Youtube would have been crushed without google. I bring you highlights from my studio 1. 0 interview. All of that ahead on bloomberg west. First though, we are talking about amazon, out with a much better than expected quarterly report, revenue jumping 20 and returned a surprise gain of . 19 per share. Analysts were expecting a loss of . 14 per share. They have efforts to lure more customers with amazon video. Right now, shares a rub 17 . With us from new york, the senior equity strategist for amazon and the Vice President of media ventures, and from seattle, our guest from a joint Venture Group and an amazon investor. Matt, lets talk about what is happening with aws. Matt they are just rocketing. They are up 80 yearoveryear. They are one of the most profitable, if not the most profitable section of amazon. You saw them at 23 billion for the quarter and they are just making progress. Emily david, i want to bring you in on some of the things were seeing with online video. Transparent was a big hit. Are we seeing that replicated . Guest i wish they would show the numbers of how many subscribers are subscribing to prime and what they are doing, but the Free Shipping has really enhance the service to consumers and we sell to amazon and we do very well with our products. They are promoted properly and they are doing a really good job. They do not get the attention they deserve. Netflix steals the headlines. But amazon, i would be interested to see what their numbers are. Netflix at 50 million subscribers. I would not be surprised if amazon was at that number or above that number. Emily lets talk about the surprise profit. House apprised are you . It is not that big considering they are bringing in 23 billion in revenue. Still, it is a profit. Matt aws had 17 Profit Margins last quarter and you take that grows with the heavy profit, and that accounts for your profitability right there. There are other, newer investment areas, like david said, like twitch, that has been very successful for them. There a lot of the Second Quarter engines. I think it will have a big impact. Emily lets talk about that. Jeff bezos says the amazon is the First Company to use the Golden Globes to sell toilet paper. What is amazons ambition here . David i love the toilet paper analogy. Their ambition it is to be everything to every consumer from toilet paper to movies to games. Amazon prime, amazon fire the tv service that is competing with xbox, roku, playstation. Crime is giving a real run of prime is giving a real run of the money to netflix. Winning that golden globe does not get enough attention. I think amazon is a serious player in this space. Emily lets talk about prime. What do we know and what do we not know . We still do not know just to just how many prime customers there are, besides me. Guest thats right. Prime has crossed 50 million members. But i think it is superior. You see them investing aggressively and prime. Having the prime day content etc. That continues. I have to say this quarter is the best quarter we have seen in a while. They outperformed on the top line and the bottom line. It is hard for me to frankly see any negatives in there. The highlight has to be amazon web services. That division is on track to hit 10 billion revenue faster than we thought. The margins crossed 20 for the first time. I think it is remarkable what theyve done in this quarter. Emily prime customers are getting cash back from amazon in the form of credit, and at the same time, Retailers Online and offline are stepping up their game. I just spoke to jet. Com, a new company that is trying to drive down prices as much as possible so they are the lowest price option out there. It certainly seems like amazon versus everyone else. How big a threat is everyone else, tuna . Tuna the landscape has gotten more competitive, whether you look at the traditional retail landscapes. When amazon an ounce to their when amazon announced their prime day you look at the content. It is the same side. Netflix. They are stepping up their game and i think amazon, to be sure has taken to the next level. I love all of the underlying innovation. I think it is really coming together. Emily ok, tuna amobi, david matt shares of 17 in afterhours. We will continue to volume follow it. Thanks, guys. Google successfully by youtube back in 2006, a deal in retrospect, but the founder says he does not regret not holding out for more. And if not for the deal, youtube would have died. Take a listen. We were lucky. Google, in my mind, took a chance on us, and really youtube would not be here today or what it is today without theres a war area without their support. Emily chad hurley went on to create a video platform that landed him in legal trouble with kanye west in kim kardashian. I asked him to explain his side of the story. Chad i took some video and the next day i noticed but if you people had posted videos to instagram. I did not think it was a big deal. I asked my friend, and he did not seem to mind. After it got out there and got a little attention, kim and kanye wrote me the email. The rest is history. Emily they sued you. What happened . Chad they are still suing me. We will see when this actually airs. Emily video of their engagement, he posted. For more of my discussion with chad hurley, catch studio 1. 0 tonight at 7 30 p. M. Eastern and pacific. 10 scientists from montana pocket 2 million in the latest x prize challenge. Their research is next. Emily breaking. Airbnb is close to hiring blackstones Lawrence Tosi as cfo. He has been the cfo of blackstones sense 2008. Airbnb received another round of financing. Representatives for airbnb and laxton declined to comment. I want to get to pandora now also reporting, shrugging off apple music, and investors celebrate. They do not expect much in back from the new competition. Joining me with more, amy in new york and the capital founder in l. A. Amy, i want to start with you. Highlights, raising the forecast act of listeners listening hours flat. What is the story for you . Guest the rpms really nice and beat our estimates. They took up the lower end of their guidance. So, i think the key story is closing the gap with traditional radio broadcasting. Emily we saw the reveal of apple music. We sat down with the founder of pandora to talk about how big a threat he thinks it is. Take a listen. Guest there is a lot of novelty in this space. They do not become habitual products are folks. We tend to shed those in a hurry. And focus on things people use a lot of. Ultimately it is about simplicity. People want to hit a button and here stuff they love without too much fuss. Emily the founder of pandora does not think apple music is a big deal. What do you think . Is this a threat to pandora . Is it a threat to spotify . Adam tim said the word product. Pandora is an amazing product. The big difference here is the other services have much bigger revenue streams. They did a great job on revenue this quarter, but they went from 11 and a half dollars per average user and maybe it is straining to 14 or 15, where is spotted by gets 120. Where spotify gets 120. Pandora had a moment if you years ago where there the only one on all of these devices. Now you have spotify, all of these other services on deck and now they are in a box because they did this. They made this peer play settlement that makes them only be a Radio Station. Do they go beyond just being a Radio Station . Emily pandora talks about how its users are loyal users. Amy, i wonder. They are spending a lot to get that sales team to build out to increase ad revenue. What about the concerns adam is talking about . Amy i think adam made good points. But the big story for q2 is revenue and monetization of the user group. It is unclear how that is going to trend in 2015 and 2020 ahead of the royalty fee is coming up in the next four years. Emily adam, how do you see this play out . Lets say a year or two years from now how does apple music, pandora evolve . Who are the big three . Adam you can include amazon in there. We just got the amazon echo and they keep talking to alexa. I think the big issue here is what is the tieback apple has two devices, amazon has huge membership. If you look at spotify and pandora, spotify, 75 million users, pandora, 85 million users, but spotify has this multiple billiondollar valuation higher than pandora. I think it goes back to what tim says. I think and or is a product. Musics media. I know we are in this process of unbundling, but music is not absent of television, you have spotted by trying to do video streaming and verizon is coming into the market. I think it will be who delivers the music and how easy it is to get it. Emily all right, obviously a lot of things at play in the streaming music space. Pandora shares up almost 7 now in afterhours trading. This week, scientists from Sunburst Sensors one the x prize challenge. We sat down with them and the x prize ceo. We look at some of the worlds biggest problems that are not being soft and we put out a large cash prize, in this that are not being solved and we put out a large cash prize, in this case funded by our founder. Wendy when we look for something, we are looking for change. They were changing a system that we know can be better and we are using data. The problem we are tackling is ocean acidification. We get more than half of our oxygen from the ocean. I invited 25 marine scientists to join us in washington and talk about, what do you mean . What device do you mean to measure this phenomena and that no one can see . We had only about a years time to design devices that could affordably measure ocean ph. And also very accurately at deep ocean depths of 10,000 feet down, or at the coastline measuring on. If you cannot measure it, you cannot take action. They are headquartered in montana and they love to say, we do not have an ocean there. But we are ocean scientists and we are building ocean monitors. They were high school friends. It is a husband and wife. They have a very small business. The incentive of the prize itself takes it off the drawing table and brings it into reality. We are living in a time where entrepreneurs have access to all of this information on google, access to ai, robotics incredible technology. Its about finding the nonexpert who comes up with this novel idea like why cant we do it this way . Ms. Schmidt these tools will be in the hands of lots of people on ocean going tours, in the hands of scientists. All the teams who have anticipated from the vary beginning has given us learning. And the door is wide open for all of us to develop product in a growing market. Emily Wendi Schmidt there. Coming up the fight for the airwaves. We bring you the latest. Plus, nasa may have discovered earth 2. 0. We learn about a distant planet that is a lot like our own next. Emily time now for our daily byte, one number that tells us a whole lot. 1400. That is the number of light years between earth and another planet that could be our cousin. Nancy announced its kepler telescope spotted it today. It circles a sun like star for 385 days just a little longer than our year. The planet is located in the stars goldilocks zone where water can exist on the surface of a planet. The next task is to determine the mass of the planet to see if it is rocky. Meaning it could have active volcanoes and an atmosphere similar to earth urine. This discovery is one of 500 lannetts captured by the telescope. Lets get back to earnings. At t reported a few minutes ago. The secondlargest u. S. Wireless terrier added carrier added 2. 1 million net adds. I want to bring in Jonathan Chaplin and former fcc chairman Robert Mcdowell to discuss. Give me the good, the bad, and the ugly. At t is a company that has been struggling to drive growth. Jonathan i am fairly impressed by the headline numbers. They beat on eps. They beat on ebitda. They beat on revenue a little bit as well. I think the core of the value lies in the wireless business and they are still losing customers in wireless. They reported ads, but most of those are tablets being sold to their existing customer base. The total number of customers is the climbing, losing share to tmobile. Emily about tmobile you know, the ceo has made it his job to ruin at t. How big a threat is he . Is john linder getting it done . Is john legere getting it done . Jonathan he has done a phenomenal job of the last few years. They have taken a tremendous amount of share, at t and verizon have ceded a fair amount of share to him. He started with a big disadvantage with a worse , network, a damaged brand. Withit has been a spectacular turnaround. Over the long term, he absolutely is a real threat to at t and verizon. If he can get his hands on more spectrum. Emily lets talk about spectrum. I want to bring in robert on this, this spectrum issue. The fcc is about to reject a request for more spectrum to be reserved for smaller carriers. Robert, how does that affect tmobile versus at t . Robert i think the fcc will set aside 30 megahertz of spectrum which is quite a bit. And if sprint does not participate in the upcoming auction, that could be good news for tmobile whether they want to have more spectrum or not. They bought metro. They did a fantastic job of integrating that network. They have some fantastic engineers. They are not to be underestimated. They are a threat to all of the carriers. It is a great time to be a wireless consumer. Emily also potentially good news, fcc chairman tom wheeler signaling that the deal with directv should go through. What does that mean for at t . Robert that is a shot in the arm for at t. That is good news area that provides a nationwide footprint for a stronger National Competitor against comcast, time warner cable. Its good for competition. Emily lets talk about Comcast Comcast getting a huge boost from new films out. Are we going to see the film side of the business getting more attention Going Forward . Jonathan it was spectacular this quarter. They blew away everyones expectations. Yearoveryear. Unfortunately the cable side of the business was a little hohum, and that is the piece we tend to focus on most. The cable side of the business did fine. The broadband business is continuing to improve, but they did not beat by nearly the magnitude they didnt film entertainment. Emily comcast now has more broadband subscribers in cable viewers. Robert mcdowell, jonathan, thank you to both of us, breaking that down for us. That does it for this edition off bloomberg west. Dont forget to catch the latest episode of studio 1. 0 tonight, my discussion with youtube founder chad hurley. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Announcer from our studios in new york city, this is charlie rose. Charlie this evening, we remember acclaimed novelist, e. L. Doctorow. He died yesterday from complications of lung cancer. He was 84. He was described as a literary time traveler who stirred the past into fiction and one of contemporary fictions most restless experimenters. He was best known for ragtime the book that made him famous. He covers the decade and a half leading into world war i