Two other men who escaped from prison are still at large. A woman who taught english to one of the inmates has been booked as an accessory. Police say she gave prisoners maps of the jail complex. Michigan Governor Snyder is giving another 28 million in emergency aid for flints leadtainted water crisis. Officials may have known about the tainted water long before they acknowledged it. Workers were often offered bottled water. Residents were not told the water was unsafe until last fall. Global news 24 hours a day on bloomberg. Im emily chang and this is bloomberg west. Is apple going wireless . The companys plan to make phones that can charge without a cable insight. Ibm seals its deal with the weather channel. It has been another week of monster stock swings, which means a lot of executive fortunes in flux. The biggest risers and followers, we will ask our billionaires team. First, to our lead. Wall street is feeling woozy after a volatile week in tech earnings. Investors seem to be particularly nc this quarter given the rocky economic climate we have seen in 2016. How long can big tex deliver on shareholders inflated expectations. Cory johnson is live in the studio, and Paul Kedrosky joining us from san diego. Thank you for joining us on the wild week that was. Corey, i want to start up with apple versus alphabet. A year ago apples market cap was six under 93 billion dollars. Google, 300 47 billion. Today they are separated by a mere 24 billion. Cory projections of growth for apple is imagination of what apple can do next. This year really prove that 1 growth in iphone sales really showed the limitations of growth and the ve garritys vagary of the product cycle the are responding to. You used to be able to really try out the product cycle as they added geography later and later into the 24 month product cycle. It is much more front and loaded end loaded. Emily alphabet earnings coming out on monday, and its the first time that alphabet will break out the nongoogle businesses. How much does it cost to run google x, for example. We could be in for some real surprises. What are you expecting to happen on monday . Paul im expecting this to be a messy one. I give him credit and we have talked about this for pulling out all the different pieces that make up this monstrosity of all the different pieces of companies. Its going to catch some people by surprise, there will almost certainly be something in there that makes people nervous. Its much less likely that they find something inside. It turns out google glass still exists. I think its going to be a volatile release. Emily amazon is a company that saw the biggest moves, they are still spending, still not really turning much of a profit. The Cloud Business is going well. What stuck out to you, cory . Cory Amazon Web Services is changing the way so Many Companies work. The results we saw from amazon this week, it pushed the stock down to levels all the way back to last wednesday. The profitability for amazon is interesting. It is only 3 operating profits. I think that nonetheless it shows that they will continue to run this business to be just profitable enough to generate boatloads of free capital they can reinvest in things and invent things like Amazon Web Services. It is a fantastic business for amazon, but transforming the way the world computes. Emily microsoft and facebook had a killer week. What do you make of these major shifts that seem to be happening . Is this short or longterm . Paul so, i hate hedging answers, but i will be forced a little bit. Apple, this is a Company Specific issue. This air pocket with respect to product release, and the difficulty of forcing people to upgrade in lockstep to both microsoft and amazon getting pushed higher, and facebook to a degree on what is happening with respect to migration to cloud. Thats probably the most important transition in this recent technology era. Microsoft somehow has no business existing at this point. The Cloud Business is growing so quickly, it is saving microsoft in many ways. The cloud is hugely important and apples product deficiencies are equally important. Emily did investors just realize the cloud is a big deal . Cory both of these investors at microsoft, azure emily i call it azure. Cory its such a big deal. I went to the Amazon Web Services conference three or four years ago. Its a big business, and you can see it coming. The notion that everyone from the cia to netflix to uber are running their businesses through Amazon Web Services shows you how important their web services are. Paul . Paul 9 billion run raid. These are big numbers. Cory microsoft business is growing 100 yearoveryear growth. The real impact is not just that a lot of this stuff is moving to the cloud. You see i. T. Spending the impact of Amazon Web Services is not amazon beating microsoft or microsoft beating google. It is amazon and microsoft and google through their offerings in the crowd are crushing hewlettpackard, ibm, sun oracle certainly challenge there. You look at what happened to xerox today. That is all about the companies that dont need to hire for services anymore, that dont need to buy tons of hardware anymore. It has all changed. Emily of apple, alphabet, amazon, microsoft and facebook, which stock is the one this year . Paul it has to be google. They are so dominant in so many categories and eager to be dominant in more. Amazon is going to continue to see this earnings day volatility. Apple is a sadder story. Emily Paul Kedrosky, cory johnson, thank you both. There is more bad news for the daily Fantasy Sports industry. According to the new york times, the company that handles a significant portion of transactions for fan duel and draft kings says it will quote, suspend all processing for Payment Transactions related to Fantasy Sports in the u. S. On february 29. According to documents, a representative says the arguments made by daily Fantasy Sports operators have been unsuccessful and rejected. Coming up, from whether to watson, ibms famous a. I. Is another boss. Plus, my exclusive conversation with the e. A. Ceo. Emily ibms board is sending a message to the ceo, get that share price up. As part of 2016 compensation, remedy will get 1. 5 million premium price Stock Options in three years. This is the first time shes getting Something Like that since becoming ceo in 2012. Ibm shares hit a low last week after posting sales that declined for a 15th straight quarter. For 2015, rometty received a 4. 5 million bonus payout. Staying with ibm, the company officially closing its acquisition of the Weather Company. Ibm bought the Weather Company in october for an undisclosed amount. Some reports that a price tag north of 2 billion on the deal. Now ibm has named the former Weather Company ceo as new chief of its famous cognitive computing platform, watson. He joins us for more on his new role. Thank you for joining us. Great to have you back here on the show. What has Ginni Rometty told you that she wants out of you and why is she putting you in this position . Guest when ginni offered me this role, she was pretty clear that she wants me to take a great business in watson and make it more of a platform, as they did with whether. She very much wants to make sure that we have watson a platform that can be used for businesses of all sizes, big or small, everywhere in the world. Im going to focus on making that happen. Emily whats it has been criticized for not being more than a science project, not something driving meaningful revenue for the company. How do you respond to that and how do you fix that . David first of all, its not true. It is generating significant revenue as significant profit, and i know that running it. Emily how much . David we are not going to disclose that. What we will focus on is how to make it bigger from here by continuing to make it available as a platform so its not only working on the really large projects it works on today, but all sorts of decisions with all sorts of businesses. Emily is the previous head of watson reporting to you . What will you do differently than he did . David a senior guy at ibm, hes a colleague of mine. Just as we built the Health Business led by the i. T. Business, we expect we will build other business on top of this platform, and mike will focus on how we actually do that, what those businesses are and what combinations of investments are needed to build those. It supports those businesses as well as a number of others, as well as third parties. I will be building a platform that everyone in watson can build on. Emily what are your Top Priorities . David my First Priority is to make sure the great things we do today for some of our best clients become repeatable, products you can buy. Im also going to focus on the interface, making sure we have the right code so developers to our building businesses that depend on cognitive computing, Artificial Intelligence can easily use this. Theres already 500 such businesses but we wanted to be many multiples of that, and to focus on serving them and building up the entire watson universe. Emily there are lots of questions about ibms longterm future. As a former ceo yourself, how would you assess Ginni Romettys leadership . David i think ginni is doing an outstanding job with an interesting hand. Since she came in she has been making tough decisions. I think she has been working to build the team to do that. Im thrilled by some of my new colleagues, both traditional ibmers and new people. Shes going to build a good team and together we will continue to grow ibm and i think she will lead us all their. Emily what do you think is the future of ibm . What is the solution to ending quarters of declining revenue . David and a business in transition needs to focus on its growth, whether it be cloud or security or watson. I find the investment in a turnaround on those areas, areas that may be not growing as much are going to get focused and other ways. Ibm has a long history. It has gone through transitions before and im excited to be coming in at this phase to show upside from here. Its about transitioning to the next platform. Cognitive is going to change computing again and ibm has a clear leadership position on that. Emily ibm watsons new general manager, david kenny. Thank you for stopping by. James murdoch is back. Hes returning as chairman of sky, four years after a highprofile hacking scandal drove him out of the paytv company. Last year, james replaced Rupert Murdoch as ceo of 21st century fox, which owns 39 of sky. Coming up, sick of all those wires tangling up your iphone . It sounds like tim cook is too. What he plans to do about it, next. Emily u. S. Stocks close out january with a day of gains after the worst start to the year since 2009. Ramy inocencio has the wrap of new york. Ramy for the week it was a nailbiter. In the last 15 minutes of the trade, closing well above 4600. The s p and dow also ended at session highs, the dow seeing its best day since september. Bankshares were to thank for the rally. Big names saw some big gains, microsofts secondquarter profit Beat Estimates on growing business in the cloud, with azure and office 365. The ceo says more than 70 of fortune 500 companies now use at least two microsoft cloud services. But amazon fell because of rising spending costs, as much as 15 . Jeff bezos is ramping up spending, including for faster shipping and its first super bowl ad. A report out shows pc sales fell below the 300 million unit mark in 2015, its lowest since 2008. Over to apple, a close as a session high after news that the Company Might release a wirelessly charging phone as early as 2017, and for facebook, it hit a record high today, shares continuing to go gangbusters after posting another quarter of record revenue and profits this week. Shares of the social network have rallied 52 in the last 52 weeks. Emily could the worlds Biggest Social Network they looking to get into the ridesharing business . In a Patent Application published today, faust book outline plans to become a ridesharing platform. The company showed how people could form carpools through their events feature. It is an interesting development, especially considering the recent partnership between facebook and uber. Speaking of patents, apple could be preparing to go wireless. As ramy just mentioned, the company is working with partners in the u. S. And asia to develop new Wireless Charging technology that can be used on its mobile devices as soon as next year. The Cutting Edge Technology would allow iphones and ipads r bloomberg reporter who covers apple for us how does this Technology Work . Reporter wireless signals enable you to charge your battery without having to put it in tether. This is a bit far off and there are some technical barriers apple has been running into, and other companies have already introduced some of this technology. Apple is playing a bit of catchup. This is something that will not be happening with the next model of the phone, but a bit further out. Emily in 2010 apple saw the pageant with this concept of using a mac as a hub for Wireless Charging. Is that what were talking about here . Reporter apple files a lot of patents. That could be a direction they could go. In that case, your mac laptop or desktop is the energy hub for your phone. Theres a lot of different capabilities out there, there are things like a map they have placed on other products as well. Emily theres been rumors for a while with apple that they want to get rid of headphone jacks. Do you know if thats true, if they want to make it totally Wireless Phone . Reporter things have been going in that direction for some time and they have shown us they have no qualms about making a dramatic change like that. A while back they change the jack at the bottom for how you charge the phone, which caused an uproar because it required people to change the accessories they had, but there are a lot of different changes they can make. These are incremental changes they have been making to the device. The question a lot of investors are asking around the company and why you are seeing the stock falling of late is, what is something really big thats going to happen that will drive more people to buy the iphone . Sales of the handset have been tapering off and that is why you see the stock coming down. Emily i want to talk about Virtual Reality. Tim cook, for the very first time, made comments about Virtual Reality. Take a listen to what tim cook had to say. In terms of Virtual Reality, i dont think its the niche. Its really cool and has some interesting applications. Emily apple is building a secret team of hundreds of people who are working on Virtual Reality. What do we know about this, adam . Adam you can hear the hemming and hawing in tim cooks voice. I have people working on this at their desk right now but i cant tell anybody about it. The Financial Times had a good scoop about how apple has been amassing a lot of employees to work on an effort to do their own Virtual Reality. This is something a lot of companies are doing. Htc, sony, samsung this is an area of intense interest among a lot of electronics companies. The question for apple will be how will what you do be any different from anything else out there. Emily apparently apple experimented with Virtual Reality in 2000 under steve jobs. How is this time different . Adam one thing ive learned about apple is they become incredibly focused on the thing they are doing. At this moment in time in their history is when they were in Major Development of the iphone. Now theyre looking for what their next big product is going to be. Theres rumors about a car, but that takes a long time to get through development. Virtual reality can be another stream they pull on. These are Different Things you can see behind the scenes, when they are setting the foundation for different product that they might be able to release. Emily thank you very much grade when we return, how do two proenvironment billionaires and up on different sides of the fight for solar energy in nevada . Emily welcome back to bloomberg west. Im emily chang. Facebook stealing the show after a record quarter on wednesday. Stocks surged in thursday trading and still riding high. The market sent apple tumbling after admitting it is seeing some softness in china and amazon sliding after missing on sales and profit. Behind all these companies are ceos with a lot of skin in the game. Joining me is tom metcalf. Lets start with the biggest riser this week, up 6 billion. Tom its been a volatile week for him. He started aids in the world and he has overtaken the 8th in the world and he has overtaken the koch brothers. Emily hes the only tech guy up here to date. Tom exactly. He was well down before this week. Investors are sort of buying Facebook Like crazy on one hand and selling like crazy. Emily amazon down 733 million this week, down 8. 8 billion today. Tom the interesting thing, he started out during the week he started up but when the actual results came out, it really disappointed. This questionnaire, maybe this is a company where they need to manage those expectations a bit better. Emily how about microsoft . Tom in the middle ground, right . Up about 5 as a stock. Emily alphabet earnings out at the close on monday, and larry and surrogate have had a pretty good week as well, up 1 billion each. Tom its a question of what will happen on monday. And again, will investors get nervous from that or really excited, and we could see some real big gains today . Emily quickly, musk. Tom he did well today. About 100 million net he just made, having the options at the right time and building the company into what it is today. Emily thank you so much. Emily the struggle for the future of the energy future. On one side is worn buffet. On the other side, theres elon musk, chairman of solar city. In the middle, hundreds of regular people who install solar panels on their roof thinking it would save them money, but that situation has now changed. I want to bring in bloombergs chris martin, who wrote this story for us. What happened to the solar customers . Chris the Customers Put solar on their roof thinking they would be able to save money for decades going forward, and what they did in nevada was change the structure of the utility rates so that now they have these fees on solar homes that were not expected by anyone before this year. Emily how did these two tro environment billionaires, buffett and musk, and up on the opposite sides of a solar debate . Chris buffett bought a lot of utilities, and he wants them to continue to make money. Musk helped form solar city, and he owns a big stake in the company. Hes also the chairman or utilities are fighting against solar now that its cheap. A program called net metering, where your meter spins backwards and utilities in almost every state have this now, but now that solar is so cheap and Companies Like solar city are providing panels for no money down, its a lot more development than utilities expected. Regulators are concerned that utilities are losing some income from these companies and not paying their fair share of the grid. Emily how long is this battle been going on and when will it end . Chris its been going on for a few years now. There was a big battle in phoenix, arizona, where in raged homeowners were doing the same thing they did a couple weeks ago. Its happening in every state at different times when the utilities come up against these net metering caps put in place to control the growth of solar. Emily has rooftop solar become a political issue . Who supports it and who doesnt . Chris it initially has been a bit of a political issue where conservatives tended to side with the utilities. It is morphed into a freedom, personal right, i want to be able to put solar on my roof, or least cut my wires to the utility it is nonpartisan. Both republicans and democrats support the solar and are trying to fight the utilities that keep clapping down on them. Emily excellent story in the magazine this week, thank you so much for joining us. Coming up, we will be back with more of bloomberg west. We are geeking out today about new york state may quote, turn off niagara falls. This process will allow officials to tear down two bridges across the niagara river. They are more than 100 years old and cannot be replaced with 30,000 cubic feet of water flowing each second. What is it going to cost . Right now officials estimate just 3 million. Coming up, the ea ceo says star wars game sales have not peaked his plan to keep the high alive. Emily turning to the gaming industry, one title can make or break a company. How do you follow up a smash hit . Even after eas Star Wars Battlefront searched past 13 million copies sold in the third quarter, investors focus on next quarters guidance and sent shares down 8 today. The ea ceo, andrew wilson, join me for an interview. Joined before an interview. We sold more than our guidance. Our mmypg has a High Subscriber rate in 3 years. We had top five downloads in 130 countries. You roll right in with sports doing well, ultimate teamup, and i think we had a spectacular quarter. Star wars is just getting started. Emily you see room for sales to continue to rise now that the movie has come out . Andrew our relationship with disney is a long one. We have battlefront, star wars, the old republic, star wars, galaxies heroes. We have more titles coming. Were in it for the long haul. This is one of the best ips in the planet, that we put our best teams on it right now and continue to deliver amazing content to star wars fans and gamers alike for a long time. Emily would you offer paid, downloadable, star wars content to keep the enthusiasm alive . Andrew last week we announced the first set of free content and there will be more of that over time. We also announced expansion packs, Premium Service that lets you play on all kinds of things. For star wars fans, they will play mapped out on the desktop. It is an important way to play a star wars game. We set out on a journey to fulfill star wars fantasies and remain old and young and thats exactly what were doing. Emily will you continue to roll out star wars games as the movies continue to roll out so you guys continue to benefit from the franchise . Andrew absolutely. Its a longterm plan. We have a longterm relationship with lucas and disney, and we have talked about action title and development coming out of our studios here. We have mobile titles. We are going to continue to support star worse, the old republic, which is out, massively multiplayer game with lots of great new content. Emily what is eas strategy around vr and what should be be watching for . We be watching for . Andrew first and foremost, vr will be more utility. You think about videoconferencing, training, education. It will revolutionize those industries as a utility. As we think about it in terms of video games, theres a whole bunch of challenges we get. One is consumer uptake. We do believe it will be an important part. Were investing in two vectors right now, our core engine to make sure we can create Virtual Reality experiences for any of the devices that come out, as well as our core teams working on specific experiences and genres so we can start to test those over the coming years. Emily talk to me about which genres you think would be enhanced by the vr experience. Andrew anything that puts you in a car, in a ship, or in a stationary vehicle that moves is spectacular in vr right now. As soon as you start running around in a virtual space, it creates issues for some players. What is the low hanging fruit . Emily does that mean new title . Andrew new titles and existing titles that include that type of element is how were thinking about it. Emily apple is building up a secret vr team. Now you have apple and facebook and google experimenting with Virtual Reality, facebook not just experimenting, but has oculus. How does that change the game for you . Andrew we have always been a platform agnostic company. The great value is we have always worked at a core engine and technology and game level to deliver awesome interactive experiences irrespective of what platform or device a player was to use. You have apple and google and facebook playing. There are better than average chances this could be big, and for us thats good news. More players playing more games more of the time, and we have a demonstrated history of pushing content to any new and relevant devices. Emily how big do you think vr will be . Andrew i hope its really big. I think it could be really big. We have challenges as it relates to our industry and how we overcome those. We have our best and brightest, we have a cool lab of engineers who have demonstrated an ability to do innovative stuff for us over the years. Really looking at vr and trying to understand how best we manifest the spirit says experiences we make. Emily you announce your getting more than more serious than ever about esports, competitive gaming. Andrew for us, engagement is key. Building experiences that connect people to each other, to the experiences we make, and esports is doing that on two fronts. It has more people playing and more people watching play. Our games have been utilized in sports tournaments for a long time. We have driven some of those and the market at other people have driven a bunch of those. We see the opportunity of building an overarching architecture that offers best in class experiences for all players and viewers. It is starting with our madden live challenge playing, which will culminate with the super bowl. Players and viewers understand the single best place to play ea games in a competitive way, to view ea games in a competitive way is through the torments we put together. Emily there is competition, microsoft has its championship series for payload. How do you see your competition standing out . Your games are actual sports games, with madden and football and soccer. Does that translate well to esports . Andrew the fever interactive world cup is something we been running for the better part of a decade, which reports rewards great playing. We do that in partnership with microsoft, we now do that in partnership with sony. Weve seen tremendous translation of our sports, but also things like battlefield, which has a tremendous esports culture surrounding it. Our opportunity is to capitalize on more and more people playing more and more games for more of the time and using our games to connect with each other, and us being able to facilitate that connection. I think its always good for the game. Emily Electronic ArtsCeo Andrew Wilson in an exclusive interview. Here is a throwback. Today marks the first day in history that tetris was available to u. S. Consumers. Before 1988, tetris with a Simple Program created in cold war russia by an engineer. The game became overwhelmingly popular. Given the Political Climate at the time, he was forced to cede his Publishing Rights to the russian government. Tetris success continues today, selling over 425 million copies of its license trouble on mobile devices. Facebooks tetris app has over 20 billion place to date. Up next, blackrock stealing a page from hp. Emily Facebook Says it is banning private gun sales between people on its social network. Some users on the platform had been toward making transactions without background checks. The company has been taking steps to. Limit gun sales on its site since 2014. Birch box has announced it is cutting 15 of its workforce and suspending operations in canada. The startup says the cutbacks will affect 45 people out of a staff of 300, just the latest sign that Tech Startups are struggling as venture funding begins to cool. Turning now to xerox, the company best known for xerox machines is trying to find its footing in the digital age. His xerox is splitting into two companies, one focused on hardware, the other on services. The news comes after activist investor carl icon campaigned for the split. Icahn will get several feeds on the service companys board. What has been reported is that this was given by mr. Icahn. Interesting in love interestingly enough, it was not. The board came to its conclusion without speaking to mr. Icahn at all. Emily the Company Dates back to 1906, when xeroxs predecessor was founded in rochester, new york. 30 years later, the Company Created its first zero graphic steve jobs visited the office in its late 1970s. In the 1990s, xerox went on to develop touchscreen input for handheld devices. Since then xerox has been struggling to stay at the front of digital trends. S p just downgraded xerox after the split was announced and said if revenue declines, it may prompt a cut to junk. Here to discuss the xerox changes is a Senior Research analyst at piper jaffray. What do you make of this xerox split . This is probably the most are medic change that xerox could have taken coming out of this strategic review. The decision was arrived at after a very thorough and comprehensive review by the board and management. My understanding is icahn did not really have a say, but obviously he is supportive. First, it sharpens management focus. It makes sense to have leadership dedicate their attention on each separate business. Secondly, higher invest ability because now you will have a Place Investors can go to. Emily ursula burns talked a bit more about why she thought the split was the right move. Given the strength that both of these businesses have, combined that with changes in the marketplace, with changes in the industry, competitors, that is probably best for us to be separate companies, not together. Emily what are the Growth Opportunities in Document Technologies . Are they big enough for a standalone business . George there are a number of those opportunities still within document technology. You have high and color end color, customized print leveraging. You also have expansion into the smb channel, expansion into emerging markets. There are levers that xerox can hold to drive growth and to mitigate some of the headwinds we are seeing. Emily what are the challenges in services, and can they even catch up with tech venture . George the challenge with services it is an involving industry. It is an industry focused on transformation, and industry very focused on automation, intelligence, analytics. To stay ahead, you have to constantly reinvent yourself. You have to innovate, you have to invest. And so, by having this company be split, you have sharpened the management focus. You dont have competing investment, you have more opportunity to drive higher. Emily management said the cost will be more than offset. Do you buy that . George i do. Today xerox announced it has a threeyear, 2. 4 billion transformational cost. My understanding is the 600 million incremental cost will be more than enough to offset the separation cost in addition to the this synergy dissynergy. Emily can xerox reinvent . George i think it can. These are evolving industries. You have to evolve. You have to adapt in order to grow. Emily george tong, thank you so much. It is time for todays edition of best day ever. Whos having one today . Poe the panda. Dreamworks animation kung fu panda 3 is well on its way to 13 million on opening day and an estimated 45 Million Weekend according to deadline. Com, proving that the third time is just as charming for the kung fu panda dynasty. Congrats. That does it for this edition of bloomberg west. Next week, do not miss an exclusive conversation with the oracle ceo and our editor at large, cory johnson. Have a wonderful weekend, everybody. The following is a paid advertisement for time lifes video collection. Hi, dean. Hi there. [laughter] bob. From the battlefield to the white house, from hollywood to the heartlands, americas entertainer was bob hope. Oh, this room is so dull and