they will run the business through tim armstrong who runs aol.there's a chance that with a right combination of equity , but it's going to be difficult to compete with giants like google and horizon. carol: is there a chance a deal does not get done? alex: there's a chance. there's a proxy fight looming in the background where star board plans on replacing the board of directors. if nothing gets done, there's a chance the board and marissa mayer get pushed out anyway. they may be copied between a rock and a hard place here if they don't want to sell. if the barbarians at the gate go away, they sell or they get pushed out. yahoo! is fully aware that the clock is ticking. to have enough interested parties in terms of the asset. alex: we have to see where the first-round bids commend. how much money of these companies willing to pay? carol: great story. i know you wrote get here at bloomberg. alex sherman right here on bloomberg news. up, the fed is uncertain about the state of the global economy, citing multiple risks to growth. is a weaker dollar

i think tim armstrong is the new head. everyone is having a look at it -- what does verizon have to gain? mobile operator, surely they want content, but it is hard to know what kind of company they would make? alex: they want content, they want millennials. francine: two millennials read yahoo!? alex: millennials search, and read whatever application they pick up. you can have an aol search, or a yahoo! search. at the moment, yahoo! is still a credible player in the search business. let's give them some credibility for what they have. for mobile operators, having access to that is important. tom: let's go back to look at .he yahoo! price here is memories of ages ago. , down. we pull up halfway as well. it does come to leadership and management. i look at the consolidation of yahoo!, and almost got it like aol. i don't know anyone who uses it. review by anyone wants yahoo!. i don't get it. behind microsoft and google, of course, but they still command share. yahoo! mail is still used by a lot of people. when you go to yahoo

they have tim armstrong.hey have synergies between the technology assets they are trying to invigorate in their mobile strategy. >> what is a reason price for verizon to pay? what price would you say, you people are crazy? >> i think for the core, i think if you value it as a multiple of their adjusted $750 million, you would say five times makes sense for the asset where revenue is eroding. so five times is almost $4 billion. there is problem a control appeal yum on top of that, premium on on the of that. if it goes above 8, that is crazy. >> but you're fine with above 6 it sounds like. >> yeah, that sounds reasonable. >> one of the pieces -- maybe it is bankers trying to advertise this, is the value of the patents this company may have. and the royalty arrange. they have with yahoo! japan. >> was that $90 million? >> yeah. >> assuming that gentlemyahoo! continues to make money and doesn't try to get out of this. >> if yahoo! japan continues, there's a royalty payment for the right to use the brand name of y

tim armstrong combining with aol could be interesting, and it is fascinating.ing worked there for 25 years, i think there'd digital strategy has endlessly been wrong. i hope that doesn't happen for the sake of yahoo! but it's interesting how many companies think they can do something interesting. what if alibaba bought it? that is not out of the question. emily: the one prominent company not on that list is alibaba. jack ma seems to not want any part of it. he didn't have a nice things to say about yahoo! when ice folks to him a few months ago. david kirkpatrick, thank you so much for stopping by. i know we will be asking you every day what is going on and you will keep us posted. thanks guys. coming up, we had to the bloomberg businessweek design conference where we will catch up with a 26 rolled hacker taking on tesla and google. tomorrow, i sit down with a gender a silicon valley investor peter thiel. don't miss that interview. more "bloomberg west" up next. ♪ emily: researchers have identified an unusual stage of ran somewhere. a report says the virus plate

emily: how have you liked working with tim armstrong and , and do you buy into the idea to build a media advertising giant that could compete with google and facebook? mrs. huffington: well, first of all tim and i have now worked , together for five years. he bought "the huffington post" in 2011. and if you think of it, it was a visionary act. the shareholders vanished. they thought it was a foolhardy move. aol received two bids while they were negotiating with verizon to buy "the huffington post" for $1 billion. clearly, he bought it for $350 million. so already in what was then four , years, he had an asset that because he invested in us, had become significantly more valuable. he really backed me up when i want to take "the huffington post" around the world. it was really fantastic from our first trip together a couple of months after the acquisition in london. we announced we would be expanding in the u.k., in canada, and after that, it became -- we had the kind of first mover advantage of growing internationally while now everybody is trying to do the same thing. emily: facebook is

emily: how have you liked working with tim armstrong and it do you buy into the idea to build a mediand advertising giant that could compete wi google and facebook question mark ms. huffington:tim and i have now worked together for five years. inbought the huffington post 2011. it was a visionary act if you think about it. the shareholders vanished. they thought it was a foolhardy move. aol received two bids while they were negotiating with verizon to buy the huffington post for $1 billion. clearly, he bought it for $350 million. years, hes then four had an asset that because he invested in it, had significantly -- had become significantly more valuable. up when ibacked me wanted to take the huffington post around the world. our firsttastic from trip together a couple of months after the acquisition in london. we announced we would be expanding in canada and the u.k. we had the kind of first mover advantage of growing while nownally everybody is trying to do the same thing. emily: facebook is interesting because, we are seeing this trend where potentially personal sharing is down on f

, they would replace marissa mayer with tim armstrong from aol and another executive ice president that the two of them combined. indeednteresting that if verizon buys it yahoo!, it seems like marissa mayer would be out of a job. guest: emily touched on that marissa would not come along and they verizon deal but there are other private equity firms that are going to proceed with a first round bid. these firms have said we are open to partnering with a strategic firm that might be interested. in a combination like that, marissa could come along but we have been told that it is probably unlikely that she sticks around. sources have said we would not bring her along. said to proceed along -- rain and tpg considering bids. losingd comcast interest. more bloomberg markets after the break. ♪ betty: it is 3 p.m. in new york and 3:00 a.m. in hong kong. we have breaking news at this hour that has to do with yahoo! and it web properties. verizon said to be considering a bid according to those earlier with the matter. google also considering voting or yahoo!'s core business according to another pe

tim armstrong would run the whole thing.y be the one party willing to pay the most to do it. >> there are some big health and pharmacy deals that came out. abbott laboratories has agreed to buy st. jude medical at $25 million. and at the will buy stem centrex. carol: what do you think happened? >> it begin with the thing up and down. it really got slow. today is a pretty busy day, health care is leading the way. that is not a surprise. with the obamacare and the push for consolidation, you will see more companies whether we are talking about arma companies or device companies or insurance and hospitals. something will keep happening. carol: that is like top of mind in the health care. nopi and astrazeneca will get aggressive. this will be in play for a while. comcast plans to buy dreamworks animation. it is a $3.8 billion price tag, if you percent premium over dreamworks' last close. could this be a rich valuation? comcastestion, it is who is doing it. beenworks animation has for tailed it for years, and what bankers and adv

she can take a lesson from her former colleague, tim armstrong. he was struggling as the aol ceo. offer to sell the company for a 23% markup. now, armstrong is helping lead verizon. if she sells now, she can hop aboard the same liferaft that saved armstrong. lisa: a number of major companies are due to report earnings next week, including yahoo! on tuesday. joining us now from san francisco is emily chang, following netflix and yahoo! what are the big things you are watching from yahoo!? emily: of course, the bids are due for yahoo! on monday. tuesday, we will be watching earnings. as we've heard, we are starting to hear that the field might be narrowing. number one is verizon, they have been straight up about their interests. with it arianna huffington come which was bought by aol, which was bought by asked. -- i she would like to see yahoo! in the family and she said absolutely. >> it is a hybrid. it is a journalistic enterprise and it is a platform. tumblr is an incredible asset. as more and more people want to express their views in more than 140 characters, you have an incred

management want cash, marissa mayer wants a big payday, and to say thank you, see you later, and tim armstrongow works for verizon, wants to run the new company. that still seems like the most logical way this will pan out. if for some reason verizon sours on it, they do more due diligence and decide, you know, we thought we wanted a certain amount of billions of dollars, but now we do not think it is worth it. then it is possible that yahoo! has a new fallback option. betty: when will we know all of this? when will this conclude? alex: great question. not for weeks. after all the bids come in, and we will know that at the end of the day tomorrow, early tomorrow , we'll find out, then moving forward, yahoo! will have to analyze every one of these bids. they will all be a little different. maybe verizon wants to buy yahoo! japan. this could be a reverse mortgage trust. revit equity firms might want a portion of the business but not all of it. they will all be a little different. it will be a lot of work for the yahoo! financial advisors and yahoo! management to sort out and figure out, all righ

for a dose of courage, she can take a lesson from her former colleague, tim armstrong, who .as strugglingaol ceo then he got an offer to sell the company for a 23% markup. the sale made him look like a genius, and now, he is helping lead verizon's bid for yahoo!. she could hop aboard the same liferaft that saved him. emily: monday is the deadline for all the bidders who want to throw in their hat into the ring. potential suitors include the daily mail, verizon, private equity funds like tpg. we had heard there could be as many as 40 companies looking, but obviously, the number of actual bids will be much smaller than that. how many do you think will come ? rward >> there are people who kick tires, and that's what you do when a house is for sale or a company is for sale. when it comes time to put in bids, there will be a small number. they have made no secret -- arise and has made no secret that they are interested in web business -- has madeg -- verizon no secret. erizon expressed early on that they were interested, and they do not seem to have wavered. , spoke to arianna huffington and s

tim armstrong would run the whole thing. seems like they are very interested in getting this. they may be the one party willing to pay the most to do it. david: there are some big health and pharma deals that came out. abbott laboratories has agreed to buy st. jude medical at $25 billion dollars. and abbie will buy stem centrex. $5.8 billion. carol: what do you think happened? jeff: it begin with the thing up and down. that slowed a lot of deals. the deals that happened or once we were working on last year and he got slow. today is a pretty busy day, healthcare is leading the way. that is not a surprise. with the obamacare and the push for consolidation, you will see more companies, whether we are talking about pharma companies or device companies or insurance and hospitals. you will see consolidation going on. carol: that is like top of mind in the health care. jeff: sunopi and astrazeneca will get aggressive. this medivation will be in play for a while. scarlet: comcast plans to buy dreamworks animation. we have been repor

now, according to bloomberg, if verizon does get yahoo, it would name its aol boss tim armstrong as theending marissa mayer packing. yahoo shares are higher on this latest news. san francisco-based gap is looking to turn things around but so far, the start to the spring selling season got off to a tough start. same-store sales across its three major chains down 6%. gap was down 3%. banana republic fell by 14%. and old navy down by 6%. gap shares are down in the early going. the overall market is looking at a rebound after heavy selling yesterday. looking good so far. let's take a look at the big board. dow is up 116. nasdaq up 29. s&p up by 24. shares in gap are down by 10%. frank and michelle, back to you. >> i would call that a good friday unless you work for gap. >> reporter: all things aside, overall the market looking better. >> thank you, jason brooks from kcbs radio. >>> the good news just keeps coming for palo alto-based tesla. in the weeks since the company introduced its model 3 vehicle, the electric carmaker has booked 325,000 reservations. the car has a base price of $35,000

>> i would like to see the company in the hands of verizon, hired tim armstrong google, google with theeption of marissa mayer, very good, like ge in the old days when jack welch was there, tim cook is a manager of internet assets, he has taken aol which was lost for debt and made it through skillful deals and a big force and advertising, and the assets would fit cleverly, and clearly verizon has an interactive strategy, they are not talking about it. maria: a backdoor way to do what they want to do they wanted tim armstrong to run yahoo and aol, this is starboard and to get together, if verizon does the deal that takes care of that. >> a marriage made in heaven. the thing that is beautiful about it is it is so easy for verizon to finance it. if you look at 700 million, $6 billion deal for assets, $180 million before a tax deduction and it is accretive to verizon's cash flow, the potential of this cash flow growing by 40% a year under proper leadership. maria: that is a good story from your standpoint given you own that and facebook is a big story but before you go, we have seen real we

tim armstrong, who ran aol as a public company could run a combined aol-yahoo!on umbrella. if not, there is the possibility that private equity firms may partner with media firms, smaller media firms, to make a bid for yahoo!. "the wall street journal" reported that "the daily mail" was interested. we will find out on tuesday, when the dust will settle, when we will have some clarity. scarlet: you reference the possibility of pe teaming up with media companies. do we expect anyone to emerge from the woodwork? >> absolutely. i would not be surprised if we reported one or two names that we had not heard from at this point. that said, i have asked that question to several people that are very close to this sales process, and they have consistently told me, chances are the company that ends up by yahoo! has already been reported. you would hear another name or two, but whether it actually emerges victorious, i would say the probability is fairly low. alix: how do they want to value in the company? i read report that yahoo! was not able to give forecasts. how do you

is tim armstrong and verizon am a should they be the ones here?ave wanted to. i think that tim has the respect , somehow, of the powers that be that he can balance all of the content together. let's be honest. i don't trust verizon to deliver me anything. i trust that my bill will be confusing. when i hear yahoo! and verizon, my eyes roll back. it means more miss execution will be tolerated at the media level. tom: thank you so much. greatly appreciate you coming. howard lindzon with stock twitch. he has a perspective on what we see with facebook and twitter we should you bank earnings every day. the bank of america, disappointment versus what we saw with j.p. morgan. tomorrow, we focus on international economics. we have more on bloomberg radio, bloomberg "surveillance." ♪ ♪ david: welcome to bloomberg "." i am david westin with jonathan ferro and vonnie quinn. morgan o stand former investment officer. jonathan: 13% drop in profit, that is the discussion point. the bank of england doing nothing. the benchmark interest rates staying in 0.5%. t

>> the motivation that verizon has is tim armstrong.ogle as the ad director with marissa. who is now at yahoo!, obviously and he knows the business. he has salvaged aol and turned it into a very high-tech ad serving system. that had no reason for existence before that. i think he thinks he can do the same thing with yahoo! what he wants and what verizon wants is 240 million regular viewers. carol: is it a good fit? >> it's not a great deal but it depends on much of a cost. we're not talking a lot of money, between $5 billion and $9 billion. cory: if they want all of it. they might just want pieces of it. do you think they would rather have more content from yahoo! or would they rather have the ads? marissa's sure initiative on content has delivered on any level. if verizon ends up with yahoo!, they have the resources and capability to go out and buy any content they want. carol: thank you so much. back to tracy and scarlet. scarlet: our thanks to carol massar and cory johnson. tracy: con edison gets burned by its acquisitions. will it b

what is the new new for professor galloway, as tim armstrong possibly takes over the headache known asld argue that marissa mayer has been your disappointment. favorite is verizon, because verizon can afford to overpay. 105 million handsets, plus the assets of aol and yahoo!, you are looking at the largest mobile network in the world. the fastest growth around the epicenter of media is global advertising. so verizon can afford to spend the money for this thing. tom: that is the key word, isn't that? they can overpay. scott: they can overpay. the odds-on favorite -- i cannot imagine one of these trust merger things over time. can you imagine if yahoo! ends up going to the yellow pages? it does not make any sense. it will be exciting to see. this is a lesson why active investing works. i think these guys would have played slow ball and kill the deal if not for this guy. francine: scott, you think verizon buying this core business in what is essentially a failed internet portal makes sense because of advertising that they will have to overpay for? scott: there are some assets here. it is

but then at the right price, i think marrying up the assets with aol under tim armstrong's leadsershipood thing -- >> so then we get the story from kara swisher that the book put together for put together prospective bidders. it looks like the company has been in freefall for a while. >> i will say most of the financial details about the broad market performance, company performance pretty much linked up with yahoo!'s public guidance. so that piece wasn't a surprise. it did sort of highlight some of these other side deals they have for revenue from yahoo! japan, backed by soft bank. essentially all these noncore revenue items that may go away. what is the core operating performance of yahoo!? that's a fundamental question. what yahoo! is doing is running a wide-open bidding process. the process is going to go for a month or two for sure. what they're saying is, come in, look around, you can buy the whole company, you can buy the core web business, maybe japan along with it. we're willing to listen to everything. we'll consider your proposal. we're nominally going ahead with the idea of

if it's verizon, it will be tim armstrong's show. >> that's what you would like to see happen in termstim? >> the reason i'm not up there at the 6 billion, they don't need a lot of these royalties from asian markets. they want the domestic assets to apply all of the advertising platforms and synergies. there's many ways to skin the cat but everybody agrees, verizon is the strategic. i would love to see them get this. marisa mayer will be another one of the ceo in the long revolving doors that extracted $100 million from shareholders and this asset never returned capital to shareholders in the 260 years it's been around. >> let's not skin any cats. kevin, thank you for joining us. we'll see how it plays out. >>> valeant telling michael pooerson to cooperate with a senate probe on drug pricing after he missed a deposition. what this latest development means for the future and goldman sachs agreeing to settle a security ploeb for $5 billion today. new york attorney generic schneiderman breaks down settlement on a first on cnbc interview after this. you know, to show the importance of savi

they brought in tim armstrong and got aol. what they would want to do is and remove a lot of heads.the customers they have come a pair that up with yahoo! and a. daily mail has done well online. they would want to get this media access and boost their scoring and get more eyeballs coming into their pipelines. it really feels site this is a verizon thing. but before i am too declarative, let's get the bids in first. jeff mccracken. coming up, a rocky oil at an all-time high. that is next on "bloomberg ." hertz.ut shares of cheers already down 31% in 2016, almost down 10% in three markets. ♪ innie: timeout for futures focus. crude sinking lower. outputid it has raised to a record. a -- g us is joe, a massive move. perhaps a little that of a disappointment after last week's rally. surprised that we did not go through with conviction. right now, the futures complex and the nymex is not showing there is expectation going into the september expiration that we will get about 42. vonnie: is it a stretch that nobody thought a rack which moved to a record -- iraq moved to a record. put ou

to stream his annual meeting and that's worth it to somebody who has the management still like tim armstrongrizon, there are surely others to try to monetize those users. it only costs you to finance that $6 billion in the neighborhood of $150 million before any interest deduction. if you accord $6 billion to the value of the company, the other assets are pretty easy to value, there is some tax link annual, owning the stocks at $36, $37, you will easily get $45. i think if marissa doesn't lead the process and board somebody is going to do it for her. we will see some action in probably four to six months. >> larry, just to follow up there you kind of laid out the case for why there might be more than one bidder willing to go above $6 billion. i wondered if you think that's where this might lead in future bidding rounds as you have other players surfacing and also you talk about $750 million in cash flow as a baseline, you know somebody is going to come in and say i can cut a lot of costs get that up a little higher. >> i think right on both cases. i've watched through the years a number of m

me interested in this area where brands advertising and digital technology converge and i think tim armstrong did a wonderful job managing that company. when the twitter opportunity came along this is now from a media perspective rather than a digital advertising perspective, what i learned there actually i think comes back nicely to pepsico. and hopefully with what i bring to the table in terms of my experiences i can help twitter have its best days in front of it. the one thing i will say is with a platform of 320 million users active on a monthly basis, that's a powerful media platform. and i think there's lots of potential in that business. >> all right. hugh, we know you just joined, signed on, thank you for joining us on pepsi results and of course as a new board member of twitter, guys. >> all right. and thank you. >> thanks for having me. >> sarah, see you in a little bit. >>> up next cramer's mad dash as we countdown to the opening bell. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1)

david: tim armstrong, the head of a well, he's sort of would like to run yahoo!it makes sense why would stick around at verizon when he ran a full and independent company. if you could merge those companies together, he becomes a much bigger presence in the world. stephanie: is the important thing the price? one could argue, what is the great value of yahoo! if marissa mayer cannot turn it around? given how depressed it is, everything is valuable at a certain level. alex: i think you're right. the important thing is the price and we are questionable, that price will be with the core business. rico came out and said that yahoo! revenue would be about downnd earnings would be 20%, so it is a declining asset and you wonder how much progress in the paper that. on the flipside, they own a well, so there are certain things verizon could get that other companies cannot get for yahoo! david: let's take a look, julie. julie: this is the revenue chart alex was talking about on bloomberg. this is yahoo! going back to 2009 and it looks of the revenue decline over time. at le

when you talk about suitors, verizon, tim armstrong did a great job running aol and if they were to lookat come with it, i think he would do a much better job than marissa has done. >> when they experience the 1996 brands effectively, turning into the 2016 brand, i guess the other thing here is that one of the wall street, we get. jeff smith at star board is act advising on this thing. george w. bush words, so the question i have, is this something that happens in the next month? do you think? >> well, we're going to see here is, this is the first deadline, right? and we've seen a couple of these, we may see some of the potential suitors reacting to the earnings news as well that comes out and later this week, and so, i sense that it's going to go on for a while even though there's been a rush and a deadline, it seems like they're taking it methodically. >> what about marissa mayors. >> if they replace the board, it seems like she would be out. depends who purchases, if we can find the right price. maria: there must have been debate, a number of board members stepped down. and there's a-