Engagement in current users and this is overshadowing the tax revenue actually doubled. The costello says the company dines on making twitter easier to use to increase growth but will it be enough . Cory johnson is with me. Is twitter losing steam . Classic example, they be done revenue, theyd be done earningspershare. But that is not telling us the business, what is happening is they are losing user growth dramatically. Users did grow, 241 million, and that is a big number, but when the previous quarter was 23 2 million, they only added one million users in the u. S. They got more publicity than they ever will, and that is a disconcerting sign. And timeline growth declined sequentially for the very first time. Peopleber of times actually a refreshing their timeline. And analyst talked about that. The user growth rate, three point nine percent, you can see how dramatically the user growth is slowing down. The timeline thing, maybe it is not a bad thing people look at fewer timelines, if they find what they want. That could be a big deal to fix that. The times people spend is more important than the number of timelines they look at. Cost alone talked about all of these things theyre doing to try to attract new users, make it easier to join twitter and to understand twitter and he expressed confidence they will be able to do this. Howaid he does not know fast, take a listen to what he had to say. What that looks like and when i will occur is not something can guess. It will be the cumulative affect of those changes we make to the product. That we believe, confidently, will have that impact. Said, asher thing he they make these changes, they may be sacrificing timeline views in the short term. The idea sounds like they are quality. Increase i was having a conversation this morning, he read the transcript, he had an exact different take on what dick like. O sounded we talked about how emphatic o sounded. Costol i think the words belie the problem. Even the bullish analysts were wenting, jeez, you just public in your user growth is falling apart. The u. S. User growth is below two percent. Those are weak numbers. And the vast majority are international. But the revenue is coming from united dates. I want to bring in palm paul sweeney. He covers twitter and joins us now from new york. What do you think . Do we need to give them time . This stock has become a little bit of a show me stock, and that is clearly not what it was price for prior to yesterday. Given the valuation, people want to see accelerating growth, growth, engagement and what we heard yesterday as we have to reset expectations. It has become a little bit of a show me stock. It is like facebook when they stumbled, the whole mobile revenue story. This is a company that had to take a reset and now it is up to management to show they can drive engagement. But of twitters if twitters growth is slowing down, how big can it be . A lot of investors are stepping back and saying, is this more of a niche play, social service . 41 million users relative to the billion users at facebook, investors are trying to gauge how big the twitter universe can be. Answering that question goes to, what is the revenue pie for twitter . Can they grow into this valuation . A lot of people are reevaluating. Are always talking about businesses, not stocks, but i think the stock is the story, moneympany took so much off the table, i wonder what effect off all in the stock will have on the business, and on the people that work at the company. We have heard this, particularly from Tech Companies, and are there is a hiccup, they take a hit to their stock, what we hear from a lot of successful stories, we can take facebook, to worry about the stock, make to the right decisions, do what is right for the business and the stock will take care of itself. This is a stock that was priced to perfection yesterday. The Quarterly Results were far from perfect. The timeline view situation bother you, this change in engagement of current users . That is a big issue because when you are selling advertising, whether it is traditional or digital, you are the size ofmetrics, the audience and the engagement. How long do they stay . Adt goes to how relevant and can be to that user. To the extent you have issues that presents a challenge for the folks trying to sell spots. This is where i disagree. They could have a lot fewer timeline, timeline does not measure engagement. How many clicks they get. For example, the users stayed on one page and followed every aspect in more depth and spent time, that would mean more engagement, fewer timelines. I would not be surprised if, over time, we would see fewer metrics out of this company. That may be the case but unfortunately for the company and for investors, that was not the story they brought to the marketplace several months ago. It is not the story most of madison avenue is comfortable with. Right now the Company Needs to go back and say, what is the best environment to monetize our user base . Is a number of views or the duration of those views . A kind of have to rethink their strategy. That is what we heard last night, they are thinking about new products, however they want to define that, and they need to bring that message to madison avenue and show this is not a niche medium but can continue to be a mass medium similar to google or facebook. Downile twitter shares are 20 , yelp shares are up 20 . What is going on . Yelp had a good quarter. Very good guidance for the First Quarter and for 2014 overall. Swap story,ve a people swapping out of twitter and into yelp, and or as well, which had a disappointing quarter. One of the issues is yelp is one of the few examples where in thernet company has cracked local advertising code. The last frontier for internet advertising is local. Even google sites the struggle of targeting local advertisers. Yelp is an example where they are doing a very good job. Watching how that develops. Paul sweeney, thanks for joining us today on bloomberg west. To the mobileovie strategy, we get the latest on disneys business from bob eiger. Welcome back to bloomberg west. I am emily chang. Hisis showing growth in first fourthquarter earnings report. Were were up 13 sales up 13 . Joined, Tim Armstrong surveillance. Take a listen. We have record results for last decade. A lot of that is driven by advertising, 20 three percent Global Growth in advertising and that is coming from video, the absoluteeally, tailwind from Consumer Usage on digital services. Aol also took up 5. 8 Million Dollar charge for layoffs on its patch local news service. Disney was also out with earnings yesterday. They got a big boost from the animated hit frozen. Net income soared by a third. Jon erlichman sat down with chairman and ceo bob eiger. They talked about the quarter and he joins us now. Jon. Emily, you compare this story to twitter, investors are disappointed, one of the reasons they were pleased with disney is that element of surprise coming from the box office. Specifically with the film animation,der disney which is having a bit of a turnaround. Now that it is entering china and japan, we asked bob biker if it could generate a billion dollars at the box office. We are thrilled with frozen, of course. You hit the nail on the head when you talked about the pixar acquisition in 2006. It would still designed not only to a neighbor pixar to continue to prosper, but to turn disney animation around, and i think this film proves that has been accomplished, although we never rested on our laurels. Million in 870 global box office. It just opened in china. It did extremely well in south korea. I think the biggest animated film there. That bodes well for those territories. Although they are not the same. I think the possibility exists, but i would rather not under the word until we are there. One thing you did say was it has real franchise potential. I believe i heard you talk about the possibility about going to broadway. When you said that it made me think, he is thinking sequel. Could there be a frozen sequel . I dont want to rule anything out. As wee been as specific can be about other plans. Specific,obably more but we are very excited. There is great demand for it. Not just across our businesses, but in marketplaces around the world. Franchises, we talk about something that is successful across businesses and territories over a long time. Of thosehis checks all boxes. Cable consolidation, time warner cable, charter, are they going to come together. Is that good or bad for disney . Does not have much of an impact as far as we are concerned. Disney, for espn, instance. Wellrks that are not only branded but really in demand because of their product. Is consolidation or the ownership of the existing multichannel business changes, we will be as in demand as we have been. You cant go after the multi channel subscriber without offering them our product. It is not really mean that much to us. We believe in technology, for a number of reasons. I have articulated this often. It gives us the ability to make the product better. Movie, tv show, or a theme park attraction or experience. Technology is giving us tools to paint better pictures and create better experiences. It also is creating much more consumer, andthe vice versa. I love mobile technology because, particularly in television, if you wanted to watch tv, you had to watch tv on a fixed screen attached to the wall or on a shelf or on a cabinet. In the home. You could not watch tv elsewhere. You now have the ability to do that. That is only going to grow. To accessility products grows, your consumption is going to increase. That is a great thing for creators, and distributors. On the theme parks side, technology is a very powerful friend to us and to the consumer. Wants, evenconsumer though the experience is great, they want a better experience. They want to have more fun. They want to do more things. They want to be able to customize the experience they have. We have technology that enables that to happen. What he had to say about the importance of mobile. Reading the iger tea leaves, what does that mean . They will continue to push ahead with a lot of apps. Even though they are tied to cable, people want to watch stuff anywhere, everywhere. They have to do that but also in a world like gaming, where they have struggled, they might license the technology so there are disney games on your phone. Arequestion is whether they making them. A great interview with bob iger. Women are leaving highprofile Venture Capital firms to start their own. We sit down with both of them to talk about why these veterans are going solo. This is bloomberg west. I am emily chang. Top 50 venturehe capital firms in the United States do not have a female partner, according to a 2009 study. Two women are leaving wellknown firms to start their own. Teresa is leaving excel partners, and Jennifer Scott is leaving Draper Fisher jervis and, both of them starting aspect ventures together. For he and i sat down with them to talk about why. I think for jennifer and i, we felt like this is our entrepreneurial thing. Vision and you have a shared vision and your being called to something. We thought this was a great time to be focused on earlystage investing around mobility as a theme through the stack from enterprise to consumer and to work with somebody you have known for over two decades. How about you, jennifer . Was this a difficult decision . I have been in the business 17 years. It is a great opportunity and a great time and if not now, then when . We have been fortunate in our careers. Working our way into managing attner roles, and now we are the top of our game and we thought this was an opportunity for us to do Something Different and start a different kind of firm and focus on Building Companies for the longterm. Now is the, you say time. Is now the time for fundraising . What is the fundraising environment like right now . Towe have both an fortunate have successful careers and right now we are founder funding. We have jennifer and my capital. It is more than enough to last for two or three years. You are betting your own money. Absolutely. We have been far and heart and we have been getting proactive hand raising from people we have worked with, wanting to invest. At this point we are excited to be investing our own capital. It is no secret the industry is dominated by men, 11 are women and now we have two women founding a from together. How do you look at the fact both of you are women . Well, we are women. [laughter] that aspect is there. You know, i think our view is that we want to invest in companies that are focused on earlystage, building longterm Successful Companies over 10 plus years, whether that is the healthcare space, or earlystage, building up the public alien dollar companies. Those companies happened to be founded by men, so we will equally back men, women, people from all different backgrounds and other aspects. We actually find having diversity of views in the boardroom, when youre trying to tackle tough challenges and be creative, having different perspectives, whether operating to the bottomadds line and there are tons of studies that show that. Fact you arenk the a woman gives you an advantage because of your different perspective . Majority ofom the the industry. The data shows having a different perspective in the boardroom around gender, something they have been able to study through private company and Public Companies has shown it does improve the bottom line and increase the chance of success. Jennifer scott, and theresia gouw, founder of aspect ventures. It is 26 minutes past the hour, which means Olivia Sterns is in new york. How is looking . Stocks are on the rise, the dow is now on track to post its biggest gain of 2014. It is on track to post its biggest gain since december 18 after jobless claims drop for the first time in three weeks. We are also watching a couple of individual stocks, the first one is pfizer, the drugmaker. They have won a ruling to block generic rulings generic versions of lyrica until 2018. It has become recently important to pfizer ever since they lost their patent to lipitor. We are also watching shares of 21st century stock, matching fiscal secondquarter in earnings with . 33 a share. It still beat analyst predictions spurred by programming fees and its stake in germany. We will be back again in 30 minutes. After the break, more bloomberg west. Youre watching bloomberg west. Chang. Ly sony is trying to save its business, trying to save its restructuring plan. It is trying to sell its unprofitable pc unit, cut 5000 jobs, and split its tv business into a separate subsidiary. Sony is forecasting a 1. 1 billion losses the school year. Again accepting new subscribers without it has regained enough capacity to handle the demand, but in atlanta, the service is just so out sold out. Battle atng a legal the Supreme Court with broadcast networks. Apple has removed bitcoin app from its store. It allows users to send and receive digital currency. The ceo says he received an e mail from apple saying the cap as being withdrawn due to an unresolved issue. Is technology and the Tech Industry really responsible for rising rents and housing in San Francisco . Reportis that with a new on tech hubs across the country. The chief economist at truly a is here with me to discuss more. So is Technology Beat reason that rent and housing prices are rising so fast in San Francisco . Were definitely seeing rents rising faster in semper cisco and another tech help them we see in the rest of the country, and it is much less affordable to live in San Francisco them pretty much anywhere else, but these differences have been here for a long time. The affordability gap that separates San Francisco from the rest of the country has been here long before you and i were all using emails. Ok, so you are saying it is not necessarily technology that is causing this to happen. Certainly not the whole story. What we are seeing across these tech hubs is that the cubs were drawn to people, Tech Industries were drawn to places that were expensive to begin with, places that have good weather, universities, other industries that were already there, so most of the gap in home rises that we see today between tech hubs and other metros was actually in place 25 years ago. Would you go so far as to say the Technology Industry had nothing to do with rising rents and housing prices in San Francisco . Technology is a big part of Economic Growth in the bay area. It is a big part of demand. In housing prices as a result are Strong Demand. Certainly the Technology Industry because it is the heart of the local economy is helping but up prices and rents, the other pieces apply. San francisco is an incredibly difficult place to build new housing. Other tech hubs across the country like austin and raleigh have a lot lower home prices and a lot more construction. So supply matters, too. It is not just the tech fueling demand for housing. So our rents and housing prices rising here because im francisco is a San Francisco . Only so big, it cost so much to build big home stand the area surrounding is so great . What makes San Francisco so extreme is the supplyside. On one side, bay on the other, and hills know her by, and also because of regulation, it is difficult for developers to build new housing here, and as a result, we see 1 10 of the construction and South Carolina in semper cisco that rally, South Carolina band in San Francisco raleigh, South Carolina has. Did you find anything you did not expect . One of these surprises for me is how much the gap in a fellow and affordability existed way five years ago. It is often hard to get that Historical Perspective because we are focused on what is happening now, but most of the gap in housing costs between tech hubs and other metros was in place in 1990. That wasnt surprising. How much bigger has that gap become in the last 15 years . It has gotten bigger. Home prices have risen more in tech cubs than in other markets. That has been growing and without a lot more construction, it will probably continue to grow because the tech cups have hubs have Strong Demand and that is a recipe for growing prices. What you think is a responsibility of Tech Companies and tech employees in this issue of tension between the haves and havenots . I think it is a bigger issue than just the Tech Industry, though certainly in San Francisco, the Tech Industry is an import a part of the economy. I think a lot of the story has to do with building more housing. Some of that Housing Needs to be affordable, but building more housing overall will help slow down the rent increases. So you think it is up to the government . I think it is a much bigger issue than just the Tech Industry. Kolko ofd trulia, thank you. Amazon is boosting its software presents. It has acquired a gaming students, studio, double helix games, and it is to build innovative games for customers. It also announced a partnership with a videogame app, free will. I do not know amazon had an ongoing commitment to provide games to its customers. Someone who knows more about amazon and anyone, brad sto ne, did you know . It has certainly been given the idea of the app store, the kindle fire, but getting into the publishing and reaction of games is a little bit new. I look at it as amazon running the same business it has an e books, right, it publishes its own ebooks, they are the most popular kindle. And demean the ebooks youished by amazon and mean the ebooks published by amazon . Yes. Now amazon is doing the same thing with video. , the bread crumbs into the amazon ecosystem, it is doing it with books, it till, and now it is doing it with games. I, the foundingat members, they loved the hardware launches, intel is fueled speculation but hey, this is proof that amazon is going to make their own and console. There was more speculation but any reader, but lo and behold they came up with the kindle. Do you think is like other speculation that it never happened, or is this kindle like . Likely andit is remember, we broke that story last year. I think amazon realized it had to create something a little or versatile. It is repositioning the slightly as an entertainment and a gaming device. Certainly publishing games works for the kindle fire as well but it is another foundation where you can build a set top that offers differentiation over an set settop box or a roku top box. One of the tricks to getting amazon prime to work is to have it on your cable box or have it on your roku or apple tv that is never going to happen. That is never going to happen but otherwise it is everywhere. Rhymes and video, videoon demand, it is being built into tvs they are happening. Amazon continues to rattle. Brad from businessweek, thank you very much. Thank you, cory. Move over, google. Oakley is already with a pair of hightech goggles. Were going for a run coming up. Im emily chang. This is bloomberg west. Jay lenos last second last tonight show is tonight. He is passing the torch to jimmy fallon. Jon erlichman with us from l. A. Ira member Johnny Carson on the tonight show vividly and now im just feeling old will stop old. Really . That, but good on you. When you look at the numbers beyond the tonight show congo is amazing how big a risk this is because that program is one of the few that in bc have that is number one and by a mile generates a huge amount of advertising revenue, and i think the reason why they are doing it at this point when jay leno is still under contract, emily, which is a little awkward, theyve got the olympics coming up, they will be getting a lot of viewers, they want to make the transition to jimmy fallon so they can get that younger demographic, so why not do it when a lot of people are watching nbc . You spoke last night with the disney ceo bob iger about how they are preparing for the switch, anything there that you can share . Definitely. Jimmy kimmel is part of the catalyst was happening. Abc wanted to move him earlier to be more head to head with the tonight showm, and in some sense that may have forced inbcs hand. We asked bob iger, and heres what he had is a integrated a need for us to aggressively remind audiences that not only that jimmy is there already, but that show was really good, so you will see more support for the jimmy today butw, not just across the company, because the company is changing and it is clear that nbc will go after the incumbent in a bit way, not just abc but cbs as well. Quarks it almost feels like and almost feel like the battle of late i will be over the battle of the viral video. Emil or fallon, who will do the smarter, funnier video. Theyre both good at it, and that is part of the future two. All right, jon erlichman, thank you. We got so wrapped up in twitter being down 20 , pandora is not doing good either, down 13 effort or its report yesterday. You know, from 830,000,foot 30 thousandfoot view, 300 million in content cost for a company that has brought in 600 million in revenue, 600 40 million in revenue, so theyre spending so much money, so much of the revenues to pay for the music that they play, it is a difficult and what is business to continue to be, and they continue to find ways to lower those costs. How does a Business Model like pandora differ from Companies Like spotify, for example . And spotify, you will see also high content cost, although we have not seen their numbers. The big issue are they going to pay significant differences from terrestrial radio and ir radio, which has a different content revenue situation . Where the right to pay to is one of two new devices, bmi or ascap, and they control the music rights, the rights to the written music, so we talked to the president of ascap ahead of its 100th anniversary, composer Paul Williams, and i found out by asking him a little bit about the history of the organization. Check out what he had to say. Is a performing rights license asian. License agent was a by started out as a member of cap over 9072, 40 years ago, and i am writing a book with my friend, tracy jackson. Im grateful for the life i have had, and i trust in the future, largely because of ascap because i know that when my music is performed, as a member of ascap, you say will be properly licensed, the royalties will be collected, it will get back to me in time with a small operating cost, the big thing is that money turns into food on the table and gas in my car so i can raise my kids. The introduction of a new mobile technology, let me describe it to you. There is a way suddenly to distribute music and play music for people, lots of mobile locations, wherever they were, they did not have to be in a place where it was being performed, they did not have to have the right ticket or be in front of the right performer. Called the player p l, and it led to this distribution of music. When i look at the laws that govern things like ascap and bmi, i think that these laws and rules are written around this antiquated technology, the player piano, i can i think you cannot awesomely be relevant to itunes or pandora. Thehat is not relevant is rules that govern most of what we do, a consent agreement was created over 70 years ago. I am over 70 years old. I operate pretty well. But a consent agreement written 70 years ago, long before the cyber world existed, is really unfair to us. We are forced to operate in a fashion that is really unfair. We love technology. At ascap. Why would i not love an operation like pandora, 70 Million People listen to our music and all . We want them to be wildly successful, of course, but what we want them to fairly honor the music, and building the business on the back of music, you need to honor the creators of the visit with their compensation. And we have been licensing, cory, we have been licensing on mine as cap since 1995. We have from the largest to the smallest, we are able to make sure that there is more music being played more often on more amazing devices than ever before in the history of music. In, radioadio came said well, that is not a performance, that is an electronic transmission. We fought for it, we establish a right and then we went to work on the rate. Standing in the world we are in right now. There is not a question that there is a right there, but with somebody like pandora paying eight cents for 1000 strings, it is just not fair. Theut pandora will point to comment i looked at financials and gray damp, it proves that pandora is paying so much more than radio that they but pandora will point to this, and i look at the financials as well, it points that pandora is paying so much more than radio. It is not the same as rideau, it is a different Business Model. Fina get into too arete specifics because we in court with pandora, but we wanted to work out, every platform from radio to television to cable to satellite , straight down the line, we have always had that period of adjustment where we could find a way to do business, and we have done it across the board. We will continue to do it, but there are some challenges. Emily, Paul Williams just won a grammy with album of the year, daft punk, although we also have a rainbow connection. I love that song. Actually become at the front version. All right, cory, thank you. We will be back with more bloomberg west after this quick break. Welcome back to bloomberg west. Im emily chang. When you think about technology, you may think of a futurist except a futuristic abscessed geek. You are a little geeky. The last place he might expect it, on the slopes of park city, utah. Check this out. For oakley, Wearable Technology is happening now. It is the oakley airways, goggles that committee k with users in realtime. It is the next generation. Er as the border or skati goes down the mountain, trail maps, out the tubes, and skis. The sons of danger, the stuff lawsuits are made of, but in practice, the Little Pencil eraser sized monitors are unintrusive, and the services are industry are interesting. Glovefriendly a controller worn on the wrist, allowing the rider to quickly switch. We base everything off technology and design, and being first to market with products that are disruptive and revolutionary. Oakley has already sold tens of thousands of these 600 50 goggles. This is not just about selling technologically equipped a ski goggles. No, this is a defining the oakley brand is innovative, technological, cuttingedge. Cheapell everything from sunglasses two yes, 650 ski goggles. Be industry is estimated to 3. 6 billion dollars. We are pushing the envelope on a small niche market, but what we are learning in doing that translates to a product that is maybe downstream a bit as well. The key to the oakley marketing effort is to get schoolkids to work cool sunglasses. They have a massive marketing effort here at salt lake fo. To get celebrities wearing oakley, the Company Launched a learn to ride program, which top libyans and snowboarders give lessons to actors like adrian and modelsllen lutz, like ireland baldwin. At the end of the day, it is about reviving a Technology EnhancedUser Experience on the mountain, one that they hope will enhance the entire oakley product line. Anytime we look at telling our Technology Story, that Technology Story trickles down. I thought i was going to get to particular snowboarding skills was a preks i concur to get myself it stinks. Can critique it myself it stinks. Hardly anybody is going to buy these. I dont imagine they will get to a halfmillion ever, but it really does position the oakley brand as technological. It is something they believe about their brand, but it lets an sort of say hey, we are on the cutting edge. Shades,buy these 80 but they are nearly as hightech as our high end stuff. It is about a Sunglasses Company positioning itself closer to things like bloomberg west and google and other things going on here in technology. Who is actually going to wear wearable technologically connected glasses . Is it something consumers are going to want to buy . I could see construction workers using it on a construction site or a doctor in the operating room or a teacher with lesson plans streaming in, but am i going to want to wear it walking down the street . I dont know. Speaking of the geeks, you would. What will the case studies be, and how will there are concerns literally but the slopes. As i was boarding down the mountain, and i go a little faster, can i go a little faster . That is not the safest way to snowboard, but kind of fun. Man, i would like to see that. Cory johnson, thank you for bringing that to us and thank you all for watching this edition of bloomberg west. From bloomberg World Headquarters in new york, i am mark crumpton. Is is bottom line lawmakers in washington might be closer to a deal on the debt ceiling. Debt why puerto ricos problems mental for investors problems matter for investors and as jay leno passes the baton, we look at the value of latenight television programs. To our viewers in the United States, and those joining us around the world, welcome