All of this coming from the recently updated ipo filing. The company is expected to go public in the u. S. In coming months. And Dreamworks Animation has launched dreamworks tv on youtube. It will feature live action and animated programming. The project is being led by optimist tv. The company dreamworks paid 33 million for last year. Now to our lead story of the day, growth is slowing at alibaba and that has some investors worried. Updated ipo perspectives show that sales slowed considerably in the Fourth Quarter, and margins were down dropping from 51 earlier in the year 245 . To 45 . Ded it is something that made the company choose to list in new york over hong kong. For more now we are joined by cory johnson and leslie packer. Picker. Theycker also broke out some of the numbers that were not in the original ipo filing. What jumped out . There was not a lot that surprised me. We got an investor reaction, because of yahoo s ownership stake we might see the way the market is thinking about these numbers and what their optimism might have been. If the numbers had gone straight up to the right and forever they are not. Growth will slow down at some point and you can see a little bit of that in these numbers. But generally speaking the numbers are great, the size and profitability is great. It is worth something. Would you ipo that . Echo that . Certainly. We seen a tripling of profits on an annual basis. On an annual basis, the numbers look great. The Fourth Quarter is reasonably week for an Ecommerce Company in china because it is coming off of the Third Quarter which has singles day in which they posted nearly 26 billion in sales and a 24hour time print in a 24hour timeframe. The quarter that comes out of that, you can expect to see a dropoff. The slowdown in growth came on a Fourth Quarter 2014 as opposed to Fourth Quarter 2013. That was a little bit slower. Once you take into account all of the spending that took place before that, it is no surprise you will see a trailing off. The two big parts of the business, team all is growing faster by quite a lot. Compare that to amazon, amazon does 100 billion dollars. It gives you an idea of how much business they are actually doing. In terms of the growth rate, what we have seen is a euro per group yearoveryear growth rate that slows down in the Fourth Quarter. I think yearoveryear is important because you have seasonality. We only saw 39 in yearoveryear sales growth. That is the slowest we have ever seen from the limited numbers that we have seen. It is worth noting that it is not up and to the right forever. They also have a lot of acquisitions pay in as well. Baked in as well. This is a much bigger part of the chinese economy than anything in the u. S. Economy. 2 of the chinese economy flows through alibaba, compared to the. 02 of walmart for u. S. There is no better comparison to the chinese economy. As goes the chinese economy, so. Ell Aly Baba Alibaba any surprises in electing the board . This is their version this is important for investors because it is their version of a dual cross shares structure. In the initial filing they said it would be 28 and that number could fluctuate about so it came out to be 27. One interesting aspect in my opinion was that 9 of the 27 were female partners so that was , a surprise. Most of the members are executives within the company. No major standouts or surprises in terms of the actual members of the partnership. It is nice to know who those people are and their backgrounds. Any updates on timing . When are we expecting this to happen . It is nice that they were able to come out with this filing today because it shows that they are on track for potentially an august debut. One of the holdups would be this backandforth with the sec that we do not see in the public spotlight. We just see the revisions. It is only after they go public that we will see the actual comments that the sec had, the actual questions they had about the initial filing. That is one of the things that could delay it until september. They are paying close attention to market conditions. The fact that it came out today shows that they are still probably on track to do and august debut as long as the market holds up and the s p sec revisions continue at this pace in this manner. We have been talking about the downs in the public tech markets recently. Is alibaba in a league of its own because it is so big . In a lot of ways. A lot of these comments from the sec is coming to light in terms of what they were trying to hide or reveal. Those will be worth looking at after the ipo happens. One of the things a cursory look at the numbers the gross , margins which are pretty spectacular. Over 70 gross margins. They did not get worse yearoveryear. The margins were getting better. The margins fall to 71 on a yearoveryear basis where as you look back, you see march of 2013, 70 4 . Decline on a yearoveryear basis and you see a consistent trend in net change. The numbers are so good, 70 or better gross margins, they still are good, but systole getting worse. You begin to wonder at what point does pry start to matter . They have to lower prices and let those margins reflect that. The uniqueness of alibaba and how much of the chinese economy it really captures. What are investors saying to you . Are they excited about this . Are they wanting in at any cost . We are looking at a 20 billion ipo. It could be the biggest to ever come to the u. S. Regardless, every investor is going to have to look at it no matter what because it is so massive. Their will have to put in portfolio just reflect what is going on in the overall stock market. People are still very excited about the growth. We are looking at incredible margins as cory mentioned, incredible growth despite some of the slowdown we have seen. It is not something that is enough of a red flag to scare anyone away. Every company has to slow in terms of growth at some point. It is a unique play for u. S. Investors in terms of the chinese economy, and that will make them take a closer look. Thank you both. Still ahead, want to work at at t . Education you destiny may be able to help. You can watch a streaming on your phone, tablet, and bloomberg. Com. I am emily chang, this is bloomberg west. Twitter is dealing with a gap in the ranks of departure from its executive. First, Michael Sippy and chris fry, then the twitter coo allie resigned from the head of north american media. How will this impact their business . We recently caught up with greylock partner josh. Josh formerly served as the product lead at twitter and we got his take on the management mixup. If they are not functioning well, it can hurt company innovation, even if there are just great engineers and designers around. When things dont seem to be going well in some respects, it is such a central role that sometimes changing it out will help you to give a new or different shot. Before that he also worked on the platform at facebook. We asked him what he thinks about facebooks recent purchase of whatsapp. Facebook is a place where we are with our friends in meaningful ways and they are one of the other companies i forget the numbers, hundreds of millions of people communicating with their closest friends and family every day, i think facebook will be able to bring that into the product where one part will be communication, another part will be sharing photos, stories, and their lives through the core product. We turn now to the future of Online Education. At t has teamed up with udacity to offer a new Degree Program focused on entrylevel software skills. They say the new degree will be offered online, 200 per month. The payoff for graduates . A paid internship at at t is the. The cofounder and ceo of udacity talked to us earlier today, he is also part of google glass. I started by asking him to explain exactly what a nano degree is. A very short degree, very focused, directly meant to endow you with the skills to find a job. We are super excited to work with at t. They are our initial partner here. They are helping us to build these degrees, but they are also putting on the table employment, saying that these degrees have the same value as a degree that is faster and cheaper, with the top internships for the program. Who can apply for this degree . Who can get into this program . Anybody can. You have to be good at math and so on with some basic Computer Science, but once they get to the education they get to a sought after job, a mobile engineer. So, salesforce, autodesk, other companies have endorsed this. Do you see partnering with them in doing something similar . What other companies could you partner with . We have a lot of announcements coming up and we hope that this will become an industrywide standard. We believe that in this day and age that learning will be lifelong. Things move so fast, you need to stay engaged in learning and output the skills throughout your lifetime. It would normally take 15 to create more nano degrees. Sebastian, you invented the google car and are a founder of google ask. How do you apply that moonshot big thinking to education . Education is ripe for innovation. Students need more options than they had in the past. If you look at this we have one , trillion tools, college debt, young people not finishing their degrees. Even more so people in an advanced stage of life have no credentials that allow them to learn from home flexibly and in a focused way. I believe that they can create options for people in all walks of life so that you can have a tremendous impact to society. A lot of people are extremely talented, but to unleash their potential into a new career, they need the dedication that this will provide to them. Specifically what other industries can you see this idea of a nano degree applied . Given how big the skills gap is. Pretty much any industry. We are starting with computer technology, it is where Silicon Valley is, but there are other fields that could focus and benefit from a very focused education. You have a partnership with georgia tech. You can get their prestigious Computer Science masters degree for 6,600. In the future do you foresee partnering more with universities like that . Or companies, like you did today . We are very proud to have partnered with those companies and at t has been the signature sponsor and georgia tech has lowered the tuition fees. But i think you need a lot of creativity around core principles. What is required to get a job . It turns out for many people, especially lifelong learners, you dont need a four year or two year degree, you need something very focused. By doing it in a focused and fast way we hope to empower people to change their careers much faster. You are a professor at stanford. I recently interviewed john hennessy, we talked a lot about Online Education. He does not think an online degree or Online Education will ever replace a Traditional College degree. An mba maybe, but never a Traditional College degree. How do you respond to that . This is not a traditional degree, it is much more focused on the shortterm and we should remember that. We should all remember the days of the libraries, when librarians argued it was important to physically sit and read that book, but the amount of knowledge acquisition and inquiry has gone up to factors of a thousand. There is more potential for people engaged in Higher Education because they dont have to go to campus, for the most part. Tomorrow you might just do it on your cell phone. That was the cofounder and ceo of udacity. Hackers are not just after your credit card data these days. Find out while they may be trying to steal your medical records next. I am emily chang. This is bloomberg west. The fcc is investigating controversial deals between some of the Biggest Companies on the web. Comcast, verizon, and netflix. The investigation is a reaction to a flood of consumer complaints over the speed and quality of broadband connections and the latest salvo in the fight over Net Neutrality. Netflix struck deals with compacts comcast and verizon for faster download speeds during this socalled last mile, the fcc is looking into whether consumers are receiving at the higher speeds. This week we are looking at how technology is changing health care, moving medical records onto computers and tablets made life easier for doctors, but the shift poses new security and privacy risks for patients. How secure are these records . Is enough being done to protect them . Jordan robertson joins me now. We have the coverage on Cyber Security in the digital age. So, hackers want my medical records . Why . Not for the reasons you might suspect. We are all concerned about them accessing our medical records to learn of our medical conditions. They really want your medical records, but it is for your other personal information, to commit identity theft, for the most part using your name and Social Security number. That is all in your medical records. Doctors offices and hospitals are prime targets for hackers. For the same reason they are trying to get our credit card data and Everything Else . We have not seen much use by hackers of the medical information, though you could see why it would be valuable, blackmail and things like that. Another shift has been the one to electronic records. There is a new threat vector that has been opened. Hackers will break into hospital and doctors offices, encrypt the patient records, and then demand payment for the keys to unlock it. It is a new kind of stress that we have never faced before and if you dont do security well enough, you could be in big trouble. We have seen this with a couple of clinical practices. How often does this happen . That happens rarely, but we seen a case in illinois and australia. Those are the only ones we know about it. Otherwise, electronic records are dangerous in that sense. I think we have all experienced the difficulty that our doctors offices seem to have in shifting to the digital age. Are they adopting better security protections . Is the government helping at all . They are. With the Affordable Care act there are requirements and penalties for not adopting those. We can all agree that the shift promises some substantial gains for improved care and quality of care. I think everyone is on board with that. With that comes security requirements. The government is stepping up its policing and enforcement, which had been fairly minimal before this. It was only the providers themselves and anyone else who had access were not really policed, but the biggest threat is almost always going to be the insiders. Identity theft rings almost always have an insider who feeds them documents, information, and access to the computer system. Nowhere more than in the medical profession is that a big threat. How do they get an insider . Usually someone who is corrupt to begin with or gets a job as an administrator or as someone with access to sensitive networks. Because the Healthcare System is so big and there are so many players, it can be easy to get access to the system. You will not see target like bridges like the target breached all the time but there are lots of cores. Another thing to be worried about. Thank you so much, we will be right back with more bloomberg time now for on the markets. Im julie hyman. The markets ended and not Much Movement. The imf cutting its u. S. Forecast to 2 . Production did Beat Estimates and once again on a monday, a number of deals were announced and that helped. You are watching bloomberg west, where we focus on the future of business. The San Francisco giants are leveraging their relationship with the Tech Community both on and off the baseball field. In addition to using technology to track and improved player performance, they are keeping an eye on the recent tensions between the Technology Industry and local community. In part two of my interview i started by asking him how recent debates over technology and inequality have impacted the team. Take a listen. We have a as a have a chance Baseball Team we have a chance to sort of take a whack at that inequality in the sense that i see our all park and ballparks around the country as kind of town centers, where people come together. Three world series games i would see a Hedge Fund Guys sitting next to 14yearolds from the boys and girls club who happen to be at the game together. I think that what we provide in baseball, as we have a lot of games and have had the ability four games this week we have that eight dollars. I think that what baseball can provide is a coming together and melting pot, if you will, to take a whack at that inequality. A lot of the bay area sports teams are moving around. The niners are going to santa clara. The warriors are trying to go to mission bay. The as trying to go to san jose. Does this affect the giants and giant fans . When we started 20 years ago, we were the team in flux. We were the team that did not have a home or a future, potentially, we almost moved to florida. We are stable. What is going to happen in the bay area is that with all the economic growth, there is room for two nfl teams, a prosperous nba team and prosperous nhl team. There is plenty of disposable income and Economic Movement for strength for that in this community, but you do have to have a place to play that is compelling. I think that what we found is that in todays world with so much competition for the entertainment hours, not so much the dollar, but the time. And if you are in a substandard stadium or arena, it is hard to take that and make that for our investment. By the time you get in the car, get on your bicycle or scooter, by the time you go to the ballpark it is an investment in time, so you want it to be a compelling experience. Speaking about sports rights and affiliate fees, there has been a discussion that fees are too high and that costs are being transported to the consumer does they dont want to pay for things they dont want to watch. Would you be open to a format in which people pay for giants games only if they want to watch them . I think the bundled approach has shown that it does work. You have to be responsible in your pricing. There are some teams in some communities are not getting distributed right now, the pricing does not work because the price went to the team and then through the distributor, and people have been priced out. The consumer might be priced out the consumer ultimately would he priced out if that was passed along, but i think that responsible not reckless, but responsible pricing of the bundle allows the system to work well and there is no reason the bundle cannot work. The answer to that question is no, i dont think we need that kind of a la carte system. What is the way for Major League Baseball to take advantage of this digital age . I think we are doing a good job with Major League Baseball advanced media. We just need to keep moving. If you stand still, you lose. We need to keep innovating and figuring out ways to talk to the 12 to 17yearold. Or even a little younger than that, the eight to 17yearolds. That is where the habit for the consumption of media is so different than it used to be an we have to make sure that we understand that. Someone working six blocks from our ballpark at twitter is not checking out at 6 00 and going home for dinner and plugging in. What they are doing is at eight they are checking on their giants and then checking in on the handheld or pad, wherever, tablet. You have got to be able to get that information to them in a compelling, concise, and entertaining way. If that does not happen, we will be sacrificing younger fans. Are you aware and concerned about people circumventing different blackout rules on mlb. Com . Putting a different zip code and cutting the cord . Look, cord cutting, all of that is part of the fabric. Sure, we are concerned that we want to be able to have packages that are officially and legitimately obtained, but i dont think that the problem is so large that it has been affecting us today. I think we will have to authenticate in real ways so that everyone is patched in in legitimate ways. Last question, the niners are doing well, but have not won any championships. The giants have obviously won two in the last few years. Is San Francisco a baseball city or a Football City . When we bought the team in 1993, people said that this was a football town. Quite frankly, we are now in a mode over the last 20 year odyssey with several years of sellouts in a row and a couple of championships that we are as much a baseball town as a football town. How is that, as a note to our friends at the 49ers . That is very diplomatic. It think it is both. It is good to be both a baseball town and football town. The San Francisco giants ceo, larry baird. Whether it is new york, cupertino, even london, what does it take to attract top talent and startups to your city . We sit down with Boris Johnson for an exclusive conversation, next. I am emily chang. This is bloomberg west, streaming on your phone, tablet, and bloomberg. Com. Today bloomberg kicks off London Technology week with a Bloomberg Technology summit. Michael bloomberg and the mayor of london, Boris Johnson, sought down with joss for a conversation on the state of the Technology Sector in the capital of the u. K. Bloomberg and johnson discussed londons draw for the top tech talent in europe. Take a listen. I think that local government can provide lots of the conditions that make it attractive for Technology Entrepreneurs to live here. The crime rates are very low in london. Mass transportation, lots of things that you can do to make it attractive. And then things that you cannot really do, politicians tried to have the vibe, that is what people come for. People like you and i, we have to be careful that we dont interfere with the vibe. Creative people want to have diversity of interests. The fact that london and new york are Cultural Centers is attractive to them. If you go to places that are quieter, with fewer diversions, you would think that they would be more productive, but that is not where you get the best and brightest. The best and brightest want to be a big fish in a big pond. They want to be able to have access to different cultures, cuisines, religions, languages, different ways to dress. They also want to be in places where there are lots of other industries. Just technology is not enough. The tech people feed off of the media, entertainment. They feed off fashion, medicine, you have to have the whole picture if you are going to be successful and in all fairness, london does, so does new york, there are other cities that do but not to the same extent. They also have great time zones for dealing with a big chunk of the world. New york and london very much resemble each other, like nuclear reactors. You can get the same Critical Mass in both. There is massive talent. Bloomberg lp founder, michael bloomberg, with the mayor of london this week. Michael bloomberg is the owner of bloomberg television. We turn back now to our wiring the world series, where we look at how technology is. Fusing technology and medicine has allowed doctors to treat patients with the most sophisticated and durable devices available, but it is not always easy or simple to get this equipment. Aptitude, out of texas, is trying to change that. They describe themselves as the amazon of medical devices. It connects hospitals and medical practices directly with suppliers. The vp and general manager joins me now in our studio along with our editor at large, cory johnson. The amazon of medical devices, what does that mean, exactly . Of business marketplace it is a business to business marketplace focused on helping hospitals suppliers come together to do contracts for health care supplies. Hospitals have to source tens of thousands of different products in support of patient care. To manage the costs associated with these products, they use purchasing contracts. The process of bidding for those contracts can take anywhere from six months to nine months. Aptitude takes a Market Driven approach to inform hospitals where the supply cost have changed based on the, markets and give them the opportunity to automate the bids and measure the performance of the contracts over time. Is the process so long because there are so few major suppliers . Striker with 9 billion per year . That they want to get everything under one umbrella . Obviously, the clinical performance of a product is major in the ultimate decisionmaking around that process when a hospital makes products they want to purchase. The process is long and painful because her choosing data and health care is hard to get a handle on. Hospitals or suppliers . Both. If you look at retail environments where you look at places where you have standard codes for ordering products, like walmart, for example, knowing how much spending on certain skus, that is difficult to do in health care because of the lack of standardization. How do you on your end how do you source this . With Technology Changing so quickly, i am sure that options are constantly changing yes,. They are. The Market Driven approach really brings a demand driver. Ultimately when hospitals are talking with sales reps looking at latest technology, that is what they are going to be interested in sourcing and that is what we will be automating through the process. The hot trend in hospitals 100 years ago was goat. Not so much now. I imagine that you can see the greatest trends. Which is what . A great question, not one i am an expert in. Ultimately i could say that we see the focus in physician preference categories as extreme, mostly because that is where the cost is. Implantable devices. Think about pacemakers, spinal implants. That is where a lot of the focus is on the cost and ultimately we think that that is where we can help to bring down the costs. Where are you seeing the most innovation with the most rapid change in terms of what is available and what providers should be using in terms of products and types of medical care . The bleeding edge, from my perspective, in the device space. That is where we see the continued tremendous investments, etc. That is where i think it is challenging for hospitals, to make sure they have the latest and greatest products with a good price and good manufacturer. How responsive are hospitals and providers to getting this equipment . I am sure Everyone Wants to upgrade, but it is more expensive and an inconvenience. When you think more about business to business applications, the bar is not that high with relative to easeofuse. We have taken an approach to make it feel like amazon. When we talk about the amazon of the Health Care Supply chain, that is what we are referring to. It is as simple as using your computer at home to buy products. We have built into the system the User Experience that is like that. Meaning you are not taking inventory over. I wonder, when you look, where is the greatest amount of waste . Where do you find the greatest opportunity for margins . You mentioned signing contracts, i bet you could take some cost . We have seen an 80 reduction in the cycle time. I think a lot of that activity is tied to legal negotiations. When hospitals do contracts directly for supplies, you have to get the lawyers involved. Lawyers are adding to the Things Health care is buying . They certainly have a toll. Aptitude takes a market approach. We establish a prenegotiated set of conditions to procure under. With that we are able to come together much more rapidly. All right, thank you so much for joining us. The amazon of medical devices. Well, dreamworks may be known for its animated films, but today they Just Launched a new Youtube Channel. We will tell you about their big push into digital, next. There something i need to get off my chest. Fiona is making me take her to see wrong direction, the hottest boy band. Welcome back to bloomberg west, that was shrek in his new role as a blogger. Dreamworks animation launched dreamworks tv, a Youtube Channel and that young viewers who are not touching traditional television. Jon erlichman joins us from l. A. With more on todays new hollywood. Following the dreamworks purchase . Right . Definitely. It was just over one year ago the dreamworks acquired awesomeness tv, which basically brings together all sorts of different Youtube Channels to create a multichannel network. Obviously, there has been a lot of focus on where people are watching television these days. In the case of dreamworks it is a company that has been thinking about the future of its own business, which is why they have been fairly proactive in finding new homes for their content, striking deals with netflix and in acquiring awesomeness tv they were trying to make a bet on the future to figure out what it will all mean for them. One year later there had been some discussion that with the help of awesomeness, knowing a lot about teenagers, they would launch a traditional cable channel, but in the end they went online. Who knows, maybe they build an audience here and they can take it to cable down the road. Disney also recently bought maker studios. How does this all come together . It is fascinating to look at these deals. They tell you that hollywood is thinking a lot about the future. Whether it is dreamworks or the disney acquisition of maker studios, or even warner bros. , who took a significant stake in a Gaming Network channel called machinima. You realize that hollywood is interested in the new landscape and the key players, these youtube stars, are just as equally interested in hollywood and big media. If there is ownership from big media they know that there are new ways for their voice to get out there in bigger ways, to make more money. I can tell you there is a growing list of youtube stars making their way from the bedrooms where they were bloggers to hollywood. John, of course youtube has been trying to cultivate more of these channels and get more companies to focus on Youtube Channels. Specifically how has that in working out terms of the is this of youtube . The business of youtube . All of this stuff is generally good for youtube. Generally speaking, youtube has embraced all of this. They loved to see these new networks, what are being described as these new cable channels being born on youtube. I think there is still this issue of frustration from content creators and multichannel networks. At the end of the day, youtube, if it is an advertising business, youtube takes a huge cut of the advertising dollars, ultimately. We have seen some push from these players to maybe build an audience through youtube then go elsewhere with it. There have even been discussions of yahoo , for example, trying to launch its own youtube kind of service. We will watch and see what happens. All right, jon erlichman. Hang on. It is time for the bwest byte, where we focus on one number that tells a whole lot. This is a big one. 6,915,000,000. The current enterprise value of time warner telecom. Level three has agreed to pay all that in a combination of stock and cash. Separate from Time Warner Cable . Right. Time warner separated or Time Warner Cable business. They kept the hbo business years ago, but now they have spun off. This is an Internet Service provider focused on business. Level three, the acquirer, is one of the largest internet act companies. This was long thought to be a target of comcast. While comcast and Time Warner Cable might be happening while , at t and direct tv might be happening, level three acquiring this telecom means that one of the biggest backbone companies is trying to acquire one of the biggest business focused Internet Service providers. More consolidation within the industry, allowing one company to control things from stem to stern in terms of how information moves across the internet. The kind of thing the fcc used to oppose, but maybe it will not now. So Much Movement happening in this debate in the arena of Net Neutrality and the sec looking into the spot between netflix and verizon. How much are people in hollywood paying attention . They are watching. The netflix of the world cbs, nbc, they are all customers of level three. The reaction to the deal was that it was good for level three. They get that much closer to the businesses. But in terms of what the businesses wind up paying is part of the same conversation that netflix might have about what they have to pay comcast for access to broadband. Imagine netflix or hulu, looking at it and saying that you have a deal to get information out faster to get ahead of us, now we can pay level three or we pay or we have to pay level three to get those services out beyond that. That is the kind of thing that would not have been allowed under a stricter sec. It looks like these things are going to allow to get this deal approved. All right, cory johnson, thank you. Thank you all for watching bloomberg west. We will see you later. The following is a paid program. These statements have not evaluated by the fda. This product is not intended to diagnose, treat, cure, or prevent any disease. Thank you for watching