Troubled schools is leaving the job earlier. He completed work ahead of his 18month schedule, with Governor Snyder pushing the legislature for state funding to address the state debt. Thats global news. Im mark crumpton. Im emily chang and this is bloomberg west. Ating up, slash and burn yahoo , cutting jobs, winding down legacy products, and addressing Strategic Alternatives, but what does that mean . And we hear from oracle ceo mark hurd of what it takes to be a leader and what it takes to keep competitors at bay. We check out how mega cabs compare with the Biggest Companies over time mega caps compare with the Biggest Companies over time. But first, to our league alternativesing for the core business. Is that the company putting the for sale sign on the door . For the time being Marissa Mayer exploring aosts and spinoff of the web business rather than sell now because they feel it is kinder late it is currently undervalued. Is up 12 . Revenue but here is what chairman maynard webb added in a news release the board also believes that exporting additional Strategic Alternatives in parallel to the execution of the Management Plan is in the best interest of our shareholders. I want to bring in our Bloomberg Intelligence analyst to breakdown the numbers, but what does this mean . What exactly are they trying to say here . First, ao things spinoff will take nine to 12 months and the Strategic Options were with with respect to the alibaba state and not the core business. You are saying they are not saying we are going to sell. Reporter yes, and they talk about patent sales, corporate headcount reduction they are trying to simplify yahoo is mercer mayer here . Is she saying she can turn it around . Or is the ship going down . She is trying to basically simplify the company as much as try to focus on the division that has been growing and inspire growth. This mobile and video is an acronym she made up. How well is the is missed doing . Is the growth enough to sustain this for the future . Reporter that is exactly what their needs to be more transparency on from yahoo . What is the user activity . Grown froms has almost nothing to 34 of gap revenues in four years, but if you compare that to Something Like a facebook, now they have 80 of their ad revenues coming from mobile advertising, and they were very low four or five years ago, too. On a relative scale, its not growing as fast as competitors, but if you look at absolute numbers, yes, there has been strong growth. I think programmatic is doing well. Shares are down in afterhours trading, so of course we will be talking about how investors are looking at the announcements here, what they want if they still want to pursue a proxy fight. Taking it down for us. Now we are going to get back to yahoo in a few, but i want to turn to competition in the cloud where microsoft, amazon, and google has been gathering steam. Our editor at large cory johnson is standing by at the headquarters of another cloud contender and that is oracle. He has an exclusive conversation with oracle ceo mark hurd. Cory . Thank you, Emily Chang A Bloomberg tv, Bloomberg Radio as well. Were sitting down with mark hurd, ceo of oracle. Thank you. Youre going through an interesting time in oracle. You have gone through changes. You have gone through a ton of acquisitions. Now we have this huge change, the move to the cloud. Lookso me about what that like for oracle which has a strong footprint in on premise software. The development of Cloud Software has been targeted at oracle. What does that mean for the industry . Mark it is a big shift. I think you will see a majority i. T. Shift to the cloud. For us, we look at this as an opportunity. Premisesuch a strong on based, it will be important to make those worlds were together. Building a whole new stack of capability through platforms, infrastructure that can work with that on premise base, thats a huge opportunity for us. Cory some of the contenders say they dont have to work together. Throw out the baby with the bath ater with the Cloud Software. Newer companies, why are they not just starting with the slate clean . Vendors are interesting, but customers probably have a different answer. Have a long set of applications on premise and they have to run their businesses every day. Dont get me wrong. The bulk of work is moving to the crowd, but for a long time, you will have to get applications that work together. The ability to share information. I think it becomes a key advantage. Most of our competitors are. Or purely on premise or purely on the cloud. The cloud, the argument is it is so much cheaper. You guys also have a difference of the pricing strategies from what is going on. Work . U make that how do you make that work . Mark i do not know if i would call it cheaper. It is more variable. To be able to shut something off when you dont need it, to get a variable price i would not say that is cheaper. Betterallows you to have control of your costs. For us, we love the cloud world. We love the on trend world. Both Business Models are extremely attractive. We are about as agnostic as you can imagine. We are invested in driving our cloud stack and that is what were focused on. That transition to the cloud. Cory your competitors like to talk about what youre not doing. Talkingn particular about how they are stronger, cloud growth, comparing it to what you guys are doing. How do you view s. A. P. Is a competitor . Mark idol think they are doing very much. To be very frank, they have acquired some properties. Cory do you mean things like concur . Arriba is a, property they bought. The core franchise is really erp. That is the core franchise that company is built on. They have not done any work from the bottom up to the architect architect to the club. Long run customers want to move those rps to the cloud. Just to give you a quick view of our progress, we have sold i guess by the end of the year, we will probably be between 2000 Erp Solutions in the cloud. Its a Staggering Number from zero a couple years ago. Erp solution pure colleagues have referred to their acquisition of what are we going to do next, buy dairy queen . Completely agree with her comments. Strategically, it did not look interesting. Strategy, ande a then build to that strategy. It has to make sense to us. A dairy queen would make as much sense to us as buying concur. It did not align strategically where we saw the market going our what we thought was important for our customers. You think we will see oracle doing a serious acquisition sometime in the next year or two . Mark i know you know im not going to comment much on forwardlooking just wonder your philosophy. How do you make those decisions question mark you guys are famous in the m a world, giving answers. You do the diligence, given answer whether you are interested or not. Mark we know what we are doing. We will do what we always do. Something will have to make strategic sense for us to acquire it. It has to make financial sense. We have to be evil to operate it we have to be able to operate it. Disciplined acquirers. We dont buy something just to buy it. Some ofen you look at the Fast Software companies, those valuations, i would say, are really high right now . Do you look at that . Mark they are high and they have been high for a long time. We have tended to be a first mover. We do not buy a company on the cheap. We buy the best property in that important. Use its whether we build it or whether we buy it, we want to be the best. Cory do you think it is the time to sit back and keep some powder dry in case some things go on sale . Mark its always an advantage when that happens. Its always better when things cost less. If you look at our history, that has not driven every decision we have made. We make a decision based on the right thing to do at the right time that fits with our strategy and we made a lot of acquisitions back in these days may be wrong, but the end of 2010, 2011. Leo, a couple others. It was so important. Our future product line was just now coming to market. Were buying multiple companies and learning so much about the business and taking leadership positions. Learnwhat you think you from the sun acquisition . Surely you tonight at the numbers to be as hard as theyve been. If you look at the sun acquisition, which predates me a little bit. Think you have java, the most popular programming tool in the world. Just that asset in isolation was really important. On top of that you have solaris. Youve got probably the best operating system probably the abrasive to me world. You had an increase little system that came with it. It was an acquisition that brought a lot of technology with a lot of customers. Cory when i look across the some at your competitors, are struggling, some arent. If i had to pick which companies were in more trouble, sap, ibm which companies have the wrong strategy, wrong products, most wrong . Great question. I think i will stick with i would rather have our hand than any other hand in the industry to make thesed transitions. There is a reason why every company does not get to the other side area its hard. Its hard to do it in the Public Markets. Look at the investments we have had to make. When i got to oracle, i think our r d was 3. 8 billion . We are probably only path to 5. 2 billion this year. Cory huge numbers. Mark huge numbers, but we have had to invest. Investedad to transition. We have to keep the capabilities and play at the same time we invest in new cloud capabilities. Think about this, cory. Cloudou get into the business we have to build data centers in 20 countries around the world. Thats like Building Hotels before you can rent a room. We have had to invest in that capability. Simultaneously we have had to build out a larger go to Market Organization and make all of those investments and if you are in the Public Markets doing all of those at the same time, it can be a challenge. Theres a lot of companies and you have mentioned a few, that it is hard to get from here to there and i can tell you why. , ceo of torque will, thank you for your time. Back to you guys. Editor at large, cory johnson, thanks so much there, with mark hurd. Still ahead, weve got to keep digging into the latest news from yahoo as the company cut its workforce and explores alternatives for its investors. Will it come investors or trigger a proxy fight . Emily lets get straight back to yahoo , shares ticking down in afterhours trading. Marissa mayer planning to cut 15 of jobs, leaving yahoo with about 9000 employees, and winding down a legacy of products, closing offices, and yes, looking at selling parts of the company. I want to bring in our deals were alex sherman and our guest eric. Will start with you. How do you translate what they say about Strategic Alternatives . Are they exploring as sale of this company . Ambiguous at best. At some point she did say that board was going to explore the sale of Strategic Alternatives, which means the sale of the company. She was not very specific about it, and i understand from other reporters the board has said they will explore the sale of the business. The core business. Emily at least in afterhours, not reactingrs are kindly to this. Is she asking for a proxy fight . Alex it depends on what we see between now and april, i think, emily. With theg goes forward sale of the company or perhaps sale of nonstrategic assets, i dont know that i fully believe we will see what happens with yahoo i think the discussion will probably be based around the entire company. If nothing moves forward with that between now and april, yeah, i think Marissa Mayer may be in for a proxy fight. I think be included in that language and all you have to do is read our story from three weeks ago when we reported that the board was warming to the idea of selling the entire core business. That is the way to appease angry shareholders at this point. A think we have probably reached the end game when it comes to selling the entire business, and theres a lot of confusing language today and certainly morris is going to move or word with a turnaround land because whether you sell the company or not turnaround plan because not,er you sell the youre writing the ship is probably good idea. I know my job is going to be trying to figure out who they are talking to and when they are talking to them and exactly what they are talking about, if in fact they are going to sell the entire business. How much money you they would give her that business . Emily alex, i will try to help you with that. Doing the best i can. Talk about where the business is now and what the business is doing. Take a listen to what Marissa Mayer had to say about the mobile business. Marissa mayer we will continue to drive native through same time at the we will stabilize and slow declines in our legacy revenue. When you look at the mobile and video part of the as is, how well is that doing . Eric not well. If you look at the waterfall that they offered to us during voiceall to show us where revenue is going to go from this year to the next, the maven revenue is only going to 200 million dollars. Its not doing well. This is not a credible plan. This is the turnaround of the turnaround, and its a little that today is groundhog day because its groundhog day for yahoo emily deja vu all over again. And our ownpeau alex sherman. Iswe had to break, uber rebranding. Many critics taking aim at the new logo on twitter, saying it looks like a doughnut, and basketball court, even a pokeball. Emily the European Union and the u. S. Have reached a deal on data sharing. Agreement replaces an earlier accord ruled illegal in the wake of Edward Snowdens revelations. The eu fear that personal data stored by u. S. Companies might be exposed to spying. Officials in the eu say that they can be sure that data is protected. Coming up some of from a garage in menlo park to the worlds Biggest Company by market cap, we look at alphabet. Biggest Virtual Reality funding round of all time. Bloomberg news check us out on the radio. You can listen on the Bloomberg Radio at, bloomberg. Com, and sirius xm. Emily im emily chang and this is bloomberg west. It is 3 30 p. M. Tuesday here in san francisco. 7 30 thursday morning in hong kong. Where were joined by sherry with a look at the stories making headlines in air asia. Good morning. Good morning. Kim china is set to complete the biggest acquisition ever by a chinese company. The deal said to be worth 43 billion and county announced later today. Sources also saying kim china is considering delisting after the takeover. An independent panel has told an r bag maker, tecate to prioritize control to avoid further safety defects. It was told to form teams to investigate reports. The cause of the air bag crisis is sought, linked to 11 deaths and the recall of millions of vehicles. Shares have plunged more than 50 over the past year. Nissan and hyundai kia are enjoying the best january auto sales in a decade. Along with g. M. , they posted gains while losses of toyota, honda and ford were smaller than feared. Still, investors didnt like the uneven nature of the results with some up and some down. Indias startup scene could traket more overseas money. The reserve bank of india is giving foreign Capital Funds more options. Theyre allowing to invest in india startup companies. The r. B. I. Is also letting startups file reports over the internet and is easing the rules governing shares transactions. Emily . Emily wednesday in hong kong, not thursday. But what is this going to do for the startup scene in india . Well, in the past decade, most of indias best performing internet startups chose to establish themselves in places such as singapore, even though all of their busy business was in india. Ecommerce businesses. So with this package, making life easier for investors, internet is expected to become more attractive and the government is helping them out too, promising tax breaks as ll as a 1. 5 billion fund to increase boost. Some are already raising questions about valuations. Emily . Emily thanks so much. Shery in hong kong. Emily a changing of the guard, at least when it comes to the most valuable companies in the world this week we saw facebook surpass exxon mobile to become the fourth Largest Company by market cap in the world and apple cruised to become the number one spot. We look back to another age, 1993 for this week back in bloomberg and the rankings were much different. Exxon was the worlds Biggest Company followed by general electric. By the eve of the dot. Com crash in 1999 exsons was replaced by microsoft but companies lining g. E. And microsoft still loomed large. What caused the change in the rankings . Here to join us Stock Traders almanac editor and chief jeff hish. And paul, ill start with you. As a formers equities analyst on wall street covering technology, are you concerned that so much on wall street today is concentrated in the tech center . How can that be wrong . So yeah, it doesnt really, its not particularly surprising. Its a sectsor thats seen more growth teaver last 30 years, 40 years now, dating back to the semiconductor and its seeing increasing market captainlation captainlyization flowing in that direction and it is a bigger share and it shows up in the rankings you showed. Emily Tech Companies comprised in 2004 on september 1, comprised 32 of the s p. Today theyre more like 17. 4 of the s p so not nearly as much as it accounted for back then but still, four of the five most valuable companies in the world. Jeff, what do you make of that . Jeff i think this is the beginning of the future here. Back when i did the superboom book in 2011 our contention was that technology would be leading the future and here they are leading the stock market so i think its very an propro and the beginning of the next superboom. We own apple and Probabilities Fund management but of the top four i would think that google and are much more entrenched. I think those are the kind of enabling paradigm technologies they mentioned in the superboom book that is going to drive the Economic Impact individuals on an irreplaceable, irreversible manner and change the world. Im not sure these companies are those but its the beginning of Technology Leadership for the boom of the future. Emily paul go ahead. Paul technologies insinuating itself into nontechnology parts of the economy. Looking a is the tracking boom, driven oil prices down to insanely low letsful in a large part its the technology story. The technology leaking boo the broader economy, not Just Technology for technologys sake anymore. Its truly ubiquitous and thats the phenomenon were seeing. Paul great point, jeff. Emily how long can alphabet stay in the lead. Gene staying when the apple phone comes out. Its going to exchange and go back top al. Im not sure. I do have an iphone and i use it but i find google much prosecutor more important in my life for researching and tracking things down. They have a modem immersed in many more technologies. Same thing were am. Theyre deep in database and information technology. I could live would excel. Emily the Top Companies then cisco, and others. Facebook is only four years old as a public company. Can facebook stay up there . Facebook im less optimistic about than google. The way i look at it, you think of it in terms of market saturation in semiconductors, you had a rapidly emerging market that truly became competitive and same thing in smart phones, the phenomenon that apple is running up against. Yet in googles advertising market, only about 8 have moved online and yet people spend 20 , 30 , 40 of their time staring at mobile devices. Google is in a dominant position and theres an awful lot of room yet to grow. Emily this is the question im asked often about, microsoft in particular. What did they do except announce a new c. E. O. . I dont think the c. E. O. Is the i think bill gates laid the groundwork there for a company thats going immerse itself in the services and software and things that drive the technology economy. Theyll probably have Microsoft Technology in tracking Companies Making thure thats done properly. I think facebook, like paul said could easily be dethroned much more than microsoft and everything thats entrenched in everything we use technologically in this world. Emily jeff hish, Stock Traders editor in chief and paul our bloomberg contributing editor. Thank you both. Possibly the largest sea round in internet history. The super secret startup has raised more than 793 million in a new round led by alley babba. This leaves the company at 4. 5 billion. It will speed up the project of bringing their first project to market. Magic leap is using working a head set that creates realties superimposed over real world views. Google previously invested over happen half a billion dollars in the company in 2014. Coming up, the video game disrupture thats shelling out serious cash for new games, even helping some pay their way through college. And up next, the official football of the nfl gets a hightech upgrade. The next wilson x connected football coming up. Emily today marks the first tay in history that a polygraph was used in court. Since the beginning of time, humans have tried to separate fact from fictions and catch liars in the act. Before the 20th century, this usually meant torture and a lot of speculation but on this day n 1935 the first polygraphic was used to quaket criminal in court. Its still under dispute as a valid form of technology but theres no doubt its changed the lying game forever. Wilson has provided the official nfl football for every super bowl in history and this year, the company is going hightech, introducing the wilson x connected football. It includes a builtin sensor to measure speed, distance, and spiral efficiency. Earlier i caught up with bob thoroughman, v. P. Of wilson lab and asked him to give me a quick demo of how it works. The ball is asleep. We want to wake it up. This is a beta version of the football theyre working on now. If i spin it up in the air youll see it captures the motion that a football being thrown. It will capture the speed. The amount of revolutions. A quarterback gets a tight spiral and butts a little spin on the ball. Thats a little wobbly at 6 . Not very good. Every time you throw the football, it measures that. Not only that, it opens game mechanics. Now we can play a game in the backyard. You become the receiver and i can be the quarterback and we can march down the field without actually leaving the back yarlingd. Could this be used to separate the best from the best . Thats exactly how i see it. We want to measure arm strength, cognitive ability, the throwing quality and its also a scouting tool. A tool that a quarterback can train to get better but also find that young quarterback in high school and find that next talent. Whos the target audience . Everybody that loves playing pass, everybody that loves getting out and throwing the football around. Two kids in a backyard, two dads at a tailgate. Wilson has been making the football used in the super bowl since the beginning. All of them. Every point ever scored has been a wilson football. Emily how is it different from the ball thats going to be used this year . Its essentially the same but in this case weve inserted a sensor into the football to measure how hard somebody threw it, how hard they threw it, how much of a spiral they put on it. This gives you more information. Offensive and its sinked into a mobile app, right . Absolutely. The ball is connected seam li lesley to an app on the seam lesley to an app. Emily so what does tom brady think of this football . Were not sure. We hasnt tried it yet. Emily can it tell if its been deflated. No, not yet. Emily youve been at wilson personally for 24 years. What was different about this challenge . What challenges indict you did you run into . First of all we wanted to make sure nobody knows theres a sensor in here. Second of all, we want it to be ready. It runs on a single charge, lasts for two years. Its always ready. Turn it on, wake it up, throw the football and its ready to go. Emily why did you guys decide to do this . Were you compelled by Companies Like apple . We didnt want to do it just for the sake of making the product. We wanted to do Something Special for kids who wanted to play. We want kids off the couch, being more active, learning to three the football and having fun. Its healthy for us and then. Emily the connective basketball came out first. Do you see opportunities for connective tennis balls or volleyballs or golf balls . Absolutely. We have a huge pipeline of things we started. It started with the basketball. Every kid thats stood out in the driveway and done three, two, one, and shoots and scores. Every kid that says hey, lets go deep. Or every kid that says bases bottom nobody out. Emily does this change the game at all . It does change the game. Were talking about bringing nextgeneration analytics to the sport. The trajectory, how low the quarterback threw it, the timing of the route. Emily bob thurman, v. P. Of innovation at wilson labs. Sticking with sports, to the battle lines drawn in ink from athletes tattoos, take two has carved out a name in the Video Industry with astonishing graphics and stunning character models in its nba 2k series that looks like real life players. Their extraordinary attention to detail may cost them. Turns out a Tattoo Company named solid observation oaks sketches earns the rights to tattoos on several athletes, including kobe bryant and lebron. The tattoo artists claimed they signed copyright agreements with the nba players. The company is suing for more than 1 million. Coming up, the video game platform thats creating a new economy for developers and netting some teens six figures. That story next. Emily it is time now for poll teching where politics and tech merge. Monday marks the start of primary season with the iowa caulk us and seems the caucuses gave twitter somewhat of a competitive advantage. While facebook showed more interest in trump and sanders. Trump cruz and clinton as the winners. Sales have plunged 30 from a ii r ago and sales of the w players continue to shrink. Gaming original content is a challenge for everybody but a has up called robucks created a new line. The company has paid out over 3. 6 million so joining me roadblock c. E. O. David zoifpblgt thank you votch. Youve been doing this for a while but just now announcing a partnership with the xbox 1. Thanks for having me on the show. Emily of course, a pleasure to have you. Were creating the future of entertainment at roadblocks and xbox is our latest thing we have announced. The engage in the is amazing. Almost a million hours have already been played on xbox. Emily as i understand, there are teenagers creating games and some of them are pulling in six figures. Absolutely. Emily how does this make sense for you . The box is a platform. Over 2 million play every month. They range from hanging out with your friends at a pizza restaurant to surviving a tornado. Over 300,000 developers every month are creating these games. They literally make money from the games theyre creating. Offensive who are these people . Amateur colders . Experienced Game Developers . Almost a star search or American Idol for video games. Take 20 million visitors every month, find the best to create games. The best of them rise to the top. This is college students, 12yearolds, 18yearolds. People paying for college, saving for college, people even making Small Businesses on top of the platform. Emily wow. Whats the most a single creator has made . As the number of people playing grows the amount theyre earning is growing. We have Developers Making over 250,000 a year. Some are making studios that run on top of the roblox platform. Emily this is a challenge for the traditional game makers. I was speaking with e. A. s Andrew Wilson earlier this week. Listen to what he had to say. They spend about 22 minutes in nonnative apps but have an average of 26 apps. Any Company Company is fighting for less than a minute of time. If you dont have a great network, if you arent able to connect hundreds of millions of players in the context of your games experiences, times are going to get really tough. Emily Companies Like king digital spending a lot of money. What impact is this going to have on the Broader Market . Its what brings more people to our platform and its the Fastest Growing number at roblox. Were getting literally over three million coming to the platform every month because theyre doing it for free. Youre hearing it from your friend. Its bringing them primarily virally to our platform. Offensive so ultimately who owns the game in the end . The. Comer owns the game. It runs on our platform. We share in the virtual economy with them and they make money. Emily what happens if a big Company Wants to buy it . Some day there may be vision that is pop off the platform and become standalone games. Emily how do you see the sort of hierarchy shifting within the gaming industry, whether its mobile or social so were whats cool about roblox, is everything youre seeing here is running on all platforms. Play it on your phone, a tab let, a computer and now on xbox. User creative games need to run everywhere, we think so you need to be able to play them with your friends wherever you are. On your phone against your friend on xbox. Mobile gaming and Facebook Gaming is pretty mature. Virtual reality is what everything is talking about. Roblox is the ultimate platform for that. Youre already with your friends. I think thats where a lot of the action will be. Offensive to be a kid today. When i was young it was just tetris and super mario brothers. Thank you so much for joining us. Thank you. Emily that does it for this edition of bloomberg west. Tomorrow on the show, a full breakdown of go pro earnings as the volatile stock continues to slide, now down 80 in the last year. Thats all today from san francisco. From our studios in new york city, this is contract Charlie Rose Charlie senator Bernie Sanders is here. He is, as you know, a candidate for the democratic candidate for president. He refers to himself as a democratic socialist. Former secretary of state Hillary Clinton currently leads him in the polls but sanders has continued to draw huge crowds. He and clinton spoke at the jeffersonjackson dinner on sunday in iowa. Bernie today some are trying to rewrite hi