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tv   Bloomberg West  Bloomberg  April 28, 2015 11:00pm-12:01am EDT

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♪ matt: we are live from new york and from san francisco. welcome to "bloomberg west" where we cover innovation, technology and the future of business. i'm matt miller in for emily chang. here's a check on the top headlines. japanese prime minister shinzo abe is at the white house for key meetings with president obama. the two leaders say they are committed to strengthening their alliance and signing the transpacific trade partnership
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despite political opposition to the trade deal. prime minister shinzo abe: on the bilateral issues significant progress was made. we will continue to cooperate to lead the talks to its last phase. matt: a state dinner is tonight with 300 guests in attendance. president obama also spoke about the riots in baltimore. he says while there have been troubling police interactions with black citizens across the country, there is no excuse for the violence. president obama: it is not a protest. it is not a statement. it is a handful of people taking advantage of the situation for their own purposes and they need to be treated as criminals. matt: meanwhile, the orioles canceled their games with the white sox for the second straight night. they will play tomorrow but the
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game is closed to the public. the first time we recall there is ever been a private baseball game on the professional level. the fed is likely to delay its interest rate increase until september. that is the opinion of economists. policymakers are meeting today and tomorrow in washington where they will assess how much the labor market, the strong dollar and harsh winter have affected the economy. gopro makes about half its money overseas now. they said sales rose 66% in europe and asia in the first quarter. they also announced they are buying, color, a startup that creates 360 degree panoramas. terms of the deal were not released. shares of endurance international group plunged the most ever today. they sell internet-based services to small companies, but gotham research wrote today their products were suspect.
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endurance says gotham's claims are not rooted in reality. twitter shares tumbled after financial information provider solarity posted first earning members of they'll do one hour ahead of time on twitter. twitter shares were halted on the new york stock exchange. revenue was $436 million. the company posted a $162 million loss. they had 302 million monthly active users and they are partnering with google's double click and buying a marketing company. meanwhile solarity says it , found the information on twitter's own website. saying in a tweet, there was no leak or hack. talking about all things twitter, is cory johnson in san francisco and bloomberg news twitter reporter sarah frier. here in new york paul swinging
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of bloomberg intelligence is joining us. sarah, let me start with you. is this leak twitter's fault? not that it matters by how did solarity get the information? sarah: twitter is saying that nasdaq was actually in charge. nasdaq has admitted this. they were in charge of the i.r. website. they put something up a little too soon. it came up around 3:07 p.m. and solarity saw it and was able to get the numbers. i went on the website as well, but i could not find it.
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matt: if you want something done right, cory johnson? cory: ask a computer, i think. matt: do it yourself. why does twitter give this job to nasdaq? cory: i think this caught twitter and the executives by surprise. i think the real issue is how the numbers got out, but what was in the numbers. profits were better than expected as well as shares, but what is worrisome to the company is this performance in terms of growing revenue and growing its user base. we know user base growth was a struggle, but the revenue growth we really thought they had a better key on, particularly after a very positive investors day when they met with analysts and said things were going like gangbusters and the chief financial officer and dick costolo giving a very upbeat presentation about what is going on in business. to see these results, i'll think it suggested at all they were not being upfront with investors. they really cannot tell what advertiser intent is because of the nature of the business. that is disconcerting to people that expect predictability
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about twitter's growth. the business is still growing and looking even more profitable. if these kinds of valuations for the stock, they want to know what is coming and twitter investors did not see it coming. matt: paul, while the leak may have been an embarrassment for twitter and maybe in embarrassment for nasdaq, it's not the reason we saw the stock fall 20% when it started trading again. the problem is this company is not able to monetize, is not able to raise enough money from ad sales as it hoped, as analysts had hoped it would. paul: exactly. when you think about the twitter story, it is very much in a relatively early stage from an investor's perspective. that means investors want to see sustained user growth and they had decent growth that came in line with expectations but that has been slowing. they also want to see topline revenue growth. they want to see twitter like they want to see the other social media companies monetize
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their growing user base is. it is one thing to attract users to your social website but it is another thing to engage them for long periods of time so advertisers will pay good money. this disappointing earnings for the second quarter in terms of revenue outlook and for the full year really took investors by surprise. it brings back the question of how fast can we really expect this company to grow? matt: this is a company that was trading up 40% year-to-date. sarah, how does the company responded to disappointed investors? sarah: the company is telling it as it is. i think they are surprised as well.
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their advertising team is really highly regarded when talking to madison avenue executives. it is really surprising for people that they disappointed this quarter for the first time. and, the company is saying, ok this is a problem. they especially had an issue with the direct response ads which are ads that have certain calls to action like something to buy or sign up for. they are not finding those work very well on twitter. so, the word we heard a lot on they have to try new things again. they spent the last year focusing on this road issue and now they have to think about revenue as well. matt: tomorrow, we will hear from ev williams. i'm sure we will hear from twitter executives. cory, will they change a strategy? do they really need to iterate because of what happened in the stock market or do they need to ignore and focus more on the business of making money? cory: i don't believe every ceo should ignore the stock market and make their business
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awesome. as it relates to the stock market, the chief financial officer, goldman sachs analysts, goldman sachs banker if anybody knows how to manage expectations, he should know that. i think what this really points to is the business is a young business. it is unpredictable. it has never been tried before what they are trying to do. this notion of direct response with the connection with a user who they maybe don't know that well. they know from their tweets but not a lot about their identity. the operating in the dark, unable to protect what is happening with her very own business. matt: thank you very much, cory johnson. sarah frier also in san francisco and paul sweeney here in new york. when i said tomorrow we will hear from ev williams, i met today. ev williams will give us his
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take on twitter's troubles today. that is coming up next. stay with us for that. ♪
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matt: this is "bloomberg west." let's get a check of bloomberg's top headlines -- the supreme court has heard arguments in the gay marriage case. supporters want the court to extend gay marriage rights to the 14 states that do not allow it currently saying it violates their constitutional rights. here is justice stephen breyer during the arguments today justice breyer: there is one group of people whom they won't open marriage to so they have no ability to participate in that fundamental liberty. that is people of the same sex who wish to marry. we ask why? the answer we get is, well people have always done it. you could've answered that one the same way we talk about racial segregation. matt: opponents say it is a
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decision that should be left to each state individually. tyson foods is eliminating the use of human antibiotics in its chicken. it is the largest seller of chicken in the nation and is expecting to complete the change by 2017. it has reduced its reliance on antibiotics 80% since 2011. the blogging site medium founded by ev williams has attracted journalists, big-time brands and even the white house, but in stark contrast from twitter, williams has insisted on focusing on winning over users. brad stone sat down with williams to discuss the secret to beautiful design.
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ev: everything about medium, we try to look at this what some people consider solving problems -- how do you publish text and pictures on the web? we looked at it from a fresh perspective. how do you do that for today's world? very mobile focused. we have better browser technology. the content is on the apps and multiple places. we built from the ground up and it looked different from most the web does today. brad: was there any way in reaction to the designs you have created before -- twitter for example? it behaves in a much different way than medium. ev: it is designed around the content. twitter is about real-time \twitter is about real-time very short blips of content of that was originally designed around sms. medium was not necessarily for long stuff but longer form stuff. we wanted to create a better experience. brad: the white house is used medium so president obama can talk to his constituents. was that surprising? ev: it was. we have been very fortunate with that and other high profile people who found medium to be the best place to share their ideas. we think people at the white house and other people are
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liking the idea that while there is lots of ways to publish online, there are very few where your words and ideas stand out above the chrome and navigation and the advertising that is crowding out the experience. brad: folks like president obama, elon musk, other professional writers feel comfortable. what are you doing to make it more accessible to everyday folks who may feel self-conscious? ev: the original idea was always that medium was open to everybody. we knew not everyone had the inclination to publish anything longer than a tweet. we really wanted to crate the best ways for those who did have that desire. to really lower the barrier in most respects. you don't have the overhead or commitment required to publish a blog which is pretty much the other alternative people have if they want to do something more substantial than social media. the point was really to create the easiest and simplest on-ramp for everybody. we have had a lot of high profile people and really professional content, but the vast majority of it comes from normal folks. a lot of people who were unknown have become really big on medium. we are really trying to -- our belief is the whole becomes greater than the parts. it is one of the few places where president obama writes. he wrote this message to millenial's and a millenial came on and wrote a response. a comment lives on the same level on medium.
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brad: one of the other areas you are focusing on is the business side. it is moving from a more traditional model to focusing on what matters like time spent with an article. what kind of response you getting in the advertising community?
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ev: it is great so far. it is mostly experimental, but what we are doing is we are helping brands publish on the platform. what we're doing really is that we are measuring by the time people spend reading, which is not a perfect measurement at the value delivered, but we think it is a much closer proxy to whether or not people are really getting something out of the story than just whether or not they saw it or loaded in their web browser which could be for two seconds before they move on. brad: i want to ask you about twitter. you are a cofounder and still on the board of directors. today was not the best day for twitter's history based on the financials and the decline of the stock. are you disappointed? ev: well, nobody likes to see a stock fall like that. honestly, i have the utmost
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faith in long-term business at twitter. the team and the business they are building right now -- i'm very optimistic about. brad: so many new products we are seeing are from twitter like a program released. is the team having success enlightening the appeal for twitter? ev: i think so. i'm excited about the roll the twitter team is on right now. they are releasing a lot of features we have talked about. they are just scratching the surface of what is possible. lots of other stuff that they are making rapid progress on. it'll make the value of twitter more for our people. matt: that was twitter cofounder ev williams. do not miss our conversation with dick costolo tomorrow on
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"street smart." "bloomberg west" will be right back. ♪
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mark: this is "bloomberg west." i'm mark crumpton. t-mobile's aggressive promotional strategy appears to be paying off. the added more than one million new subscribers last quarter outpacing its bigger rivals verizon and at&t. joining me now from san francisco is john legere. welcome back to "bloomberg west." good to see you. t-mobile is gaining subscribers share, but not generating meaningful net income. you have booked a net loss in
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six of the past eight quarters. what is your long-term plan and what changes do you need to make to reach sustained profitability? john: we are right on track with what we have given as an outline of how this company becomes highly successful which started with aggressive customer growth which leads to revenue growth, even profitability and cash flow. we headed 1.8 million customers this quarter which was the eighth quarter in a row over one million subscribers. revenue growth was 13% year over year and even grow 20%. we actually updated our guidance to have greater growth on the postpaid side between three and 3.5 million and kept firm our profitability
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guidance. even 6.8 and 7.2 billion. we will be profitable through the rest of the year and i think our investors have been very pleased with the progress of this company. it is a good day. mark: do you have enough spectrum right now? what are your plans in participating in future fcc spectrum auctions? john: we have more capacity per customer than any of our bigger rivals. the topic is one of the most important ones. it is scheduled so far in early 2016, broadcast options for 600 megahertz which is very important low-band spectrum. we plan to participate and hope to get a nationwide swath of spectrum. everybody in the industry because of huge growth everybody needs more and that is what this is targeted at. mark: you talked about
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consolidation in the past. how have you changed your view on that in the wireless business now that the comcast-time warner merger is off? john: what i have always said is consolidation is inevitable. it is not a matter of if, it is a matter of when and how and who. what people need to think about is entertainment and content and social are moving to the internet and the internet is mobile. amongst the players who will be looking to serve customers on a mobile basis, they do include the cable players. google has just entered the wi-fi service business. i think you can think about these as potential coming togethers in some fashion over the next five years in the u.s. mark: i only have about 20 seconds. you said cable companies would totally make sense as an m&a possibility. how likely is that? john: who knows? we will have to wait to see. they are an adjacent industry. they are playing and services that could be complementary to what we are doing. if customers are better served i think markets will find a way. mark: john, thank you for your time. john: thank you very much. mark: still ahead, we talk design with the man in charge with the look and feel of your
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android. later, a conversation with robert brunner, the iconic designer behind beats by dre. "bloomberg west" continues in a moment. ♪
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♪ mark: welcome back. this is "bloomberg west." where we focus on business technology it in the future of technology. i'm mark crumpton in for emily chang. here are the top headlines -- the cost to rebuild nepal after that devastating earthquake will be greater than $10 billion. that word comes from the country's finance minister who says the government is still focused on rescue efforts. thousands may still be trapped more than three days after the quake. the death toll is more than 4300. the prime minister of greece says votes may ultimately decide whether to approve an agreement with greece's creditors which remains in limbo.
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here is the prime minister talking about his pledge to roll back austerity. prime minister tsipras: this mandate creates limitations for me. if i have an agreement that puts me outside, i will have no other resort. that people will decide. i want to make that clear. mark: he also lashed out of the european central bank and the eurogroup, accusing them of treating greece unfairly and breaking promises. consumer confidence in the u.s. posted a surprise drop in april, falling to the lowest level in four months, according to the conference board. the homeownership rate fell to its lowest level in two decades. the u.s. census bureau says 63.7% of americans own their
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homes in the first quarter. the national football league is ending its tax-exempt status meaning the league's central office will become a taxable entity. commissioner roger goodell informed team owners of the decision today saying he was eliminating what he called a distraction. he says every dollar of income is earned by the teams and is taxable in their own states. he says this will change -- this change will no longer make a material difference in the league's business. amazon sets its sights on the $1 trillion american businesses spend every year on supplies with a new service called amazon business. it will sell everything from tractor parts to paperclips that employees may need in factories, hospitals and offices. this expanded version of the supply service comes as studies show businesses do as much as 68% of their spending online. we turn back to the bloomberg businessweek design conference where we are bringing together the world's top designers in
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san francisco. cory johnson is at the event all day speaking to the leaders in technology and design. josh, the editor of bloomberg digital, is also at the conference. cory? cory: yes, he is. we are joined by matias duarter, the head of design at google. i want to start with what you do is so important, it affects more people than any other designer in the world. for example, design changes to google maps. that is what you doing a google really struck me because that interface changed dramatically within the last year or so. what were you trying to do with the design to change the way google maps -- it is a successful product -- what are you trying to do with the product in changing it? matias: we are trying to make things more beautiful. that is the philosophy google approaches all of its products.
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try to make something really wonderful for the user. the original search page is so simple and fast. there is a beauty in that simplicity. cory: it is different now. design was not a focus of google. it is now. i wonder how you see that difference. matias: one of the things we have been dealing with is how important every detail the experience is. that is no different for google than any other company. josh: on that point, you are so huge now and have so many different regions and maps has become a product that is a court to the experience. even if you get an iphone, they use google maps. it's a better product. the slightest change can really throw off literally tens of millions, hundreds of millions of users. i don't know what the numbers are.
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i mean, how much are you worrying about how this change will affect the users? matias: we agonize about that. design and google encompasses more than just designed for the products. we design android. we designed material designs that go beyond google products to the web. we take this responsibility of not just try to push a particular style, very seriously. we are trying to make sure everything we design is objectively as good as it can be and that requires both inspiration, by getting the best designers and empowering them, but also a lot of testing, monitoring. cory: everyone cares about their work is striving to do the very best they can and hating their results as well. matias: that is the curse of a designer. cory: that is the curse of work. you always want to do better.
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i wonder when you look at android, one of the reasons it is ubiquitous because it is so open. that are so many flavors of android. what do you think is the fullest android experience? matias: i think it is actually all of those different facets of and drug you can get. you can choose an android that is better suited for you. perhaps you like the customizations. josh can pick something else. he really wanted to be waterproof. josh: you say that but the reality is you guys have gotten tighter about control of how android looks and feels with your partners. if you look at the new galaxy s6, they are much closer to the core android experience then you look -- than a couple of years ago. matias: think about design as if you are designing a car. you want to have everybody be able to choose what kind of car they have. some people want a cadillac. they wanted to be this sporty
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coupe. other people want a station wagon or pickup truck, whatever it is. there is a lot of room for the functionality and the style you will have. there are some parts of it the need to work the same. it will have to have the steering wheel in front of you make sure the brake pedal is on one side and the gas is on the other. if you don't conform to some common standard, to a common standard, it will be a mess. cory: used the word flexible versus atomic. can you describe what that means to you? matias: i'm not sure when i said that. josh: you confirm or deny? [laughter] cory: some designs need to be complete in of it self? like the cars as opposed to
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something flexible like something that some of the picks up. matias: we do things like cars or the structure and material design because we think these things are tools. they are like building blocks and we want all of those cool to be used at the right place and right time. cory: give me an example. matias: when you have a lot of different things they want to
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show you at the same time when it comes to a car. cory: like maps when you are getting results, you get it on the map and it shows you the phone number and a direction. matias: that is like an icon for the restaurant but it contains so much more information than a single picture could. that is atomic. what is great about it is in its little modular natural, you can take it to other places. if you open up google now, we can present that same format that same card. we can take that restaurant out of the contacts you saw before and transform it, and put it somewhere new. you recognize the same thing. it is not a new thing you have to learn. josh: the way you work denies your apps, it is basically inside cards. is android moving towards the structure that everything is a card or a card that lives inside of the card? we don't think of things as apps anymore? the browser that opens up is a separate card in your multitask. does that become everything -- a little atomic unit? matias: i think this reflects the tension we all have with our digital world. we go to specific brands and specific apps to get one little beautiful piece of functionality.
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we need to find a way to connect them so you are not locked in. you will talk to your friends about where you will go to dinner and look it up on yelp and get directions with google maps and maybe you will get a car with uber. each of those things are isolated. you need a mechanism to bring that together into one strand. cory: really interesting stuff. one of the most important designers of our time. matias: it is a team effort. cory: we will have more from the bloomberg businessweek design conference when "bloomberg west" continues. ♪
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mark: this is "bloomberg
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west." let's check some of the other top headlines we are following. google's youtube is going to make movies featuring youtube stars. the films will be made in partnership with awesomeness tv, a service that helps develop youtube stars. the first movies are expected in the fall and will appear on youtube first before being distributed. google is trying to make nice with the european union news publishers, spending $164 million on online journalism grants in europe. papers like "the financial times" are taking part. the eu has received at least 20 complaints from newsrooms who say google consistently ranks their websites below results from its own sites such as youtube and google news. later this year, swiss luxury watchmaker tag heuer will start selling its own smart watch developed in partnership with google and intel. this watch will sell for about $1400, more expensive than apple sport. its battery lasts about 40 hours versus apple's 18-hour battery life. let's head back to san francisco where the bloomberg businessweek design conference is underway.
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cory johnson is standing by. cory: yes, i am. robert brunner is here from a firm called ammunition. this place is running thick with designers. some people might say we're up to our arms in designers. the notion of the importance of design in business -- i wonder if you can talk about that. where business is being led by design as opposed to putting design on top of what is already being done. robert: the old model was designed by something that happened in the process. there were requirements that went in and stuff went out. it was manufactured. today, it is more design is the topic of conversation from the very beginning as to what some they should be to how it is made and how people use it. all of those things. all of that should be designed. the really great companies that understand -- cory: the conversation starts earlier?
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if somebody says if i had a widget to solve the problem and it looks great or is it more the looking great? robert: everything. when someone uses something, they experience everything about it. all of that is really important. it starts earlier and continues all the way through. it is not just a moment in time. what technology companies realize, that technology is important but it is designed that makes it work in people's lives and attracts them to it. it has become at par with enabling technology. cory: i could do two years at harvard business school and not take a design class, but i have to take three classes on accounting. robert: that is changing. you are seeing more and more design being integrated into
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these schools. the understanding of design and why it is important. it is not just for our schools. cory: beats -- a fascinating group of products. i wonder where design fits into the evolution of that. where did the company come from in your experience. robert: as we thought about the headset -- it is a wearable technology. most headsets were complicated and mechanical prior to that. cory: the great ones. the crummy one -- robert: they are driven by function, but they are things you wear. as smartphones became the primary way people got their music, what you wear and how it looks and feels becomes very important. cory: was the notion that the product would be so much better because the design would be integral to it and that was missing as the design was slapped on top or was it a different pattern as opposed to something you thought about from the very beginning? robert: it is just thinking about it differently.
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i mean, any time you create something you are designing right it is thinking about where you want to end up in how you want this to fit into people's lives which becomes very important. bates was very focused on bringing a younger audience into high-quality sound. building products that understood that and understood what they were about was very important. cory: why do you think this focus of developing around design and adding on design -- why do you think that is happening now? what are the drivers of that making design more essential? robert: it has a lot to do with success. everybody points to companies like apple. they are seeing -- cory: i wouldn't say companies are just pointing at apple. robert: i don't know how many people come into our office and say we want to be like apple. i say you are not apple, so we will work with the assets you have and make that great.
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but the point is people see that demonstrable success of a design not just from a business point of view, but from a customer loyalty experience. all of these things that are traced back to the design. successes like that have made businesses look at how are we designing and are we doing it to our advantage? cory: you mentioned wearables. you are also working on some home design. leo, which you mentioned. witches like -- robert: it is a nightlight that listens for smoke and co2 alarms and tells you if something goes off and tells your neighbors. so it effectively turns a simple thing into a more capable thing. there is a lot to going on right now. everyone with this internet of england's is looking to connect every ring in your home. the question is does everything
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the question isthe question is does everything have to be does everything have to be connect it and if so, what should be like? cory: is that -- do you think the category gets bigger because it starts with design so it is more natural in someone's life? robert: everyday things are very embedded in our consciousness and how we live. when you start messing with them, and adding more stuff, it is very important to think about how they are designed and how they behave and what they do and what people understand about them. a lot of things are not successful because companies try to shove too much functionality into it because they can and people do not know what it is anymore. do i really need a smart can opener? i don't think so. cory: pro-spork or anti-spork? you just want a spoon and fork? robert: i want a spoon and a fork. i'm a believer in purpose-built tools that do the job well. cory: really interesting conversation. robert of ammunition. thank you very much. we will have more as "bloomberg west" continues. ♪
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♪ cory: it is now time for the bwest byte, one number that tells us a whole lot. here is brad stone to tell us. when you heard the bloomberg businessweek design conference -- brad: 26, the number of designers we have at today's conference. it is an incredible group. we have the architect of the new googleplex. we also have armani, a textile and jewelry designer. daniel caudill, the creative director of shynola. cory: the watch company in detroit. brad: it's a great line-up. robot designers, app designers. i'm interviewing ev williams later today from medium and twitter. cory: it is so interesting how apple is the company that is mentioned in the beginning of the conversation of building a company where beauty is the beginning of the product and functionality is just as important.
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brad: that's right. apple started something with product design, but it spread into different areas of business like designing great workplace environments designing strategies. this is our third year holding the conference and it is really about the way in which design has infected businesses. cory: i cannot help, but think about -- we have a cadillac sitting behind us. you think about china and detroit and cadillac and how cars when we were kids were so cool, like the muscle cars. that has come back to a lot of industries. brad: i get it when i talked to architects and designers is that for many years, that is where it was lost. they settled the commodities product, not a lot of love went into it. everybody is trying to bring it back and build authenticity back into our lives. cory: brad stone, we appreciate it. i want to have fun in there, but we will be out here
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throughout the day. keep your tvs on. by all means more "bloomberg west" later on today. we will have more from the design conference. "bloomberg west" will be back in its regular form tomorrow. thank you for joining us. mark: remember, you can get the latest headlines all the time on your phone, tablet, and bloomberg radio. we will see you tomorrow. ♪
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