up more than 6.5%. double the ipo price. more than double it right now. and we are heading for our 27th record close in the s&p 500 of 2014. >> all right, sarah, thanks very much. that will do it for this edition of power lunch. "street signs" begins right now. >> just over three hours now until the exclusive interview with president obama what do you want to hear? let us know. a look at that big interview, plus another missing plane. this time in africa. we'll give you the very latest. plus, another embarrassing software fail in the federal government. that might be costing you $400

million. bad luck comes in threes, well, so does good luck. it's the second consecutive week of gains for the s&p. it probably wouldn't be a huge deal, but that really hasn't happened in 2 1/2 months. now it's energy that's taken the top spot as sector leader year to date taking the crowd from tech and utilities. exxon trailing from all-time highs. electronic arts, something great we talked about yesterday. the second best performer in the stock market year to date. video games and social media. let's go now to dominic chew. what have you got? >> we're watching trulia. they're up about 10%, but they're halted. this has bloomberg is reporting that fellow real estate site zillow may be looking to acquire trulia for a valuation of as much as $2 billion.

the shares are currently halted. they're indicated to be sharply higher. again, you can see right there, zillo shares up as well. so possibly a deal for a valuation as much as $2 billion. we'll follow up with more details as the stock begins trading again. that's what's moving those shares. >> zillow has the currency. their stock is up 93% in the past 12 months, about three times that of trulia. the capital has certainly grown their market capital about $5 billion. trulia is about $1.5 billion. so bigger going for smaller. >> we have another sad airline story. what do we know?

>> we know a plane is missing and it's missing in africa. this involves an algeria airl e airlinairlin airlines plane, operated by swift air. it is missing in a part of africa, you might be familiar with this, mali, in the western central africa, 116 people onboard. the pilot asked to change path due to bad weather conditions. as soon as we learn more about this, we will certainly bring it to you. meanwhile, the faa has lifted its been a on u.s. airlines flying into tel aviv. they operate eight flights daily. a united flight will be taking off later on today. that will be the first flight there. here's the transportation secretary earlier today talking about the decision to lift this been a. >> we don't take lightly issuing it nor do we take lightly entering one. so we have information now that has given us the satisfaction we need to lift it. and that's all i have to say about it.

>> three of the four airlines here all beat the street and reported strong positive earnings for the second quarter. we also want to show you american. guys, american is doing something we haven't seen in 34 years, declaring a dividend. there you go. we haven't seen that from american since 1980. so there's the story regarding the airline industry. guys, back to you. >> all right, phil. thank you very much. >> well, now to two more frustrating stories for you from the government. first, the state department's database for travel documents apparently has crashed. but what that means is it's difficult to get a passport or visa. the social security administration went on a major plan to replace old computers. six years and $300 million later, the new system apparently still not ready. joining us now is phillip k. howard. he literal wrote the book on br government. we've had mr. howard on the show. we welcome you back to the show.

to be fair to the federal government if we can, lockheed martin was designed to make the software for social security. at what point do taxpayers realize that the federal government seems to treat money as if it's from a monopoly game. >> right. it is from a game. because they don't give anybody the freedom to actually execute the contract. there are so many rigidities in the procurement process. the specifications are laid out in advance with very little flexibility. the people who tend to get the contracts are people who are good at the red tape. not good at actually doing the i.t. >> so one study suggested that only 4% of all i.t. frogts from the federal government were successful. and 40% failed completely. >> i think it might be fair to say, though, a lot of governments around the world, with perhaps the exception of the government of singapore have had time -- you could accuse them of inefficiency and overbloatedness and spending way too much money and taking way too much time and not being able to justify it.

can we compare the u.s. government in this area, say, with other western governments. is it better, worse? we don't want to load on necessari necessarily. >> i've studied a few procurement programs. the united states is really far worse than, say, germany. it doesn't give anyone the responsibility and the flexibility to make it happen. it would be far better to simply abandon the thousands of pages of regulations, give somebody responsibility and have an oversagt body made up of industry officials. >> as you note in the book, there are 19 or so different regulatory agencies dedicated to environmental protection. there's one or two in germany and they're better at it than we are. people are actually given the ability to make a decision. and what do you think would happen if you worked for ibm and you made a $300 million mistake. >> you would get fired. immediately. >> your butt would be scratching

the sidewalk in about six seconds. >> who's going to take the blame here? >> no, no nobody is responsible. it's the rule of nobody. that's the problem. you really can't repair the system. you have to abandon it and go to a system where you locate experts with responsibility to make decisions and let them succeed or fail. but giving them the freedom to actually use their judgment and adapt it's complicated to put together an i.t. system. you can't do it in advance. you have to do it in process. >> we're talking about huge sums of money. we had people come on and people in other sources of the media say i could probably build that for about $5 million in my garage. right? give me three smart programmers and a month and we'll get it running. >> they had 55 separate vendors. none of them could possibly talk with each other and make it fit. >> phillip howard, thank you very much once again for joining us on "street signs."

>> we have a preshoe of this huge interview. >> and remember this cnbc moment? >> quite frankly, i'm exhausted. i'm exhausted of defending you, defending your administration, defending the mantle of change that i voted for. and deeply disappointed with where we are right now. >> so that was a town hall back in 2010. how does she feel now? we're going to ask her on our show. work for $175 dollars a month? yup. all five of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line anytime for 15 bucks a month. low dues... great terms... let's close. introducing at&t mobile share value plans... ...with our best-ever pricing for business.

we areless than three hours away now from stevelessman's exclusive interview with president obama. our coverage will supersede "fast money." steve is live in los angeles where he will sit down with the president. i guarantee you some of the president's folks are watching the show right now, so you can't give away too much. can you give us the basic gist as obviously our economics guy where you might be going with this thing? >> well, you know, there's a lot of things to talk with the president about economically. his views on overall growth, his views on how to get back to stronger growth that we had in this country. so those are things when i look at the record hasn't been straight economic question, but also this question that's right in front of us today which is this tax inversion story, which i know you' been following. and my understanding is the president is going to talk about this in a speech later today.

in patriotic terms but also in legislative terms. what they want to do is raise that threshold to 50% ownership to qualify to not be treated -- or foreign ownership to qualify to not be treated as a foreign entity and make corporations pay u.s. taxes. my understanding from senior white house officials is they're concerned about this thing snowballing at a precipitous erosion in the u.s. corporate tax base. so the president has taken this on. whether or not anything can happen -- and i'll tell you right away, one of the things i'm interested in is the relationship between doing this tax inversion issue and doing border reform. how might they work together. >> what kind of tone are you going to take, steve? are you going to play hardball and really make this a hard question type of sitdown interview? or is it going to be like a fire side chat? >> you know, mandy, when i was in moscow, i had a friend from austral australia. we used to play cards a lot. when i couldn't figure out what card to play, he would always say play your natural game. i'm just going to be myself

basically. i'm going to play my natural game as my australian friend told me to do. >> and hope that your natural charm will just bring out the president in the president, i'm sure. >> i'm not going to tell you what to ask. was sneak in something about infrastructure? just slide it in? >> you know, brian, with all the e-mails and suggestions i've gotten, questions right now are running about $1,500 per question. so -- >> mandy has that in our purse right now. >> infrastructure is an important question. my guess is i won't have to ask the question about infrastructure, that he's ready to talk about it, prompted or not. i'll do my guest best. >> if it doesn't come up naturally, do us a favor, thank you stevie, we're really looking forward to it. and a cnbc town hall back in september of 2010 when a lady named velma hart stepped forward

and said this -- >> i'm exhausted defending you, the mantle of change i voted for. and deeply disappointed with where we are right now. >> so is she still disappointed? and what does she want to hear from president obama today? let's bring in her in. velma hart, welcome back to cnbc. thank you very much for your time today. it's a simple question. are you still disappointed? >> i think i've already answered that question, but yeah. i'm disappointed. the economy needs to rebound, needs desperately to rebounders as a matter of fact. >> what would you ask the president if you had a chance like steve to sit down with him? >> i gave it a lot of thought. first offal awe, i think it's an important question. i think one of your previous spokepersons said there's no better time to be talking to the president than this particular week with w so many things

coming to alignment all at the same time. i would ask him about the economy. it's always always been -- the entire administration has been about the economy. how are you going to help people get to the place they need to get to? how are we going to advance the economy? how are we going to make sure our children are educated. the second issue, the dragging resource on the economy here and helping other countries and helping assist in other areas. we certainly see the value, but we wonder how that can realistically be done. the other issue for us is immigration. we're wondering about immigration, not because we don't see the value of helping children, but we wonder when, how, what resources will be attached to that. and then for me personally, the thurgood marshall college fund, it's all about education. this president promised that he was going to be focused on educati education. and education has suffered during his administration. and quite frankly, that's not the president, that's not the h

ill. that's more the department of education that has adversely affected it. the elimination of summer pell grant. those things have magnificent impact. >> they really do. velma hart, it was a pleasure to get you back on cnbc. thank you very much for coming on. have a great day. we'll talk to you soon. >> joining us now, former pennsylvania governor ed rendell, former white house deputy secretary, tony, you and i were circling various airports at the same time last night which goes to sort of the governor's point, too. we'll talk about infrastructure a bit here. we've all suffered through it. and we don't know what steve is going to ask. we got our plug in for infrastructure. do you think he will? and more importantly, do you believe that the president truly with this little time left in his administration has any real power to influence massive and significant policy decisions such as perhaps an

infrastructure bank? >> i think an infrastructure bank is doable. i don't think it's a massive step. i think it's an important first step. >> i think it goes to the republican mantra of getting the private sector involved and rebuilding our infrastructure. that's very achievablchievable. the big question is going to be on the transportation bill, we can't kick the can down the road too much further. we just did that. sometime in december or january they're going to have to have a real bill. does the president have the leadership to bring both sides together and fashion something. look, the president's proposal, $310 billion in the next four years, that's a good, significant step. how do we pay for it? well, that's tax reform. it's the question you asked, brian. tax reform could lower the rate and pay for some of these things. you know in 1980, we had $600 billion in tax expenditures. today we have $1.4 trillion of tax expenditures a year.

that means $1.4 trillion that doesn't go into the treasury. let's give some of that back to the working for america. >> indeed. tony, what would you ask the president? >> look, i really would love to see ways we could talk about growth. both velma and governor rendell touched on a few of those with obviously infrastructure and ways that we could, you know, really redo the tax code in ways that are pro growth. those are huge priorities. the problem isn't really inversion. the problem is we have companies really looking to escape the country to get out from under this burden. and that's unhealthy. we need to fix the real problem, which is the tack code. i would love to see him talk about where we can get my trade. another pro growth area we need to get to. we need to get these trade deals done so we can start, you know, exporting to more markets and getting the benefits of trade in both directions. it would be a huge boost for growth and eventually the trade agreement with europe as well. >> you know, listen, tony,

you're spot on act the tax inversions. fortune magazine's cover said unpatriotic. many people might away that is the case. but that can also be used, unfortunately, as a boogie man by congress for other problems. could it snot yes, these are big deals. these companies will still pay taxes in the united states. i don't like the process, by the way, but we just talked about $300 million possibly going down the strain on a social security program that's not working. we've got to make sure we look at the forest for the trees. >> i agree. look, i don't really like the process either and i understand the emotion behind this also, but we need to recognize what the root cause is. we are burdening our international active corporations with really inefficient regulations and inefficient tax codes. and especially the inefficient tax code that does not let them operate on the same footing as other internationally active local corporations.

we need to fix that. >> we do indeed. very quickly, governor, what would you ask the president? >> well, i would ask the president, does the international storm that's about us is that going to hurt his ability to get the economy done? i think the answer should be no. we can do both at the same time. good lord. abraham lincoln saw the building of the transatlantic railway in the middle of the civil war. >> ed and tony, thank you very much for joining us. and just once again to remind everyone, steve leesman's exclusive interview with the president. that is today. cnbc obviously. 5:00 p.m. eastern. make sure you tune in. it is the busiest day so far of the early season with 50 s&p 500 companies reporting alone. >> and caffeine king is roasting dunkin' donuts over its dismal quarter. also a facebook twitter debate.

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get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us. >> it is time for "the earning squad." a big jump due to tech and

health care. will the momentum keep up? pandora, amazon and the biggest hazardous waste company in the country. herb is handling that. here's the scorecard, 41% of the s&p 500 have reported. 68% beat their eps targets. 11% have met estimates. 2 1% of earnings have kwom in below forecast. kick it off here with pandora. we should just first put it out on the table that this is a lousy trade after earnings for the past five quarters .it has traded well regardless of the results and out of the past 12 publicly traded quarters, eight times it's traded lower as well. >> so the odds are maybe -- >> expectations on the street, though, are high. local ad growth is going to be key. it's estimated 2/3 of the total u.s. ad market is local. so people are going to be looking at that. and also car integrations. because a lot of cars out there, new ones but you are skeptical

as you are always. >> what i will point out is that, of course, sanza, which has a very interesting algorithm, the ceo, the founder has been on "street signs" a number of times, acquired by google. that will be an interesting level of competition. when i watch the stock rise, all i can think is people are thinking who's going to buy pandora at this point. >> this is the herb greenberg personal data point. herb prefers sanza so thinks pandora is in trouble. i'm just stating. i report, you can do whatever you want with it. >> you be the judge, right? >> you be the judge. we're also looking act listener hours. >> absolutely. upon dor a, this is a highly competitive space. but what should give in fact tors a little bit of comfort, all the big guys who have tried to get in hasn't made that much of a success. >> look for 15 to 15.2 billion

listener a hours for pandora. amazon. >> another company that doesn't trade quite as volatilely as amazon. it's up or down by about 7%, 7.5% after earnings. now, with amazon, this is a company that's notorious for not being all that transparent with all parts of their business. they don't break out a lot of the unit sales for certain products or the unit divisions and what not. but you've got to figure they're going to make some commentary on the prime subscriber and membership program. and we know that wall street has been rewarding technology companies, specifically software, but tech companies overall that can demonstrate they can transition to a subscription based model. if amazon has anything positive to say about the growth strengths in prime, that might be big>> it's down 10% year to date. it was washed up in the downturn that are not profitable, which

is going to be key. >> this is a company that people cut so many slack for years. >> for a long time. >> and now it's less so. by the way, if prime doesn't deliver, neither will the stock. >> why are we paying attention to this one, herb? >> it's now gone from a yellow flag to a red flag for my sup skripgs reality check for an interesting company. $9 billion market cap. the biggest hazardous waste company within the past quarter -- an environmental waste company. that's getting them out of their kor competency. does this suggest that their business, their core business they' got as much out of it as they can? by the way, the environmental, they' got a clean harbors competition over there. so you've got to keep watching this. what will the organic growth be for their core business? >> not on my radar. >> now it is. brian, over to you. >> thank you very much.

all right, coming up, a tech stock that's getting hit today. maybe going even lower. the name and who's saying that coming up. >> plus, brian it has been the word on our show. these popular ads just ahead. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ [ radio chatter ] ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris

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>> verizon is not moving that much. >> not terrible. fbr says ver rye i don't know sees continued momentum in both wireless and a moderating decline in the wireline business. i guess fewer people are cutting their lines at home. target is $57. stocks are $51 and a quarter. you can do the math there. >> let's move on. we've got health net is our second stop. upgrade to underperform. that's not right. >> no, try jut perform. >> yeah, must be. it's an upgrade. if it's an upgrade to underperform, you ear dead. you went from dead to zombie. they like the margin story meerp

the target was placed at 59. that's about 30% above the current trading price. the company stock has increased 35% in the past month. help that is alive, alive! according to them. >> moreso zombies coming yo you are way. >> that was a good save. the zombie tease for the scary baby dudes that are coming on. >> that's more the mummy than the zombie. they're totally different. let's talk pepsi. little pop. >> pepsi is entering a period of positive earnings revisions. easy for him to say. the target on pepsi set at $106. the stock is at $91.90. so a lot of upside in pep. >> and this next stock is the one that we teased before the break. if you were listening, qualcomm, you might have guessed it. >> the backup earnings, the market didn't like qualcomm earnings. the stock down 6.5% right now. you do have firms coming out and

defending qualcomm. they slapped a $100 price target on the name. putting a $74 target on the stock. that's about a 3.5% drop from where the stock is already. about a 10% drop from where qualcomm was this morning. >> and cabalo growers. only just squeak into our allowed market cap. we're very stringent here on cnbc. but it is an international consumer goods and farms product company. >> what i love about this last one we always do is that you learn new names. names i literally never heard of. they've been around since 1924. i think they're the largest or second largest avocado producener the united states. so really if you're getting avocado, it might be from calabo. that's hair marketing. anyway, just over our market cap requirement. lake street, if you're wondering who they are, they are a boutique research firm out of the minneapolis, minnesota.

from street talk to "talking numbers." and shares of the world east largest retailer down a little bit today after the company announced bill simon will be stepping down in 2.5 weeks, just six months ago. simon was considered a top contender to be ceo of that company, which you probably guessed is walmart. let's talk numbers here. let's get to the stock and take a look at it from a technical and fundamental look if we can. how was wmt look? >> it doesn't look good. this stock has been a real disappointment. you're trailing the s&p 500 by 20% over the last 12 months. and 10% on a yore to date basis. that's not good on a bull market. the key feature here, brian, is how not good the performance has been. you see that wedge pattern. it's neutral at best. we continue to struggle with resistance at the 77 level. as we cling to the 50-day moving

average. but brian, the chart you really want to focus on is that longer term weekly. when you bring that up, you see that 100-week moving average. that provided support. we held that level since 2011. that comes in around $75. any break below $75 and walmart is going much, much lower and the recent underperformance is telling us that's exactly where the stock wants to go. >> do you think it will continue from a fundamental basis, andrew? >> i do. we don't like it at all. we would consider it a bad house in a bad neighborhood. we don't particularly like retailing. walmart on our earnings model har a sell for 20 months in a row. you know, down same-store sales for the last five quarters. the switch in strategy would basically suggest the head of back to school and the year-end holiday season, things aren't going to particularly improve. so we don't see it picking up inside.

we would be sellers still. >> okay. sounds like you're pretty much both on the same page. >> thank you for your thoughts on walmart down 3% year to date. and you can get more on the online edition of "talking numbers" on the afternoon finance. >> what did you talk about today? >> we did gold. we did the ten-year yield, and we also did time warner. >> i'll check it out. yahoo finance/cnbc/all right. >> it is the tale of two companies. dunkin' donuts blaming the weather but chipotle's doing just fine. herb greenberg has been tweeting up a storm over this. tdd#: 1-800-345-2550 there are trading opportunities tdd#: 1-800-345-2550 just waiting to be found. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 bring what inspires you tdd#: 1-800-345-2550 out there... in here. tdd#: 1-800-345-2550 out there, tdd#: 1-800-345-2550 there are stocks on the move. tdd#: 1-800-345-2550 in here, streetsmart edge has tdd#: 1-800-345-2550 chart pattern recognition tdd#: 1-800-345-2550 which shows you which ones are bullish or bearish.

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>> coffee has levelled up since january, february. >> yes, it has. and those coffee prices are likely very important to the ceo's of dunkin' brands. but he may have some other problems to worry about. the stock is down after the company's earnings.

we're going to talk more about this. guys, what are you going to go with this? there's a lot of questions. >> nigel is not one to beat around the bush a lot. i can't imagine that he was very pleased with this quarter that they had. some of their international stores were not performing as he would like. but more importantly here in the u.s., what they're blaming them on believe it or not is the weather still. as he points out onka his conference call earlier today, we had a rainy, early spring. >> so people don't drink coffee when it's raining? >> that's exactly my question. where are they going to go for their cup of coffee even if it's raining? that doesn't wash here. so we'll talk about that. and we have many things to discuss. that stock hit an all-time high of $53 back in march and it's down to $41 now. it's been suffering for the fst few months here. >> thank you very much. we're going to look forward to the earnings. >> amazon's earnings are out after the top.

>> 50 companies reporting from the s&p. take your pick. >> if the rains produce flash floods and block roads, theoretically, that could impact coffee -- >> if that was me, i would still make my way. i would swim. >> they sell coffee for the home. >> it really isn't a good excuse. i can't make coffee when it's raining. >> it's not just coffee. what it is, it's not just the weather. they also talked about the consumer. in a sense, they were talk act the quote, unquote, retail funk. they were talking about baskin robbins international in japan. but here's what's really interesting. on the al qaeda, one analyst asked a very important question. he said, you know, i'm not used to you guys talking about quarter to quarter sensitivity. the company came out and said you know what the real issue is, competition. they said everyone has competition. well, wait a second here. it's that we're so active in the breakfast market and there's no market more competitive than the

breakfast market. then they talked about discounting. here you have a company, people paying a premium saying we've got issues with competition here's what's important about this. you take a look at all the companies in the segment. if you had a chart there, and you looked at chipotle versus all of them. chipotle going one way and the others going the other way. i tweeted this out this morning. what i tweeted out is either chipotle is cooking its books or it's just a much better operator concept than others. spend a few minutes and a few of those and you'll see the difference. and that's what this is all about. you have one company that's the dpepgs. and the others sucking wind because of competition or whatever the case may be. >> when we talk about rampant discounting of competition, mcdonald's was totally giving coffee free. literally giving it away to get people in the door. you can't compete with free.

>> you're right. and that's a loss leader. that is competition. you know what, this was a dougnut company. they had good coffee nape ear trying to expand it across the country with starbucks and everybody else. and i think that's going to be tougher. >> winchell. >> are they still around? >> yes! >> hang tight for two seconds. we've got a market flash. dom? >> i go to tim hortons. there are not that many of them. all right, let's talk about drden. shares up to session highs. up about 1.5%. starboard value run by jeffrey smith. it's trying to get a look at darden's books. starboard said it was sdeek zeking a judicial order to compel darden to provide it with data. it also said it raised its stake to 8%. previously, it was north of 6%. starboard has been prove moving to replace darden after it sold

off to golden gate capital for $2.1 billion. starboard viewed the price as undervaluing that red lobster chain, guys. back over to you. >> the ceo was on my list among the worst last year. still a lot more to go there. >> i talked to the guys a couple of months ago. they really, really hated that whole red lobster sfinoff idea. it's amazing they're still fighting given that it seems like they've lost. it basically seems like a vendetta and a feeling that's going to go on for a long, long time. so let's talk about facebook. here's what we sort of -- a lot of people don't realize on the show, when things happen, we send a lot of e-mails around to each other. and throw out ideas to each other. if facebook is killing it so much in mobile, as they appear to be. is there room for other players? are they going to own mobl and

twitter and who else will fade away. we're media, we have to promote ourselves on all the platforms. mom and pop don't. why am i yelling? >> i understand i'm biased because i'm a big user of twitter and a big user of facebook. >> take ourselves out of it. >> if twitter can convince mom and pop that they've got the news feed. i've been saying this for a long time. the news feed is there, it's everywhere you are. you can find stuff out, you can create your own. it's a time waster if you want to call it for many people. the fact of the matter is i think that will help twitter certainly. i come back to something very important here, and that is that you use twitter and facebook for two very different things. >> right, right. >> and maybe if twitter -- even if it's peaked. if you say it's peaked it's not going to go away. >> do you think it's peaked? >> if they cannot get more people to become passive users, which they do not agree with my

assessme assessment. on that. facebook is up by nearly 40%. completely different. >> facebook also has -- i have to tell you. i'm on twitter all the sometime. >> but take yourself out of it. we're in the media. that's our job is to promote ourselves. mandy, your point of view. you're a mom, two young boys. a spouse who works. you're a busy, working woman. and you're on twitter, but you don't do facebook. i don't either. i don't know if you do pintreest. don't you feel at times it becomes a job. >> it's homing if you have to check hot mail, g mail, work e-mail, linkedin, facebook, twitter. >> you just proved my point. >> i think the sur vooirs are facebook and twitter. >> we were talking about the buyback on facebook and how, you know, maybe it isn't compared to

amazon just yet because amazon is a test neigh for shopping. whereas the buy fwut ton on facebook, it might be an impulse buy. but they say having the buy button will keep you there for longer. perhaps give you more options, more things to play with. if. >> time will tell. but they've just done a very cracky job. >> every single person i know that's not in our quiz. put them all aside. every single person i know that's not in media is bored of twitter. they don't use it, they don't get it. they've got 14 followers. >> it's the haters. it's offputting. >> facebook, you broadcast to 300 friends and family members. >> don't give the haters ammunitions. >> i'm the only member in my family that uses twitter, which is really scary. >> you're also the oldest memory of your family which is doubly sca scarey. >> indeed. >> we have that market cap stat. maybe it's emblematic of

america. facebook market cap is $195 billion. they have 6,800 employees. their market capper employee is $28.6 million. walmart's market capper employee, 111,000. ibm, 450,000. just round those numbers. may mean nothing. i just got yelled at. we know that you remember this viral marketing campaign. it was terrifying and awesome. the devil baby. gee. we're going to meet the guys behind it and find out why companies are paying them a lot of money to scare the people.

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idea for sales giveaway. return a call. sign a contract. pick a tie. take a break with mr. duck. practice up for the business trip. fly to florida. win an award. 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. we may have seen these viral videos. they've racked up around 160 million views on youtube all created by the two founders of a small production company called think moto. they are the kings of viral video. there's james and that over there is michael. they are hired guns paid big, big money to score tens of millions of eyeballs. cnbc had exclusive behind h behind-the-scenes access when 20th century fox paid them to

wield a devilled baby around town to scare new yorkers. it generated wide impact for some well known publicly traded companies. >> michael and james won't reveal how of much it cost to make the video so we don't know how much they charged oakley to create the whoevhover craft go . or what popcorn, indiana paid them to design a poppernator. but they will tell us that business is booming. so let's see how much buzz and awareness they can generate for fox with this little bundle of joy and exactly how they do it with a custom built animated demon baby. . >> it's a miserable snow day in new york, but nothing is going to stop michael and james from coming out today to do the devil's work. >> we don't script things. therefore the outcome is totally a surprise and it's what gives

it the reality but it is also what gives it the danger that it might not work. >> they're hunting for viral gold, those little nuggets that will make tv producers want to put the video on their shows. >> a new york city worker was in the shot and took upon himself to push the stroller. he stripped the gears and now we have to go back to the office before the next location and replace the motor assembly. >> it is an unexpected bump in the road but the unexpected is exactly what they're looking for. after four days of shooting and ten days of editing, michael and james post the two-minute long video called "devil baby attack" to an anonymous youtube account. only the last seven seconds reveal its link to the fox film. the question is will the youtube community bite. >> we want to make sure this video is really entertaining. >> at this stage success is measured in views and they're rolling in.

it hits over 40 million views on youtube. just two days after it posts online, little lucifer lands a spot on the highly rated "today" show. all the expore shu sure on the free and in the end it was estimated to have been seen by more than 00 million people. let's bring in the guys behind think moto, the co-founders, james and michael. an absolutely absolute stunt. you're disrupting traditional advertising. it is brilliant. >> thank you. the problem right now brand have great websites, great onsiline stores but how do you drive them? >> how do you make money for the company that comes to you and says i don't want to do a traditional ad, i want something like devil baby.

>> two components. they get free earned media. we get coverage worldwide, starts online. >> on shows like this. >> and goes on great shows like this. >> suddenly you're on national television programs. who comes up with the ideas. >> we do it together. >> does fox say, hey, guys, devil's due coming out. create a devil baby. or you say we got you covered. just give us creative rein. >> we sit down and find that core idea that one idea that sticky element that people will remember and say, hey, that is awesome, i got to share it with everybody i know. >> what have you brought along for us today? >> this is a popenator for a company called popcorn, indiana. we create fantasy products that are close to reality. we are now discussing making a real product out of it. this one shoots when you say pop, finds your mouth -- >> can we try that? >> we're not going to try this today. but michael can show you the

shaving helmet. >> i just used it so it works really well. a helmet that shaves your head in 20 seconds. >> it is a shaving helmet. what he said, those are blades. you see that? those are shaving blades. >> this is completely calibrated to the exact side of your head. it is basically going to take the skin off of you. can be blood everywhere. >> that is the concept. that is the idea. >> here you go. let's give it a go. >> what's next? >> the next project we cannot tell you. we are shooting one for a major motion picture and we have one for a new product. >> okay. thank you very much. thank you so much for joining us. we look forward to seeing your next work. >> you can see the product works. >> well, for him. james and michael, thanks for joining us. watch the full version about the behind-the-scenes story of think

moto tonight on cnbc.com. we'll give a quick shout-out to a viewer that correctly guessed where i was yesterday. that's where i was. still guess, why not? tweet me or mandy. we'll give you the answer in a shout-out next. there's a gap out there. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes, if frustration and paperwork decrease... the gap begins to close.

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get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us. welcome back to street signs. imagine a world where you can hail an uber car using facebook and its mobile app. facebook and uber have held discussions on the integration

of the service into facebook's messenger app according to a new report. the company's held reprelim talks according to people briefed on the matter. nbc universal is an investor in the company and has a news partnership with it, with re/code. >> thank you for joining us here on street signs. >> take care. hi, everybody. welcome to the "closing bell." i'm kelly evans on this thursday at the new york stock exchange. >> i'm bill griffeth back here at cnbc headquarters. markets continue to trade at or near all-time highs. we're watching for a batch of very important earnings due out -- i know we say that every day, but this is a big group. >> been a big week. >> big group coming out tonight could drive the rest of the week. amazon, visa, starbucks, pandora, among those set to report just after t