want and as conveniently as they can get them. we've been supporting hachette which is a good publishing partner of ours as well as their customers and authors. >> finally, mike, it was brought to my attention on twitter actually that you've been a seller of stock. i don't know if that's a force planned sale or what but i would like an explanation as to why you've been a seller of barnes & noble. >> well, that's not accurate. i've never sold any barnes & noble stock except for some vesting that i had where the restricted stock was withheld in order to satisfy the taxes on that vesting. i'm not -- in fact, we have an executive retention requirement that we'll disclose later that we just put in place. so i wouldn't be in a position to do that. >> all right. mike, we've got to leave it there. appreciate you joining us. mike huseby, cref barnes & noble. the company announcing it's going to split into two.

of course it's going to be a while. these things take time. carl, over to you. welcome to "squawk alley." what a day of news it has been. not just the downward revision to gdp. the supreme court killing aereo. google conference begins today. and the dow holding on to a 61-point gain. john steinberg, jon fortt and kayla towshy. aereo ruling, the supreme court ruling it does violate copyright laws by providing subscribers with broadcast content over the internet. the ceo was on cnbc last week. >> the ethos of the foundation of the company was to create a parallel system that is a fair -- that is a consumer-centric system, that is based on the internet model. if we don't succeed in doing that, then we don't succeed in doing that. but we didn't start this to figure out some clever way of making money. >> with more on aereo, let's get straight to hampton pearson, who is outside the supreme court. hampton, good morning once

again. >> reporter: hi, carl. well, what's amazing is when you go into stephen breyer, who delivered the majority opinion for the court, they just did not buy aereo's claim that it was worthy of copyright protection. for example, in the opinion it says, "aereo claims it doesn't play shows for a user until the user directs it to do so. that means that aereo is only the subscriber that really transmits the program." the court majority saying in essence, "we believe that's too fine a point." very next page. in the opinion of the court, quoting now, "aereo's system is for all practical purposes identical to a cable system. both use their own equipment. both receive broadcaster telephone programs. many of which are copyrighted." and finally, again, that this was very much an aereo-specific ruling. the court saying in very plain english here, "we believe the resolution questions about cloud computing, remote storage dvrs and other novel matters are not

now before us and in essence should await a case in which they are clearly presented." so that's the nub of the opinion. very straightforward. huge win for the broadcast networks going forward. >> thank you so much, hampton. hampton pearson joining us from outside the supreme court. let's bring in rich greenfield, btig media analyst, who joins us this morning on the phone. rich, good morning to you. >> hey, carl, thanks for having us. >> hard to find a way out here if you're aereo. barry diller did give a statement to our becky quick saying we did try but it's over. are they done? >> look, we were completely wrong. we firmly believed that aereo was in the right simply because this is all technology that you could have bought yourself and located in your own home and once cablevision's case that you could have the dvr in the cloud, which the supreme court did not want to overturn several years ago, we thought the difference between buying and lease the equipment wouldn't at the end of the day make a difference to the court. obviously, the court seemed to view this as a cable system.

and so the question becomes, and i think the real way to answer your question, is if aereo is essentially a cable system are they entitled to compulsory licenses? it's something that came up during the actual oral arguments back in april. could aereo pay license fees that cable operators pay for this con snent this may not be completely over. i think it's certainly going to open up a lot of new questions. and it's clearly not going to be the easy path aereo hoped for if they won. >> they can't afford -- at $8 a month they could not afford the compulsory licenses. isn't that the reality of it? >> no, compulsory licenses are actually very tiny. i think they're something like 1% base fee. compulsory copyright fees are different than retransmission consent fees. retransmission is very expensive. i think that's what you're talking about. retran is paid by what the fcc defines as cable operators or multichannel operators such as

comcast or time warner cable or directv. i think in order for that to be something that aereo would need to pay the fcc would need to change its definition of what defines a cable system. but if the court is going to view them from a copyright standpoint as a cable operator that's different than retrans. there's copyright and then there's retrans. two different legal doctrines. they could gain access potentially to the signals from a copyright standpoint. i think the thing that we need to figure out and everyone who's looking at this case, on what basis can you deny a compulsory license to somebody that essentially the court is saying looks like a cable operator? >> rich, could it be that the most important implication here isn't about aereo, because most people haven't had a chance to use it anyway, but it's the calculus for other companies that are thinking about trying to come in and disrupt the broadcast model. does that in essence get more expensive now that this is on the books? >> yeah, look, at the end of the

day i used to have a hard drive sitting on my desk where i stored lots of files. when i think of my home computer. now i use this thing called google drive and i remotely store files in the cloud. and sometimes the hard drive space is used by jon and his family. sometimes it's used by mine. it's our own personal space in the cloud. but it's far more efficient. technology has advanced. and we've gone from having to buy things to being able to basically lease access in the cloud. this decision obviously is disappointing because it's saying you yourself, you have to buy your antenna, you have to buy your dvr, and you have to buy a slingbox, you can't lease those things. as soon as you lease those three pieces of equipment, you're by definition a cable operator. if you buy them and put them in your home, you're totally fine. sought difference of kind of where you locate the equipment and how you buy it or lease it was a huge determining factor it appears for the court. >> but rich, the court very clearly says new technologies will be evaluated as they come to market. do you believe definitively that this will not have a chilling

effect on new technologies going forward? >> look, this is a very long and complex decision. it is surprising. there's a couple of paragraphs in there that, you know, seemed a little surprising in terms of opening up a can of worms that i'm not sure -- that i guess i'm surprised that the court wanted to open up. you know, there was one comment in there where it basically talks about we note that to the extent commercial actors or other interested entities may be concerned with the relationship between the use of such technology and the copyright account they're free to seek action from congress. it seems like there's a little bit of opening up like what could happen to new technologies. but this is going to be a much more detailed read to figure out those implications. i think the immediate implication for aereo is is there going to be a way for them to get compulsory licenses to survive or do they simply disappear? >> why is diller saying it's over then? has he done the math and he he thinks it's not possible? why would he kind of wave the white flag so quickly? >> you'd have to get barry diller on the phone and ask him.

>> we're on that. >> i don't know. i'm sure he's disappointed. >> rich, thank you so much. rich greenfield giving some very quick analysis on the aereo decision, which obviously people are still giving a second read this morning. next up, google's annual developers conference kicks off in a little under an hour from now in san francisco. heard some rumors about a tv set-top box, some new car technology and a lot more. our josh lipton's live outside the conference with what we can expect. hi, josh. >> hey, carl. yeah, thousands of developers here this morning in san francisco at this conference. keynote starts in about just one hour. the rumor mill, of course, in full effect about what to expect. but here's what financial analysts who cover google think you're going to see. one is a new version of android is did you. the chatter is that it's going to be called lollipop. of course they're always named after desserts. one of the features, though, and the capabilities that google's going to build into this version, that's what we're

waiting to see. also the question is can android replicate the success in other product categories? will we see new smartwatches today? new wearables? earlier this year google unveiled android wear, its platform for wearables. other headlines we're going to keep an eye out for, these reports of a new set-top box. that would be google competing with apple and amazon to gain more control over your living room. as well as, carl, any more information we get about google's alliance with automakers bringing android into your car. analysts also think you could see google try and counter apple's recent announcements of health products and home automation. that keynote begins at noon eastern. i'm going to be watching, bringing you guys headlines as we get them. carl, back to you. >> josh thanks so much. josh lipton. can i turn to the google alum at the table? >> sure. google tv didn't work. so we'll try it again with another set-top box. i'm so tired of the set-top boxes. every week on the show someone is doing a new piece of hardware

to connect to the tv. the watch is exciting. they're going head to head with apple which should have their watch by september. also exciting the phone to computer connectivity. >> tv just got less exciting with this aereo decision. if it had gone the other way you best bet everyone would be rushing into this trying to build something extra on top of this over-the-top series that they're already at now. it's just sort of a defensive defend your ecosystem play. >> we don't even have data an chromecast yet. they said in march they had users in the millions they expanded internationally but we still don't know how many people have that and are using it. >> i think the tv is not a great battleground. i talk to a lot of other publishers and people who do web video that are into connected tv and they tell me connected tv is meaningful. it's not something i've seen as a big playground but a lot of people think it is. >> how much is google -- >> i think there's more meaningful stuff. i think android and the watch is what everyone's excited about. these are practical things we're going to see in months. >> josh will be there. we'll get back to him a little later with more on that.

next up yahoo! having a big meeting today. that's its annual shareholder meeting which started just a few minutes ago. ceo marissa meyer in the news unfortunately. she's publicly apologizing for being two hours late to that dinner with advertisers last week in the south of france. mayer saying "i think the dinner is unfortunate. how much attention it's gotten. i was late. i apoll jooapologized to ipg ate time and in no way meant for it to be slight a. slight to them." >> the meeting just got under way. they're taking care of some housekeeping. in a couple of minutes we expect to hear how shareholders voted on re-electing the boofrd directors and electing a couple of new directors, approving the company's executive compensation and also a restatement of the company's stock plan plan to increase the number of shares available for grant. some of the proposals that are up for vote from shareholders are about creating a committee to oversee yahoo!'s responses to human rights. the second one proposes an annual report on yahoo!'s lobbying. another one proposes a report on

yahoo!'s human rights issues. this meeting comes on the heels of criticism of mayer's performance in cannes and how she faces increasing pressure to turn around yahoo!'s advertising business. yahoo! has been losing market share to google and facebook. and mayer opted to take on more responsibility for advertising when she fired her chief operating officer enrique del castro in january. since then she's launched new digital magazines on topics from beauty to technology in hopes of luring more readers and advertisers. i'll continue to monitor the meeting, which is under way right now. carl? >> a lot of good information. the question, jon, is whether all of that good information is being undermined by something we probably shouldn't be talking about. again, for a second day. >> yeah-i think we should be talking about it. >> you do. >> i pro wro a piece on linkedin, got a lot of flak from readers, why is this even important? these are yahoo!'s customers at a time they need to grow revenue. marissa mayer likes to say she's internally focused p.

revenue doesn't come internally. it comes from people who are at that dinner on time. maybe she needs to get a number two. maybe she needs to get more visible executives like mark zuckerberg did who can meet with these people and have thatability. she doesn't have that now. >> the bottom line is if someone's offended enough to leak the fact this happened to the "wall street journal" they're offended. bottom line. >> that's a good point. >> i don't think it's meaningful to the stock and i don't think it's meaningful to revenue in the immediate situation because let me walk you through this. four holding companies ipg -- within ipg which is the meeting she didn't go to. the agencies compete against each other. conceivably one of those people from those agencies could have been offended but more or less these agencies are still going to buy with her the brand teams are still going to place advertising. tts it will not affect revenue on a quarterly basis. >> but you were telling me about the culture of this particular conference. everybody's in a very small space, they're all trying to get attention. >> yes. >> parties are trying to one-up each other. this was not the place to do this. >> these are the four companies that all of the publishers and

all the technology vendors are there to interact with it and getting a big holding company dinner is something everybody wants to be able to do. absolutely. >> all right, guys, we'll leave it there for now. we want to get a check on the markets. yahoo! is down slightly as that meeting gets under way. the broader market has turned around after opening into the red on news of a weaker than expected durable goods number. really dismal first quarter gdp number. you're seeing the dow up 60 points. the s&p up by just about seven points. nasdaq up just about 14 points as investors are hoping that second quarter bounce will actually be seen in the growth number. of course that economy contracting by 2.9% in the first quarter. shares of barnes & noble also rallyi rallying. the company announcing it intends to split its nook business from its retail operations. that separation expected to be completed by the end of the first quarter in 2015. the stock up 7%, but i'm told by investors short interest was at 20% just a couple days ago. so that could also be a very quick short cover. finally, shares of valero energy sinking after the obama administration granting

permission to two energy companies to export an ultralight type of crude oil. investors thinking that's not necessarily good for valero's business, and that stock, carl, down 9%. >> all right. when we come back, one day ahead of the nba draft everyone's still talking about lebron after the heat star opted out of his contract. is he really heading somewhere else? we'll ask one of the top agents in the world, drew rosenhaus. plus, is amazon's dream of delivery by drone over before it even starts? we'll break down a major new ruling from the faa. and google glass getting a little style. the maker of the new diane von furstenberg line of google glass joins us later this hour. you're watching "squawk alley." the fact is, it comes standard with an engine that's been called the benchmark of its class. really, guys, i thought... it also has more rear legroom than other midsize sedans. and the volkswagen passat has a lower starting price than... much better. vo: hurry in and lease the 2014

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it has been a shock to the sports world. miami heat star lebron james opting out of his contract to become a free agent. now, this doesn't necessarily mean he's leaving miami. he could re-sign for less or the team can afford another star player. or he could be taking his talents somewhere else once again. joining us this morning, super agent drew rosenhaus. the ceo of rosenhaus sports representation. he joins us this morning from miami. drew, it's great to have you back. good morning. >> good morning. good to be with you. >> pat riley says stay together if you've got the guts. is lebron going to do that? >> my instinct is that he will. i think he's going to stay in miami. not just because i'm based here in miami and i'm a heat fan but i really think that he's got something special going here. the heat have had really an

amazing run. and they've got a great nucleus and they came so close this year and they're the favorites next year if they stay together. i understand why he opted out of his contract. as an agent you want as many options available to you as possible. and people are talking about him. and now he's got a lot of different options. he's got different things that he can do. but ultimately i think it's all going to come together where miami's the most attractive place for him to stay. he came here for a reason. to win championships. to live here. he's bringing his talents to south beach. why leave now? he's got all those elements together. unless somebody can put together a more attractive situation, which i don't think is possible. i expect him to be back with the heat next year. >> i think lebron makes something like 2/3 of his take-home per year outside of actually playing basketball in endorsements. so what's more valuable for his

brand, being seen as a mercenary and going somewhere else where he might win more or staying there and kind of being seen as a miami guy who's loyal now? >> he's absolutely one of the most marketable athletes in the world. and of course his income from marketing is greater than what he makes on the basketball court. so that should be a factor. and i do think that staying in miami will help him. i think taking his talents someplace else, the decision part two, all of that is fine and ultimately if he stays in miami i think that's going to be the best for his marketability. but what really will help him make money off the field is continuing to play great and winning championships. so ultimately if he feels like he's got a better chance to win a championship or to play better elsewhere, in the long run that's going to be better for his marketing than just staying somebody so it looks like he's not a mercenary. i think he's exploring all of his options and at the end of

the day he's going to find that miami's the best place for him both on the court and off the court, for winning a championship and marketing dollars. >> drew, it's no surprise he's disappointed with the way the heat played in the playoffs. but this idea that he could potentially re-sign with the heat for less so the team could afford another all-star player to potentially have them do better next year, it sounds counterintuitive. why would any player do this? >> well, because he makes so much money off the field. he's one of the most marketable players in the world. so he could -- yes, he can afford to take less as a basketball player to have a better team and win and make even more money off the field. it makes sense to me. there's no question. he's unprecedented right now in the nba marketingwise. >> yeah. some size the finals really showed wade to be a fading player. do you envision a scenario in

which bosh and/or wade elect to take less money so they can keep both lebron and maybe some new talent? >> sure. i could see that. they all came to miami for a reason. they all wanted to win. and they've done nthat. what they accomplished this year was amazing. even though they didn't win the championship. but they've accomplished their goals. they've won two championships. that's remarkable. and nearly another. so at the end of the day there's no doubt in my mind that they are going to talk about how they can get back to being the best team in the nba and dethrone the spurs. >> well, we'll see what all those people in cleveland who'd love to have both lebron and manziel in one year, but we'll see how it plays out. drew, always good to have you. we'll see you soon. >> my pleasure. >> drew rosenhaus talk lebron today. when we come back, gopro's ipo

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welcome back to "squawk alley." we have the markets marching upward. the vix still near all-time lows. great market for ipos. and gopro is the one that's going to test those waters after market close today. it's going to price its ipo 17.8 million shares in a price range of 21 to $24 a share. that means that the high end of that range it could raise upwards of $400 million. valuing the company about $4 billion, that's roughly four times last year's annual sales. so that wouldn't seem like it would be too risky. and of course there will be traditional book runners underwriting this deal, but one thing that will be interesting, guys, is this company's actually doing a tiny slice of that $17.8 million deal via loyal3. this is a direct to consumer platform that does not charge you as long as you have $100 minimum to buy these shares. so a little bit more than $250,000 will be offered on

loyal3. there aren't a lot of data points to tell us exactly how these deals perform when they do price shares on loyal3. we had san tand rhys's consumer unit do that earlier this year as well as amc entertainment. both those deals we should note are up since their debut. but those are the only two we've had in recent memory. so it's unclear whether this is actually a trend we can point to. now, nick woodman, the founder and ceo of gopro, has said he wants this to be a friends and family deal. often-time that means friends and family of the banks and the underwriters. but he's trying to put at least a tiny portion of this out to the public directly. it will be interesting to see what the demand is on loyal3 and what the demand is after the bell when we see that book close. so we'll hope to have the pricing live here on cnbc when that happens. >> people paying some attention to q1 revenue, down year over year. >> but that's mostly because they're trying to branch out into some other areas. you're seeing costs go up as well as they're trying to market

their content in addition to their hardware. it's definitely a company in transsxigs that's one thing the critics have highlighted. >> they said they had a delay the prior year which pushed more of the christmas units into q1 which made last year's q1 higher than this year's q1. and i haven't heard a lot of discussion on that so it seems like most people are buying that explanation. and q4 is so seasonally hot for them i guess it makes sense. >> of course the underwriters will tell you this deal is already oversubscribed. >> i'm sure. >> they always tell you -- >> yeah, but this one's going to be -- >> we will see where that price is after the bell today. meanwhile, european markets are set to close in a few minutes. for that we turn as always to simon hobbs. >> hey, kayla. on n. stark contrast to what you see not this side of the atlantic there's a deep red in europe. the fourth day or fourth session in negative territory. the market seems to be increasingly concerned about what is happening in iraq. you'll be aware that the prime minister of iraq has effectively said no to a unity government today, as u.s. monitors arrive and there's the possibility of course of air strikes in iraq. i mean, it's profit taking. of course on a rally that's taken us up so strongly.

the banks are very active today. actually in both directions. a lot of the oil majors are in negative territory. the oil engineers are in negative territory. as far as the banks are concerned, the second largest in portugal today launched a heavily discounted $3.3 billion rights issue. the stock actually higher on, that up 14% as you can see. and france has been -- the french government has been freeing up cash to buy that s k stake in alston. they did the deal with suez. at the bottom end of what people are bpexpecting. the most interesting story toyed is that abu dhabi continues to buy major stakes in airlines. it's bought a 49% stake in alitalia, which is in its second round of bankruptcy. we think probably for about 3/4 of a billion dollars. basically, mohammed bin zayed, the crown prince of abu dhabi, has been buying up air berlin,

aer lingus, serbia, small stakes to try to force a lot of these international carriers to transport people via abu dhabi, the united arab emirates, as they seek that to be a major hub, a major way for them to reinvent the countries as a transport hub around the world. so that deal going down. of course air france was the original deal for alitalia, but that fell by the wayside. >> thank you so much, simon. simon hobbs this morning. when we come back, is a future with drone delivery already dead? some details on the latest move by the faa. we're still following the supreme court's decision that aereo has violated broadcasters' copyrights. more on what that means for you when "squawk alley" comes right back. i spent my entire childhood seeing the world in reverse, and i loved every minute of it.

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the market action today certainly belying the downward revision of the q1 gdp down 29. the premarket was relatively ugly. but no major losses at the open and we're currently 48 points to the up side. s&p up 5 after a tough day yesterday. the economy contracted 2.9% in the first quarter. bob pisani can talk about exactly why we saw that big drop in gdp. >> health care spending. that's the problem. this was really a shocker. you always get revisions all the time. that's no surprise. but it's the magnitude. let me show you the three reads we had. you can see the big declines we had. this was the final read we had on the gdp for the first quarter.

down 2.9%. but take a look at the second read we had was down 1%. and the first read that was back in april was up 0.1%. this is a huge revision, much bigger than normal, and generally it's due to the weaker pace of health care spending. there was apparently an overestimation of how much the aca might cost, the affordable care act might cost, but it was a little broader than that. there was also weakness in trade, weakness in housing. so health care i think was the largest component, but it wasn't just that. we're going to see some downward revisions in 2015 gdp. of course the consensus is let's just ignore it, it's backward-looking. well, i don't think that's a very healthy way to look at things. so right now a couple days ago the consensus for 2015 gdp might be up 2.2%. look what happened to barclays today. they had it at 1.9%. they now have it at 1.6%. so it costs 30 basis points, that 2015 -- that q1 lousy number that we had. i don't think that's irrelevant at all. i think we were much weaker than anticipated. and i think trade and housing

definitely figured into that. looking at the stock market, of course they argue it's backward looking. we did see a small drop. look at the s&p futures there at 8.30. futures did drop. once the market opened we immediately moved to the up side here. you would think that a notable health care spending growth revised downward would hurt health care stocks. but if you look, some of the health care groups, some of the hospitals, tenet and universal, those are hospitals, down a little bit here but not dramatically. wellcare and humana, those are in the medicaid, medicaid area. sort on the mixed side. i think the reason we're not seeing big moves down in health care is the consensus is spending going to increase. there was a stud yoit yesterday i think it was price waterhouse, that said spending might increase 6%. walgreen's yesterday as well came out yesterday and said prescriptions filtd had been increasing. they declined yesterday because of some separate issues. but guys, i think the bottom line is overall the feeling is health care spending despite what happened in the first quarter is going to increase

notably this year. that's why we're not seeing big drops in health care. back to you. >> all right, bob, a lot to work with today. thanks for bringing that all to us this morning. the big news, of course, the supreme court ruling that tv startup aereo does violate copyright laws by providing subscribers with broadcast content over the internet. here's aereo ceo chet kanojia on cnbc last week. >> the ethos, or the foundation of the company was to create a parallel system that is a fair, that is a consumer-centric system, that is based on the internet model. if we don't succeed in doing that, then we don't succeed in doing that. but you know, we didn't start this to figure out some clever way of making money. >> for the highlights of that decision let's get to hampton pearson outside the supreme court. >> aereo certainly did not succeed with the 6-3 court majority that ruled in favorite broadcasters. specifically, this was a decision in two parts.

number one, very focused on aereo and whether or not the justices thought its technology infringed on broadcasters' copyrights. an overwhelming yes. a portion of justice stephen breyer's majority opinion reads in part, quoting now, "the aereo system is for all practical purposes identical to a cable system. both use their own equipment. both receive broadcast television programs. many of which are copyrighted. both enable subscribers to watch those programs virtually as they're being broadcast." so the court majority was not buying aereo's technology. now, remember, during the course of the argument it almost got to a point where if there was going to be any kind of a hail mary, if you will, for aereo it would be whether or not the justices took on the question of what a ruling might mean for the future of the cloud and cloud-based technologies. well, again, the court in very plain english in the opinion basically says that decision will wait another day. another set of cases that are

clearly presented around cloud-related copyright and/or digital storage issues, if you will. back to you. >> hampton, thank you so much. hampton pearson outside the court for us today. meantime, so much for amazon's much talked about delivery drones. looks like they're grounded, at least for now. in a memo released by the faa this week the agency said the delivery drones used for business purposes are banned until further notice. joining us former acting fa administrate bobby sturnlg'll. now senior vice president of rockwell collins. good morning to you. >> good morning, carl. >> there's been some conflicting information. one update from the faa says in fact the rules only address hob yifts and recreational flyers. who's right? >> well, look, i don't think amazon expected to be flying commercial drones tomorrow. but what they did do is open everybody's eyes up to the possibilities of this technology in this part of the industry. it's going to be a great economic contributor to the u.s. economy. and the faster we get these

regulations in place the better for everybody. i think the faa is really trying to just at this time clarify its rules, put everybody on hold and then move forward from here without kind of being overrun by all the folks that want to do things like photography, pipeline monitoring, search and rescue, and all those other types of operations that this technology will permit. >> it seems like the theme of the day is government regulators or courts running up against technology that's trying to advance really quickly. what do you think are the key things that are going to have to get addressed with drone technology before they might feel comfortable saying yes, go ahead? >> you know, that's a key point. because a lot of these rules and a lot of the government regulations go back many, many years. you know, the faa, more than 50 years old. a lot of these rules go way, way back in time. and they're really not set up to contemplate this type of technology. so the faa and other government

agencies really need to exercise some flexibility and take a hard look at what's out there today and how they can fit into the regulatory framework. companies -- >> i'm sorry, bobby. as a frequent drone pilot myself, i've had numerous -- >> pilot is a nice word. >> i've had numerous problems and accidents with my drone. no one's been harmed. what is the balance between this actually being something where you look up in the sky five years from now and there are packages whizzing by and actually protecting people and actually kind of monitoring safety? because these things will inevitably fall out of the sky. is it just like accidents with cars basically, something we have to adjust to? >> so it's a safety risk management system. you know, for the air transport, for the large drones it will go up. companies like rockwell collins, northrop grumman and others are developing data links, flight management systems that are all going to be certified and very capable and very safe. equivalent to the level of safety we have in the operations today. for the folks that are down

flying at very low altitudes, the model aircraft, the low flyers, below 400 feet or so, you know, the risk -- the safety risk is not that great. so there are areas where the agencies can be flexible and permit those types of operations to move forward. so the guy doing the cropdusting or the crop monitoring out in the middle of iowa with nobody around him at low altitude, you know, we've got to find ways to permit those types of operations to start to occur. >> so bobby, the faa says it will have new rules in place by the beginning of 2015. do you think it can write those as flexible as you say they will be in that amount of time without seeing how some of this technology can work? >> i don't think we're going to get there in 2015 with the large unmanned aircraft that are operating at higher altitudes. i do think we could pretty easily get there for these low-altitude operations, whether it be for crop monitoring, whether it be for pipeline monitoring, whether it be for

arctic wildlife monitoring. you know, these things at low altitude and away from populated areas don't pose the safety risk that other types of operations do. so if we can get those going forward, we can learn a lot from those types of activities and then slowly work up into the higher altitudes. >> bobby thanks for the insight on that. it's going to be fun to watch. bobby sturgell joining us this morning talking about that faa ruling. >> thank you. speaking of amazon, david faber's documentary "amazon rising" premieres this sunday night beginning at 9:00 p.m. eastern time right here on cnbc. when we come back, a big question for google. how do you make people want to wear google glass? the answer for now, make it a little bit more stylish. the maker of the diane von furstenberg line of glass is coming up in a few minutes. but first, rick santelli, what are you watching today? >> what everybody's watching. the ongoing disparity between a stock market that digested a down 2.9% gdp a whole lot better

than the treasury complex with yields down to 3 1/2-week lows. so we're going to do a little bit of gdp forensics after the break. ♪ time and sales data. split-second stats. ♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade. but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year.

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the halftime report lots of news in the energy space causing stocks to stumble after a strong run-up. so what's the real story and how do you trade it? plus the google developers conference just moments away. we'll go there live bring you all the big reveals. and steve nash in the house. do you know this nba star is a soccer super fan and player? we're talking all things sports when he joins us live. it's all astraight ahead on the halftime report here from the new york stock exchange. carl, over to you. >> all right, melissa, thanks a lot. let's get over to the cme group this morning. rick santelli with the santelli exchange. hey, rick. >> hi, carl. the battle rages on. which market's right? which market's wrong? what does the stock market see or pay attention to that the bond market doesn't seem to? and for many that argument not too long ago had a couple of alternate kind of roads it was taking. first of all, one reason was that the treasury complex really isn't handicapping weakness in the u.s. economy slash or weakness in the global economy because i still think it's impossible to separate whether you're talking about higher

prices, lower prices, disinflation, deflation, inflation, credit availability he. i think the world's all tied in together. there's just some lags before the messages get sent from one economy to the other. but in the end it was blamed on geopolitics. it was blamed on weather. let's take the weather issue. now, one of the guests -- and we have so many sharp guests. talked about basically the first quarter's roughly 90 days. and if you have, you know, two to three days where everything's completely under snow, although if you look at how many states out of the 50 really had snow, that diminishes the argument as well. but that that would acknowledge then that 2.9% could be based on these days. but that doesn't hold water. listen, we get a lot of snow in chicago. and if you can't buy it on tuesday, maybe you buy it on thursday. there are services that do better with snow. if you order something on

amazon.com and they can't deliver on tuesday because of the snow, maybe on the fourth day you get it. but in the end that isn't explaining it either. and why does it need any explanation at all? the man of the day in my opinion today is simon hobbs because he's been pushing back. let's remember, exogenous forces are a fundamental of the u.s. economy. and maybe who doesn't believe that, look at all the past recessio recessions, and many of them are based on exogenous influences. think about the '70s. it was the oil shock. so even if weather did play a part, we know it did, it's just debatable how much of a part, whether you're the federal reserve or you're an economist, these are the fundamentals that you have to put together to accurately try to handicap the economy today, tomorrow, and the next day. and one other point we want to make. the other issue is hey, stocks are pricing on earnings and profitability but that isn't necessarily true as well because last year we were up over 30% and believe me, earnings were only a fraction of that number. back to you.

>> great point, rick. rick santelli in chicago. rick, thanks. google of course partnering with famous designer diane von furstenberg to help make google glass a little more stylish. up next, the company that's physically bringing that vision to life. dow's up 35. watching. waiting. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours.

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close a deal. hire an intern. and still have time to spare. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business. built for business. google is trying to attract young buyers for their glass products so it partnered with diane von furstenberg, premiere fashion designer to sell limited edition glasses. joining us on set is the ceo of

marshan eyewear. we've been talking about this ever since we heard of glass as even a notion. how will you make them cool to wear? what does it mean to have this deal with von furstenberg? >> what happened, von furstenberg is a very well known designer, she has a particular way of looking at colors, designs. google has a device that is very technical in nature. we as a company were manufacturers, marchon is a manufacturer of eyewear. we have a license with diane that goes back many, many years. we design products for many other famous brands like nike, calvin klein. we developed basically the design that goes with the device that fits the overall style that diane von furstenberg wants. >> is the point to minimize how the technology presents itself? you have some --

>> yes. >> -- samples right here. >> there are a few things. one you can minimize it. another is it makes it more wearable, it becomes a product that is not as intrusive from a standpoint of view. >> these roll out on monday on an upscale fashion website. i'm wondering if you have preliminary sales numbers. how did they do? >> these are sold by google. we manufacture the products for them. we also supply them -- marchon is part of vsp, vision service plan. we also supply the training to the doctors. we have over 30,000 doctors in america that are now being trained for the fitting of the product for the prescription of the lenses that goes with the product. because obviously if you need a prescription it has to go with the proper lenses, with the proper manufacturing. so as of now we are receiving a very high demand by our doctors

for training, because the pressure from the market is coming to us. it is a little early to say, only two days we're out in the market. >> you're the largest manufacturer of eyeglasses. >> yes. >> in the world, correct? >> yes. >> this is a major channel opportunity for google. can you roll this out to the other brands as well? do you have the relationship with google to do that or is it via von furstenberg. >> von furstenberg is a long-lasting relationship with google. through that they brought us into this. while we also have a long lasting relationship with google. the future we think this is going to be expanding on many other brands and many other opportunities. we own, for instance, dragon, which is one of the largest manufacturers of googles in the world, ski goggles. in that area, this is an interesting product. it allows you to read the terrain, send information, receive information, even monitor your health while you do

that, heartbeat and so forth. it's a cool product. >> do you wear google glass out and about. >> yes. >> what color and under what circumstances? >> i have several colors. thank god i can afford to do that. generally speaking i wear brilliant colors. i have here a yellow one. >> hello. >> yes. >> i am in the fashion industry. i have to do that. i have to tell you, in certain circumstances this product really gives you a leg up in getting your information quicker and faster. remember also that it also has a microphone built in that allows you to hear. as you're wearing a piece that goes into your ear, this one actually doesn't need a piece to go into your ear. it reads your voice and transmits your voice through the bone that's behind your ear. you don't have to have anything going inside your ear. it's an interesting device to wear and use in many occasions. >> the price point will have to come down over time, right? >> the device by itself is pricey today. obviously it's part of the marketing of google. they frame the sun glass by

itself is not that expensive, but if you look at the one you're wearing it's pretty cool and wearable. i think in the near future -- >> kayla does not agree. >> i'm looking at steinberg with the cat eyes. i'm not sure that's your style. >> these are nicer than the v1. carl, you look dashing in those. >> please come back and tell us how it's doing over time. >> yes, thank you very much. >> thanks for a great hour as always. when we come back, marissa meyer wrapping up the yahoo! annual shareholder meeting. we'll get some details in just a minute. and if i tap my geico app here i can pay my bill. tap it here, digital insurance id card. and tap it here, boom, roadside assistance. on'tday ooklay, it's axwellmay. the igpay? otallytay. take an icturepay! onephay, onephay!

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vo: hurry in and lease the 2014 passat s for $199 a month. visit vwdealer.com today. all of yahoo!'s proposals, include nominees for the board, including former walmart ceo lee scott were approved. ceo marissa mayer took the stage to give updates on the km. she said the company's mission to make daily habits inspiring and entertaining. she's focused on returning yahoo! to growth. she kicked it off by talking about how many applications yahoo! has received, more than ever before. more than 100 applications for every hire. she also went into some detail

on how they're investing in terms of their hiring and content. then they did a demo of a new app called aviate that is designed to sort take over user's home screen on android devices. back over to you. >> julia, we'll see if that leeds to more share down the road. great hour. david faber by the way is going to have les moonves coming up in the next hour. welcome to the "halftime report." here is today's game plan, the incredible shrinking economy. first quarter gdp plunges the most in five years. is it a game changer for your portfolio or nothing more than stale data? google mania, he are expecting tons of announcements. will there be a watch for android or cars? we'll bring you the headlines, live. he's a two-time nba mvp. but the l.a. lakers steve nash isn't only here to talk hoops. he's actually talking soccer. his take on the bite heard round the world cup. his cri