hi, hi, everyone, welcome to "on the money", i'm becky quick. turning education on its head, how to revolutionize how american learns and for free. >> five years ago we were working out of an walk-in closet. >> a company is headed into new territory. you will see what we mean. a family with a whole lot to celebrate, their horse won the triple crown an they won a chunk of change. what the future holds for american pharaoh. summer is almost here and so is peak travel season. how to make the most of your frequent flyer miles. "on the money" starts now.

>> here's a look at what's making news as we head into a new week. americans are starting to open wallets once again. retail sales rose 1.2% in may, slightly above expectations. the number for april was revised higher as well. retail sales are always important because the consumer makes up two-thirds of america's economy. auto sales were strong and so were clothing and building materials. stocks had the best day in a month. the dow was up 230 points on hopes of greece reaching a deal to pay off its debt. stocks rose again on thursday but fell on friday. two big changes in the media world. one old and one new the ceo is stopping down, facing over faltering demand for advertising and he'll be replaced on an interim basis by jack dorsey. rupert murdoch is expected to step down. the 84-year-old ceo is expected to give the title to his son

james. rupert murdoch will continue as executive chairman. if you plan on sipping a soda in san francisco, it could be the first to have health warnings on soda ads, the consumption of sugary drinks is responsible for high rates of obesity and diabetes. the non-profit educational education just launched free online step for students studying for the entrance exam. the official s.a.t. practice is created in cooperation with the board. sal khan, thanks for being here today. >> great to be here. >> for those who aren't familiar, what is the khan academy. >> we're not for profit with the mission of providing a free

world class education for anyone. we have thousands of videos, actually now in many languages and interactive software, students can go there, start at whatever level they, it could be first or second grade and to go to college level humanities and learn anything you want. >> how did you come up with this idea? >> it was a little happenstance, i was analyst at a hedge fund and started tutoring cousins and started making some youtube lessons for them and long story short, they gave me feedback they liked me better on youtube than in person. i took that as a positive feedback and soon became clear who people who weren't my cousins were watching. >> this new practice one will be free. is it your intention to put it into the companies like kaplan

and princeton review? >> they are a 100 year organization and there's been a perceived and unleveling the playing field because of the industry. and i think it was pretty forward thinking to say if we're going to call it out and work with the khan academy to make greatest prep. not just videos and written content but interactive software. our goal is to level the playing field to be able to be prepared on equal footing. >> they reached out to you? >> they did. it was kind of an incredible thing for us. i just mentioned five years we were operating out of a walk-in closet. >> in terms of what people can learn from these online lectures, are there limitations and some things it does better, are there things that still are done better if they are in a one on one environment or in the classroom? >> we don't view these as replacement for necessarily human interaction, if you don't

have human interaction, these can go a long way. if you can get explanations on demand, and get as much exercise as you need with feedback that's great but we even see students who have what we call coaches or teachers to help them stay motivated like i was doing with my cousins. they can get more engaged. that's one of the reasons we're partnering with the boys and girls club of america. not only are we creating great content or software, but students who don't have internet and could use mentorship can use the materials. >> what do you think of the state of the u.s. education system? >> there's bashing on it sometimes and it's a diverse system and there's very bright spots in the education system, these schools are as good as any schools on the planet and some places that need a lot of work. it's hard to speak of it as one monolivic thing but there's room for improvement across the board, not just public but

private education. >> where does khan academy fit into future? where do you think you'll be five years from now? >> we're reaching a 15 million students every month right now. what we saw last year is roughly 20 or 30% of all american students used kahn academy at least once in a year. in five years you can go to khan academy and get a deep experience and well into college material and beyond. it will be internationalized and the role we play with physical education is now that you can get explanations at your own time and pace whenever you want, you get unlimited feedback. it allows the classroom to not be about lecture but be about interactive dialogue and doing simulations. >> was there one moment quh you realized this is really something that's going to take off? before you quit your job but was there one eureka moment? >> when i was getting letters -- some of the comments on youtube said thank you.

that was a big deal, most on youtube are not thank you. but then i started to get letters from folks all over the planet, this is why i want to be a physicist and why after retiring from the military i'm able to go back to college. it felt like maybe it was potential it could reach millions. >> sal, thank you so much. i appreciate your time. >> thank you. >> up next, we're "on the money." the smartphone app that recognizes music and can name that tune in seconds. america's reigning pharaoh. what's next and what's he worth now? as we head to break, look how the stock market ended the week.

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that's shazam, finds out that's shazam, finds out both the title and artist. that version of take me out to the ball game is by steve goodman. now expanding beyond sound to sight. it doesn't only hear music but can see objects and images. rich, thank you for joining us. >> thanks for having me. >> in terms of recognizing music, i've been fascinated how this works. how does shazam do it? >> when users push the button, we take a sample of the audio and send it back to our system and scan a data base of over 30 million songs and 160 tv channels and in seconds we return that result and do that over 20 million times a day. >> how does that work that quickly? i love the name because it is shazam, like music. >> our users do associate us

with magic and we take that seriously. in milliseconds we make that match so there are over 100 scientists and engineers behind the scenes making that look easy but technically it's quite challenging. >> it's perfect in terms of music application. how often do you walk into a restaurant and hear a song playing or card radio or something. i don't understand the visual. how does that work? >> we've been doing music for a long time and world leader in music identification and we've been moving beyond music. you can recognize tv now and shazam 160 u.s. tv channels and we know what show it is and what music is in the show and cast of the show. we also do tv spots and so we'll make a tv spot shazamable and we'll want to go inside the car or schedule a test drive, two taps away from your smartphone and we're continuing that evolution of our platteform into visual. what we launched just last week

is the ability to use the camera and our launch partners include disney, for example, and they have print ads that say george cloon clooney's tomorrowland movie coming soon. now you can wave your phone over the land and we take you to "tomorr "tomorrowland" in seconds. >> there's a mix where you can make this monday tiesed? >> the bigger vision is to connect people to the world around them. smart devices will become smarter and faster. but one number that's not changing is the number of apps people use. they use less than 25 apps. >> this is a free app and i wonder how you make money? how does it make before you get to that? are you making money right now? >> our business model is selling a lot of music. we sell hundreds and thousands of tracks a day for apple and amazon and google. we also have advertising within the app. there's mobile display advertising and a lot of brands

want to get to our mobile audience out enjoying music and doing things. and then we also work with streaming providers so we also send a lot of subscribers to leading screaming around the world. we believe advertising is the largest sense of revenue and will be for the long term. >> you mentioned your partnership with apple. it made waves when it said it's streaming music service. does that change your relationship? >> they are the largest global partner. we send them a lot of music sales and have historically, live demo from the watch announcement lately and do a lot with them. we're very excited about their new music offering and hope to continue to be big partners for a long, long time. >> one of the things we talk about, what's been happening with valuations in the marketplace. you've had investors including carlos slim and their

investments have valued the company about $1 billion. what do you think is going on with valuations, if you think it's sustainable? >> there's been enough evidence that big companies can be built quickly of the look at facebook and twitter and uber. and people realize the world is changing fast. and mobile is a big part of that, shazam is one of the biggest mobile first brands, one of the top 20 apps in the world. in the word of people using less than 25 apps, there's huge potential in a platform like ours and others and that's what drives these valuations. >> would you see yourself going towards an ipo or do you think shazam would be potentially bought by another company? >> we're trying to build a great stand alone company. i think we have over 100 million users every month. been downloaded many hundreds and millions of times and have a great business model, advertising and partnering with brands around the world. we're certainly building for

that. at the same time, we do think there are a lot of potential acquires and that could make sense too. we'll see what happens. >> thank you for coming in and i do like your form of magic. >> thank you. >> up next, his owners are richer and happier, taking a break from the spotlight, what is next for america's first triple crown winner in 37 years? you have them but what's the best way to use them. those frequent flyer meals, we'll talk travel deals and dollars and cents. (actor) it does help...i'm not just acting. i also do illustration. so whether i'm on camera or just working at my desk... ...with quickbooks, i can focus on my lines. (dad) i wear a dozen different hats doing small gigs,

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it's it's been 37 years since america had a triple crown winner and now american pharaoh is reigning supreme in the horse racing world. his value has skyrocketed and future is brighter and celebrations haven't stopped yet. robert frank joins us with more on what is next for the house that made history and family that hasn't stopped smiling. great story. i haven't stopped smiling either. >> it was such an inspirational race. he may be finished riding off into history last weekend but not riding off into the sunset. american pharaoh will appear in at least two or three more races this year. if all goes well, let's take a look at his journey so far. the drought is finally over. american pharaoh has taken the

triple crown, a fete not accomplished by any thoroughbred in 37 yeersz. it was pure pandemonium as his owner's, the zayat family, watched him charge into history, winning five and a half lengths at the final leg of the triple crown race's belmont stakes. their journey to the triple crown was a six-week roller coaster ride with the 3-year-old colt. >> oh, my god! >> roses, sir. >> first stop, a momentous win at the kentucky derby with a home bred horse. >> 141 winners. i'm one of them, it's history. >> i still can't believe it. >> $1.2 million prize they walked away with was just the beginning. in just two weeks after the derby, in a torrential downpour. >> what is this weather doing to us right now? >> american pharaoh stormed the tracks. >> let's go!

>> reigned supreme once again winning by seven lengths. >> american pharaoh! >> ready? >> yes. >> and three weeks later in new york, he secured the ultimate title in horse racing and becoming only the 12th horse in history to win the triple crown. what do you do after you win the most elusive title in the sports world, they hit their rv for a post race party and champagne shower. they have a lot to celebrate. they are estimate the value has skyrocketed north of $30 million. what's in the champ's future before hitting the stallion farm for millions in stud fees, they plan to enter american pharaoh in even more races, including a race in their home state of new jersey and there's even talk of heading back to kentucky for the breeder's cup classic in october. >> the great news is for those who want more of this horse, you

can catch him at the breeder's cup in kentucky in october and he may be in new jersey, by far a record crowd for that -- if he has 200 pairings a year, 20 million a year, twice of average pay of the fortune 500 ceo. >> i read stories there are hundreds and thousands of dollars of winning tickets never cashed in. >> including mine. i'm going to frame that and put it on my desk, not just a reminder of this inspiring family and horse, as journalists we want to be part of watching history happen. we got this over this six weeks. >> we did. our kids were excited about it. it was an amazing moment, glad to have been there to see it myself. >> up next "on the money", a look at the news ahead, free hotel rooms and airline upgrades, are there ways to beat the system when it comes to frequent flyer miles.

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and also on tuesday may's new home construction data will be released. on thursday we'll see if there are any signs of inflation when the consumer price index is out. also on thursday, fitness wearable committee fitbit looks to raise additional $358 million in financing through an initial public offering. how can you make the most of your frequent flyer miles or reward points sitting in your account? joining us right now is sharon epperson on how to navigate the market. it's pretty tricky, a lot of people have these miles and not a lot of people know how to use them. >> 100 million customers have one frequent flyer program they belong to but the question is, how do you go about redeeming those points and miles and it's easy to do online. you can find out in terms of airlines how many points it takes for certain flights, where you want to go. if you have your account number and password ready, you get that information. if you don't, you can call up

the airline and get it that way. >> are there ways to beat the system? >> the good news is there are surveys that say there are more rewards seats available than we've ever seen. they are increasing the number of open seats but a lot of us say yeah, right, it's hard to get the ones we want when we want it three weeks from now. you have to be flexible. one of the first things you have to think about, trying a connecting flight. i know, it's the last thing you want to do. then there are a lot of partner airlines, people don't realize when you're traveling oversees that some domestic carriers like american airlines in particular, alliance, world airlines belong to that as well, you may be able to travel on another airline. the other thing is not necessarily using miles for nonflight rewards because if you're trying to get maybe a hotel room or set of luggage, you're not going to get the same bang for your buck. >> that's an interesting point too. are the rules constantly changing on what you can and can't do? >> they are changing and there's

been big changes this year, in terms of how you use those points and whether it's the points that count towards the mileage or how much you spend. delta and united have made a big change saying it's the price of the ticket we're going to use for your points to calculate your points and not how far you've flown. and of course the merger with american and u.s. airways, the merger of frequent flyer miles as well and southwest had a standard they used and now saying maybe we'll look at the destination, time you travel and bunch of different factors to figure out how to calculate the points you're going to get. >> it doesn't sound like it's getting easier. are there times when you should say forget it and it really makes sense to buy a ticket -- i don't think i've ever used miles? >> how much should you really spend and how many miles have you used? for every mile, you should have it be at least two cents you're spending higher on the ticket. if you have 25,000 miles, you want to have a $500 ticket or

higher in order to use the miles, if it's $189 ticket or something it's probably not worth it to use the miles. so then you might be better to buy the ticket like you did. >> i'm doing the right thing. >> when you have a big vacation, that's when you need to think ahead. >> sharon, thank you. that's the show for today, everybody, i'm becky quick. thanks for joining us. is there an entrepreneur gene, three generations of one family, each one of which started their own business. keep it right here "on the money." have a great week and i'll see you next weekend. en all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care...

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>> narrator: in this episode of "american greed"... a milwaukee crime boss, michael lock, is a man with ambition. >> i was a young man that grew up who always had the aspirations of being rich. >> narrator: and rich he is. >> michael really saw how you could make money. he was worried about costs. he was worried about how to distribute the wealth in his organization. so he understood the business model. >> narrator: a business model taking him from cocaine dealing to bank fraud. >> you know, there's an old saying that you can steal more money with a ballpoint than at gunpoint. it's absolutely true. >> narrator: and he has a surefire way to beat the competition. >> the victim would be