We are actually going to take you inside the airshow. Gettingt, alan mulally together with google, Companies Looking for a partner at the dance, but then again, you get rejected. 20 , confirming. They made an offer to buy time warner. Fox says time warner rejected that offer, and there are no talks going on right now, but they would be willing to pay more than 85 per share for time warner. And time warner in firms they rejected the 21st century fox proposal. And if anyone knows rupert murdoch, this is not over. This is just the opening step, the opening damage. The fact that it was in the New York Times is kind of game on. Pressure and lobbying. We have seen him make audacious things in the past that nobody thought was going to go through, but this is the kind of situation where we are in for a ride here. Theyre going to hear a lot more from him. We are going to hear a lot more from time warner. Toe warner is really going have to justify their strategy. Standing alone as opposed to taking an offer like this. Shareholders always like to be able to have big offers and cashing out, and i think jeff bezos is going to be under pressure. The chairman and ceo of time warner met privately with the fox president in early june, according to a person familiar with the matter. Now, while they have had a couple of meetings, this has not exactly been a robust, twoway conversation. He is looking for a meaner and leaner time warner. He thinks it is better for the company to remain independent. He has been selling off. When he first took over, he sold off or spun off aol, as well as Time Warner Cable, and then time inc. , the magazine publisher. In a way, it is almost as if he set the company up to be traded. It is a much more focused company in terms of being a pure play entertainment business, which would fit nicely in with fox. Leaner, meaner time warner still includes cnn, turner broadcasting, and then the big one, hbo. Would be a stretch to say it is all about hbo, but it is all about hbo. People have speculated that maybe this was as much or more. At the very least, fox and their advisers believe hbo is worth at least 20 billion and probably more, and there is a lot of potential to build the hbo business overseas, as well as on the digital platform and on mobile platforms. It is not like hbo does not exist there, but it could be bigger, especially overseas. And there is an opportunity for the fox programming on hbo. Cnn, which there is competes with fox news in the Cable Television news business. The word from the talks . Spinoff. That is to address risk. 550generates roughly billion dollars of million times, of ebitda, and 12 that would give you at least 6 billion or possibly more. Fox believe there is some vanity value in cnn, and someone may like to buy it. Well, for now, no deal, and media mega meteor merger, to say the least. I think rupert is a classic entrepreneur, along the lines of some of the great john malones of the world and Sumner Redstone and so on, and rupert is a great , and he will clearly be in the hunt on this. He understands how to repurpose content. He understands the fact that when you get an apple or what jeff, just be those company. I think it is a company of the global marketplace technology, the middle class of india and china, and mobile devices. It is terrific, so he just monetizes what he has. Lookingt murdoch, still for that big conquest at 83 years old. All right, now lets talk about the dance partners. In, to aying hop former ford ceo, alan mulally, and yes, those are the ceos together. The decadesold rivalry, that is next in tech, and hillary the dailyopped by show, to speak with jon stewart, and she talked about a run in 2016. A lot of hard choices, a lot of hard choices. Not for your editor. It is a complex and well tosoned and i witness a view the history of those four years, and i think i speak for everybody when no one cares, they just want to know if you are running for president. [laughter] [laughs] jon, i was going to make an announcement, but you kind of spoiled it. Alan mulally gave rumored his last interview before leaving the office at board. The Corner Office at ford. I would like to call you on july 2 and tell you what i one am taking about. I will call you from the starbucks. Ok, he did not exactly call us from starbucks, and we had to wait a few days longer. But now we know. The former ceo of ford is joining the board of google. It gives google expertise as it pushes into the brave new world of driverless cars. Here is our matt miller and cory lastn on bloomberg west night. Theres not a company in the world that would not want alan mulally on their board. I have met hundreds of ceos. He is similarly impressive. He spent a decade at boeing. He is an engineer by background. He did not get the job. He left to go to ford. A difficult situation where you had the founders, the offspring of the founders very involved in the company. He negotiated and significantly reduce the product line. Did really and things with the company before the company was income in trouble. It made ford so much stronger than their competitors and they were able to survive and thrive. While the others were begging for and surviving on tarp money from the government. He also changed the way cars were developed. The interior electronics, the things that customers were touched, were developed on an entirely different plan than the rest of the car. That is not the way ford used to do thing. That allowed ford to be at the cutting edge of the driver experience in a way that no u. S. Automaker was. But i have talked to alan mulally about this. He is a guy that understands how people use technology. I think that is a bigger deal then self driving cars at google. Google selling cars. The software inside the car is going to be a big deal for this company. They will try to tie the android operating system into everything people do. What do you think google once a from alan mulally, matt . He was talking about the mobility situation of the future. Not just about one car that one person buys and drives around. Bill ford was a huge opponent proponent. Henry ford was a huge proponent of coming up with a better way for people to move from one place to the other in an affordable way. But i think it is interesting to get back to corys point about while allan recognized the importance of what you do in the car, i am not sure ford executed on that very well. And, you know, i have a ford f1 50 that i love. I was looking at a gp, a dream car. Comese systems that ford out with now, which are supplied by microsoft, dont work very well, to be quite honest, and it would be great if somebody could come up with a better way to work the systems. Now, if you did not see the Google Mulally connection coming you might never seen this either. Apple and ibm. Rivals of the pc era that goes back about 30 years. They are finally joining in partnership. Ibm softwarep the and services business, and it will also give apple access to industries it has not focused on such as health care and banking. Here is cory johnson once again. Because apple is the biggest Market Cap Company in the world, because they sell so many iphones and ipads, it is hard to products to introduce that will move the needle. The revenue that the ipad garnered in the First Quarter would be tiny compared to the apple of today. But this is the kind of deal that can move the needle for apple. Because it puts apple products in the hands of people who could not get them. Corporate employees whose purchasing managers were forcing blackberries and surface tablets down there throats. They wanted iphones and ipads. Theyre going to march into offices and sort of advise people in how to roll out these products in places they were uncomfortable in in the past. Ibm sales force is well known, well respected. Anybody who wants to go into sales once would point to the tactics they have learned. How much will they be able to move the needle for apple . This could make a big difference for apple. It could also make a difference for ibm. Ibm is a struggling business. Make no mistake. They have seen sales decline. Quarter after quarter after quarter. This from a business growing in 2011 to a business that is shrinking consistently on the revenue side, despite billions of dollars in acquisitions. While they are acquiring companies, sales are shrinking. They boosted earnings per share by doing buybacks, but borrowing money to do those buybacks. So they need some help. They need better products, and they achieved that with this deal yesterday. Ibm needs this deal. Probably even more than apple. It is interesting they couched it in terms of in the press release, they talked about the apps and the Ibm Technology that is going to be available on apple devices. The real benefit here will be the ability of ibm sales force to sell apples beloved products. For more perspective, here is David Kirkpatrick on surveillance this morning. It is like the employees over the will of the cio pulled apple into the enterprise. The cios are saying, ok, ibm. This is the world we are in. Everybody has wanted to use apple in enterprise for some time. I remember four or five years ago, i moderated a panel. A guy was telling me he had helped a Major Media Company give ipads to its senior leadership. It was the only time as a cio that he had ever seen true enthusiasm among tech clients inside the company. When they gave them an ipad, they lit up. The knock against apple is that the security is not as tight as a blackberry. It needs to get tighter. China has its own agenda, but there is a vulnerability. The knock against every kind of technology is security needs to get tighter. And, you know apple is not going , to be as practiced as ibm. This extraordinary Global Sales Force they can bring to help apple. To increase their incredible market share. Now they can really go in wholesale. What is the game theory response here of the other Major Players . It is google scratching their head and saying, maybe we can link up with maybe they would say oracle, i do not know. Google also has major designs. There are all sorts of other things they are doing in the cloud. Microsoft is definitely not thrilled by this announcement. If you look at what sonny and did putting apple on the ipad, it is the same impulse. Yahoo s future on the twoyear anniversary of Marissa Mayer taking over as ceo. Plus, our exclusive look inside what might be the most Innovative Lab in the pharmaceutical industry. And it was all about derek jeter at the 85th allstar games. The yankees captain led off with a double. Derek jeter had two hits in the final allstar game. And he was given a standing ovation he was finally pulled from the game. Pitch from simon on the way. That is in the air to write, falling fast. A double and a single. This is money clip on bloomberg television. We are streaming live everywhere. We are on apple tv and also fired tv. I am adam johnson. Yahoo says it will return have the cash it receives from alibabas ipo back to shareholders. This comes on the second anniversary of Marissa Mayer taking over as ceo. What does the future hold for yahoo . We asked David Kirkpatrick this urveillance. I think of it as a company that is trying to find its way through a transition that is pretty much it nobody has a formula for. There are a number of people saying, Marissa Mayer not be doing the greatest job. But who could do a better job . Who could save this company . They are trying to become a media company. They have a deal to do live broadcasts of concerts. They are thinking of ways to amplify their media. I think they are doing a decent job. But the problem is, the traditional banner ads and the kinds of ads that have made their history have not really have been diminishing in importance. What is a David Kirkpatrick merger that is the best outcome for ms. Mayer . I dont think aol is the best answer. If that is part of what youre asking. That is sort of like it is negative one plus negative one. That. Ing like speaking of a positive number, how do you do that . I cant think of one. With it in this conversation, that is the headline. That is the headline, especially on the heels of ibm and apples partnership. You do wonder if there are unlikely alliances that could give these struggling big Old Tech Companies a lift. I will tell you one. What if alibaba bought yahoo . Alibabas ambitions are so gigantic. You hear about them buying a soccer team. They are doing all kinds of stuff. Distributing video. They have a cable channel. Is like a child eating its mother. Alibaba has global ambitions. There is no question about it. They have a lot of ideas for ways to expand globally. At some point, maybe they would say, we want a bigger position in the u. S. If you look at the Revenue Breakdown at yahoo , it works out to, again, just pulling this off of the terminal 44 to , display ads. 34 search ads. And then the balance, 20 , marketing. Is the ad display model broken . Yes. The traditional model, in my opinion, is broken. We are in a new targeted air ra, where the people with the most data win and display ads in creative new ways. Yahoo does not have the most data. Maybe Marissa Mayer should ask reid hoffman for vice. Helping get both paypal and facebook copy ground. I guess you can probably understand why. He sat down with charlie rose to talk about what drives him. I thought i would be an academic, but then i realized academic stuff does not , resonate with public intellectual stuff. So i decided to become a creator of software. Has the fact that you have been so good at this given you an opportunity to have a voice in the National Conversation . I hope so. And maybe more over time. I mean, well anything from , writing books, to, for example, helping todd park figure now things with healthcare. Gov. Integrating technology into the government. How do you think about, like, for example, in order to fund the kinds of society we want to live in, whether it is education, health care, etc. You , have to have an effective economy. How do you create new jobs . These are ways i connect with the public discourse, in ways that i never imagined when i was a student. Watch the full conversation with reid hoffman on charlie rose tonight at 8 00 p. M. And again at 10 00 p. M. Eastern. Right here on bloomberg television. Well coming up, instability in , the middle east is making Foreign Policy very difficult for president obama. How his picks are responding. His critics are responding, and the biggest aviation event. That is ahead. This is money clip on bloomberg television. We are on apple tv. We are fully digital. We are on amazon fired tv. I am adam johnson. Moving pictures, where the video is the story. A senior track foreman and his assistant have been detained after the deadly subway derailment in moscow. They say a new switch was not properly installed when repairs were made. 22 people were killed and 136 injured. In the philippines, a typhoon picked up strength with wind gusts up to 115 miles per hour. The conditions left many residents without power. Schools and government offices were closed as authorities cautioned that dangers remain. And Bashar Alassad marks the sevenyearf another term as president of syria. Even though there is a civil war that has claimed thousands of lives. In a speech, yes said he will continue to fight terrorism until peace is restored. There was a vote to script by his critics as a sham. This will be his third term in office. Staying in the middle east, video released by the hamas military wing apparently shows domestically produced rockets being shot at israeli targets. The video also reportedly shows an unmanned aircraft. Flying over israel. Yesterday marks the first day that this is happened since the fighting began, and this was taken by an israeli airplane. It shows an alleged hamas drone facility being bombed. Meanwhile Israeli Forces dropped , leaflets in northern gaza urging residents to move away from hamas sites, in order to avoid strikes. Hundreds have been injured. Of them civilians, and hundreds more have been injured. And from the mideast, to ukraine. Instability creating a difficult foreignpolicy environment for president obama. Here is the perspective from phil mattingly. On surveillance this morning. You have ukraine, which tom was talking about. You have afghanistan which john kerry had an emergency fly into. It was starting to collapse. You have iraq, syria. It is never ending. What they have decided to do is take it piece by piece. Small steps. Try to get little accomplishments. I think afghanistan was a win for them. Looking at the ukraine, trying to force the eu to have sanctions, they look at that as a positive step forward, but, look, there is so much, and there is so much going wrong internationally, i dont know that you can shift the narrative. You have a white house official suggesting the u. S. Should tell israel to pull out of the west bank. That might create stability. Benjamin netanyahu says no. That is exactly what we are not going to do. I mean, is the u. S. Just on the wrong side of this thing . I think the u. S. Is in a very tenuous position. They are getting4 the u. S. Has to take the step to ask israel to pull back. They are looking for a pathway forward. Looking for some path forward. Look at what Benjamin Netanyahu said. I dont know how it happens anytime soon. Despite the violence, the Tel Aviv Stock Exchange has risen four days in a row. Coming up, johnson and johnson takes a page from silicon valley. We will take you inside their innovation lab, and then later motors, we will take you inside , the most extensive are the jet in the world. It is pretty fast. And china prepares for the worst police and Emergency Service personnel having a largescale antiterrorism drill. These are the images. Language voices] this is money clip on bloomberg television. We are streaming live everywhere. We are on your tablet and on amazon tv. I am adam johnson. Johnson johnson has traditionally developed drugs internally, behind closed doors. But that is actually changing. Now, johnny john is our wing borrowing a playbook. Could billiondollar drugs come from this process . Without a doubt. He is talking about the incubator in la jolla, california. They are working on hundreds of products, including we are making a product for acne. We are trying to come up with molecules to treat the diseases in a brandnew way. They are renting out labs space where they get access to millions of dollars in equipment that startups cannot usually afford. They do not work for j and j. Even though they are working under the company roof. It is no strings attached. For me, it was a potential it was essential that it was no strings attached. Because if we made it with strings attached, they would not come. He says they are coming. 400 companies have applied for space since it began in 2012. The entrepreneurs are free to sign deals with other drug companies. If they want. So, why are you doing this . Because the traditional Business Model for Large Pharmaceutical Companies does not work anymore. It became clear the old model of relying on inhouse r d did not work. Especially as they lost billions as the result of patent expirations. The company realized it needed access, and today, they scan the globe with labs and incubators, combing the scientific landscape for ideas. More than half of the pipeline of Johnson Johnson comes from outside the company now. Compared to 20 a decade ago. There could be more. They have looked at close to 2000 projects in the last year. Inking 61 deals. At Innovation Centers alone. What we are doing is sort of the Mount Everest of cancer drug discovery. Entrepreneur spent a year at the j j incubator before moving out. He is decided to work with j j. To work on his drug to treat a rare form of lung cancer. We wanted the expertise of a large company. The reason we went with them is because this is a big, hard problem. The Johnson Johnson chief scientific officer is counting on wilson and other startups to solve the problem. If j j gets to make money, all the better. What is going to be considered a success rate for you . That is what will happen. Our chief National Correspondent was at j j headquarters. In New Brunswick yesterday with the ceo, and they were looking at the picture, so how do you feel about the economy . The way i would describe myself as sort of a realistic optimist. As i look around the world, we see some signs of returning strength. But we have also seen a continued lag in demand around. Demand around health care. This year we are seeing much lower returns. This year, we are seeing much lower returns if you look at inpatient procedures, primary care physician visits. Are a bit slower in coming back. Nevertheless if you look at all , the other major drivers, demographics, and aging population, the Affordable Care act. Right here in the united states. We know that over the long term, there will will be significant demand. It is probably the biggest challenge we are facing right now. I have to ask about the pharmaceutical business. 21 with the Revenue Growth quarter over quarter. Up from one year ago. I think it was 11 in the First Quarter. Can you sustain that growth . We are very proud of the transformation. You look back at the last several years and the way they have been able to focus and the way they have been able to introduce new therapies. Things with prostate cancer. Things that are helping people live longer lives. All of our teams have done a great job, whether it is competing with new compounds in the field or not. Our head of research talked about it today. On the west coast, you are very aggressive in terms of going after new products. But at the end of the day we , want the best science. And we are very gnostic about it. When and where we can help patients, add value, that is where we make a difference. Is it sustainable . 21 is a big jump. That is a very significant jump, but if we stay focused on helping patients, great science, we can be really successful going forward. You can watch the full interviews with j j executives including the cfo caruso. , just go to bloomberg. Com. You can also watch it on the awardwinning tablet app. Course, btv plus. The three of the International Air show. We will show you the deal that inspired this race. Plus, if you have millions to burn, we have the toy for you ahead in motors. This is money clip on bloomberg television. We are streaming everywhere. Online, on your tablet, fire tv. Im adam johnson. In motors, day three of the farnborough airshow. And planes are flying off the shelves. Airbus wins 38 billion in new orders, the biggest which came from air asia. And it was all love. The air asia chief executive gave the ceo of airbus apex on just fernandez, himself. Our and edwards asked fernandez about his enthusiasm for airbus. I think it is one of the greatest aircraft ever made. There is not a lot of choice, and for four years, i kept pushing airbus to reengineer it. I said it would be a killer aircraft. The 350. But to their credit, they ran , back and took a look at it. You told me you have been harassing them. How long were you harassing them . Four years, four years. I was. They told me know in many languages. To their credit, they came through. They built a new playing with a new wing, it will save us 14 of cost and allow us to grow quicker. Is not just airbus and boeing. The makers of the worlds fastest, most expensive private jets are there also, and we are talking about gulfstream, and the latest model can deliver you and your closest friends want to go at nearly the speed of sound. We are sitting inside the gulfstream. It is the largest business jet available. It is the longest range of business aircraft. The largest cabin. And it is also the fastest certified civilian aircraft any in the world. It has a advanced cockpit, control systems, the advanced most advanced a business jet on the market today. This is a fairly standard layout for the g650. 13, for both eating, sleeping, and working. The airplane can fly for almost 16 hours. Missions attypical 9 10 the speed of sound. The price is 650 million. Plus escalation, and we have a backlog on the airplane that extend out until 2017. You have to wait your turn in the queue. But it is worth waiting for. That is gorgeous. All right, here are some of the other highlights from the worlds biggest air show. From cool planes to cool robots, students in china designing and programming their own robots. Some of these guys even dance. [speaking chinese] [speaki] it is time for on the markets. I am julie hyman. Lets look at where we ended the markets. We had energy and Technology Leading gains. A lot of deal talk fueling some of the gains. As well as earnings from Companies Like intel. That help lead the Technology Stocks higher. And for more today, i am joined by our reporter who covers equity markets. And, of course, as i mentioned, at least the sentiment around deals seems to be sending things higher. All the hubbub about Time Warner Cable and 20th century fox looking to buy it. The huge valuations they are putting on the company. What it does, it raises markets, and it gets people thinking there is capital owing into the market and gives people confidence. If this company is willing to pay that much more for its rival, then maybe i should get my money in, too. Thattock is going to go up much more, seems to be the thinking here. These experts think the market has room to grow. They feel comfortable putting capital into this market, so maybe i should, too. There is also the earnings reports. Intel coming in definitely a , surprise. The speaks of the optimism we have any earnings season. It seems like a lot of investors are feeling good about what we going to continue to hear. , yes, yesterday, we had jpmorgan and Goldman Sachs come in good. The rest of the market can only do better. If the worst performing sector is doing well in peoples minds, then it can do better maybe the , way people are interpreting it. With intel, we saw a bump of up in their shares. We should talk about janet yellen. She testified yesterday and again today. Yesterday, stocks went down. Today, stocks went up. What was the key difference twin between yesterday and today in terms of investor reaction . Saw her doterday, we something a chief doesnt do often. She was calling out sectors for being overvalued. The winners of the bull market in the stock market last year. We saw a selloff in those earlier this year, in the First Quarter, and she is putting more pressure on those valuations. They have picked back up. Maybe shes trying to put a bit of a lid on them. I guess. Even though stocks were up, 2000 was still down, and particularly, you have seen those, particularly the small caps, lead a rally, so i dont know what it says about the rally if they start to fall. Yes she might have drawn a thoseding line between stocks and the rest of the market. They might start trading on fundamentals. It remains to be seen. They dont always move on the same day. We will see if it recovers. Joe, bloomberg news. Thank you so much. That is on the markets today, and for on the markets i am , julie hyman