that luck with ceos. we'll see. good morning, 8 o'-of-o'-:0 alto and 11:00 a.m. on the street. and "squawk alley" is live. ♪ good thursday morning. carl quintanilla is off today, but joining us for the entire hour, dennis berman, business editor at the "wall street journal." dennis good to see you today. >> good to see you. >> jon fortt you're here as always looking good and in shaum br shaumbray. >> i like to pull it out at least once a week. >> report on the information that said the company is telling potential paypal ceo candidates

a spin-off of that unit could come as soon as next year. that's pushing ebay shares up close to 5% theirs morning. remember ebay's settlement with carl icahn. icahn withdrawing his proposal to attempt to separate ebays paypal business. joining us now on the phone is the person who broke that story. jessica lessen, founder and editor-in-chief of the information. jessica, thanks for going to the phone this morning. >> thanks for having me, kayla. >> talk about this story. the information, subscription only. a lot of people haven't been able to see this. it basically says, in essence, that when ebay has been interviewing potential candidates for the role, it's been telling them to prepare for this to be a separate unit. is that correct? >> that's a little close to that. i mean, basically, in the concept of talking to candidates, this issue has come up. so, you know, ebay has, you know, indicated to people it wants to replace markets, this

is something they're considering. no idea if something they've decided to do, but thought it was interesting it came up in the context of trying to find a new leader and shows the issue is very much on the table. >> if yew the ceo, john donahoe, aren't you thinking about moving to paypal instead of sticking with ebay? running the paypal business now. do you have a sense of the possibility he might be the new leader of maypal? >> from what i hear, donahoe is asking everyone in the silicon valley who should take this role. so i don't think he has himself in mind. he's a pretty seasoned operator in what he's doing. so that would be a surprise to me. i mean, i think the story around paypal right now is, you know, the folks who are sort of proponents of the spin see a great future for it by doubling down on tech, on innovation, on growing the market. so i think they want basically the kind of leader that david

marcus was, i think, for some people there, you know, someone of the tech world who could really turbo charge this, hire the best engineers, and i think that's the kind of candidate they're looking for. >> jessica, nice to hear from you this morning. you know i think the question for paypal is, isn't it an inevitability there will be a spin-off? my gut says, maybe this year, next year, three years from now, maybe john donahoe, but, yes, will be its own company. seems inevitable. doesn't it? >> i agree. i think nrp, we talked to davis sax, coo in the early days, pre-ebay and paypal. that's the point he made. the percent of transactions on ebay that -- sorry. the percent of transactions on paypal, down from the 70s to the

20 pse 20%. he said the same thing. the question of, if not when. it's also a question of how. there are many flavors are spinoffs. there are partial 13ispirns. talked about the alibaba paypal out there. the synergy of setting up for longer term different trajectory. >> jessica in your piece you say this has been speculated as something that could happen as soon as next year. of course, the market has been ruminating over when this could happen, because ebay thatd made that peculiar announcement, repatriating cash. maybe a move to give more cash to paypal as a stand-alone company or to ebay or what have you. in terms of timing or how near-term this could be, are you getting a more clear sense of people you're talking to be? >> the indication the potential recruits, as a possibility of 2015. you know, we're still in a lot

of hypotheticals here, but that was, you know, the nature of those talks and so i think it's -- it's something that, you know, we ma have an answer sooner rather than later. someone pointed out actually on twitter after our piece with the joys of social media, that the company even in its last earnings call was sort of indicating it's continued to think about this issue. while, of course, saying, it's still better together. so i think we'll have a lot more roomenating, but probably some action sooner rather than later. >> and jessica, as you know well, where there is smoke there is often fire. especially where this name is concerned. we'll see how this turns out. your story's made quite a move in the stock today. congratulations on that, and thanks for joining us. >> thanks for having me, guys. >> all right. move now to hewlett-packard. stock rallying after third quarter revenue topping analysts estimates. that stock up nearly 5%.

for hpq as well this morning. talked to hpc meg whitman exclusively asking her about earnings, m & a and 3d printing. here's meg whitman earlier today. >> our objective, execute the turnaround strategy we laid out three years ago and are working hashed on that. -o hard on that. we have to prove that thesis. we believe providing and end to end solution for our customers is a very important value proposition. again, we have to prove the thesis, but feel good where we are in the turnaround. i would pull the lens all the way back and say, we're about where i thought i would be here. >> you are. really are. >> yeah. it was a milestone for the company after three year, put up 1% revenue growth. of course, not our aspiration but better than the declines we've. and turnaround, there are bright spots and there are spots we need to work on. pcs were strong. servers very strong. up 9% perversing a long-term

trend. traditional storage up. so we had very good bright spots. we have work to do. we're now in a position to comfortably do m & a but want to be thoughtful about it and are committed to our capital location strategy of returning 50% of cash to shareholders through share repurchase and dividends. that does leave us room for acquisition but we want to be thoughtful, return spaced and do things only that we can't do organically. one of the core values of this company is innovation, engineering r & d. we unleash our engineers, amazing what they can do. we will acquire but want to be thoughtful. sell the value of hewlett-packa hewlett-packard, sell the value of managing devices on a stock with one major vendor. we have plan. one of the great things about the technology business it is amazingly competitive. you see it sitting here at desk. the speed of change has accelerated dramatically. what used to happen in three years now happens in three

months. look at the cloud. you know, if you'd thought the cloud would be as important as it was even three or four years ago, no one would have said -- that would be the case. we are going to do 3d printing but take really the enterprise side of 3d printing as opposed to the consumer side. >> that's why i set stratus. not 3d. not that way. >> all organically, because it has a lot of shared technology with our toner business. >> yes. makes so much sense for you. >> doing that organically, as i've said. this fall we'll announcing the technology, and you'll see that begin to kick in for hp. >> kudos to jim cramer and david faber, covering quite a lot of ground in that interview. jon, three years into a five-year turnaround, whitman says the company is exactly where she thought they would be. how do you grated the turnaround jnlts still incomplete. i won't put a letter grade on it. a couple things that concern me about the quarter looking forward, one was it's heavily reliant on pcs industry standard

servers. nice those are hanging in there nicely, but i don't know if you expect those to continue to have strength versus mobile and the cloud. china was also particularly strong. i think the fundamental question here is about hp's reason for being. right now it's structured as a scale play. a share of wallet play. a horizontal play, but a lot of versicle plays in the enterprise are doing better. vm wares, oracles. mayor another year to prove that a company like hp built for scale can really thrive in this environment. >> and maybe a deal up her sleeve to prove that. interesting comment having says hp is not buying back stock because they have material non-public information what they plan to do saying we're finally comfortable to start acquiring acquisitions. something abm -- about m & a? what do you think they're doing? >> there are so many vc-backed

enterprise plays that hp could buy and try to make something out of it. there is something to the customer scale inside hp, if you can get three or four nice things and put them together, there's at least a possibility of having something special. a lot has to be proven over time. >> more small enterprised backed vc-type deals? not another autonomy, say? >> for hp's sake, certainly hope it's not autonomy. number of also mid-sized companies. rack space comes to mind, another one of those companies. whether that fits in for hp, hard to say. but i vote more on the smaller side than the big. >> the fact pcs were so strong this quarter, jon, was that a one-time occurrence or do you think that's going to be a lingering problem? >> i think that continues. the xp refresh continues somewhat. continues to be strength in domestic markets. hp has to milk that cash flow and invest it somewhere else, i think. the question, where does that go? software business, not growing.

networking business not growing as much as you hope since hp is an insurgent in that market. >> 1% revenue growth compared to cisco and ibm. still a positive. >> and i say one thing hanging over hp, that company will get split up, too? >> announced that. didn't rule it out, said not now. certainly a -- >> referring to with the -- >> could be on the table again. next up, a tess flight for an somme drones. according to the economic times of india the company will test delivery drones in india as soon as october. ceo jeff bezos announced plans for drone delivery back in december but hit a roadblock during testing because commercial drone use is illegal in the u.s. when we saw this "60 minutes" report about the coming age of the drone delivery program, it seemed like it was years away, dennis. are you surprised to see this rolled out? in the country? >> i love this story. we're going to go to india. no rules. set the drones out and get packages out there.

i do think they're a little ahead of themselves. doing it in india has all sorts of problems. i don't think it's really going to be feasible over the next few years. ahead of themselves. it's going to be five, ten years even before it truly happens. >> what's great about doing it in india. india doesn't have the same kind of transportation infrastructure you see other places where amazon has already got operations. in terms of streets, in terms of addresses, even. so a drone that's maybe delivering to something ordered by a mobile device can make sense. the other piece of this, though, that as we've seen with flipcart, the local income meant in india, cash on delivery is the most popular means of payment, because there are a lot of credit cards. so how do you do cash on delivery with a drone? am zone might have the to figure that out if they do that there and if this actually expands. >> yes, and it being somewhat smaller a market for amazon compared to the u.s., maybe this is a good ground for it to try and iron out some of the wrinkles in this program.

then it certainly doesn't have the echo chamber that is tech media in this country. >> come on. you'll send reporters out right away to take pictures of the drones and only a matter of time until one is shot out of the sky. all sorts of problems. something like this will happen over time. it's just a little ahead of its time. >> interestingly, in communications, wireless communications, for instance, getting wireless broadband in a lot of cases before you get the wired version in markets like india because of infrastructure issues. that could be part of a case for doing it this way. >> and, of course, still have new faa rules supposed to be written by the end of this year. the story continues for amazon. certainly an interesting development there. we will leave that topic there for now and check in on the markets, because right now we are near session highs. the dow is up some 80 points. the s&p is up 6. nasdaq up 2 points. helped there by hp as well as amazon. we had positive housing data this morning. jobless claims went below 300,000 for the first time in several weeks.

that is certainly hedging the markets despite a somewhat hawkish tone from the fed yesterday afternoon. look at shares of sears. slipping this morning after posting a wider than expected loss in the second quarter. ceo eddie lamp ert called the performance unacceptable and said steps are being taken to correct the situation. that situation has been a long time coming for that company, though. shares down 8% today. meantime, shares of hormel rallying after third quarter earnings and revenue topped estimates at that company. the foodmaker saying most segments were strong except for grocery products and specialty foods. that stock up nearly 5%. much of those costs, of course, we know passed along to the consumer. 7. when "squawk alley" comes back, some of the pop economic minds in the country gathering in jackson hole, wyoming this week. we'll talk to one of them. john williams coming up a little later on in the hour. this feels like the future. talked to one company designs an easy way that you can make your

own virtual reality content right from your home. and if you can't beat 'em, hire 'em. find out why tesla is offering some of the top hackers full time positions on the company's payroll. you won't want to miss that story, when "squawk alley" comes back. ♪ ♪ developers are all about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud. the ibm cloud is the cloud for business.

come one, come all. tesla wants to pay hackers a salary to break into its cars.

this on the heels of a sturnt hack-a-thon in china and a presence at hackers conference def con, reportedly looking to hire a full-time hacker. gary davis' chief consumer security evangelist joins us to talk about this. gary, good morning. >> good morning. >> we hear that with the add vent of the internet of things, cars are revitch raters, everybody will be hackable. why would tesla want to bring one of these hackers in-house? >> you know, the average high-end car has about 100 million lines of code, and they're producing more and more capabilities in those cars that need protected by tesla or any largs car manufacturer. i need to understand what are the attack surfaces that my car can be exposed to, and what are the linkages between the systems on that car that a hacker may exploit? so i applaud tesla for this. it's the right thing to do. >> gary, talk about the strategy involved here, though. we've seen sites like facebook

and others, services offer bounties to hackers to figure out crucial weaknesses in their system. if you're tesla, high stake here's. you don't want to create a market for people hacking these cars. so is that why they're doing an in-house employee instead of putting a bounty out there for people to try to hack the cars? >> well, you know, there's a variety of different ways that you can do this. i mean, either -- hackers are going to try to do this anyways. so why not bring them in-house. bring them in, provide them the platform to say, go figure out wham you could do and then let us make sure we're building the systems to prevent any type of hacks from doing anything to our vehicles. so i think it makes a lot of sense. i think their approach, could you do it either way. either pay a bounty or bring them in-house. in fact, i would recommend they try both. right jt because the more people you have looking at this, the more opportunities you have to bring people's in to take a look at this i think it's going to be a good thing. >> hey, gary.

isn't the holy grail here hacking the driverless car? >> it could be. for sure. i mean, if you look at, you know, taking a driverless car and doing something inappropriate with it, you know, taking it off course, or causing havoc, you know, that would be -- you're right -- the hom h grail. phi was a hacker and wanted to demonstrate the ultimate objective, that would be a very -- strong proof point to demonstrate that. >> gary, there is another big hack in the news today, and that's a security breach at u.p.s. that the company says took place between january and august. that's quite a chunk of time, when you think how many people would be using those affected u.p.s. stores during some eight months. i'm wondering, for all the consumers who said i already changed my credit card after getting a warning from target, neiman marcus or p.f. chang's what can a consumer do if

they've already changed their information and how worried should they were when you see news like this? >> certainly if i was a consumer and went to one of those u.p.s. stores and used my credit card, i would be mindful of my credit scores. tracking my credit cards to make sure they aren't being inappropriately used. you know, this is something that is going to require, i think, dramatic shifts in how we do your credit card transactions both in brick and mortar retailers as well as online. >> gary, we have to leave it there today, but appreciate your expertise in a wide variety of topics. thank you for joining us. >> thanks for having me. have a great day. >> you, too. gary davis's mcafee. the future, remember, oculus vr, $1.6 billion earlier this year. our next guest agrees his company let's you make your own virtual reality content for things like auk doculus.

all from your own home. talking to one of the economic minds of country. john williams joins us on a first cnbc interview up later on "squawk alley."

and from indiegogo and kickstarter in our contest. number one, hover bike. a scaled down drone of the first manned flying motorcycle, the creator's ultimate goal. up against a smart helmet that connects to the web a rear view camera and onboard gps. the poll closes at 1:00 p.m. eastern. get your votes in.

tomorrow, as always, we'll enveil this week's tech crowd leader. e-mail cnbc woin com/techcrowd. >> and luke skywalker. >> which swun most likely to gelt your neck broke jn goodness. looks dangerous. anyway, our next guest is letting users make their own virtual reality content for devices like facebook's recent acquisition, oculus rift. virtual reality and hardware company jaunt announcing a near $30 million round 67 funding today. the ceo joins us. tell me how do you expect the market to expand? because it's clearly early. most people have never even tried on these things much less seen them at retail. is this going to expand through versicles like real estate? like autos? or is it grog to oing to be eve consumers driving things up, driving the market? >> thanks, jon.

yes, definitely everyday consumers. it's going to start this year. later this year as devices become more widely available. and as soon as people start experiencing virtual reality for the first time, there's going to be a tremendous need for content. for things to watch in this virtual reality experience. one of the key things about technology, you're completely immersed in the continue tent. look all around, a full spherical view of the world, both video and audio. when you try it, it feels as if you've been transported to the location where the camera was recording. so at our company we've built a 360-degree camera that records everything in all directions and when you put on the goggles you feel you've been transported to that location. >> jens, back in the day, pac-man brought video games loam

to people. what do you think is the breakthrough application or moment or service that's going to do that for virtual reality? for everyday people? >> hard to predict. the whole virtual reality space is really divided into two segments. the first one is the gaming segment. that is video games. very compelling. that is, you put on the goggles and basically play video games. the second big segment, the one we're focused on what we call cinematic vr. that's the segment of entertainment, of live action footage. and you know, some of the really sort of killer apps for that are music. you know? imagine being in the middle of a music video or at a music concert. sports. up know? you can be right courtside as your five rit spoavorite sporti. travel. imagine going to the taj mahal and experiencing from the comfort of your home, looking all around, getting a feel for

the scale and beauty of it. or even just visiting hotel rooms before you go there. and checking out the hotel. checking out the pool. there are a myriad of applications. a little hard to predict exactly what's going to be the killer app. >> jens, final question before we go. only a moment left. facebook acquisition of oculus the deal that put everyday reality.the map. billions of dollars. no profit. has that changed your valuation in the eyes of investors? >> i think it happen definitely accelerated the whole market, and it definitely has made the whole ecosystem i think more appealing to investors in that facebook's acquisition was really a major stamp of approval. so the answer is, yes. >> yeah. hey, when facebook likes you, that's a big deal. jens, thanks for joining us. >> thank you. bring in simon hobbs.

euro business looking sluggish, a lot of green on the map there is. many sense good news. maybe bad news for europe. makes it uncomfortable for mario draghi, ecb president. flies in to give a speech tomorrow afternoon. a question of whether the eurozone recovery is moving in the right direction, quite clearly what they might do moving forward. mario draghi, unveiled a package in june. going to the banks next month. let's wait and sigh. jp morguen in a note suggested they believe the risk of sovereign qe, buying of government debt around the eu eurozone is steadily rising because of risk of moral hazard the germans might object to is falling, they say. a lot of countries have restructural reform and a lot of the banks go through the stress test we'll hear much more about. interesting that the italian banks were rising today. upgrade coming through on that, recapitalizations. you see around europe, weaker banks rising perhaps in

anticipation that the ecb might do nor moving forward. the austrian a bank, most with russia, the europeans and russians know upbeat today. its exposure to russia suggesting it's fully committed. hasn't seen an impact from what's going on there. stock rising almost 11%, you can see. in general, the other dynamic in europe, the tensioning with russia are easing. if you look at the moscow index, for example. it's risen for ten straight sessions. up again today. here you see the bounceback coming, not to the where they were, but russian stocks are rebounding partly in anticipation of the meeting that vladimir putin has with the ukrainian president in belarus on tuesday, and some expectation that there may be some sort of deal or the beginnings of a further diffusing there of the situation. on the face of it, a good day for europe, actually, kayla, not so good. >> draghi's speech is tomorrow, simon, you said?

>> oh, yes. >> thanks. we'll be watching. >> yes, indeed. coming up, yahoo! bobought tumblr. a long way towards answering that question. bring you that in a moment. plus, keep it here. our first on cnbc interview with san francisco fed president john williams is coming up in a moment. "squawk alley" will be right back. e reward was that new car smell and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com what does it mean to have

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annual summit in jackson hole when janet yellen takes the stage. steve, take it away with a special guest. >> who else would i bring on "squawk alley" but the san francisco fed president, john williams. the minutes came out yesterday. >> good morning. >> they suggest to some the possibility of earlier rate hikes. care to comment on that? >> well, you know, when we actually started to raise interest rates will depend on how the economy is doing, and if the economy continues to improve really well, then -- and we see inflation moving back to our 2% inflation target faster than we've expected, that would argue for a little sooner rate hike than otherwise. if the economy disappoints, pushes back, raise rates, i think we want to be data dependant and have our monetary

policy driven on how the economy is doing. >> but the market needs a date in the sense that you can't buy a bond that says, well it will go up when the fed turns, but go up at a certain time. so the market's kind of dialed into this summer 2015. that time frame. the average we come up with in our survey. too late, too soon, too early? does it need to think of another possibility? >> based and my own forecasts, i think thinking around summer of 2015 for the first rate hike is a reasonable guess, given where we think the economy is going, and how much progress we're making towards our goals, but, again, it depends on the data. if the data gets stronger, coulding earlier. if the data disappoints, could be a little later. >> give me a view on the data. unemployment rate coming down sharply? >> down more than a percentage point in the past year and more importantly, we're seeing improvements across the broad set of indicators in the labor

markets. in terms of job growth. quits, hires. in terms of job openings that come up a lot. we're really seeing improvement broadly across a lot of categories of the labor market. one thing i'll mention, the long-term unemployment is coming down too. that's a really positive sign for the labor market. >> what's your number for where the fed funds rate will be in 2015? >> so -- again, i think that a rate hike sometime in the middle of the 2015 seems reasonable. after that, depending how the economy progresses, i expect it to be gradual in raising rates. the economy is not not robust. it's still, the recovery is still relatively modest in terms of its pace. i expect us to raise interest rates gradually over the next few years once we start this. again, driven by the economy. >> what are your concerns about being too slow here? i mean, inflation is one of them. a lot of talk about excesses in markets and whether or not there's too much -- certain bubbles created by lates being

too low? >> something we take seriously. we look at that a lot. right now i don't see a lot of risk to the economy for financial system broadly from the signs we see of excesses in certain financial markets. you know, leverage loans is once mentioned the. certain areas of the stock market are very strong. we try to look, though, where the risk to the economy and look for systemic risks. those still seem reasonably under control. inner terms of waiting too long, inflationary pressures issomething i think about a lot. on that front, wage growth remains modest. inflation is still running urnlder our 2% goal and expect inflation to gradually come back. something we watch carefully. >> how tolerance for wage growth? now 2%. we've heard nushs 3% would not be inflationary? >> normally the way we think about this, nominal wages, dollar wages are going to grow somewhat with inflation plus the rate of productivity growth.

to my mind, a normal wage growth, something like 3%, to 3.5%. consistent with the goal and productivity we're seeing. seeing 2% wage growth and haven't seen convincing signs of any uptick in wage growth. and so that's again a sign that there's still slack in the labor market and we have a ways to go to bring our economy back to full employment. >> give me colleagues, anchors at "squawk alley" a sense of the tech economy. how's it going, going fright commerce on productivity, are they creating the stuff that will create the productivity in the future? >> one thing about the bay area economy. it's booming. when i come into work, there are cranes to the right, to the left, behind me, in front of me, and everyone talks about the housing market in the bay area. it's hot, hot, hot. you know, the tech sector is definitely a big part of our local economy, and that's a strong area. the productivity question is the big question, because so far in the last past few years we've

not seen the robust productivity growth we saw of the tech revolution of the '90s and i.t. growth. this is a wait and see. are we going to really see the -- upshift in productivity growth we saw back in the '90s this time? right now what we're seeing is an economy that is really strong and very dynamic. >> and how far do you think the potential of the economy is right now in terms of how it can be growing, and how far -- how far, fast can it be growing? >> right now my own view is potential gdp growth of the trend growth of the u.s. economy in terms of real gdp is around 2%. that's pretty low compared to history. part is labor force growth is lower than it was in the past. population growth is less. a lot of baby boomers are retiring. the other is, productivity growth slowed quite a bit. kind of backed down to levels we saw in the '70s and '80ss, not like in the '90s.

the big question mark, will that continue? and, again, if that gets higher we might see potential growth get back up to 2.5% or something. >> john, thanks for joining us. >> great to be here. >> jon fortt, the message from my people is that your people need to get back to work. >> yes, indeed. fueled by red bull. you next, the angst to a question we've been asking for some time. is yahoo! billion dollar by of essential network tumblr paying off? stay tuned. "squawk alley" will be right back with the answers. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

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coming up at the new york stock exchange, record breaking fine for bank of america over mortgages. talking live to one of the men behindit. new york attorney general eric snyder. and hp reports a sales surge. is the death of the pc greatly exaggerated? the traders break down all the winners and losers, and we pull back the curtain on the najarians ponytail power. all straight ahead, top of the hour from post nine right behind me. see you in a bit. >> wapner in the house today. thank you so much. throw back to 1977. a time before smart watches and wearables, but there was this gem from hewlett-packard, all of those many years ago. it was the hp o 1 calculator wristwatch. much to the chagrin of math teachers everywhere. priced between $650 and $850,

and at the time, weighed about one-third of a pound. today it is a collector's item selling on ebay for nearly $15,000. so that's a good return on an investment, if you had been smart enough to pick one of those up. man, that looks like straight out of the casio product lineup. >> buy two, one to wear and one to save and sell 35 years later. >> i have 20 pairs of air jordans under my bed. >> and 200 beanie babies. that's not doing anything for me. is it? >> kayla tausche and jon fortt was in diapers. >> yes. but is it safe to say, hp invented the smart watch? >> yeah. yeah. i mean, smart is relative. isn't it? what people always tell me. >> you're right. doesn't look like the smartest watch, but you know. >> for 1977, it was freaking brilliant! since yahoo! bought. it tumblr for $1 million, was it

paying off? julia boorstin join s us with numbers. >> released a first analysis of tumblr's growth what it means for thety place business. user base expected to grow 25% this year, but it's slowing. that's nearly half of last year's growth rate and next year growth is projected to slow by half again. on the upside, tumblr has the advantage of a young user base. most aged 18 to 34, and emarket reports to huge potential for sponsored or native content. average post shared about 10,000 times on the down side unlike facebook and twitter, people can access tumblr without logging in meaning less data for marketers to target with, and tumblr isn't saving yahoo!'ses did play ad business. that share decline pd since it bought the blogging service. in contrast, faisbook share of the display ad market is

growing. now 2.5 times yahoo!'s share. more positive news for facebook, instagram's user growth is accelerating, unlike tumblrs which is slowing, making facebook's billion dollar acquisition of instagram look like a getter in1re67vestment t yahoo! was of tumblr. >> talking during a commercial break, how many times has yahoo! mentioned tumblr on the conference call? >> not a lot. don't have a lot to show. when it comes down to it, this acquisition has not paid off. can i say it? it's been a dud. >> i think there's potential here. reminds me of google's acquisition of youtube. for a while people saying, that's a dud, too. figured out ho monetize i think with pinterest, revenue and mode modernizati modernization, content from tumblr. that user base is growing and young, in the demo. got value. i don't thinks over for tumblr

yet. >> the market tells us rump yahoo! is rereventually worthle. if all of yahoo! is worthless, that means tumblr ain't worth much either. >> means there's up side. >> takes two to make a market. it is interesting when this acquisition first got announced, a lot of people were in favor of the deal and said if anything, it makes yahoo! younger, fresher. it's a brand. rarely do you see a kpip paying $1 billion to freshen up its image. would you argue it's been success at that? >> i wouldn't argue as far as tumblr is concerned yet. there's a potential in mobile, in younger user, but they node to get busy. >> no brand equity? >> i don't think much. katie couric is out there doing her thing. not sure what the purpose or mission of? yahoo! is, young, old?

>> but certainly time will temperature postalibaba especially. in the mobile workplace, conference calls are ubiquitous. so are the things that distract you from those set of conference calls. why no one is listening, and what they're really doing instead. first, rick santelli is always focused. what's he got his eye on today? rick. >> definitely keep our eye on jackson hole. i heard somebody at jackson hole was making fun of technical analysis. so -- what we're going to do is, we're going to compare technical analysis to monetary policy. what gives the best signals? get ready to rumble, after the break! ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer.

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over to the krm" grocme gro. rick santelli appears to have had his cup of coffee. >> a couple of coffees. mcdonald's coffee. a negative rap. i heard somebody in jackson hole say something like what are you going to do? listen to a death cross or the federal reserve when you trade the markets? you know what? i'd like to dig into that a bit. for those that don't know, death cross is basically when you get a short-term moving average going below a long-term moving average. that's bearish. a golden cross is exactly the opposite. short-term moving averages move above long-term moving averages.

the deal, whether gold cross, oscillators, bollinger bands. no matter where you are in the entire world, everybody has the same number. can see it coming, evolving, when it devolves, see it all. whether it's the 50-day versus the 200 and you're looking at the s&ps or a currency, everybody has the same. now let's think about a fed statement. you know, it's like a rorshach. you could get ten people reading, 20 different opinions. ever really, really -- i urge everybody, maybe go home have a cocktail and read a couple of these statements. i'm telling you what, try to keep up with where they're going. especially over the long haul. i sometimes truly question whether central bankers have any type of efinty or deep understanding of the marketplace, because i'll tell you what. when it comes to a comparison between trading markets on monetary policy, its implications, its changing dates and goal posts, technical analysis, one major difference. it's called money.

because technicy analysis works, because it isn't paper trading. these markets in the grafts of what markets do, each one of these turning points represents a shifting capital or investmenter's moneying up the trait. so inaggregate, the behavior of the market and the notion of human behavior being repetitive, and it always is representative. give you an example. you don't believe magic numbers? take anybody you know, have them pretend this is your front door. tell them to knock on your front door. i bet you a dollar to a doughnut, they're knock three times. they always knock three times, because three is a comfortable number. you know your fibbin'nocci numbers. i don't think people in jackson hole should make fun of numbers. get a book on t. i might take a doughnut. sounds good. if on a conference call you're probably also in the

bathroom? inside a new stud they reveals what you, yes, you, are really doing, instead of activity listening. next.

if you are watching on tv right now whilealities on a conference call, you're not alone. a new study from intercall shows spacing out on conference calls at work is the norm. more than 60% of intercalls respondents admitted to doing other work or sending an e-mail while on a conference call. more than 50% eating. 47%, just under a half, in the bathroom. one in five are shopping. 6% are on another call. not quite sure how you do the other call, but -- >> some must be eating in the bathroom? or shopping in the bathroom. with all of those percentages, right. >> yeah. >> makes sense. you see people walking down the street. no one is paying attention. all looking at our phones. on a conference call, doing other things actually doesn't surprise me at all. >> the invention of the earbud made that eder. >> don't even eat in the

bathroom. that's gross. >> maybe video chap-of-chat. videoconferences. >> where it's heading. might rule out the bathroom. a quick check of markets. nasdaq negative by a couple points. earlier at a 14-year high. the fourth day in a row the nasdaq composite hit a 14-year high. goes back to september 2000. quite a move for that index. >> amazing. everyone's paying attention to jackson hole. stock markets are going great. bond markets benign and underneath it all, just sort of this feeling of malaise about the economy. it's just not quite as good as everyone wants it to be. that is the fundamental disconnect economically and politically right now. >> yet the fed continues to be confident in its assertions. we just heard from san francisco fed president john williams who sed rate hike in summer '15, reasonable. some are saying earlier. >> sounds reasonable to him, but i think right now, markets are great. here we are, 2014, long way from the summer are 2008, where

everything changed. >> all of us with 401(k)s are not complaining either. good for the dog days. dennis, thanks nofr joining us. always great to have you. jon, see you again tomorrow. for now that's all for "squawk alley." send it over a few feet away to the "half time" crew. >> have a great day. welcome to the "half time show." today's starting lineup, stephanie link, and josh brown, and also jon and pete najarian, co-founders of option mons sister's in a few minutes, right here at post nine, we will be joined by new york attorney general eric schschneiderman. a first on cnbc interview about bank of america's record settlement over mortgages. first we begin with the dow back above 17,000 and the s&pa 00 hitting a new record high one day ahead of the big doings out in jackson hole with fed chair yellen taking center stage. if the market is nervous what's