Moment hasnt come. Twowe can rethink the past this future and why he did not take the ceo at microsoft, samuel paul masato. We are looking at a huge increase in shares of mankind, a pharmaceutical maker. It doesnt actually have any drugs on the market. The first could be its in held insulin diabetes treatment. It will get fda approval but it has an important step and shares are just about doubling in one day. Another big game today is for intuitive surgical. Shares were up even more yesterday when he did get fda approval for its da vinci surgical robot. Upgraded shares of intuitive. Privateducation, the forprofit Education Company coming out with earnings that beat estimates. But at the same time disclosing a subpoena from the department of education looking for records all the way back to 2007. A lot of these forprofit Education Companies have come under fire from congress. Lets get to our big story. It is the battle for your living room. Amazon is launching its new streaming device, the third tech giant with an internetconnected to gadget for streaming videos. You have Companies Like apple and google who have gone into the hardware space. Creating a device in an already saturated market. Why get into the hardware business right now . They want to get more software out. This is a company that was the leading provider, the seller of dvds, and that has gone in favor of streaming. Services nowhere as near as netflix, but the impediment is just getting the stuff to the tv. With this device, it puts their or evenont and center on the tivo box or comcast boxes. While they might offer something from amazon, it is hard to find. I think it will give them an advantage. They already have a lot of the media content. It is not just about movies and tv shows and music. They are adding a gaming site as well. This is an attack on the electronic arts. Actually making this taking smartphonelike games and bringing those lower prices and high quality games to the living room. Instead of 60, you will get highquality gains in the two dollar price range. Where amazon is going to take every part of the living room, not just tv and tv shows with original content, but games, music, and there is a cloud feature where they want to give you access to your photos or anything stored in the cloud on a 1. 99 device. They succeed when so many others are trying to do exactly the same thing . Nobody else is offering all of these things together right now. I think that is what amazons that is. Rochus has a lot of channels roku has a lot of channels. But nobody is putting together this many pieces. People are spending enough as it is on the cable platform and on content. Whether you have a two dollar a month cable bill or in a dollar 99 netflix bill or hulu, are people really going to absorb one more bill . It is a fair point, one worth thinking about. I think that is part of the context here. Haven recognizes that you comcast and they deal with netflix to make the netflix signal arrive to your tv faster with competing Services Like amazon. Amazon is tried to go around the cable arbeiter, particularly around comcast and time warner who are for now separate companies and may not be in the future. Ablen, with this box, is to go around those providers to really put their content from an center. But you need to have the content. Let me just jump in and point out you need to have the content. It is fine that you are going to go around, but people need to want to watch it. They thought alpha house would be a big success but it pretty much failed. That is one of the few shows i can think of that amazon has done. How do they get their house of cardstype . They will have to find something pretty sharp to compete with house of cards. But that is what is critical here. Amazon isnt just trying to be a distribution platform. They are actually creating content. They will create their own shows, their own games. There were at least 12 games shown today that did not exist. Amazon, for a couple of years, has been working quietly on its own video games. Amazon is not just a set top box provider but an original content provider which is an incredibly powerful change for the Business Model. Amazon Sells Everything that we might want. So if they capture us in our living room onestop shopping. Yeah, if you like something that is being worn by a particular character these subscriptions go handinhand with their most frequent customers, the customers who get it in day delivery. You get second day delivery. This company spend nearly 5 billion last year. That is that use expenditure. That does not include the catholics for longterm projects. That does not include the cafx for longterm projects. Worried . Netflix be absolutely. This is a shot against apple tv, against roku, but definitely against netflix. But netflix will be on this fire tv, so is apple tv and youtube. Will serve out that content but also offer our own original programming and the debt will be over time will has the best content and basically who has everything in one place. Right now, amazon is the only guy who is try to provide everything. Does this mean netflix will come forward with some kind of device of its own . It is the only player out there that is not offering the hardware. They have not gotten a lot of credit for making partnerships with the tivo of the world and apple tv of the war than the cable providers to make sure that there is a netflix option on their hardware. There are three approaches. There is the game console, the and then youve got the smart tv itself, which is samsung and lg and sony as well. It will be interesting which of those approaches works the best. Commodity of the set itself stays a commodity or if you want to have it all rolled up into one or if you want to have a very robust game console and get the eas developing for you. This surprise announcement is the gaming side. There was a kick starter project to try to do this. They tried to bring smartphone game strictly to the television. It has not been that successful. There is a Company Called steam that allows you stream to your pc. I think they are grabbing some of these newer Business Models and deliver in a very powerful manner. That is something no one else is doing. Globally, games billions of global downloads and nobody elses really try to bring that into the living room in a meaningful way. Doingtoday, amazon is that and that could be the surprise piece of this announcement. Coming up next, Christine Lagarde says the Global Economy is too weak for comfort. She seems to have also coined a new phrase. I will be speaking with the former chairman and ceo of ibm about the future of business and why every corporation needs to consider a fresher porch a fresh approach to global computing. Christine lagarde this morning said that the economic recovery is too weak for comfort , what she calls lowflation particularly in the euro area. European weakness means that it may be the right time to get in. Anastasiad with amoroso. Wflation, is this a new word for stagflation . It continues to be an issue for the European Central bank. But i am not sure that Interest Rates are there option number one because i dont think low rates is the number one problem. We had low rates and did it result in any kind of inflation . No. Janet yellen would be thrilled to see a little bit of inflation in the sea economy. Are they in a potentially similar situation . They are in a similar situation in some respects because they are going through this deleveraging period. So they have this low inflation and low Economic Growth. In that case, it is similar. But what is different is that they really have to get the problem of fragmentation solved. They have to make sure that the rates are not only low in germany but also low, the lending rates and the deposit rates are low in the peripheral eurozone. In the United States, we dont have that issue, but they do have to address that in europe. This gets back to the central issue that is plaguing the entire region. How do you have a system where you dont have one political and one monetary unit all functioning together . I think that is what they are trying to figure out right now. Rome wasnt built in a day so this takes time, two. They are in the early innings of building the european institutions necessary to have one banking system, necessary to having a banking union. Is in european equities and european highyield bonds because this is likely a multiyear and multistage recovery process. Did they get the repair or correct, which i think they are getting correct, then you have this rampup in european equities. So you are going are you advising people to buy now . Dips think deftly by the in european equities. We have the rally already on the books. But this multiyear rampup period, any opportunity and i think there is this pullback i absolutely think there are opportunities. Thank you very much. Move over, siri. Microsoft has just unveiled its own digital assistant. We will find out what else satya has upt else his sleeve. Mr. Palmisano has done anything but slow down since ibm. He started the center for global enterprises. It is all detailed in his brandnew book rethink, a path to the future. He also served as a security advisor. He is joining me here right now. Congratulations on the new book. A lot of what you are talking about here is the globalization of business and the world. You explain how corporations can take advantage of that. Give us some examples. Basically, if you look at the factors that are driving the change of a multitude of things, one is the fact that more and more of the emerging countries are now engaged in the Global Economy. Their governments are more stable. They are more oriented to Global Economics and they have moved in. . Examples like china. You have a population that is educated in these geographies that are entering the middle class and you have a technology shift. When these three factors converge, governments opening up, engaging in the economic thed, complying with wtotypes of characteristics, that created an opportunity for economic expansion and growth for the company and access to great sets of skills. Dontother words, you have to rely on if you are in texas, instead of all your workers being in texas, you can have workers anywhere in the world so long as they can do the job because of the advantages in technology. Thats right. Iji is really a concept gig is really a concept. Entity, you have access to talent pools and natural resources. You have access to capital anywhere in the world where it makes sense. What does this mean for a company, a pretty goodsized company that is taking advantage of these . Mid to Large Companies that would be looking at this, one is growth and expansion. When i was at ibm from about 2004 through 2011, those countries were [indiscernible] so tremendous growth opportunities. The other thing it represents is access to great talent. They have great Technical Skills and talent that you can have access to that can help you innovate, provide services, do all sorts of things that are now available to you in this globalized world. As you do these things beyond growth, which i referred to as something in the book, you create a scale that drives tremendous productivity, therefore competitiveness. Let me play devils advocate. Where does face time and genuine oneonone interaction how does that fit into this plan if people are scattered all over the world . That may make sense from a talent perspective, but does it ultimately work if people dont get a chance to see each other . Basically, think about it for a second, there are always good to be human interaction. There is a lot of study going around what is global and what is local. You will never have a substitute for people on the ground establishing relationships, selling and serving to customers or clients, wherever they happen to be. I used to always say our address is not planet earth, milky way galaxy. I dont sell to planet earth. You sell to a company or a country or seoul, korea or beijing, china. That will always occur. At the same time, innovation and development, collaboration goes on all over the world. But small teams interact not always facetoface but often times in a facetoface environment. The reason for that is because you need to build trust. Trust skills within the corporation itself am a they depend on each other. If you are going to create this global model that provides Accounting Services or Technical Services for your entire entity, if a bloomberg llp were to do that, you need to trust each other. If you are a Company Operating now country, ibm which is operating in china or india, you have to be trusted. The only way you will be trusted is through government interaction. Trust is very important in todays world. There are so many concerns about the u. S. Economy and the u. S. Worker and the American Dream ostensibly, the chance for one generation to do better than the other. A lot of people pointed to globalization. It is this kind of outsourcing a very Technical Skills, not just manufacturing, but as it moves up the food change, it is really threatening this a standard of living for all americans. My view is that you need to engage the world. If you would retrench think about it from the u. S. Perspective. I can make the argument from the asia perspective and i will take the u. S. Perspective. The Economic Growth in the United States is not enough to sustain standard of living improvement. That is a fact. The only way you will get the Economic Growth is you have to engage the Global Economy. You have to export. You have to sell. You have to service. Any company can be successful in that environment. Why cant we just live in our borders . That will lead to a standard of living destruction. Piehave to expand the because, for whatever sets of reasons, economic expansion population growth, Public Public public policy, what have you, there is not that level of growth. So you have to expand. Do not go anywhere. I am coming up against a hard break so we will take a quick commercial. We are talking about the most Important Company you may not have heard of. Connecting those who want to buy ads with the companies who are selling the space. On the new debuted York Stock Exchange today opening at 17. 50 a share, two dollars over its share price. Handles 450 Million Dollars in media buying and 1. 2 billion in Online Advertising just for last year. Right now, we are joined by its dante. R frank a we also have Sam Palmisano still with us. Congrats on the ipo. Why did you decide to go public now . That is a good question. We are on a long journey. This is a giant market. It is a 100 billion market and growing. I have been at this for seven years. We have not raised capital in the past three years. We have been operating on our own cash for the past three years. We see an opportunity where this is top of mind for people in the industry and we want to accelerate this vision. It speaks in some ways to this globalization issue that i was just talking about with sam. Productivity is so important right now. You look at how it can even affect the advertising space. Is this the future where you can cut out the middleman and say, ok, i want to put in an x y and z criteria and reach this particular demo and software that can effectively get you that . If you think about technology, it is basically the ultimate democratization of business process. It structures a complete how do you see the future playing out . Market entry strategy was to start with digital. But ultimately television as well as even visual billboards someday. Why is this such an opportunity . Do you see inefficiencies in the Current System . Absolutely. There is an effective 60 tax in only 40 makes its way to the seller. Taxes coming from a lot of manual effort and manual work going into these transactions. How do you see the role of big data as you look into a new Business Model . Threeare processing trillion transactions on a monthly basis. Our system interacts with 97 of the u. S. Internet population. No other company in the world reaches more people. That is three pellet 3 trillion pieces of data. Pricing, makeze other matches between buyers and sellers, which makes the overall market of advertising even more efficient. Congratulations. It is a wonderful Business Model. Is thathe frustrations you cant really measure it is hard to measure the effectiveness of your ad campaign. It is easier online. You can give us the data and provide the metric that for these corporations and the target audience, etc. , etc. You almost think that some of this online media would be more precious, more expensive than traditional in terms of advertising because you have the ability to target a target exactly who you want. Is it going to change, frank . Are prices going to go up . I think that is changing. In digital media, you have the ability to purchase an individual impression on an individual user which is far more effective than traditional media for you put out a big yet in the middle of time squaring you have no idea what the effectiveness is. Its nice to measure it. Coming up, move over, siri. There is a new digital assistant in town. U. S. Multinational companies are storing cash overseas. Discuss howo will best to overall our nations tax code. Microsoft held its annual Developers Conference today. Cory johnson is here today to explain. Also here with me as our guest Sam Palmisano. Lets talk about nadellas announcement, the second in two weeks. In San Francisco no less. Last we