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welcome to squawk alley for a wednesday. john fort, kayla, and myself at post nine. founder, editor, and ceo henry -- do we have a lot to talk about today? a half hour from yellen, but we'll start with yahoo. shares rallying after hearing that the wrau hue board is considering selling off the internet business. they're meeting today to discuss the idea and also meeting with jeff smith, ceo of star lord. marissa myer, yahoo's board reportedly still has her back. according to kara swisher, not considering a change in leadership at this time. she says if marissa myer leaves, it will happen on her terms. what do you think? >> i thought star word is right. it will be tied up for years. where would you do this? maybe consider selling the core business. yahoo either needs to say to all the activists swirling around, shut up, we're not selling

anything, back off, good-bye, or get something done quickly and get past it because it's just so distracting. >> what's hard about this for me, though, is how do you know how much yahoo is worth? they're going to be numbers all over the map probably. people are likely to use the aol sale to verizon as a benchmark, but right now with the asian assets in there, depending on what the tax treatment of those is, even arriving at any kind of value for yahoo will be hard. >> you know, it's worth something. people talk, oh, the business is so challenged. it is challenged. it is still generating almost a billion dollars of cash per year. it's worth something, and the argument is the market is not valuing it at anything. that's a reasonable strategy. >> although who would eventually buy it, and who would be the best steward for this type of company given that the question we often ask is what is the core business, what is the fate of the core business? >> yahoo is still a tremendously

valuable platform. they reach a billion people around the world every month. they have still a huge e-mail business. they have a huge news business, sports, finance. there is a lot there to work with. you would have to think about what you want to do with it. you could say telecom companies. you could say media companies. there's a media distribution platform. we have all the traditional networks saying what's going to be the future of television? maybe yahoo could be used in the future of television. somebody is going to have to make a bet. nothing is a sure thing, but there's still value there. >> hiring marissa myer was a bet on the technology camp. we'll come up with technology that will fix this. that has been a slow process. meanwhile, the business -- traditional business has been under assault because you've had direct advertising, the people wrum stuff is getting replaced with program attic, video, all these others things.

it's been very hard to grow revenue in that environment. >> i don't know if it's going to hold her interest that long. right? how often do you want to go to work and get punched in the face every morning that things aren't going well. she doesn't have to do that, and that's another position she can take. she can be very aggressive here and say, look, careful what you wish for. keep talking about how you might want to make a change. you may have to make a change, and who are you going to bring in? >> why would a company even listen to somebody like starboard who is basically just backtracking on advice that it very sharply worded to the company just a few months ago? >> lots of investors will do anything to make a quick buck, and that is the opportunity here. if starboard with suddenly

manufacture cash through financial engineering quickly, or a sale, lots of folks will want to jump on board for that. far fewer investors will say, okay, let's look ahead three to five years into what this can become. especially given the struggles they've been going through. >> are you surprised on the tax front? the degree to which it's wagging the dog here. or is this par for the course here? >> the fact that tax laws are so open to argument and all the best we can do here is the two camps thing. yes, it probably is. the other side said, well, i'm not going to fwarn tee it. the one that you can say here is there's a huge amount of money at stake. a huge amount of money. if they can find a way for alibaba to buy back its own stock and eliminate the tax gain in some way, that would be very helpful. it's perfectly reasonable. if they've got a guarantee from the irs saying it's not taxable, it would be a different conversation. >> we need to be careful about the myth making around executives. turnarounds are very difficult. often, it takes a founder

because of cultural reasons. there are all kinds of moving parts you don't think about beneath the seniurface. if you are looking at diane green running the cloud business, yes, she has experience, she could to it, but it's not like superman flying in every time. >> have you to wonder one reason marissa meyer might not be going anywhere is because if she can't turn around this company, who can? >> bob peck has some ideas. >> it's the media root they have not embraced. that's a possibility. other than that marissa meyer has the chops. >> meantime, we turn to facebook this morning. ceo mark zuckerberg announcing the birth of his daughter, max via facebook post yesterday. he and his wife, priscilla, will give away 99% of their shares during their lives. that's currently worth more than $45 billion. a facebook spokeswoman says it will go to an initiative structured as an llc. not a charitable trust. joining the conversation on the phone, roger mcnamee, who holds a significant stake in facebook.

roger, you've called the initiative admirable. what are you saying about it beyond that? >> i think the key thing to keep in mind here is that this is something that is going to take place over the rest of mark zuckerberg's lifetime. if you are an investor and say he owns the largest part of the stake, that is not going to happen. they're limiting the sales over the first three wreerz to $1 billion a we're. this is not going to be an interim stock. we can simply look at it as an act of tremendous swren roft, from somebody who i think has a very steep learning curve. he is not the first person to commit to giving away money this way. you know, he has a model in the gates foundation. i think a thing we should expect, there are going to be success and failures. mark has already had a failure in his attempt to help the school system in newark. you know, he learned from that. he is doing a much smarter thing in the bay area.

i'm really optimistic about what they can do here. i believe that priscilla's expertise as a physician is going to give them things in public health that will be incredibly valuable, but i think we should also remember that while it's a really cool idea to see billionaires giving this kind of money away, it's also a bit of an indictment of society today because the reason that they have to do this is the government institutions around the world are failing us. >> henry, he is not giving this away. right? unless i'm missing something here, this is kind of like when i transfer money from my checking account to my savings account because i'm planning to spend on something. he is planning to spend on these initiatives that are important to him, but this isn't a foundation that he is setting up. it's an llc. he has broad discretion. he is not selling the shares. he is gifting them into this llc. >> that is great, and we should totally celebrate it.

>> it's different from saying he is giving away -- >> he is committing to taking 99% of the shares. as you would in a foundation. i think what he is pointing out is that there is a role for nonprofit foundations, absolutely, giving money can do a lot. there's a role for the government. there is also absolutely a role for investment that is focused on companies that are helping the world. private enterprise is a huge role to play here. you can't solve it with government and nonprofits, and i think this is just an incredible step toward where we need to evolve capitalism toward, which is it's not just about the bottom line. it's what companies are doing to help the whole world. >> but, roger, we saw nick woodman, the founder of gopro, do something simpler. albeit, on a much smaller scale. that marked the top of gopro's stock. just shy of $100 per share. is there anything symbolic in this headline number, anything we should read about mark zuckberg's take on where

facebook's stock is right now to get that number? >> in reality the stock sales that are driven by this will take place over a couple of decades, so i don't think you should take any message out. i think it is the right question, but i'm with henry on this. this is a new experiment. we don't know how it's going to turn out. mark and priscilla are really smart people. i think they are committed toing the world a better place. i can't wait to see what they do with it. it's not a silver bullet, i don't think, but it's way better than having them not do this. it's millions of miles better. i think they're very capable. >> i think it's interesting. the whole story is such a comment on the degree of cynicism in our culture today. people don't want to believe short of knowing exactly where these dollars are going that it's actually true or meaningful. does that say anything to you? >> it does, but i also think that people are not crazy to be skeptical. i mean, the gates foundation's failures in education -- mark

zuckerberg's own failures in education show that the notion -- this new concept of hacker philanthropy, this idea that you can approach big problems in the world the way you can approach creating software is not without pitfalls. there are going to be problems. not all problems are success 1e79ible to the techniques of the software companies. what is clear, though, is that the gates foundation has shown that they can do unbelievable things against communicable diseases and other things around the world, with immunization and a variety of other public health things, so i'm super confident that they're going to find good things to do. i just don't think it's going to be -- it's not going to happen overnight, and it's not always going to be easy.

>> i do think to henry's point, one of the things that these guys are going to really make progress on are alternative energies. if they do some of this as a business, i really do believe that renewable energies is susceptible to highly focused investor approaches, and i'm really hopeful that they -- that someone, mark zuckerberg, bill gates, someone will take that problem and really make progress. >> it's going to be fascinating to watch over the next literally, years, decades. henry, roger, great to have you here. >> thank you. >> let's go over to dominik. a busy market day. he has a market flash. >> carl, we're watching tech and wreed giants like google, amazon, netflix because we're all hitting -- they've all hit a record on all-team high, and

microsoft shares also hitting a 14-we're high. amazon, remember, up 120% already this year. keeping an eye on facebook shares, as we talk about mark zuckerberg, they are near a new high, but are still a few bucks away. 110 and change is that level to watch for facebook. still, a lot of tech and media giants, carl, making big waves today. back to you. >> thank you very much. when we come back, mossberg says an encryption back door for the government is a bad idea. he will join us live. plus nadella hosting a second shareholder meeting today. and drones expected to be a top gift this holiday season, but are regulators still holding the industry back? one of the top drone makers in the world will tell us where things stand when "squawk alley" continues in a moment. tucson.

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walt mossberg weighing in on the back door for encryption saying it's then available for lots of bad guys. walt mossberg, executive editor at "the verge" and editor at large at re/code. we're talking a lot about back doors and encryption and why that might be a bad idea. somebody is going to make encryption that doesn't have a back door even if the u.s. and other western governments require it. isn't there a way to allow something like wiretapping in

electronic communications short of creating an encryption back door? >> well, john, you know, i hope so. as i said in the piece, i spent part of my career before covering tech as the "wall street journal"'s chief defense correspondent. i covered national security and the intelligence agencies, and i certainly have an appreciation for how important it is and how hard it is to protect the security of the country, but i hope there's a way to do this without breaking encryption, but right now what the fbi director and the other security chiefs are asking for is exactly that. a full back door to encryption that google has introduced into their smartphones, and in which the fbi says is making it "go dark" for them to be able to get

into these phones and learn things. i just -- i just think that would be a big mistake. >> when we hear about things like what's app, kick, and those things being impossible for the government to decode, is in a inaccurate? >> i don't know what's -- you know, the nsa is so secretive, i mean, really -- the nsa, the old joke in washington was that it stood for no such agency. i mean, it's unbelievably secretive, so i don't know what they can decrypt or break into, but let's assume you're right, that you can't descript it, that is -- those services and there are, like, eight or nine of them, telegram, that aren't even american, those services aren't

under the control of apple or google, and, yet, the government is really leaning on apple and google because they control the smartphone platforms, but even if you could break in -- if the fbi had a back door and could break into your iphone, which i repeat would be a bad idea, which i think is plain, even if they could, it doesn't mean they could decrypt telegram, which is a russian developed service based somewhere in europe and has nothing -- google and apple have nothing to do with it. >> walt, can you do a little tech review or diplomacy? is there some middle ground here between the governments who want a back door and encryption position and silicon valley's no way position? where is the space where they can perhaps begin a conversation about how one can be helpful to the other and technology doesn't get seen as this blockage toward finding terrorists and others

who would do harm to society? >> well, you know, according to fbi director, they are having conversations, those conversations are already underway to try to see if there is some way around this, but they're holding firm on the back door because it breaches encryption. once you open a pathway for the government, which is, itself, by the way, insecure as we know from the massive breach of the office of personnel management, which contains social security numbers, fingerprints, and all kinds of things -- once you open a breach for the government, two things will happen. bad guys, hackers, criminals will find a way to exploit that breach. we know this kind of thing is just a certainty, but more importantly, i think, maybe is that china and russia and other

countries will simply say you want to sell your galaxy phone or iphone in our country, you're going to have to give us exactly the same back door as you give the american government, and that is the problem with this particular approach. i would love to see an approach that is a middle ground. i just don't know what that would be. >> suddenly in that case all the doors and windows are open at night and nobody feels sure then. walt mossberg, great column. thanks so much for joining us. >> thank you. up next, mark zuckerberg says he will take two months of paternity leave after the birth of his daughter, max, but people in most workplaces aren't that lucky. we'll have more on that story when "squawk alley" returns. for every family. mage and this year, look at what he put in our driveway. the lexus december to remember sales event is here. lease the 2016 es350 for $349 a month for 36 months and we'll make your first month's payment. see your lexus dealer.

facebook's mark zuckerberg says he will take two months of paternity leave as a new dad, and he is offering four months paternity leave --

the first born boy specifically. subsequent children or girls actually reduce the amount of paternity leave that fathers take. for mothers this isn't true. they're likely to stay at home more if they have a girl, but having a first born or younger baby doesn't impact that decision. another big factor, look around the office. when men work in a field that's dominated by women, they'll take more time off. when they work in a heavily male field, they'll keep coming to work. there's also research to suggest that having a brother or male co-workers take time off will increase a new father's chance of doing the same thing. that's actually why zuckerberg has a real hands to change the culture -- you might be able to see the trends shift and full paternity leave become more acceptable, but there's clearly a long way to go.

>> interesting, issuing. a lot of viewers probably nodding their heads at that date wra. thank you very much. >> doubling down on its efforts to force feed cash into the euro zone economy to better invigorate it. basically qe, the buying of bonds, delivering a greater scope and intensity and duration of that process tomorrow, that's the expectation. the inflation figures today, the headline i object flags figure is a disappointment. more importantly, the core inflation level in europe, when you strip out oil and so on, is actually falling. that's very important

potentially for many people. greater action, greater qe, greater intensity and so on. it means that the your wroe has resumed its full currently trading below $1.06. this fall that you've had against the dollar lute the year, is one reason why deutsche bank points out that if you look at manufacturing pmi's, the greatest positivity is coming from germany and the euro zone. the greatest negativity is coming from this country. that, of course, is born out time and time again. that's the affect of that exchange rate arguably and the success from the ecb's point of view of what they've been trying to do. the big question is tomorrow can they deliver to market expectations because the rally on the bond market has been huge. can they overdeliver. if they don't presumably bond markets sell off and yields spike. you don't want to be in that situation. we keep saying about one-third roughly of the your wroe zone bond market has negative yields, and that's where we're coming from. other parts of the market are not as distorted as arguably they were earlier in the we're. this is the yields on the

ten-year as you can see over the last year. remember when bill gross said it was the greatest short of a lifetime when yields had been absolutely pushed down on this, the major bench mash for the euro zone, but clearly not down at that level, although it's a fairly low yield to say the least. just want to mention. relatively well. down 60% so far this year. citi today downgraded their estimate. it's one reason why the stock is down another 9%. they said that they were -- they called the turn in this too early, and they don't see any major trigger point moving forward that would revive the stock and steal prices more broadly. that's one of the big questions, of course, commodities for next year. back to you. strong gain for yahoo. what could yahoo look like without that core business? we'll get some answers on that in just a moment. proud of you, son.

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slander turkey by accusing it of buying oil from the islamic state. it's in response to russia's claims that it had proof that erdogan and his family were benefiting from the smuggling of oil from isis. the judge agreed to prosecutors' requests to dismiss manslaughter charges against him and robert caluzza who were working on the rig where 11 workers died in the 2010 deep water horizon explosion. and former national security advisor sandy berger who helped devise foreign policy and later got in trouble for mishandling classified documents has died. he has been in ill health recently. back to "squawk alley" and kayla. >> thank you so much, sue. sue herrera back at headquarters. yahoo gaining 7% this morning. the company's board reportedly considering selling off the

company's core internet business. as our david faber reported earlier this morning, the board is meeting to discuss that idea as well as taking a meeting with jeff smith, ceo of activist investor starboard. let's bring in john steinberg, ceo of the daily mail north america. >> i think there will be a bidding war for it. people that sht interested in had tech have an idea for yahoo. it's the turnaround to end all turnarounds. it's the golden goose that no one is ever really able to capture and figure out. i think there's a lot of hubris, myself included. everybody has an whered for what they would do if they were running yahoo. >> look at the spat of ideas that's out there so far. having private equity, take a behind the scenes turnaround, maybe outside the public eye. give it to a telecom company that can use the distribution prowess that they already have to leverage yahoo video. where do you go? >> i think the debate that i see is between breaking it up and actually taking it out whole, right? i can't tell you whether it will be a telecom or private equity, but certainly when you look at

the prices that a take-out would run at, peck has it at $6 billion to $8 3w8. there's a cantor fitzgerald report that says $4 billion-ish. people salivate and say, oh, it's a few billion dollars, and then very quickly i could see it running up to $10 billion. it's a bit like skype. who is going to buy it once you take it out? right? all the people that are there to buy it now are presumably the same people you would sell it to a year or two later. >> the easiest thing to do yahoo is not much. if a comcast or at&t gets ahold of, it you don't have yahoo. you have people logging into certain services every day. you mix that signal with the signal they've already got on where people are, what they are interested in, what they are doing. you have a building relationship with them already. there's lots of money that you can milk out of this business if you are in that position already versus trying to turn into the next group.

>> a billion dollars worth of revenue per quarter. display advertising now. you can buy that audience basically anywhere. none of the products are ino vaifsh. there's really no there there. if you want to zap a billion dollars a quarter in revenue and find some way to get that even more positive, i guess that could be interesting to a telecom play. the issue is there's not much there. without growth and the ability to get growth, there's not much of a reason to buy it. >> we keep coming back to this question. a lot of effort has already been expended trying it turn around exactly what are you doing. what was that all about? where could somebody else do a better job than meyer or her team? >> i have long said i don't think anyone could have done a better job than her. i don't think it's a fixable problem. it's the idea that it is fixable that's so attractive. there's never been -- it's a my understanding mill. there's never been an internet turnaround that anyone can name. brands rise so quickly now with the network externalalities. no one had ever heard of snap chat. now they have hundreds of daily users. it happens so fast so what's a

brand really worth anymore? not much. >> you say there will be a collection of bidding wars among a group of suckers. >> everybody looks at a business and says it's run badly because they're so stupid. i'm so smart that i can make it better, right? ultimately that's what's going to happen. it's going to get taken out at a higher price and get slowed in distress or -- it will be like a my space. >> hibd sight being 20-20, should they have sold the stake at alibaba a year ago? >> when i got out of the shower this morning and i was watching the news about this, i had a flashback to watching cnbc when microsoft proposed the merger with yahoo. that's what they should have done. the fact that the board didn't do that then at a price that was, i don't know, double or triple what it trades at now, certainly when you look at the core substantially more, that's the hindsight 2020 to me. >> why is the stock down 30% this year even including today's bump? >> because there's no growth, and when you -- it's not even that profitable. if you don't have growth, these companies very quickly, the multiple, just contracts like

that. >> is there an ideal ceo to run it? >> no ideal ceo. most of the people that peck put on that list have probably done the calculus that i've done in my head. unless ross has to do it because he always want to give it a shot, he is the only person that i could say give ross a shot maybe. >> switching gears now. facebook ceo mark zuckerberg and his wife dr. priscilla chan in the spirit of giving tuesday, while announcing the birth of their daughter, max, yesterday, the couple vowed to give away 99% of their facebook shares to charitable and philanthropic organizations over the course of their lives. that amount right now $45 billion. john, it's nice in theory. we were talking to roger mcnamee about the pitfalls of hacker fill an tlop where i. it's not going to be a slam dunk overnight. >> it's nice, period. it's nice, period. it's unbelievable, period. when i saw that he did that, i thought to myself this guy is such a better human being than me. really. the scale of it -- let's not put

any cavat on it. it's unreal. what's clever about it is had he done anything else with it, he would have paid a 23.8% capital gains tax. by putting it in the entity, the entity will gift tax -- will gift stock to nonprofits, and they then will in turn pay no taxes in it. he says i want to do good in the world. i don't want to leave it to the government to tax it and distribute it how they see fit zoosh he is taking the stock out of one pocket and putting it into another pocket. he is still going to control it. he is gifting it to an entity that they are going to control, and it's an llc. he doesn't have to give it to charitable organizations. not to take -- hey, i'm not taking anything away from him, but let's call it what it is. this is his opportunity to make change in the world. it's hang that probably not everybody is going to agree with. everybody is saying it's great now because it's education. it's saving the planet. as soon as he wants gun control, oh, some people are going to have something to say. >> i agree with that. as soon as the checks start getting written, people are

going to say he is writing it to the wrong thing here and the right thing there. as a stockholder of facebook, i'm excited about my facebook stock because the scale of his ambition is so enormous. to say i'm going to give away $45 billion -- i'm just going to leave max with $5 million. means that he doesn't want to buy an island or see how many jets committee buy. he wants to do big, giant things in his life. >> he wants to do that without ceding voting control. the instrument allows him to maintain that as he starts to give all these -- >> presumably he will accelerate in the out years, right? a billion a year. i guess he will live another 45 years. i assume that he is not going to give away $1 billion a year for the next 45 years. >> if he thinks that island is good for the planet, he can buy it through the llc. >> i think all this negativity around it, all this questioning around it, it's a bit off the wall. the man says he is giving away $45 billion, 99% of his wealth. not many billionaires say i'm not going to be a billionaire. >> there's still time for you, john. >> yes.

>> give away $45 billion. >> it made me question myself and what i want to do and what's the right amount of wealth to create and hold on to, and i think it will have good affects on people. >> john steinberg, thank you. >> thank you. >> drones are the top gift for the holiday season. maybe so you can do stuff like this. you are looking at a live shot of our one market bureau. shot from a d somewhere i drone that just took off from the balcony. a senior u.s. executive will swroin us later, but, first, rick santelli, what are you watching today? is. >> i'm still hung up on yesterday's ism number. why? because when you match it up, when you pair it up, when you look at it side-by-side with the run rate for the auto industry, that phil lebeau has been covering so great, it really leaves a lot of questions. we're going to deal with some of the answers after the break.

coming up, fed chair janet yellen set to give a policy speech in washington d.c. that could move the markets. we're going take you there live. plus, new reports that yahoo could be set for a major shake-up soon. analysts bob peck on what moves the company could be planning and when. it's more pain ahead for crude or is a comeback in the cards? we ask citi's head of commodities ed morris. john, we'll see you in about 15. >> all right. sounds good, scott. microsoft is holding its annual shareholder meeting today. this will be the second shareholder meeting as ceo. investors have reason to be happy with him this year. shares of microsoft are up about

20% so far in 2015. microsoft is looking to add two of the board. pat, former exec from cisco and motorola. maria, harvey mud is leaving the board, but for those keeping score at home, this will position microsoft with three women on its 11-member board. an african-american chairman and an indian-american ceo. not necessarily something you think about when you are looking at the stock chart. it's up 20%. they're charging ahead in cloud. very interesting way that the leadership of this company is changing its complexion. not just talking about diversity, but actually making those changes. >> thinking about this upgrade they got earlier in the week where the call was essentially not that long ago this was a company, a pc company that had missed mobile, right? and now they're charging the cloud about as good as anybody else is. >> and that is a rare case where they were charging ahead into the cloud all along. server and tools business that

sati was running, was growing double digits every quarter, but it took a while for investor focus to shift to that away from just the windows business and the trouble and struggle that is they were having there in the pc business. now, they've got the benefit of that focus. i guess you could argue that the subbusiness within microsoft, the internet business if you include some of the cloud stuff, it's that rare turnaround, i guess, that john steinberg was just telling us we haven't seen. that might be a little bit of a stretch to call it that. >> difficult to do with this size of company and year-to-date gain almost 20%. very interesting. let's get to the cme this morning. get the santelli exchange with rick. >> hey, rick. >> hi, carl. you know, i really enjoy steve -- or phil "four on four" lebeau when he talks about the run rate on autos that he talked about yesterday. it really is quite amazing. in the morning what did we learn? we learned that we had the weakest level of employment as

defined by the ism since late 2009. first time under 50 since november of 2012. reconciling those. well, i'm going to leave some of that to you, but i'm going to give you some important bullet points to consider while you ponder those divergent thoughts on each side of the manufacturing aisle. first of all, before i get to my board, look at the 20-year chart that we're showing on the screen right now. that's the annualized run rate going back to 1995. okay? now we're going to come to my white board and basically this is the same chart. listen, it's pretty easy. if this was a chart of a commodity or interest rate as a technician, a couple of things really jump out at you. we call it crossing the canyon. happened in the stock market in 2009. you have something going on. then you have an episode. for all practical purposes, many would expect that you are going to get back up into that zone. okay? that's normal. kind of mean reversion. another issue here, look at the

slope, okay? look at how nice and steady it was from 1995 to around 2007, 2008. see, this is pulling forward activity. at least that's my impression. that rate of change, that slope being much steeper than history tells me that not only do you mean reverting all the people that had issues between 2008 and 2011 that wanted to buy cars and couldn't and now we have people that can't necessarily afford houses because they can't get the type of credit, but they can get the easy credit in autos. i think that's pulling forward. that's some of your divergence. here's another issue. everybody dismissed everybody's notion. why? it's only 12% of the economy. listen, i went to the nam website, national association of manufacturers, and i found some fascinating things. that basically the recent year that they're studying in 2014 manufacturing accounted for about 2 trillion in the economy. in 2009 it was about $1.7

trillion. even though it is roughly 12%, it has a really nice multiplier. for every dollar, $1.37 is created. it accounts for roughly 18 million jobs, and in 2013 the average person in manufacturing made about $78,000 a year versus all industries, around 62k. remember, when you have 2.5% gdp, the leverage of had sector can be enormous affecting that from 2% to 2.75% to 3%. it might be a good canary in the coal mine to pay attention to. kayla, back to you. >> rick, thanks. up next, drones expected to be one of the top gifts this holiday season, but the industry as a whole still facing plenty of red tape. we'll get an update from one of the biggest drone companies in the world when we come back.

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for many the hottest gift this holiday season will be their own personal drone. in fact, the faa is predicting as many as 400,000 new unmanned aircraft will be sold leaving regulators playing catch up. good to have you with us, romeo? >> thanks for having me. >> it's been quite a couple of weeks. we've got amazon here throwing shade. the regulators way. what does the future of

regulation look like from where you sit? >> well, it's definitely a very exciting time right now, and pretty much everyone in this industry is looking forward to having the regulatory environment set in stone, and we're excited that the faa has realized the importance of this technology and all the possible applications that can come from it, and so hopefully by the middle of 2016 we will have those final regulatory environments in place for commercial use of this technology. >> romeo, how does dji as a company handle this uncertainty? i imagine there are going to be some thousands probably of customers who are going to open up the drone under the tree this holiday season and say what's legal to do with this? what do you tell them? >> absolutely. and we have realized the

importance of education. together with the faa, we want to educate not only the new pilot, but also existing pilots and one great tool is faa's know before you fly campaign. it's a website that really gives a lot of information to first-time pilots as well as more experienced pilots on what they can and what they cannot do. >> this is a really good question, and my back ground is space science, and i always compare this to the early 1960s when john f. kennedy said by the end of this decade we will be walking on the moon and we actually achieved all of that. what's really interesting is all

the things that were developed in the process of it, and similarly here, we have this big idea that someday drones will be doing delivery of cargo. perhaps even individuals. that's the ultimate goal, but as we're figuring out how to use this application for the better good, that's the exciting part to me. >> romeo, from an engineering standpoint, in order to carry cargo, even if it's light cargo that amazon is trying to deliver, for instance, what needs to happen? do rotors need to get larger? is it about battery life? i mean, how do you explain that to a layman? >> this is a very complex issue, and, you know, if you think about it, just a little bit over 100 years ago we started to really take to the sky and fly, and so it has taken us quite a long time to achieve flying and

then to perfect flight. similarly here, improvement needs to happen in battery power and new ways of thinking about verticals have to come into place, and so it's not something that will happen overnight. , but the possibilities are definitely there, and that's the exciting part. >> i'll tell you one thing, i don't think we've had a live signal on this program at least coming from an active drone. fascinating shot of you as we've been speaking with you. thanks for your time. >> absolutely. thank you. >> romeo of dji, a drone maker. if you haven't heard of them by now, you definitely will. dominik is back at hq with a quick market flash. >> carl, here what we're watching right now are shares of rail operator csx which is are now dropping. can you see the intraday chart down by 2.5%. ? just the last few moments here, the company has yumted its full year earnings per share guidance and now expects about 3% growth.

they say they've seen the coal shipments fall off further than anticipated. a drop-off in coal shipments leads to a revised guidance lower, and those shares taking a hit, carl, in the trade as well. back over to you. >> tom, thank you very much. zishgts another shot fired in the war of words over streaming music. pandora's ceo with choice words for the competition. when we come back.

>> he says "if consumers can legally listen to free on-demand music permanently without converting to paying models, the value of music will continue to spiral downward to the benefit of no one." his fix to the problem? free on demand music, on limited time trials. aimed at spotify and promoting his own internet radio service. interesting topic that we're not done hearing about. >> 99 cents for three months of premium. they want your credit card information in their system.

>> rise of apple music. i think the success of taylor swift and adele without streaming right off the bat strengthens the hand of the music industry and people like ryan mccann who is making this. >> four million copies in ten days. watch yahoo. up almost 8% now. yellen in the next half hour. that's it for us. let's get back to headquarters. scott and the half. ♪ thanks. welcome to the halftime show. let's meet our starting line-up for today. joe is here along with stephanie and john and pete. >> we're going to take you there for the comments that could move markets. moderatety crush. it s oil heading even lower, or is a comeback in the cards? we're going to ask city's top expert ed morris. we do begin with the story of the day on wall street. reports that yahoo mulling its future and could soon make big moves to shake up