Transcripts For BLOOMBERG Market Makers 20140404

It is a tasty deal for investors. Happy friday, everybody. Welcome to Market Makers. We have a great show ahead but i want to start with the march jobs report, 190 2000 jobs added to the economy last month. Like the below economist estimates. Who better to put this in context, to give us the real deal, michael mckee. You can have me back on may 5 as well. In the words of steve stanley, this was perhaps the most boring jobs report weve seen in some time. Everything came in pretty much as expected. 8000 this is just a rounding error. It tells us the economy is still on track. The best news in the report was the Unemployment Rate not going down because 5003000 people came into the workforce. More people think the economy is they canetter, think find jobs, so they are going out there looking for work. That tells you perhaps were are on track to see some improvement. In the commentary i have seen , some are pointing to wages as disappointing. Is it fair to describe it that way . That was a disappointment it came in flat, but there was a point for increase in the which was double the average of previous months. It is an improvement, but not the kind of improvement we need to really get people out there spending more. At least it is moving in the right direction. Thank you, michael. The markets are unchanged at this point. That is because the fed is not involved in this year they have given us their timeline. Who is watching this is mario draghi. This did not suggest that the fed would have to increase their timeline, so this is pushing the euro higher. That continues their disinflation mary problem and their slow growth problem. Michael, thank you for the lowdown on todays job support. Onnow the breaking news grubhub. The stock started trading about 15 minutes ago and popped big time. Scarlet fu is following the latest trading. Somebody left money on the table. Perhaps, or maybe that is how they wanted to do it. [ 40 a share, priced at 26 yesterday, that wasnt the higher end of its range. Grubhub is the owner of seamless. Com, and everyone seems to be doing it these days. The Company Makes money by charging restaurants a commission. It was a 192 million ipo. The question here i have for one of the people covering this for bloomberg was, was this how many priced as a consumer stock or Technology Stock . In the perspective, grubhub named brickandmortar as its competitors, but with the ipo, investors were looking at it as a tech anthony. Who is the guy in the pizza costume . He was pumped . What is it with the mascots. That was a debut that was quite the opposite from grubhub, and they had a lot of those candies roaming around the floor to keep the mood buoyant. To think about this. Think about prices in the mid 20s and it breaks at 40. The bankers who advise them on this have to be hiding their faces right now. That is a ton of money to leave on the table. One of its rivals is just e at, and they raised 600 million in london. It was the biggest ecommerce ipo in about three years. In comparison, grubhub is fairly small in the amount it raised. We will be speaking to their ceo in a few minutes, so thank you for the latest. Matthew maloney will be coming up at 10 40. Entertainment, they were once a hot couple. You remember that green dress. Now they are rivals. Z has outbid p. S diddy for a television show. We did not think that she would get into the mix. First of all, i want to make a correction. He went back to puff daddy. Is iamdiddy. He probably goes by both. Stephanie broke the story with us last night. She does not just show up on the anchor desk and mail it in. I appreciate that. Talk about what is the real value here. Tv, they arew in not changing the networks, they just want more eyeballs. It is a bit of a surprise that they won this. There are a lot of economics that go into this that are worth explaining. When another Company Comes in to buy the current network, the existing contracts with the paytv providers typically say, they acquirer comes in, need to continue to do basically the same thing or we can drop the channel. He only people that bought fuse, a music that were, were other Cable Networks doing music. Is the language squishy enough where that can happen . It depends on how they think the channel will do. Channel, maybes they think there is enough star power and they are willing to massage the language a bit, but that is potentially why this deal was only 226 million am not 50 equity stake. Could have been bigger if live Sports Networks wanted to buy it . It would have been much bigger, even with al jazeera. That was 500 million, and that was a news channel. You could make the argument that al do zero buying current tv is probably not going to be a huge moneymaker like a Sports Network would be, yet, it is possible al jazeera made needed to pay more money to get a foothold for political reasons or maybe they were given advice that they need to get in right away. You are paying for eyeballs. Nuvo will buy fuse and it will convert it. As weill not exist as far can tell. The programming may need to find another home. There are some popular shows out there. Onre is a comedy show based a comedian on the streets of new york. Do you have rights to it as nuvo . You could potentially get rights to it, but all that needs to be working on the backend. Not necessarily is the answer. We will see how all of this shakes out, but the initial plan is for Jennifer Lopez to put her nuvo tv programming and increase the distribution. It is only in about 33 million homes today. Nuvo tv does not have contracts with directv and cablevision. For sure, they will get a deal with cablevision now because ownswas owned by msg, who the dolan family. They will have a 15 equity in this company. Incould this hurt diddy terms of advertising dollars . Sorry, lets call him sean. If im an appetizer and i am considering sean or jennifer, how will he compete . Sean were interested in fuse, he would try to find another cable chatter channel. There is no other one out there that i know of that is a Music Channel that he could go out and get, but there are a lot of smaller channel that are potentially available. Transfer theoretically a nonreason channel to a music nnel but a question of how much you are prepared to pay. And if the paytv provider wants you to. Wants to recreate a dance show, im available. Mario lopez was on her channel, too. Our own media reporter, alex sherman, giving us the latest deal from j. Lo. How to prevent another massive credit card fraud like the one that hit target. The answer could be smartcards. Peter cook and his exclusive interview with defense secretary chuck hagel. They were in hawaii, lucky dog. You can also watch us streaming on your tablet, phone, and on bloomberg. Com. And apple tv. Here is the truth about the target credit and debit card data breach. It could happen again. In fact, it could be happening right now. The u. S. Continues to use the technologyt insecure exposing consumers and businesses to the threat of data theft and fraud in person and online. So why hasnt anything been done . We asked the ceo of Current Services and jpmorgan chase. Target is a defining moment for us in the u. S. Where retailers and banks need to Work Together to make it happen. It is classic chicken and egg. Retailers have to upgrade their but iffsale systems, there are no cards with chips there is no reason to do that. If retailers cannot accept it, no big reason to put them on the card. This is the opportunity for retailers and banks to get together and make it happen. It doesnt happen have to be this way. With me right now is the ceo of a French Company that makes chip and pin smartcards, the ones that you see in europe. You the idea that this is indeed a valuable business. Good morning. You know as well as anybody, she describes it as a chicken and egg scenario. Is it that way . Who needs to make the decision to go to the smart card . To me it is a nobrainer. The whole world besides china and the u. S. Has migrated to chip cards. China is rapidly moving to chip card technology. The actors are not going anywhere. The weakest point is where they will concentrate, which is the u. S. Nobrainer. The u. S. Will have to migrate to chip card technology. That, we areo exposing ourselves to theft at the hands of these hackers. That is what we saw. You have to realize the system we are putting in place, like the u. S. Payment system, we are with online authorization, which was good enough until now. Threats were distributed around the world, but now it will be caught and treated, so you have to do something in addition. Implementing our Smart Card Technology on top of the online authorization that the u. S. Does will really raise the level here in this country. Lets say that visa, mastercard, discover, American Express, get together with the largest card issuing banks and the largest merchants in an effort to get something done. They say they are trying but the evidence is scant thus far. Lets say they agree. How much would it cost to upgrade Americas Technology to emb . It is difficult to decide but you would assess a few billion dollars, spread across the country. You have to compare these numbers with two things. The cost of fraud in the u. S. Is estimated today at 5 billion to 6 billion a year. And growing financially. The retailer would be less than two years. Second, would you have to consider also is the brand image. Which is what target has found out. What is the cost of that . It is huge. The economics are right and the brand impact is could be so big, for me, it is a nobrainer. It is simply a question of timing. Is, it is already beginning to happen a little bit. You are holding an American Express with a chip on it. I have one like that in my wallet. However, it does not have a pin yet. If you want to go fast, the pin would be the second step. You can benefit from the very Strong Security identification. What this chick does, when you insert it into a terminal, it creates an encrypted code that the terminal recognizes, which is unique, a digital signature, which is unique to the transaction you are making. So even if it is hacked, it cannot be reused in another case. If you canhat, introduce a pin, and you are the only one that knows it, you can make sure the owner of the card is you. Double layer authentication. What does this mean for some of the emerging Technology Providers . I have square. It makes life so much easier for small merchants who cannot afford to be a part of these large payment networks. You plug that piece of plastic into your iphone or ipad and you can do business. That is not compatible with a chip and pin card. And that raises the security of that. It will have to be adapted to to start tois good think about the problem now , finding outater that you have put something out on the market which is double. With security. Bullet proof with security. Right now, you are depending on the cards and the payment at berkeley have created. I had to ask the question and i have to ask about bitcoin. People see this as not only an alternative currency, but if not a frictionless payment system, one that involves less rich and then the ones we have today. What is your view . It is all about trust. It is about trust in the markets. It took us about 20 years to create that trust in the technology. Bitcoin is interesting but it will take a long time for the system to be trusted. 20 years . Maybe less, maybe more. It depends on the security level that you can bring and making sure that people trust the environment. Who controls bitcoin today . Very difficult to know. Who is issuing the credit overthur. Visa, amex, you can put a name on it. With bitcoin, that is a big question. Being here. For smartcards, are they coming to america or are they not . Up, a pioneer in fashion honors trail blazers in other fields. We will speak to diane von furstenberg. You are watching Market Makers. In europe they are talking about a megamerger in the cement business. Two companies are said to be discussing a combination that would create the Worlds Largest cement company. You think it might not be that important but it is a huge story. Olivia sterns is in the newsroom with more. And wholesome are in earlystage talks about a twontial merger of companies to compete in to create a company with a market cap of over 50 billion. It could fall apart because of antitrust concerns, the potential of creating the worlds biggest cement maker. Shares in both companies are now rising. Olcim and lafarge rising. It is not too surprising that we are seeing a merger in this industry because there is a lot of overcapacity. You can thank the hangover from the Global Financial crisis. Many of the cement industries around the world right now are operating at a loss. The logic of the merger is that if a combined, they could combined operation costs and and reducests there, the overcapacity. Shares in lafarge rising in rising incim switzerland on the news that they could combined to become the greatest biggest cement maker. Thank you. When we come back, is russia really pulling back from the ukraine . Peter cook has an exclusive interview with defense secretary chuck hagel. We will have that and a lot more. Ordering staurant if you speak english and you did not understand what he said i cannot win this one. This is so good. We are talking with the ceo of grubhub. You are watching Market Makers on this friday in new york city, im Erik Schatzker. Im stephanie ruhle. For a moment, i had a hard time. Can we just sit on that for a moment . Hagele secretary chuck said the pentagon could send american troops back to europe in response to not only the russian takeover of crimea but also the threats that russia poses potentially to the rest of ukraine. With spoke exclusively peter cook during a trip to asia. Peter is with us from l. A. It sounds i do not want to overstate this, but there really are some cold war overtones to all of this, are there . There really are. We have been talking about american troops leaving europe for the last couple of years, but now maybe a reversal. I spoke to hegel as he wrapped up a meeting with asian defense ministers in honolulu on his way to china, japan, mongolia. He says the u. S. Wants a diplomatic solution to the situation in ukraine, but in the meantime, the idea of sending more troops to europe to bolster nato could send a message. We do not have any verification that they are pulling troops back. There have been various reports that they are moving troops back. There are troops that are moving around, we know that, but no indication of any Significant Movement of those large troop deployments along the border, away from the border. But the president has been focused on a diplomatic resolution. We want to deescalate this in every way we can. That is the smart, responsible way to do it. The europeans are coalescing now, the eu, nato, around his effort this effort. We have made our position clear. This is the responsible approach and we will continue to work at it. It feels as if nato is ratcheting things up. You are sending another warship into the black sea, considering more options to reinforce the position. Even if the idea of maybe returning a u. S. Army brigade back to europe, that has been floated as an idea. Would that be something the Defense Department would consider, sending an army brigade back permanently to europe . As you know, our european commanders have been tasked by nato to come back in about one week with a number of new possibilities, new measures, new options that we and nato should and cant consider cant consider can consider. Those are part of the measures that could be considered. Lets see what general breedlove comes back with. It feels like we are not the escalating. Are you worried that it will get worse before it gets better . Remember, nato was a defensive organization. It is not an offense of organization, not an invading institution. It is to defend the 28 nato countries. That is exactly what we are doing. We want to assure we have adequate defenses to protect those 28 nations that we are all obligated to protect each other. No, i do not think there is any escalation on our part. We told the russians there would be consequences for their actions. We have taken economic sanctions. He eu, United States we have been very clear about what measures we would take. Administrationa misjudged Vladimir Putin and the challenge posed by russia Going Forward . I do not think anyone misjudged Vladimir Putin. Lets go back to 2008, when putindent clinton invaded georgia. This is not a particularly new approach that he has taken. What you always have to do is you always have to be prepared contingency, any possibility. I do not think it was a matter utin, what hisp intentions were, why he did what he did. We still do not understand fully , but the point of responsible government is to have strong beions and capabilities and prepared for any contingency. It is a dangerous world out there and a very unpredictable world. One consequence to the ukraine crisis at least for secretary hagel, it could help him make the case on capitol hill for more defense dollars Going Forward and then into the sequester. He had been making that argument even before the russians took over crimea, and in particular, the army could be the biggest beneficiary of this crisis, an unusual side effect from this. Right now, the focus globally is on this relationship that america has with russia, europe has with ukraine, and what will happen. Hagel is on his way to asia. . Hy i this idea ofore credibility, that there will be a pivot towards asia, which everyone has kind of forgotten about . Because of the news elsewhere, but absolutely it is all about the rebalance to asia, as they like to call it. Asiais his fourth trip to since he took over the department a little over a year ago. This tells you how important this is to the Defense Department. And the fact that he is making this trip with everything happening in the ukraine is you an indication of how important he treats it. He will be stopping in japan, china, and mongolia. Obviously, the chinese think this is a direct threat against them, so he is going there, to an extent, to assure them that that is not what this is. Peter cook in los angeles, just back date side from his interview with chuck hagel. Back, onlineme restaurant ordering service, grubhub goes public. Rising shares above the marketed range. We will talk with the ceo matt maloney. Grubhub is public. The Online Food Delivery Service Completed its ipo last night. This morning, shares are up almost 50 . The Company Raised 192 million, now valued at 3 billion. There was already plenty of excitement going into the offering, the shares priced above the targeted range at 26 apiece. We welcome the ceo, matt maloney from the floor of the new york stock exchange. Whenever a stock spikes like this, it makes everyone who bought it feel good, but you have to ask yourself, how did so much money left on the table . Do you have an answer . Days are sorading volatile. I think we did a good job of pricing the round as well as allocation. I am very happy with the outcome and i hope that it will settle into a very nice price. So you think it should trade below the high point . When it traded at 40, you thought it was too high . No, we did a good job of pricing it and it will settle next week. If you are comfortable pricing at 26 and broke at 40, why do you feel comfortable that 26 was the right price . Would be you, i calling my bankers and saying, i could have made a lot more dough. We drove tremendous excitement through the roadshow process. Im happy with the way it turned out. Given what we do last night and the market appetite, we did a good job of pricing and allocation and the market will settle out to where it needs to in the next week. Im confident in that. The reason we ask, 4 million of the shares priced last night came out of your treasury, and that raised 190 Million Dollars for your company. Or could have raised 150 Something Like that, if shares were closer to where they are now. Isone who bought in, yes, enjoying a nice pop, but is wondering, what might grubhub have done with that money . If you do not build fast enough to generate cash flow, you might need a secondary offering, which would raise more to invest. Perhaps we need to follow that up with a question, what will you do with the 100 million you just raised . Exactly, and that is the right question to ask. The reason we did the ipo is to get exposure to the company, to it communique that this is a massive market. Why wouldnt you want to price your deal at 35, at a time when investors cannot seem to make them percent returns . You just press a deal where they made 50 in 20 minutes. I understand what you are saying but by focusing on the innovation that we bring to the table and the powerful two sided network, we are showing how powerful this industry is. We are the clear leader and we are accelerating rapidly. The entire ipo process was not about raising the cash. That is wonderful to have, dry powder in the bank, but it is more about the closure and showing the world what a powerful and simple Business Model we have built. At yourpeople look company, you are right, you are the leader in what is now a young industry. They wanted to see who else might compete with you. You may not find another company starting a grubhub, but there are Like Services that deliver other things in other ways that could come in theory, compete with you. How much competition do you believe there is, if not today, two years from now . Dynamic a massive, industry with a lot of innovation. We are very aware of what is happening in the world. What we are benefiting from is this powerful two sided network. We have made it incredibly easy for diners to find their Favorite Local restaurant to their smartphone. Andcan download the app see. I can bet your favorite restaurants are on our platform already. Once you get that two sided network working and you have the diners using it on a weekly if not nightly basis, then that is where the competitive barriers come into place. When you gain the Critical Mass of restaurants and diners. We are the clear leader so far in this very nascent industry. Power, lastpricing year you had a billion dollars in food sales on which you generated some 140 Million Dollars in revenue. So your commission is about 14 . I know that is not perfect. What if there is more commission, how much Pricing Power do you lose . Do you see a future in which you will have to drop the commission in order to maintain market share . A wonderful thing about the pricing structure is it is set by the restaurants. We have created a dynamic marketplace. Our prices are 10 . We will process orders 10 acrosstheboard. Restaurant did a higher percentage of the commission in order to receive or exposure through our platforms. That is why the Commission Rates float on a by market basis, but you are right, there is an aggregate across the country, about 14 , which is a great place for the company to be in. Thanks for joining us this morning. A big day for your company. Ceo of grubhub, matt maloney. She became an icon by designing the wrap dress 40 years ago. Now Diane Van Furstenberg has designed a way to honor female fashion designers in other fields. Women across the world have come to known diane von furstenberg for her iconic wrap dress. Now she is making her mark outside of fashion by honoring and empowering extraordinary Women Leaders throughout the world. I am joined now by the most powerful woman in fashion, the one and only diane von furstenberg. When i think about this award, this is the fifth year you are honoring these women. When i think about what it is we should honor them and we do every year, but his is is awards, part of the women of the world conference, which i showed you yesterday. We honor these women who not only had the courage to survive whatever misery they were in, but the power to inspire and the leadership to help others. For women to become the successful, isnt about having created talent created talent, or creative is it more about drive . When i see these honor these women that we honored, i feel like i have done nothing. I feel so humbled by them. Hey do so much it is incredible how much they do. I feel like i could use whatever x success and exposure i have to put them on a platform and to help them financially and also to help them spread their word. What is your advice to them . Look at what youve done for 40 years. When they win this award, they look to you. What do you tell them . I tried to learn from them really. I do not need to tell them how to survive. My mother was a survivor. My mother survived the holocaust when she was 20 before i was born. Ofhink that i have the genes a survivor. That is also why i relate with these women. Women that we honor today one of them is a woman out of. Etroit she started to create in a sense she is a designer. She created a coat that doubles up as a sleeping bag for homeless women. Is that trying to say there is nothing small enough that you can do that can help people. I love the grassroots of it all. But it is not just those grassroots people that we honor. We are also honoring gloria steinem. She is 80 this year. She still looks hot and sexy and gracious and beautiful. We would not be where we are without gloria steinem. Keys whonoring alicia has done so much for children and aids. , onee honoring two women is israeli, another is palestinian, and they Work Together in israel. It is such a difficult task. , what are the keys to success is it being a fighter and a determined survivor, or is it being an artist . What matters is the truth. To believe in the truth. We are fighting for the truth. Being true to yourself. I think nothing gives you more courage than the truth. It is a very tricky thing because it is easy to be afraid of the truth. But at the end, if you fight for the truth, that gives you an energy and the power that, you lose everything in your life. You can lose your husband, your wealth, your help, but you never lose your character. What these women have is incredible character. It sounds to me that you are also talking about being true to your brand under which is something that you are known for. When someone walks down fifth avenue, they know that is a dvf dress. How have you had the conviction to stay true to your brand . I dont at all. A lot of times i lose myself. Now, this year, i am writing a book. Had the exhibition it is like i have gone through total therapy. Therefore, i know what you have to do is stick to what you are. The great thing about aging is that you have a past. If you look at your past and the body of your work and you are proud of it, you know you did something good. Have you changed something in the 40 years how are you different than when you began . Many things along the way. End, the little me in the mirror that i communicate with him and that has been the same forever. You are about to do a reality show. It is not a reality show. I am not doing a reality show. I am developing a series, a documented series, where people will be able to get inside the company and see all the things and where we are giving toortunity to young girls learn and also to push that one door that will make them may be a brand ambassador. Look at all the women you are helping. Did anyone help you like this . Well, my mother inspired me. Helped me when i showed her my first addresses dresses when nobody else understood. She said, this is genius, this is so democratic, revolutionary. We always help each other. Today, you are helping me because i can talk about these women. It is a chain of love. What i think is, i am inspired by women, and ive designed to inspire them. At all of these extraordinary, inspiring women, does it still make you sad that so few women are Running Companies . Even in the fashion industry, so many women designers but so few own their own businesses. Why is this . Butomen are very strong sometimes they are afraid to show their strength. Stay women, so sometimes we confuse both. I think there are so many women who are running so many we are making progress and then the pendulum goes back. We have to continue to inspire. We have to go to break. Diane von furstenberg, celebrating women in the world. Legs this is Market Makers with Erik Schatzker and stephanie ruhle. We will spend the next hour looking at whether twitter or facebook can boost profits, who is really turning clicks into green dollars . Epic fail. Of buddies have had plenty social media debacles. We will look at a recovery strategy. Or the onion . Sometimes it is hard to tell with the satirical newspaper. We will talk about creating viral content. I am Erik Schatzker. It is going to be a great hour. We will take care of business now. Here are the top stories from around the world. The march jobs report came in a tiny bit like. Employers added 192 thousand jobs last month, lower than a cost of lower than economist estimates. The Unemployment Rate held steady at 6. 7 . Of the worlds two largest cement makers are confirming they are in an advanced merger discussion. Thereo companies talking about a joint committee oft will have a market share 50,000 to 50. Of 50. Launching an exclusive lingerie line. They will roll out the connection next week. Would you say pizzazz . That is what they are looking for. I dont think Elle Mcpherson would be into that. We have a very special hour for you. We are looking at what Companies Really get out of the social media campaigns. It seems like all businesses big and small talk about is social. Um how many twitter followers and facebook fans they have. Do these clicks translate into dollars . It is a question we are going to be asking. Jab, jab, author of jab, which is about how companies can use social media to their advantage. This man is a Media Consultant who knows how to get the right message out. I wanted to start by talking fail. Because there is so much access to the outside, it seems like we see Companies Get really fired up here. Can i go on the record saying jcpenney i want to get on the record, it will not work. Jcpenney will not be around much longer. On the record. Thats their move . Thats one of their moves. Its clearly a move they decided to push for places like this to talk about. It is on the Upper Echelon of their moves and they are trying to rent equity from a depreciating asset. You know about retail . What you think jcpenney should do . Thank you. Equity is inand such a negative place that was they should be looking at is alternative delivery mechanisms. First they were going to put anything on sale, they bring the apple guru to come along and change it. They are in a dying business. Their brand has no equity. Renting it from celebrities is not going to fix that. When you are in the position you basically have to destruct yourself at a very high level. Of every single retail situation they are in. If you are a store trend find your way out and because of , hees like bloomberg doesnt necessarily have any experience selling clothes. I think these are the types of conversations that happen in highlevel messaging sessions. Yet figure out what image you are going to put out there to your core consumers. We were talking about sales. People is an example of who have taken their finger off the polls of their poor consumer. Their core consumer. People are just dumb. They care if people stop buying movie tickets. It is a nice position to be in. But you dont get to be a celebrity, you are a starving artist unless people buy. Gary b did go into his dad Liquor Store Business with 3 in 1996per year and decided to sell that on this internet thing that people did not think was going to happen, and went up from three to 60 million. What an jcpenney amazon is going to do to them, you hit your crescendo. She understood. Jcpenney had their moments. The Market Conditions changed. You become a fat cat. Youre happy and content. She is not. The term is very obvious. This is the same old game. Few individuals and organizations involved. You talk about highlevel messaging discussions. Of at the end of the date the delivery has to be a low level topic. I dont think theres the same amount that goes into what to your followers. As what would happen if a company had their guest on your show, there is a session where planning on what is going on. It is very spontaneous and potentially careless what you put out through twitter. It is not the same kind of planning execution. If i am the you if i am the New York Times i have standards. I cannot tweet out a picture of kate upton wearing a begin bikini but buzz feed can. Balance the fact with these outliers i can do anything . Its a dial you have to gradually turn. I dont think this is something you are going to change overnight. He said consumers just care about clicks. Companies care about clicks. I just wanted to follow. If Companies Just care about clicks, what happens when you are an established company . We would be arguing if hiphop is quality to that loyalty enough to be music in 1990s. What markets change a have a decision. You can stay you make a good but the discussion in 1989 is we would not have known if hiphop was here to stay. This isave to decide if a trend i want to ride or if im going to make an investment in something that ends up eating a joke. Is it a race to the bottom . , when we look at these fails it is the same kind of problem that exists when clients worry about the quote being taken out of context. It is a narrow thing that is tweeted out. You dont see the context before and after. Did went out over the air not create a stir when he did it on the show. Taking out of context, then it becomes a problem. This is where i want to jump in, so what becomes a argument i have. Bp poured all of their oil in the gulf. Tylenol twice with their pills. Calls with fortune 500 companies are doing a random tweet. Move that puts you out of business unless it is the highest level of murder. What you are doing is getting an argument to pay no attention to twitter whatsoever. I would argue that people arent paying attention as much as people think. Everybody is mad at facebook for their algorithm change. Im saying could, i would rather let people have let people consume. This is about to go to a television cusp television commercial. The people Pay Attention to that ad . They are looking at their phones and fast forwarding. Real attention issues in the marketplace. Him us you are an advertiser, everyone is paying attention. Are companies that decided we are going to delegate our social media execution to the youngest people in the world youngest people in the room. This disconnect between the decisionmakers who dont understand social media and these young people who may not understand it. Our social media, this we haveyour 22 all these old white fat ceos. It doesnt feel like great business. At 22yearold just doesnt have the experience or we are talking about defense. Where i get frustrated is the offense. Nobody is on the offense putting out the kind of con putting up a kind of content people want. Would disagree and say it is not a matter of nobody trying. There are two percent of brands at this level that are doing it right. They are coming on today. Thank you so much for joining. He is the author of pitch perfect. Coming up, building your brand through social media. We are going to continue the conversation. We are going to be speaking with the head of the satire newspaper, the onion. We want to bring you our headline quiz right here. Which one is real and which one is from the onion . We will be back in just a few. Youre watching bloomberg tv. We have some breaking news. The 70s dan loeb fight continues. All its ago them loebs website, he has come out with an official letter, getting aggressive. I want to show a quick excerpt. This has been going on for weeks. This letter, we need to put into context, is a response to a statement made yesterday in which the company, and a letter to shareholders, said that dan b was called into question his ability to work constructively as a director. It says he adds no relevant schools, experience, or expertise. Download obviously feel them loeb dan loeb feels differently about this. The money theyre spending is going to the wrong place, the mightthat it employs otherwise go to christies and is all wrong. If they are saying we lost our mojo. Consequencesknown of government and malfunctioning board processes. We have heard from other wellknown guys, who dan loeb has a ton of respect for. The art market is massively overvalued. If you seen any of these auctions, it is blowing peoples mines. Dan is saying no way. With the explosion of boomer wealth, there are more and more new people in the highend art market. People are going to sit all day long look how expensive it is. There is only so much out there. We are going to need another response. We are actively trying to get it. The mud fight continues. The investors aint shy. Lets go back to our social media hour. Real and whichis one is from the onion . Gary is still with us. You are a man who understands humor. What is your cassie echo american airlines. American airlines is fake . Real. No. I was just kind of play along. You would die. That was easy in the scheme of the onion game. I got it wrong. Did you really . There you go. We want to continue our social media conversation. I want to bring in another superstar. That the ceo of a startup helps celebrities, fans, and all sorts of people billed stardom through social media. Some of his clients include walk including Mark Wahlberg and hugh jackman. We want to take a look at the role of celebrities in social media. You talk a lot about the importance of influences. Define what that means. Of the role of celebrities is really changing. When we first started the audience, it was really somebody who existed in traditional media and was now starting to embark upon telling our story inside social systems. Three years later, what we are is ay seeing is there whole crop of people that natively grew up inside of facebook and tumbler and twitter. Of a whole new class of artists that we call an influencer. These people have incredible hash, whether it is who 1. 3 million followers on instagram or nash with 6. 5 million on vine or josh peck on a new era of people that can talk directly to , can influence decisions, can support brands and products among whether they are entertainment or consumer goods, and have a tremendous amount of reach and power inside the social media ecosystem. Her just talked about the importance of growing up natively on a platform like tumbler or twitter. Do you agree . I am a product of it. That means that this can only be acquired genetically. It cant be learned environmental he. , you are sol . Old i think old is a default people go to. It is old in behavior and understanding and actions. It is not old in your age. In 2006, autube bunch of the early starts were in their 40s. People dont remember this, there were several people that were popping. We are living in a world where exposure is fragmented. The year ago i started an agency only to represent divine celebrities. These people have enormous reach and theres a big difference. I would love to hear what other has to say. Traditionalg with celebrities, ones that have done commercials and other things in the past. There is a little bit of an equity loss for these fresh faces are having an upside. It is really an interesting dynamic. Star . Killed the radio vine killed the television star. These dynamics are in play. I agree completely with what you are saying. You absolutely are an influencer in the side inside of the world we live in. Behind thee are number one movie in the world, the number one business book in the world, the number one dance song in the world. And the number one viral ad in the world. The common denominator among all of those phenomenon is that influencers played an enormous role in pushing out and connecting the dots the between great content you talk a lot about great storytelling. Great storytelling only goes so far. They have to be aware of it. Thats right. You need a good group of people. There is that. There is paid tactics, smart paid advertisement, a lot of ways to light the match. Influencers will always be a part of that process. Something that came to mind was measurement. You say you are behind all of these number one things. I judge number one by how much money it makes. When we are talking about number one, how is that measured by tweets how is that measured . By tweets, by followers . Starts with the concept of how many people did it reach, who are those people, are they the right people . All of these platforms now have a tremendous amount of back end data. To be number one, it means you are selling something. It is extraordinarily easy to quantify it. Selfie is on its way to be a platinum single. Now the no debating power of these. We are looking at this selfie video. T does it take to go from selfies are amazing but when i look at it it makes me think if this is a one hit wonder. How do you take these flashes of fantastic and make them sustainable . These artists that we are working with our extraordinarily talented. Manyere are not that people that get this amount of attention. When one hit wonders happen in the real world you didnt know in insync wasnt going to be a onehit wonder. Oliver is right. We should not the held to different standards in digital and social that we dont do in original. It is a lot easier with all of her and i with the data we get to measure the actual results then getting an ad him bloombergs magazine or tv show. Goditional media does not back to a sale as easy as digital does. We accepted the math by companies that drive this reporting. The new stuff is very quantifiable. Those videos could have a call to action at the end of the day. Theres not a single place where we have a place to do a direct sales attribution. Do Companies Understand this order do they hire the likes of you and gary out of fear . I dont think it is out of fear. We are going on to her together. I think what happens is that stomata is that smart ceos are realizing that a big tidal wave has just washed through. There are a lot of pieces that we have to put together. If the ceo understands they need to be a publisher, look at some of the work we are doing. Behrendt,old consumer and we have introduced influencers into it. We are seeing a uptick in interaction and 600,000 new women new women going to the store in the last three months online. We are converting them into an instagram business, we have these amazing influencers. We are seeing cannibal result from Companies Like ford and others. Hang on because we are going to take a quick commercial break. A little more from the headline quiz. We will talk with the president of the onion in just a moment. Vladimir putin wants all russians to be tough like stephen siegel. I love that one. We will have more. This is Market Makers with Erik Schatzker and stephanie ruhle. Welcome back. What are we going to do . We are going to talk about those headlines. I got the last one wrong. Gary got it right. Lets try for number two. Gary, you nailed it. Putin really brought siddall in. He is in that outer space mind place. That is a real headline. Its a really awesome headline. You cant make that up. I love the onion. The ceo will be here in a few short minutes. You have beennt waiting for, when we talk about the real meat of this conversation. How did a company turn twitter followers into real cash . As their ev. Oliver is still with us. He is in los angeles today. We added jeff jarvis to the conversation. He is a blogger and a professor of entrepreneurial journalism thank you for joining us. Legend. We got ahead of ourselves. Gary introduced the subject of return on investment. My big . When it comes to social media, all of her and gary leave you can monetize this. The dollars are there. Through all the jargon this is about relationships with people, customers. That is where the value is. You have new ways to talk to your customers and the customers are truly in charge. If you have a decent product or service, that is how you fight your roi in this. Are companies forced to deal too much with crazy customers . Customers can send hate letters him a saying my boots werent exactly round. Companies can fit that in a back corner. Entire teams of people are responding to my crazy aunt edna. That the my fault stock went down 50 . About me being an influencer at all. It is about me getting a message at the time. We really had to learn how to talk to the customers. That is valuable. Noninfluencers work. Here is the real point. The real point of this matter is quite simple. Here insane to me, sitting in 2014, and having a conversation of the social media when it has complete attribution digitally to the sale. I really want to get serious. We are serious. How are we having this conversation . There is black and white math. Our Companies Smart enough to ask for the sale in these channels and then see what the conversion is . We have to move the customer up the design chain. They can have a far more influence in deciding how the products work. You are lucky because you get to live in l. A. That she wanty in to weigh in . I couldnt agree more with what gary was saying about the idea that we are even questioning the importance of social media and the direct connection between a brand and their audience. To see is itrting opens up a whole new world of transparency. You are starting to touch into the idea that the consumer becomes the product designer. What we are seeing is we have to be curators in our company of the brands and products that we work with to get behind because we know how transparent this medium makes the good the bad and the ugly. Would you fire a bad company . Absolutely. Its insane the clients are not willing to take it be it because wetake know it is going to be talked about. Lets call it what it is. We are keeping it very real, we are in a lucky situation where we have an enormous deal flow. The cause we are in the luxury spots we are choosing the brands that does more transparent stuff. I would take anyone if my business was struggling. Public relations needs to represent the public through the company. Complete told the customer to go below, then you should fire them. There is a great example here. Im going to jump in. I have been working a lot with the people at ford motor company. You look at the strides they have made in improving their product and really focusing on and the ecology around automobiles. There was this amazing piece of content that was made. I personally got behind this and pushed it out to an influencer network. It now has one million vote one million views on it. A brand can talk directly to the consumer with a positive message that changes the concept of what it means to be a car owner. Who is watching this right now, every human being and every business they represent is now a Media Company. The cost of entry to be a Media Training Media Company is so low. Are a company trying to make money, you have two ways of doing it. You can generate more revenue or cut costs or do a combination, which is what most companies try to do. What youre making the case for is having a presence on social media gets people excited and generates more revenue. I want to focus on the cost side of it. Did a little homework to establish whether having a presence, measured by followers there are other ways. You are dead on arrival . Box that jeff weigh in. Mcdonalds,e delta delta, mcdonalds, or jcpenney, having more followers is meaningless. It is a measurement of how many people are watching us right now. They dont know how many people are watching us right now. Watching doesnt matter much. Pardon me for going beyond revenues. We have to get past the old media metrix. The mass media metrix of unique users, page views, that is about who is watching my stuff. To help with that. Who is talking to the people out there . What are they saying, what are they carrying about . What are the outcomes in life . The reason that was an interesting moment was because you were bringing up the conversation that 98 of people are having. Its just the wrong metric. What is the right metric . Engagement. Conversion, how you get there comes from relevant relationships. , i use ways example new jerseyugh than traffic. Google knows where i live and work. Here is bloomberg media. I said what is the one data point to give people more relevance to an individual consumer . The answer was what industry are they in . Couldntew that you increase the relevant value. Advertising,tter youll have them come back more often. They will market you for less money. Lets let all of her way in. I think it is amazing that we have no privacy left. Nobody cares about privacy. I want to know where the nearest pizza is. The great thing about barring the idea of privacy, the great thing about the systems is people are willing to share the context of their lives. They are willing to share that they just got engaged. Not willing. You are right. They are no default in into thinking that is what they are supposed to do. It is like talking about my malfunction for the world to hear. I might admire you for that. I might get naked on this show right now. Right now youre glad to be in los angeles. If youre willing to share these intimate details i love it. It i got information, i inspired other men to get tested. And i got only value back. Why would this be a horrible thing . This question is on the other end, why do they care . Light we see statistics on User Engagement dropping off . It appears what happened just one minute. What is happening is that these five forms are all in motion. The consistent thing is you have users and great content. As people migrate from myspace to facebook to instagram to tumbler, to twitter, the one that is consistent is we are more information about the consumer. We want to share our lives. We are living in public. Is ifat allows us to do we rise above the platforms themselves and become content with brandsd work to become publishers inside of the systems, that is how you win at all of this. The data i think it is not just content, that is merely a tool. Of other relationships. Who do you know, what do you know . Oliver is right. You were talking about the insights that drive to the content. Up settingthem them up. Its a set up to that motion. I am going to start plugging here. Its not my fault. You have to hang on for second, i have to take the opportunity to thank jeff. Always great to talk to you. The founder of lome comeback we are going to be speaking to the president of the onion. Heres another headline quiz. Is this real or from the onion . We will have more women come back. You are watching Market Makers on bloomberg television. We have the ceo of the onion i want to say again that he is really funny. Headlines back. Which is real, which is the onion . Gary has nailed every single one. Your up again. Is theink ponzicoin onion. The dvr seems like the onion to me. Producers . No answer. Twitter is the perfect distribution outlet for us. You are from wisconsin. He went to school in minnesota, youre the ultimate area guide. Seriously, running a company like the onion, do you have to be funny . You obviously have to appreciate its like a is basketball coach, do you have to have been aced our player like tol jackson do you have have been a star player like phil jackson . You justk the goal is dont want to be funny does you have all these talented people that are amazing, working on content. The last thing you want to do is make a joke. I talked about how tough the how toughow the the writers room is. I think it is an advantage to be it makes it so much easier to run the business. I have a good question. You are very cute. Thank you. In the world that we are seeing with native advertising, the movements of the buzz feeds are you excited from a business it has created a new revenue stream that could conceivably be in your wheelhouse. Talk to the viewers about that. The native advertising movement that has happened over the last five or , they have done a great job with what they do. Division and it we launched a division called onion labs. It content for brands and applies that same writing process. It creates content for advertisers that the audience actually wants. Thingsthe really key theponsored content messaging is that you really have to create content in the same way you have to create the rest of your content. Otherwise the advertising doesnt work. Can make a labs video, can make some native content that is as funny as the stuff you put out on your website am a white why do a website at all . Everything is about entertaining an audience. Every piece of content you create is about advertising. Issome point the audience not going to feel the genuine approach to what you are doing. It is having the right mix of native content in the rest of your content. Before we go, what is your favorite headline . I think the first one that i with was Secondhand Smoke secondhand coolness. We have minutes for our final thought. I want to ask the question adjusted, we talked earlier about the New York Times and we talked about the most cutting edge happening in social media. What is an old friend . What does the New York Times need to do when it comes to the new world of social media . Does the new york team that New York Times need to be more like bus more like buzz feed . He have to go all in on your dna. Your tactics need to be somewhat modern. Whether it is a Media Company or brand or individual, you never want to be a Creepy College kid that comes back to the High School Party to hit on the checks. On the chicks. To the onset that you never want to be that guy. There is a way to do it to leverage what you have. It is understanding where to be. Itss slang marketing at finest. You can do anything as long as it is still you. Creeps win. They just went all in on their creepiness. This is a problem i have with some of the celebrities. When a nice guy tries to act like a creep you can smell it from a mile away. I love creeps and ups drivers. What an awesome show we just had. We decongestant social media. A great way to end the week. You know him as gary v. Is that it is 56 past the hour. Have a great weekend. Remind we are going to you have a lot more good stuff, including on the markets. Have a great weekend. We are diving straight into derivatives. It is time for todays options inside. Risk officer of capital funds. The jobs report showed a smaller than expected gains in jobs in march. The data overall look risk friendly. U. S. Stocks are now falling, erasing earlier gains after climbing to a high. What is the Market Insight youre getting . There is no wrong answer for economic data. Just levitated throughout all of this. If you look at all the weekly options, Something Interesting is happening. Richer anding a bit call prices are going higher create a i think the trade has been by the futures, buy stocks. If you look up further than that, it is actually the other way around. I think the Options Markets are still thinking there is going to be a correction in the nearterm. I myself in being cautious. Lets move on to individual companies. Bearisheeing some option activity in united technologies. What is behind that . Is a hugetechnologies conglomerate. Everything from jet engines to helicopters and elevators. You txo as earnings on the 22nd of april. Utx has earnings on the 22nd of april. From my analysis it looks like beenlike someone has buying the spread for insurance. Of bearish action. I wouldnt read too deep into it. On the other side i know you were a bull on google. What is your trade on that stock . Makes it a little but more affordable. Everything is relative to investors. I think the stock continues to fire off also lenders. They are showing some issues. We talked about some risks. Spread was 525 put Something Interesting to look at. It get a 25 return on your risk. Sorry have to leave it right there. He are on the markets once again in 30 minutes. Lunch money with adam johnson is next. Welcome to lunch money im adam johnson. Initiative that exclusive interview with the secretary. Americas Brian Monahan gets a title not usually associated with the thinking that a banking head. Finally, the final four