. >> yeah. almost recovered entirely the losses from that brutal spring. we'll see what the summer brings. when we come back, elevation partners, roger mcnamee, his investment in facebook and his own news innovation when "squawk alley" comes right back.

cue the u2. a lot of tech news to cover at the code conference including the buzz over that $3 million apple beats dale. joining me is roger mcnamee.

your thought on apple/beats. >> i don't think the transaction means anything to the apple shareholder. the stock is so cheap. i wish, i think that whole discussion showed the challenge of being apple now. you know, steve jobs is no longer with us. trying to pretend se is a really bad idea. if i were apple i would focus all of my energy on getti ting icloud to be an extraordinary growth service. phones today is where windows was 15 years ago. you can keep developing it but that's not what customers. customers want you to move to the next thing. apple knows this they need to stop messing around with iso 7. they are an electric utility. people don't want them changing the wall socket. but i love the stock. their strategy doesn't work for me. >> is apple smart enough on

cloud. do they need to acquire talent in that area? >> i do. i think the apple people -- the problem isn't smart. the problem is that they were so successful with the strategy it's really hard to give that strategy up. microsoft faced the same thing 20 years ago. ibm faced it 40 years ago with main frames. ibm figured out when you reach this thing of being a public utility, customers will pay you not to change anything. if i recognize ios is where ipod was five years ago. you got the right product. little enhancements is great. all the stuff should be in icloud. their problem isn't lack of smarts, their problem they need to move from an old strategy to a new one. >> question from it from a musician's perspective. you have a ban. you stream your music.

what does this mean for the music industry. he think this can be a game changer. >> of course he wants to be a game changer. he's retired. i look at this with jimmy. this is really smart. dr. dray. is really smart. they got $3 billion from apple. congratulations, gentlemen, that was great work. take the rest of the day off. >> your saying all that talk about the importance of the album and human curation is insincere because apple is responsible for the depth of the album. >> i don't think any of it matters. pi point this is like discussing the color of the paint that you're going to put on the deck chairs of the "titanic". it doesn't matter. music is still important to people but not economically important. to me just dwelling on that, just strikes me as, from apple's point of view if it makes them feel better god bless because $3 billion disappears from their balance sheet and it's not an issue of price and jimmy and dr.

dray are genius people. i don't see how they will move the needle on apple. music is this vanishing small piece of the entertainment puzzle getting smaller every year. >> let's talk about reefer. >> the reefer application is designed for people who depend on news who used to be get everything they wanted from the morning newspaper. right. that is clearly no longer true. and now we've created a product that totally approaches text friendly. right now every product uses an algorithm to figure out what text means. our founder was the editor of the oxford dictionary of american english. the genius that she had was realizing with computer technology why are we working from one tenth of one percent of the language. let's create a one to one mile scale model of english which determines the exact meaning. you apply that to add words at google, magazines and newspapers

which are going online to things like cnbc.com and the proof of concept is this application and what the application does is let you find news, yes. but it let's you dig deeper than any application you've ever seen before because when it recommends a follow up story to you, it's actually the story you want to read. so the click through rates on the product are off the charts. and you can see this. apple is featuring it on the top page of the app store now because it has had so many downloads and people are enjoying it so much it's shaken up a category, news which frankly desperately needs it >> you're an investor in an old traditional company forbes. how is that looking. >> it looks wonderful. thank you for asking. >> and your return investment will be there. >> it won't be what i hoped it would be there. the great thing about being a tech investor in the last 32 years i have a lot of scar tissue from the mistakes i've made. everything i learned from forbes

we've applied to reefer. forbes knock on wood will turn out better. >> you talk about click through rates there. i hear that. i think engagement. that's something like companies like twitter is wrestling with now. >> thank you for asking me. let's show you what i can do for twitter. this is my twitter stream. it is organized by topic. right. if you're sitting there as i do every single day, so you'll see these are things that people on my twitter stream are commenting on. they are talking about populism, u.s. immigration, politics, all kinds of technology issues and for me twitter is too much. it's a fire hose. i want to organize it. reefer does that. it's free. it's like a no brainer. but do i think this issue of curation is so important. that was one of the points of the beats commentary.

news has huge economic value. with reefer that's what we're doing and the beauty of this thing is there's so much exciting new technology going on right now, people can say whatever they will about the u.s. economy and government or whatever. but to me the creativity of people in technology has never been higher than it is right now. there's not enough money to fund all the good ideas which is ironic because it means that the venture investor will make too high of a return but the entrepreneur has so many great ideas. you have had two days at this conference the red sea parted no other news other than what was going on right here. >> we don't want to leave. roger great seeing you. thanks so much. >> when we come back they make well designed sleek hardware that let's you listen to your favorite music with an apple device. it's not beats, it's sonos. we'll talk to the ceo in a

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and the man who says the stock market is rigged is back with another warning on how the individual investor is getting the short end of the stick. that exclusive interview is straight ahead on the halftime show. carl we'll see you in 20 minutes. >> thanks so much, scott. welcome back. we're live here at the code conference in rancho palos verdes, california with apple's $3 billion kicks of beats audio and music streaming have gone mainstream. whether you use beats, am, pandora, sonos is seeking to capitalize on that rapidly growing marketplace. sonos co-founder and ceo john macfarlane joins us this morning. anything going on in "your business"? >> it's going very well. >> pretty quiet. >> yeah. >> what's the general take after this deal was announced yesterday. >> positive. great to have apple behind subscription streaming services and, of course, the crown prince of music leading the charge is a

good thing. >> he was asked about the business model of free internet radio and algorithms versus human curation. he seemed to think if you are relying on algorithms you won't last very long. >> i think it's more nuanced in that. in the united states, for example, about half our listening time on sonos is pandora, which is both human curation and algorithms. about a quarter is internet radio from anywhere on the planet and another quarter is the subscription services. so it's, you know, it's just guesting started. it's going to be a mix of both. >> where do you think the growth will come from? >> of listening time. >> of listening time. >> i think it will be a combination of both we call it lean forward and lean back. when you walk in and you're unpacking your groceries it's nice to have eat ear human curated and jimmy's world to a pandora or song list to when you hear about a new artist or song

you want to hear you want to hear that one, right? it will be a mix of both. >> john, you're at the high end of the market in terms of i don't know what you want to call it, audio accessories. hundreds of dollars for these. where do you think the growth comes from from here. is it making it more accessible to a broader swath of the population in their homes, getting in their cars, more locations outside of the home. >> up listen to music in a lot of different places. we focus on filling your home with my sick. our entry price point is $200 for a room to play one. if you love music that's pretty accessible. i don't know that it's a price point issue. i'm sure there will be cheaper ones. but i think it's really the shift to, you know, it's a dramatic change to go from a world where you picked a few

albums and you listen to that world to now you can play anything ever made on the earth, and i think that's the bigger habit change. people love it once they make it but it's not where they came from. >> there's so much discussion last night about the troubles of the business overall. >> yeah. >> the fewest newest releases for apple since q has been there. do you worry about music generation like the pure artistry of it in the future. >> i have a different take. i say people listen to more music than ever worldwide. and music is still hard to create. it's at its hard creative instance. it's the middle connecting those two that's disrupted right now and that has to work so you can't be in the -- you can't be in the business and not worry about the whole thing. and, you know, i would have liked to have asked hey jimmy what do you troem my two sons that want to be musicians

because you have to answer that question. while he's right. but i also think subscription services are a path forward because once you -- you know, once you get paid every play that's the holy grail as long as you get paid enough and that's going to be the next set of questions. >> now that apple is getting into the music accessories business do you see them introducing a product that can be a direct competitor. >> i'm sure they all have sonos and i wouldn't be surprised if there's competitive products. >> you look awfully worried about it. >> i worry about apple products but, you know, the neat thing about this environment you have to earn your customers every day so we'll work hard on doing that. >> long term are you leveraged at all. housing. we talk about household creation and when that's going start getting back up on a macro level in this country. is it more of an impulse buy, no matter where you are in the

housing cycle? >> jon is right. we also do higher end. so if people are installing systems it's tied to the housing market. but if you walk into a target store or best buy store and buy a play one you're putting those around-the-house and doesn't require you to own the house. you can be in an apartment or something else. so, in the same way you worry about the whole health of the music business you worry about the whole health of the housing market because none of us win if that's having trouble if that makes sense. >> i'm a huge fan. i have to admit. great meeting you. >> my honor. >> when we actually jon fortt spoke with some other ceos at the code conference in the past couple of days about the beats deal. everybody has an opinion. >> apple always surprises you and surprises you again. >> i don't know what the definition of unapple like is any more. >> you need head phones. >> up look at jimmy and dray,

they are major aseptembers to have on your side. >> when you have the decision, do you try to marketer and come up with your own or buy something that's already selling like crazy in the apple store. i think it's a reasonable move. >> we have a lot of respect for beats. they've done a tremendous job building a business. >> there's not been a better time for start ups in general. >> to talk to companies and get them on a platform is why we're here and why we're seeing success out of the conference. when we come back, google isn't just search or driverless cars. abigail posner of google will join us on why we share cat videos and how companies around the world are getting into the game when we come right back.

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♪ screaming code videos, cat gifts and mimes the internet is a treasure trove of content. abigail posner is the head of strategic planning from within google. she joins us from montreal. good morning. >> good morning. >> walk us through what your role is at google and this introi just read about cat

videos. why are they more important than we might think? >> great question. actually my role is to help agencies as well as our clients understand the true nature of digital and so what i do is help, help unearth that underst employing anthropologists to help us look at what are people doing in the digital space and why they're doing it. and that understanding then helps clients create that much more meaningful communications, brand experiences that help amplify their brand story in that space. >> so walk me through. connect that thought with what some people criticize as being sort of meaningless or trivial videos that get tops of engagement. why would i want to go after

that besides from it has all the eyeballs? >> funny or even just interesting or even mundane individual cross or clips or images, what they're doing is helping us understand our world better, helping us really kind of express who we are and what we want from life believe it or not. so an example that i always love to share is we tend to take pictures of or take videos of seemingly everyday things like the lattes or our pets or maybe the beach selfie. but really what those are allowing us to do is see our everyday world in a new way with a new perspective. yes, we all love to see something that is exciting or different. we love to fantasize about other people's lives or other worlds, but we also have the desire to see our lives more than just mundane, something that is full of wonder and discovery.

so being able to look at those everyday things, even if they're just cats, being able for see the lattes or the beach settings is something a little bit different, something a little bit more interesting. it allows us to feel like, hey, maybe our worlds are more exciting than we thought. the other elements -- >> i was going to ask you, there was a presentation here by a poet yesterday that essentially said i wish we could get back to the days where we didn't just look at posted photos, but actually had photo albums like the paper kind that we used to have in our houses in the old days. in your view, looking long term at google, are we going to look back at this era of selfies and cat videos and think that was ridiculous or is this with us to stay for the very long term? >> i believe that it is with us to stay. because the more that we are

playing with this space, the more that we're getting used to all the technical aspect abouts of the visual web and just life in general, the more that we're understanding you how to capture and how to manipulate and how to really kind of express our vision much the world through a lens, we'll want to play with it more and more and more.much the lens, we'll want to play with it more and more and more. of course we'll have other means by which to express that, we'll be more sophisticated and we continually see people adapt to go new technologies and ways so that they can express themselves or express their world in the most meaningful way possible. so, yes, we will have other ways and we'll continue to have more and more ways of expressing this and in more technical ways. but i do think that the scrap booking era isn't over. it's just that we're reflecting it in different ways. so what is wonderful about technology is that we can use to then turn it into something more tangible if we want to.

and we can do it much more quickly and more effectively than ever before. but the difference between online and offline is actually becoming less and less of a reality. so whether we want to be more virtual or tangible, we have that ability and we'll continue to have more and more of that ability. >> i imagine so. finally, some news we didn't want to ignore, google releasing numbers on diversity. we had reverend jesse jackson on who has been pushing for more disclosure for all kinds of tech companies. he said google has made a bold positive and necessary decision to release their equal employment opportunity report. it's a transparent effort that will unveil facts about gender and racial composition of google's workforce. they're to be commended. as a woman at google, what is your thought on that? >> this is not my area of exp t experti expertise, but we all believe in

this effort. we are very excited that we went out with these numbers to show that we are trying to meet this challenge. we are excited about meeting will challenge. as a woman of course i'm excited about that, too. but for all of us, for everybody, for all the decide verse population that we want to attract, we are just so excited to open the doors and invite more people into our community. >> thank you so much for your time. abigail posner, head of strategic planning for agency coach. at google. when we come back, your last chance to get in our caption contest. this photo tweeted out by tim cook with dr. dre and jimmy iovine. we'll show you the winners in a minute. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.

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yesterday. it is cook with dr. dre and the beats team. this morning we've been asking you to give the photo some kind of clever caption. duck boy writes really beats sounds better with ear buds? yes, you're the first billionaire in hip hop, but not the first one in this room. and jim writes at least we get to say apple beats again. ouch. that's kind of hard. especially given where the stock has been. >> crazy thing is net worth wise, he might be the highest in that room. think about how much cash apple just dropped. he's got that -- >> yeah. not unthinkable. apple beats aside or maybe even including it, big takeaways from this conference in your view. >> i think we're in this middle state where a lot of companies are trying to figure out what is the next thing that you build on top of the smartphone. we're in the post-smartphone area. but you've got nest, google, apple doing this kind of

fighting a music battle, looking at streaming. you have so many things going on. two years from now, we'll see how smart these moves are, but it will take a while. >> best presentation in your view? >> i missed several. but i love this conference. i've gotten very little sleep. i don't know about you. >> jon, great stuff. thank you very much. let's get back to scott wap they are wapner. >> we look forward to seeing you back here. welcome to the halftime show. here is today's game plan. and the beats goes on with apple finally scoring its deal with dre. what does the company really want for its $3 billion? straight from the fed. richmond president jeffrey lacker first on cnbc on how low yields may go. and central bank's plans. and the man who said the stock market is rigged is back in a