connery, cage, harris, kooent knee ya. >> your best. losers always whine about their best. winners go home and the prom queen. >> squawk alley. >> and we are here live at cnbc's new home in san francisco. one market is the name of our studios. joining thus morning, dan rosen's ceo of coo of yahoo. >> good morning, welcome. >> nice to be here. >> how's the weather? >> this is going to work. we are on set on a busy morning with the market at any highs. let's talk apple as well. apple earnings tonight after the bell. the company expects to report 216 a share, revenue of just over $56 billion. comes as new research from slice intelligence says only 22% of

pre-ordered apple watches were delivered to customers on the first weekend. another half million expected to ship over the next month or so. apple leading the dow higher this morning. we're within a dollar, dan, of an all-time high on apple. at least the mix of phones this quarter. >> look, three months from now, it'll be higher too. they're just on a roll. they create great products, people love them, fans. have you ever seen anybody worship electronics like apple? it's crazy. we got 25 apple watches in the office last week. >> you guys are the lucky ones, right? >> i don't know that anybody knows thousand use it yet, but they all have them. >> that's the issue, isn't it, john? >> somewhat. in earnings themselves, i doubt it has a presence. apple stopped talking about the traffic to retail stores explicitly. i guess they could make an exception just to give a flavor. i think it's the average selling price of the iphone that's going to be the big surprise one way

or another. we're expecting around 57 million units on the iphone, but there's also this question of inventories. apple expanded the target weeks of inventory for the iphone, but they've still been supply constrained. we saw the numbers last week, saying that apple and samsung are taking a greater share of the premium end of the market than qualcomm expected. unless samsung way outperformed than apple probably outperformed, we're likely to see good numbers tonight. >> the capital return program, investors only have a little bit of recent history, dan, to go off of, buybacks, dividend there. i'm wondering how you see apple positioned as a company to start giving back potentially more capital to shareholders. does that change the conversation for big tech companies that have traditionally shunned these programs? >> well, nobody has as much cash as they do. they have the flexibility to do anything they want.

i think tim cook has shown that he's an extraordinary ceo and a product visionary that kept the entire team together. and they keep producing, they said it was going to be the best year of products ever, and i think they are living up to it. >> a lot of discussions today about the number of companies that have taken a billion dollar haircut on four x, jnj, people are worried about apple, as they should be if you look at the mix of revenues overseas. >> my belief is so what? meaning whatever 4x issues they have won't be long-lived. and i think you know, you just look at the momentum they have as a company. i think kramer says it every morning, don't trade them, just own them. that's my view on a company like that. they've done extraordinary job. google's done a good thing. i don't know why they don't get the same love. maybe you don't hold the product in your hand, but owe knob, the tech results have been great in the last week. >> speaking of google, let's talk about it. an unlikely ally now, and it is

ebay, interview with the financial times, john donaho were direct competitors that the eu misunderstands how people buy online. also saying barriers are breaking down between different areas of online commerce. again, supporting arguments that were made by google and we were interested to just how he was coming out of the e.u. >> my guess is that ebay will adjust that statement. i believe it was taken out of context. they see themselves, of course they compete a lot in a lot of areas. there is so overlap where they work together, obviously ebay's a big advertiser, but nobody, nobody wants google to play with the results. right. it's got to be a player, a fair, you know, ground for everybody to play on. so, i have a feeling that ebay will adjust that. on the other hand, i agree with what roger said this morning, which is that's really yesterday's battle. mobiles change the entire world.

look at how amazon does without even bothering to spend much money on google. >> i'm thinking about when several months ago ebay announced they would split up into the ebay marketplace business and the paypal business, the lingering question was does the company become a takeover target and where the conversations were happening, speculation as they may have been, the speculation was that the only one that could buy the whole company or even parts of the company was google, but it seems that now that we have these charges coming out of the e.u., dan, that squashes google's power to acquire anything. >> yeah, i think they're going what through microsoft went through years ago. i think we'll discover, it's an argument that four or five years too late. i'm not sure why the e.u. is spending time on it. when the company splits up, two independent companies. i think both can be really successful independent companies, the real interesting question for me is marketplace going to be a growth company or is it going to be a cash flow company. and i'm, we'll hear from devin what he plans to do with that. there is a lot of people other

than google that could buy it. i mean, alibaba could buy it. that's always been your speculation. apple could buy it, i think it's facebook could buy it. i'm not saying they would want to, but i think you're seeing that kind of opportunity. it's going to be interesting when they split up to just to see where the stocks trade up. >> i'm not convinced it's the battle of yesterday of google. the e.u. is not just looking at desk top, they're looking at android and the arrangements google has in place to perhaps push its partners to use its apps to the exclusion of others when it's in mapping or in other areas. so the fact that they use search to extend android and they needed that in mobile, now what you are they doing in android? isn't that today's battle? >> some of it is. i think what they're focussed on right now doesn't seem that way to me. to be honest with you, look at the lack of success of google plus where they were forcing you to run all of your -- you had to log into google, gmail, users

rejected it. users are savvy at this point. my opinion has always been, look at the power that apple has over search. right. because, safari, the browser has become so big on the desktop, and second, they control the phone environment. ultimately, they can control it, and you know it, i've heard you say it, look how many people search on facebook. just the world is changing. moments in time, somebody has hour, then five years later, and we say, what happened. >> i can't find anything on facebook, except people though. >> you don't to want buy anybody on facebook. pretty sure that's not what you meant. >> can find people when a do a search, but try searching for a restaurant and trying to find out anything useful, a product, it's not -- >> today. >> although the company did say last week, search is a priority. and they know in the future they will hopefully be able to harness that. >> he was a priority at 20 years old. there's no urgency for him to do it because the core business is doing so well that i think they have time.

and what you learn in this world is every few years, things change. you know, recent articles on who the four horsemen were four years ago and who they are today. amazon now, you guys are talking about the fact that they're preparing for a world where they're not a retailer, they're a cloud company. who knows thousand all plays out. i'm not a big fan of all of government regulation, except around things like privacy. i think those are things that we really don't know the unintended consequences. they go well beyond the business consequence. and i think those are areas where we could use some help. >> speaking of ebay, ceo john donahoe will join us. that begins around 10:00 a.m. eastern time. finally, dan, this is our new home here in san francisco, one market. you've been here for a long time. >> 13 years now. >> the pulse, how would you describe the pulse right now? >> well, i wouldn't describe it the way it was described earlier this morning where it was narcissistic. i think, look, when the sun shines all the time, and people

flock here from all over the world and there's a lot of available capital, and people are afraid, not afraid to take risks, there's just a lot of optimism. you come out here, you feel the optimism, and so many of the ideas won't work, some of the ideas will get huge, and it's adjust lot of fun to be out here. >> you talk about the four horsemen and how they're different today than they were a decade ago. what is the pecking order right now? who is the most important large cap tech company in the valley? >> well, i think it's hard to argue, you've got facebook, amazon, apple, and google. i think those are the probably the big players that really determine the way people think and the actions they take. and the choices that you make, they really control a lot of ecosystem, there are big up and comers, linkedin, others that take a very prominent position in huge verticals, but i think those are the ones that really focus on what the consumers want. >> leaving microsoft off that

list resinates less now than a couple years ago. >> yeah, since his nobel days and sundays, he's not been a big south ban, you can understand why. but, look, microsoft is also making a great comeback. 20 bucks a share for what, 15 years, something like that. ten years. >> they silenced the critics last week. >> yeah, tech companies are doing well. they're performing, they're executing, cost of technology is going down, growth rates are going up. more and more people are using technology. >> do you agree with what he said, the real action in the city? it's no longer about the valley so to speak. >> one of the interesting changes, i have daughters, 22 and 20 years old -- >> colgate. >> someone graduating, i'm excited. the kids that grew up with technology, never known a day without the iphone. they're also lib rap arts majors as well as engineers. i think they prefer cities

rather than, sort of the traditional silicon valley. you're seeing, just in fact today, cheg's opening its san francisco office today. we have our tutoring program and our high school program. so yeah, the city is pretty hot right now. >> of course a lot of young people have the innovation, bob, you can't blame them with the success that's come out of this region in recent years. you fancy yourself an angel investor of sorts as well? what do you see come across your desk these days? >> there are big categories, right, the cloud, amazon just defined it in a way that people have been waiting too. sales force, adobe, consumer internet is still big. one of the great things is to understand the difference between companies that get on mobile, and companies that benefit from mobility. so, investor in the companies that really benefit, the yooubers. they benefit from having it with you, always strg on, always transact location-based things.

those are hot right now. >> dan, great to see you. >> thanks for having me. welcome. next time you're here, we'll have the giants in town. >> actually that park is so gorgeous. >> dan rosen. all right, let's gate check on the markets right now. still trading in the green as they have more much of the morning. s&p hitting a record intraday high, you're looking at it right now at 2120, dow is up by about 38 points right now. powered by apple which of course we get earnings from apple after the bell. shares of apply materials though falling after the company announced it would drop its merger with tokyo after the doj said the deal would not allow for sufficient competition. that was supposed to be an inversion and one that investors were waiting for. that stock is down very sharply today. the company though announcing a $3 billion share repurchase program over the next three years. hopefully that'll pacify investors. check out tesla searching after deutsche bank says the products

could boost earnings more than expected. tesla up more than 7%, nearly 8% this morning, carl, oen that news. great show for you this hour, coming up, evernote entered the billion dollar club back in 2012. raising over $300 million from 15 different investors. ceo will talk about the future of the company including the new app part apple watch. speaking of billion dollar valuations, we'll talk with a top vc like airbnb, spotify, and, he was so prolific at instagram, they named a filter rise after him. cole rise will join us live to talk about his new app and how it feels to be part of apple's shot on the iphone 6 ad campaign. "squawk alley" will be right back. financial noise financial noise

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♪ welcome back to "squawk alley." we are still live at one market, cnbc's new headquarters in downtown san francisco. we mentioned apple at the top of the hour, of course reporting earnings after the bell where the watch will be important for the company this quarter, but it really is still all about the iphone. josh lipton is live in cupertino with more on what to expect,

josh. >> well, kayla, you're absolutely right. all the buzz about apple watch, apple tv, the one big number analysts and investors are going to focus on is this, iphone shipments. the iphone is still the engine that drives this company, that accounts for more than 50% of total sales. now remember, q1, apple knocked it out of the park. they shipped 74 million iphones. there always is a seasonal slowdown to some extent as the initial euphoria about new models does wear off. so in q2, analysts are looking for apple to ship 55 million iphones, still that would be a 27% jump year over year. now looking ahead, one key question for investors is whether the slope of that slowdown in iphones q2-3 will be as sharp. some don't think that'll happen. jeanne munster thinks this time is different. that that slope won't be as sharp pause of the iphone 6 and

6 plus. gene says you'll see them take more and more market share and look for whether apple guides higher than the q3 revenue sfx, $46.9 million. that would indicate that apple is seeing stronger than expected iphone demand in the quarters ahead. that's going to move the stock higher in the after hours, and of course that stock has already been just a monster, up some 60% in the past 12 months. bulls like munster do believe apple has not only changed the dynamics of the smart phone energy, but apple keeps taking more share, that would be good news for apple, not so good such good news potentially for its big rivals like samsung. carl, back to you. >> all right. busy night, josh, thank you so much, josh lipton in cupertino covering apple as they report tonight. live shot of capitol hill, i can see the vice president there

alongside loretta lynch who is about to be sworn in as the next attorney general of the united states. she will replace eric holder as you may know, who held the position since the president took office in 2009. >> according to the washington post, it's the longest confirmation process for the job since at least dating back to janet rino. when we come back, according to the wall street journal, 85 companies are valued at a billion dollars or more by venture capitol firms. are any campaigns themselves worried that a sbubl brewing in civil khan valley? we will ask one, evernote, in just a moment, ceo will join us when "squawk alley" returns. thank yoand my daddy. sailor, thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them. our world-class service earned usaa the top spot in

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♪ welcome back to "squawk

alley," we are coming life in our new home at one market in downtown san francisco. unicorn, of course, the buzz word out here an the bay area and in silicon valley, it's the term used for venture-backed companies with billion dollar valuations or more. one such unicorn, evernote, the company behind the popular note taking app by the same name as using its funding to target new growth areas including capitalizing on the consumer's move to mobile and wearables. joining us now here at one market, phil libin, good to have you here. >> great to be here. >> your company in the billion dollar club has grown since you guys were valued there, at three years ago, does it mean something different now versus then? >> i think it does. i think it comes with a higher set of expectations, we were in a period of growing up as a company. awkward, teenage years maybe. >> as you know, aye been an evernote -- i've been an evernote user for many years. i've got the app on my watch. years ago, you were making apps

for like every platform. >> yeah. >> that came out. and i was like, well, i'd like you to make some improvements maybe to the iphone app. are you casting that wide a net or have the changes in the smart phone market, the need to focus on wearables like the watch app you have now, caused you to shift your philosophy sbl? >> we want to be on every device that is cool and has a shot at success. ting takes so much more work to improve an existing product than to make a new one. the vast majority of effort goes into existing apps, and maybe we get to spend 10, 20% of our time on shiny new things. >> we heard you hit 100 million users. i'm wondering if you could give us an update on where user growth is coming from giving that you've had to change your strategy. >> it's coming geographically from asia, south america, but the u.s. continues to have really strong growth for us. in terms of devices, we're

seeing a ton of growth on android, and really picking up growth on wearables. from a low base, it's going to become extremely significant for us. more and more, what we're seeing, evernote users wanted to use it with friends and co-workers. >> how would you use evernote on a wearable device. you think of okay, i'm taking notes on something, or scanning something to read later, you need a larger device, rather than something smaller, how it work? >> the apple watch is an extension of the phone. for anything that takes less than five seconds, do it on the watch. more than five seconds, you have the iphone and do that. it turns out there's a lot of stuff that takes less than five seconds that's cool to do on the watch. anything that has a glanceable information, notifications, dictating a quick note with your voice. it's a nice watch experience. you need to have the phone and the watch together. >> are there challenges in terms

of the actual coding beyond to watch to get on the watch? would you expect development to be above or below trend as we head into the developer's conference? >> i think you're going to see a tremendous number of developers. there's a lot of fun developing for the watch. i wouldn't say coding is challenging, but it's a completely different form factor, and trying to understand how people actually use it, how long do you hold your hand up before it kind of starts to hurt? that stuff is totally new for most developers. the design is a challenge, but an exciting one. >> microsoft upped its game over the past two years in the cloud, one note has gotten a lot better than it was. with a valuation like yours, people expect your subscription, subscriber business will expand, maybe move into becoming more of an enterprise company. how do you define evernote over the next couple of years that justifies that unicorn valuation in the minds of a lot of people? >> we want to be the new definition for what workplace definition is. at work to work with their

co-workers. i think that the way we work right now is totally different from the way we did 20 or 30 years ago. and things like microsoft office were designed 30 years ago. the ideas are old and just don't fit with how we want to work. we're the new definition of productivity. >> before go, phil, in conversations a couple years ago, the last ipo wave, i'm thinking linkedin, pandora, evernote was mentioned often as an ipo candidate. has that conversation changed, or is that something you would still consider for an exit? >> no, i think our standpoint ipo is stimthe same. we want to be a public company. we think we have a moral obligation to be a public company. we're asking the world to trust us with information, we to want reciprocate that trust. we don't deserve to be a public company yet. probably a couple more years. >> i'm sure we'll see more of you here in san francisco with our new studio. phil, good to see you. >> phil libin is the ceo of evernote. two and a half minutes away from the close in europe. let's get back to simon hobbs and count you down.

>> it's a powerful rally we have in europe. germany's up almost 2%. today may be an important turning point in the debate over whether greece will exit the euro zone. the prime minister of greece has reshuffled his negotiating team with the rest of europe. it reduces the power it would appear of a finance minister who many in europe regarded as being abrasive. you saw that on friday's video, but the rest of europe turned on him at that meeting and suggested he was a gambler and chancer, now he's being sidelined, it would appear in favor of two allies of the greek prime minister. this after of course he spoke to angela merkel yesterday and the dutch finance minister and also talk to the german chancellor later in the week. meanwhile, it would appear he's acting on the yields. look at the yields. this is the short end of the greek curve. we were up at 30% yields, within the last week or so. you see the way which it's rallied and the yields come back down. greek exit looks less likely, and you look at the polls come

through in greece. three quarters of people almost in greece to want deal with the rest of europe. three quarters of people to want remain within the euro zone, that appears to be what the prime minister is acknowledging. in the meantime, it happened that the deputy prime minister of portugal was here at the new york stock exchange about an hour ago. remember the smaller countries had turned on the finance minister at the meeting on friday, i asked him if he would be pleased that that finance minister had less power. this is his diplomatic response. >> nobody in europe is interested in grexits. but i must underline it's on the greek side to deliver reforms, measures, and solutions. >> and then he did his job, in an environment where goldman is saying if it was a greek exit, local yields could spike by 3.5 to 4%, he came back with what you expect him to say, if there

were a prices, don't lump the rest of us in with greece, my country, portugal sl very different, take a listen. >> the porch jeez story is another one. okay. we have economic gross, investment grooming, expert raising, and unemployment decreasing, and that's very relevant on social stability. >> in the meantime, banks were active in europe, deutsche bank is cutting back. people are worried they're not going to meet their targets. rsbc continues to follow through on the upside that it might leave the u.k. and not pay the bank tax there. and, volkswagen added in broad terms about $5 billion to its value today after the chairman was ousted over the weekend. this is the controlled by porsche, the new management team guys might be less empire building, and focus more on shareholder value. on that note, let me send it

back to you in san francisco. >> all right. simon, thank you so much. when we come back this morning, the nasdaq's only a few points away from its first record intraday high in over a decade. what's it like for investors in this kind of environment? we'll talk to scott noland, former engineer at spacex and in just a moment, "squawk alley" continues after a break. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.

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here's your cnbc news update that the hour. nearly three years after a deadly attack at a colorado movie theater that left 12 dead and dozens injured, opening statements in the james holmes trial are expected this afternoon. holmes has pleaded not guilty by reason of insanity. over 250 migrants were rescued and arrived at the italian court today. they were picked up about 40 miles off the libyan coast by an italian frigate. everyone was reported in good health. the reason for the mass migration continue fighting between islamic militants and government troops in libya where the 90,000 civilians have been displaced where attacks have caused damage. according to a new greek poll, a small majority of greeks with dissatisfied with the government's performance and

half want to compromise with the pred or sos if current negotiations don't possess. it would tolerate a break if it means staying in the euro zone. and those are cnbc news update for this hour, now let's get back to "squawk alley" in san francisco. thanks, court. welcome back to "squawk alley." live in san francisco at our new home, the bay area of course no stranger to start-ups, this is ground zero for tech. as the number of unicorns rise, so does the fear was another tech bubble. nasdaq just a few points away from the first record high in more than a decade. and joining us now here at one market, scott nohland, a partner with founders fund. off lot of thoughts about what characterizes this environment that we're in right now. how some people are making looking at the wrong metrics to determine whether things are getting overheated or not. what do you look at to determine

where we are? >> well, at a high level, first of all, we've had about 40% inflation since 2000. when people are comparing nasdaq to that, it would have to be 40% higher just to keep up with inflation. the second thing is today, price earnings ratio across nasdaq is under 25, back in 2000, it was over 150, that's a difference. everybody's obsessed with the nasdaq is the same level sort of metric. the bigger question is if there is something that's overvalued, where is it? look at dow jones, it was under 12,000 in 2000. now it's over 18,000. so if anything, it's almost this anti-tech portfolio that is the bubble portfolio. >> interesting argument. so you talk about burn rate and how some people focus too much on that and what people should be looking at. i want to know, what do bad companies look like in today's environment? what kind of an entrepreneur do you see and you say, red flag, that person's head is in the wrong place. >> yeah, the burn rate thing is finance 101. if you have high iro, put money towards them.

the negative of that is, if you're not putting money towards it. if you have a great business, but for some reason you're just kind of too hesitant to scale it and you don't see the value in just kind of owning a market, that's a negative, at the same time, if you're spending money in really bad ways. let's say you don't have the model figured out. you don't know if this is good spend and pushing cash out the door or creating huge fix costs. that's bad spin. >> one of the worries is that some of the newer money into the space, the hedge funds, the mutual funds that are chasing some of the later stage rounds, they might not be as surprised as a founder's found that has been in the space for so long, and might be chasing some of the bad companies versus some of the good companies just because they're looking for yield. how much of a risk is that? are you seeing that happening. >> it's definitely possible. ting comes down to company by company specifics. so for us, we are focussing on the companies where the model is known, it's really a question of scaling it and owning that market. and so, it's hard to say on the general basis, i could imagine that there will be ones at the

later stage investors are putting money into that won't work out. we're looking to sectors that others are not. >> speaking of sectors, we talked to entrepreneurs who to help build an app that recommends restaurants or can get you across the street. you're not interested in that. you want to do tech, you want to do science, right, aerospace, why, and why so disciplined about that? >> we are trying to invest where others aren't. where it's not crowded. that includes breakthrough tech companies, biotech, aerospace, energy, even health care. and so we're doing a lot of things across that. we think there's fewer, less capital chasing -- >> harder to understand? >> in general. >> feel like they're out of their league, over the their skis? >> our team has strong engineering backgrounds across the board. it's very easy for us, relative to other investors, we think, to be able to understand which of these are good companies and which are not. which are huge opportunities to remake entire markets. and we really focus on those. >> you mentioned fixed costs.

and expanding those too quickly being a red flag. the commercial real estate smarkt insane right now. how do you advise companies to grow at the rate they need to, you talk about the need to put capital to work, but at the same time, avoid raising those fixed costs in that environment. >> right, so the reality is these costs are extremely high, relative to where they have been at the end of the day, they're often only a smart part of the cash flow of a company. so, luckily, even though the real estate prices do feel high, it's not materially impactful for most of these companies that are raising, you know, hundreds of millions of dollars. >> bc fund raising, are you seeing that? >> yeah, there's a good amount of it. i think it's justified though because more companies are staying private longer. it's to help finance them through the growth stages that previously were out of the public markets. >> certainly lots of interesting ideas out here, it's one of the times when people feel like anything is possible. scott nolan, thanks for joining us. >> thanks.

we have a bit of news on safeway. hey cait. >> we just learned that safeway, one of the largest grocery chains that are based in the same state you are sitting in is soon to undertake the third ipo in history. this would raise more than $500 million from what i'm told. the exact terms and timing are being determined. safeway merged with albertsons, the other chain owned by a investor consortium, and it's known as ab acquisition. they have hired wall street bankers to lead that offering. ideally occurring in the next couple of months. valued at more than $500 million. interesting the timing you guys, server as in its partners bought this just in 2014, their exit has come around quickly. and again, this would be the third ipo for this company because it was taken public many years ago before kpr undertook an ip ox. once again, it was privatized as

a result of the deal that occurred last year. and now it'll be making its debut again, john and carl, not long after delisting from the nyse earlier this year. back to you. >> wow, that's a lot of leftovers, thanks, kate kelly. coming up, billions at stake in the world of online video. this week, we will tell you which company google, yahoo stands to gain the most. first, rick santelli, what are you watching today? >> well john, the last fed meeting was march 18th, last time above the percent was the meeting. this wednesday, we're going to got another statement. what has the tenure done since then? that's what we're going to talk about after the break. ♪

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why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you, it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details. coming up at the top of the hour, countdown to apple earnings. spots on the move today and traders are breaking it all down. plus a downgrade for twitter by star analyst bob peck. he will join us live to explain why he did it. and a pair of ceos are live first on cnbc. blackstone's steve schwarzman, john chen from the conference in l.a. we'll see you in about 15 minutes. >> all right. we won't miss it. meanwhile, it's that time of year when digital contact companies make their pitch to madison avenue trying to snag more advertising dollars. julia joins us now with a look

at the billions of dollars in ad spending at stake, julia. >> well john, this could be the year that digital ads prove they are a real alternative to the 30 second tv spot. today kicks off the two-week long digital new fronts. it's internet giants answer to television upfronts when they sell about two-thirds of tv ad dollars. as giants from youtube and hulu argue that their ads are more effective than tv. u.s. digital digital ad spending is projected to grow 30% to $7.8 billion while tv advertising. % this year, but it's more massive. expected to reach 70.6 billion dollars. digital video will become as important as a tv programming within three to five years.

advertising just in the 5% of youtube channels. youtube says its drawn more than 30 traditional tv advertisers who have not advertised with youtube. premium original content will be in the spotlight, aol is pushing for live content, planning 3600 episodes of news and talk shows this year, while hulu promotes amy poehler produced difficult people and katie couric. now with a dozen more presentations than last year, facebook got ahead of the crush, it presented to advertisers last week, as it signed an excitement over the potential to lure over those big tv dollars just grows and grows. now, meanwhile, tv broadcasters are fighting to hold on to the traditional tv bundles. just minutes ago, espn filed a lawsuit against verizon over its new slim down custom tv bundle

which sells espn and espn 2 separately from its core bundle. espn says in a statement that it's at the forefront of embracing innovation, but it's asking verizon to abide by the terms of contracts. i reached out for comment, verizon has not respond the just yet. >> that dispute nowhere near being resolved. >> i think this is going to be a huge battle. perhaps even the kind of legal battle at the level of it. this is the broadcasters trying to hold on to core business and about digital distributors trying to evolve and keep up with the way that consumers to want receive their content. who knows, this is the way all contracts will be resolved in the future. >> it's so interesting, talking about all of this contact, and competing with tv. there's only one espn right now, and they still feel like they have enough leverage to tell verizon, you're not going to get if it anywhere else.

you're going to play by our rules. >> espn is the most expensive channel. it's also one of the things that people need to watch live. this is the reason why people still pay for cable tv and live channels like cnbc. it's all about the live news and the live sports. >> julia, you'll be all over it, thank you. let's get the exchange, morning, rick. >> good morning, carl. yes, live, live is where it's at. we're live at the floor talking about what's going on with tenures. we all understand a fed meeting starting tomorrow, two-day ending with a statement of press conference. let's look at an important chart, shall we? let's look at a chart of ten-year note yields starting when they made their low yield for the year at 164 on january 30th. now as you look at that chart, remember, low yield was as i said 164, the high yield was 206, i'm sorry, 224, and that was on march 6th. now let's go to my board and

look at that same chart. if you look at my board. here's the chart, but we're going to hit some highlights. first of all, this is the 29th session, so you have 28 under a belt, this is the 29th where we've closed in a range of 186 to 199. okay. now i'm not looking at 3:00 eastern close when futures close, some, the new services marked that as a close. i'm talking about the evening cash close. now, if we look at 224 and 164, the difference is 60 basis points. if you divide that 60 by two to get the average, it's 30 basis points. so you either add 30 to 164 minus from 224, but in either case, you come up with 194. why is that significant? it fits rather nicely into the 28 session range. does it not? let's take it a step further. when did this begin? this began on march 18th. march 18th was a fed day. so not only is it 28 and today

the 29th session we're in a range, that's how many sessions its been since the meeting. and that is very significant because right before that on the 17th was your last close above 2%. so let's be real easy about this. we have a pretty decent range for the first quarter pretty much for ten-year note yield, and after the last meeting, it honk urs down in a range. normally it pattern, congestion around the midpoint breaks out to the downside in yields. now wlu it will or not, i can't tell you, but it seems awfully perfect the way serving lined up from fed meeting to fed meeting. we all know normalization is an issue. and normalization brings higher rates or lesser combinations. i'm discussing the long end. but the reason this is key is because of course the yield curve and the long end will have to make some type of a response, even though they know that the inventory of treasuries, good

chunk of it is on the balance sheet of the federal reserve. not tradeable. so whichever direction this moves, in either case, you're probably going to get a big breakout, but historically say traders means lower rates. kayla, back to you. >> rick santelli, to say the market's watching this week's fed meeting, quite an understatement, thanks, rick. when we come back, talk about social prowess, next guest has more than 900,000 followers on instagram, created the app's most popular filters and he's featured in apple's new iphone 6 ad campaign. cole will rise up next on squawk alley. ♪ if you're looking for a car that drives you... ...and takes the wheel right from your very hands... ...this isn't that car.

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♪ we are on the roof this morning at our new studios at one market in san francisco. and our next guest is a former instagramer who built some of the apps most famous filters, including rise and willow. he now has over 900,000 million followers on the social networking site. the ceo and founder of photo editing light app lightly. >> good to see you. >> thank you. >> we decided to come to you. good to see you again. >> easier than flying to you guys.

>> yes. you drive into san francisco and see it billboard for apple, new campaign for shot on iphone 6, one is yours? >> yeah, i think there's a double billboard now if you drive in one direction, you see one, the other direction, you see another. it's actually a testament to how good the quality is. the camera that we carry in our pocket, it's billboard ready. that's kind of a mystery process. they reached out through my representative for photos, i didn't know who or what company, but they asked for iphone 6 and iphone 6 photos, and i had been shooting a lot, i had a whole bunch of them. we're apple and by the way, you're everywhere. >> if i'm not mistaken. that's an apple watch i see. >> yeah, we're all kind of carrying apple watches here. mine just came in the mail. >> i'm curious about the thought about the capabilities. you can look at photos on it, maybe people would find that a little bit complicated, but you could also remotely shoot

photos, and it has the potential to change the selfie, how much experimentation have you done with that? >> i'm excited about the remote functionality. they sell the bluetooth things. honestly, i'm excited for the selfie drones so question control with our wrists. >> this phenomenon of live video, pair scope and meerkat have taken this by storm. is this something that'll create viable content. where do you see the space? >> it's a different medium. i love it, video brings the humanity back to social media. you can contact with your followers and your audience in a different way. on a personal level. they can see your face, they can hear your voice. and that's something real refreshing for something that's normally 140 characters. >> are we still figuring out what that market will be though and who will succeed? you are creating some celebrities, amanda oleander has

thousands on periscope. >> it connects well with my twitter followers. >> how do you decide what's p a periscope worthy? some people record it and safe it for later. how do you decide? >> that's the beauty of live video, it's more forgiving. i was watching some of sketch people live at lax. that was such a nice break from my day, i'm eating a bagel and watching someone make art. that's cool. i think people are going to misuse it and use it in great ways. people were following as i was playing piano. it's really fascinating. >> you know, there's so many filters, as you know, you created so many of them. this day in age, what makes a good photo? what makes a lasting photo? besides this, this makes a great photo. >> no-brainer. >> yeah. actually, i think the best photo

tell us a really good story. how it's made and where it's made. i think the photos that focus mostly on the content are the ones that persist through time. >> and have you topped out do you think on filters and the ability to change saturation rates in contrast? i mean -- >> what's great, i think technology is helping us take better photos. they're helping us make decisions and removing the work from the process of editing. >> all right. well, cole rise, great to have you here this morning. and it's picturesque, and so, very much appropriate. >> thanks guys. >> meantime, close eye on the markets obviously. apple will be the story of the day. 13261 is the last print. that's within 99 cents or so of an all-time high again. the estimates all over the map. people will be paying attention to the mix, john, the gross margin mix, and it's gone back and forth on the cell side as to whether or not there are more or

fewer six pluses on the street than we think. and what that's going to do to asps. >> who knows what's going to happen, but i think the margin question is a particularly good one this quarter. i think the average selling price of the iphone has been trending higher since we saw the phones come out. holiday quarter, people tend to go for cheaper things in general, so, eps upside, i don't know, it'd be interesting, i wouldn't be surprised to see it. especially with people in the mood to spend on the watch as well. >> tim cook warned that they'd become less effective, so the wild card will also be foreign exchange impact as well which we've seen with google and microsoft being a big issue. twitter got a downgrade from bob peck, very influential analyst who goes to neutral, lower disprice target from 58 down to 50, argues that maus, the guidance may actually slow down once we get guidance later in the week. and then engagement, might be declining, other metrics might not be available.

bucking the trend, 1.43 as investors wonder if google buys them in the end. >> downgrades of stock and popped. maybe twitters -- >> doesn't happen to peck often. >> no. >> big week coming up at the new bureau, the lineup includes don, john, and yahoo president among many others. you can hear the bull's toll, let's get back to headquarters, scott wapner and the half. welcome to the halftime show, our starting lineup starts with josh brown, along with pete and steven. we have a big game plan for you today as well. we have that twitter downgrade that we're going to talk an awful lot about. bob peck will be here live as well. we're going to count down to the big apple earnings report, we're even going to talk to an investor with billions of