. hi, everyone. welcome to "on the money." i'm becky quick. turning education on its head. the non-profit that wants to revolutionize how ame learns examine do it for free. >> five years ago we were operating out of a walk-in closet. >> a clear vision and an app to recognize music is head sbud new territory. you'll see what we mean. a fa a lot to celebrate. their horse won the triple crown, they won a chunk of crown. what the future holds for american pharoah. su sheis here and so is peak travel season. we'll tell you how to make the most out of your vacation. "on the money" starts now. >> announcer: you money, your future. now, becky quick. here's a look at what's making news as we head into a new week of "on the money."

americans are starting to open their wallets once again. retail sales went up 1.2% in may, and that's beyond expectations. 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. st had their best day in a month on wednesday. the dow was up about 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, one new. tw ceo dick costello is stepping down. he's been criticized for slow growth and demand for advertising. be replaced by co-founder jack dorsey. and murdoch is reportedly about to step down as the ceo of 21st century fox. he is giving the title to his son james who is currently co-chief operating officer. rupert will continue at the

company as executive chairman. if you're planning on sipping a soda in san francisco, beware. it could soon be the first city inhe warning ads. they say sugary soda is responsible for obesity and diabetes. students who are studying for the upcoming sat entrance exam. kahn academy is in partnership with the board. that's the test administrator. the question is, will this put college prep out of business? saul is the director of kahn academy. saul, thank you so much for being here today. >> great to be here. >> i know you have more than 50 million students already taking your classes on line, but for those who aren't familiar, what is the kahn academy? >> we're not for profit with the mission of providing a free world class education for anyone anywhere, and if someone goes to kahnacademy.or or downloads our

app, they'll see we ever videos in many languages, we have interactive software. students can go there, start at whatever level they are. it could be first or second grade and they can go all wathe way to college level, math, sc humanities. it's really the way to get feedback to learn anything you want. >> how did you come up with this idea? >> it was happenstance. my old day job i was an analyst and i started tutoring cousins. i started making youtube lessons for them, and long story short, they ge feedback that they liked me on youtube better than in person. i took it as positive feedback and it soon became clear that people who weren't my cousins were watching. >> like all your courses, this sat practice one is going to be free. is it your intention to try to s like college review?st prep >> our goal, and college review is a 100-year organization, and

there's always been a perceived unleveling of the playing field because of the test prep industry. i think it was pretty forward of them to say, no, we're going to call it out and work with kahn academy to make great test prep. there's never been the test makers working in conjunction way group like us to make not just videos and written content but also interactive software. so o to level the playing field to students of all demographics to be prepared on equal footing. >> so they reached out to you? >> they did, and it was kind of an incredible thing for us, because as i just mentioned, five years ago we were operating out of a walk-in closet. >> in terms of what people can learn from these on-line lectures, are there limitations to it? are there some things it does better, and are there people saying they still do better in a one-on-one environment in a classroom? this as a replacement for human interaction. if you don't have human interaction, they can go a long way. if you can get explanations on

your own at your own time and pace, if you can get explanations with feedback, . we even see on kahn academy ourselves students who have coaches to keep them motivated. that's one of the reasons why both us and the college board are partnering with the boys and girls club of america, to make sure we're not only creating great content and great software, but there's a place for students who maybe don't have internet at home, or could use some mentorship, could have a place to engage in these materials. >> what do you think about the public education system right now? >> i think there i a lot of bashing on it, but it's a very diverse system, and there are actually some very bright spots in the education system where the schools are as good as any schools on the planet, and there are some places that need a lot of work. it's hard to speak of it as one model thing, but there's definitely room for improve across the board. and not just public education, i would say all education, including private education. >> where does kahn academy fit into the future of public and private education, just in terms of where do you think you'll be

five years from now? >> yeah, you know, we're reaching 15 million students every month right now. what we saw last year is roughly 20 to 30% of all americans used kahn academy at least once in the year. i think in five years you'll be able to go to kahn academy, any domain, not just math and science, get a lot of feedback. it will go well into college material and even beyond. it will be internationalized. and the role we play wi educati can get exp tions at your own time a whenever you want, i think it allows the classroom to not be about lecture anymore, but instead about interacting with each other, doing projects, doing simulations. >> was there a moment when you realized, wow, this is really something that will take off? b job, but was there a eureka moment? >> most comments on youtube were thank you. that was a big deal, most of the comments are not thank you. but then i started getting

letters from folks all over the planet saying, hey, this is why i was able to pass algebra class. this is why i want to be a physicist now. this is why i retired from the military and am able to go back to college. so there is the potential it could reach millions. up next, we're "on the money." it's the smartphone app that recognizes music and can name that tune in seconds. now shazam can see as well as hear. later, america's reining american pharoa the horse that won the triple crown has won american hearts as well. what's next and what's next for him as well? we'll take a break and leave you look at stock markets at the end of the week.

that's shazam, the app that

listens to mus and in a few seconds tells you the song and the artist. that song is by steve goodman, "take me out to the ball game." the app not only sees music, it can see images. just in terms of recognizing music, i've always been kind of fascinated by how this works. what happens behin the scenes? how does shazam do it. >> when users push that button, we take a sample of the audio, we send it back to our system and we scan the database of over 30 million songs and 160 tv channels, and literally in seconds, we return that result and we do that over 20 million times a day. >> how does it work that quickly? i love this name because this is shazam, this is like magic. >> our viewers associate us with magic and we take that seriously. it takes a second or two to get an audio sample, and in milliseconds, we literally make that match. there are over 100 scientists and engineers behind the scenes

making that look easy, but technically it's qui challenging. >> how often do you walk into a restaurant and you hear a song playing, or maybe it's on the car radio or something. that makes perfect sense to me. i don' understand how the visual works. what the thought behind that and how does it work? >> we've been doing music for a long time. we're the clear leader in music identification and we've bean moving beyond music so you can recognize tv n shazam 160 tv channels and we know the show and the cast of the show. we also spots, so we'll make tv spots shazamable, so you see a 30-second ad for a car, you want to go inside the car, and we're continuing that evolution of our platform into visual. and so 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 clooney's new "tomorrowland" movie coming

soon. now you can wave your phone over that ad and we take you to "tomorrowland" in seconds. >> this is a much broa applicatio it sounds like there is a mix to where you can make this monetized in some way, shape or form. >> that's right. the big picture is connecting people to the world around them. smartphones are only going to get bigger, get faster. the number one thing that's not changing is the number of apps people use. they use less than 25 apps. zs are you making money right now with the music application? >> our goal right now is selling a lot of music. we sell hundreds of thousands of tracks a day for apple, amazon and google. we also have advertising within the app, so there is mobile display advertising, and a lot of brands want to get out to our mobile audience out enjoying music and doing things. and then we also work with

streaming providers, so we send subscribers to streaming providers. that is our main source of revenue and we think we'll be here for the long term. >> apple made a lot of waves this week when it announced its streaming music service sdchlt that change your relationship with them at all? >> apple is our largest global partner. we send them a lot of music sales and have historically. the only app, they live demoed from the watch announcement recently, and we do a lot with them and we're very excited about their new music offering and hope to continue to be big partners for a long, long time. >> rich, one of the things we talk about is what's happening with valuations in the private marketplace. you're still a privately held company, but you've had investors including carl slim and they've valued the company at about a billion dollars. i just wonder what you think is going on with valuations in the silicon valley right now, if you think it's sustainable? >> i think there is evidence

that big companies can be built faithfully, and you look at twitter and google and these examples, and you realize the world is changing fast. mobile is a big part of that. shazam is one of the top 20 apps in the world in people using less than 25 apps, so there is huge potential in a platform like ours and others, and that's what drives these. >> do you see yourself going to an ipo or do you think shazam will be bought by another company? >> we're presently trying to make a stand-alone company. i think shazam could be a stand-alone company. we've been downloaded millions and millions of times and have a great business model partnering with brands around the world. we're certainly buildin for that. at thetime, we do think there are a lot of potential acquirers and that could make sense, too. we'll see what happens. >> rich, i thank you for coming in today, and i do like your form of magic.

>> thank you so much. up next, we are "on the money." his owners are richer and happier. he's taking a break from the spotlight. what's next for the triple crown winner in 37 years. later, you have them, but what's the best way to use them? all those frequent flyer miles sitting in your account. we'll talk travel deals and dollars and cents. you used to sleep like a champ.

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it's been 37 years since america had a triple crown winner and now american pharoah is reining supreme in the horse running world. his future is brighter and the celebrations haven stopped yet. robe us right now on more that is next for the horse that made history and the family that hasn't stopped smiling. great story. i haven't stopped smiling. >> yeah, it was such an inspirational race, and he may be finished riding off into history last weekend, but he's not riding off into the sunset. american pharoah will appear in at least two or three more races this year, and if all goes well, let's take a look at his journey so far. the drought is finally over. american pharo has taken the triple crown, a feat not accomplished b thoroughbred in 37 years. it was pure pandemonium as his owners, the zayac family, watched him charge into history,

winning by five and a half lengths at the final leg of the triple crown races at belmont stakes. their journey to the triple crown was a six-week roller coaster ride with their three-week-old colt. for some, a momentous win at the kentucky derby with the home-bred horse? >> 37 winners. i'm one of them. it's history. >> a $1.2 million prize they walked away with was just the beginning. two wee after the derby, a torrential downpour. >> it's really getting bad. >> american pharoah forms the track. he reins supreme once again, winning by seven lengths. and three weeks later in new york, he secured the ultimate title in horse racing, becoming

only the 12th horse in history to win the triple crown. but what do you do after you win the most elusive title in the sports world? he hit the rv for a post-race party. american pharoah's estimated value has skyrocketed to more than $30 million. what's in the champ's future? before hitting the stallion farm for millions in stud fees, zayac had a plan to enter him in more races, and there's even talk of heading back to kentucky for the breeder cup classic in late october. the great news is for those of us who still want more of this horse, you can catch him at the brees c in kentucky in october rkt and he may be in m n mo park in new jersey.

he heads to stud for a foal. >> for probably less strenuous work, too. robert, i read some stories where there were hs of thousands of dollars of winning tickets that were never cashed in. you have one of those yourself? >> including mine. i bought a $2 ticket. i'm going to frame mine and put it on my desk, not just to remember this incredible horse of an aspiring family, but as a journalist, we want to be a part of watching history happen. we got that over six weeks. >> it was an amazing moment. glad i was there to see it myself. thank so much. >> thank you. up next "on the money," a look at the news for the week ahead. airline upgrades? is there a way to beat the system when it comes to frequent flyer miles? we'll find out.

for more on our show and our guests, you can go to our website, cnbc.com, and you can follow us on twitter on "on the money." we'll be getting earnings resultadobe, fedex and/or kel. it ends with a news conference with chairman yellen on

wednesday. thursday we'll see if there are any signs of inflation when the consumer price index is out. also on thursday, fitbit looks to raise an additional $358 million in fn initial public offering. summer is here and so is peak travel season. how can you make the most of those frequent flyer miles or reward points your account? joining us right now is senior correspondent epperson on how to navigate the market. people have these miles and don't know how to use them. what's the key? >> every american customer has at least one frequent flyer program they belong to, but how do you go about redeeming those miles? it's pretty easy to do on line. often you can find out from the airlines how many points it takes for certain flights where you want to go. if you have your account number, your password ready, you can get that information, and if you don't, you can call up the airline and find out and get it that way.

>> are there ways to beat the system, ways you can kind of gain things? >> the good news is there are se there than we've ever seen. there are more open seats, but it's hard to get that flight when you want it. you have to be flexible, and maybe you want to try a connecting flight. i know that's the last thing you want to do, but if you want to fly for free, that's one of the ways to do it. and there are partner airlines. people don't realize when you're traveling overseas, some domestic carriers like american airlines, world airlines belong to that as well, so you may be able to travel on another airline. and the other thing that you want to think about is not necessarily using your miles for non-flight rewards, because if you're trying to get maybe a hotel or maybe a set of luggage, you're not going to get the same bang for your buck. >> that's an interesting point, too. is it just me or are the rules constantly changing on what you can and cannot do? >> they're changing and there have been big changes this year, particularly in terms of how you

actually use those points and whether it's the points that count really toward the miles you get, or how much you spend, so delta and united have made a big change there 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. so that's a big change. and the merger with american airw and us airways, that's another thing. >> it doesn't sound like it's getting easier, it sounds like it's getting a little bit harder to move through these things. are there times you just say forget it and just buy a ticket? i don't think i've ever used miles. >> for every mile you should have it be at least two cents you're spend organize higher on the ticket. what that means is if you have 25,000 miles, you want to have a $500 ticket or higher to use

those miles. if it's a $189 ticket, it's really probably not worth it to use the miles, then you might just be better off buying the ticket like you've done. you're doing the right thing. >> i'm doing the right thing. that big vacation, that's what you use them for. that's the show for today, everybody. i'm becky quick. thank you so much for joining us. week, is there an entrepreneur gene? members of a family, each of whom started their own business. have a great week and i'll see you

nbc bay area news starts now. right now at 4:30, oh, ready for game five. warriors are hungry for an nba title. it's been a long time since they've had one. fans are hungry too. live with more of the challenges standing in the way. good evening, i'm terry mcswainy. >> i'm peggy bunker. we are very excited for this game, less than 30 minutes away from now, tip-off. the golden state warriors and cleveland cavaliers battle it out in game five of the nba finals. >> you can hear it. >> you can. the anticipation is palpable. that's right. it seems the ee