It makes you wonder what happened. She did know what she was getting. Yahoo has been down year overyear. Their share of the market is projected to be down to five percent from 5. 8 . Meanwhile, Companies Like google and facebook have seen their shares increase. Dearly, something wasnt clicking. I give her points for calling it like she sees it. Sometimes you see reorganization. Admittingdit, she is it was the wrong decision and moving on. What might be to her demerit is what he is walking away with. Job, 109 on the Million Dollars. He is making 109 Million Dollars for 14 months on the job. This includes what they paid him to leave google, severance from yahoo , his valerie, bonus. Is hisough he salary, bonus. Maybe yahoo sales arent looking good because they are paying people to much. It is clear Marissa Mayers big money. Ome she is focused on talent has been one of her top priorities. Should be. In order to attract these people, they have been paying them a lot of money. It makes you wonder if thats the way to do it. Where is the board on all this. Ithave seen a little bit of with tim armstrong. . Here are they here it is a question that remains to be answered. Somee is doing reorganization. Some of the ceo responsibilities are going to go to mike kearns. New peopleome reporting directly to her. There is no question there is good energy. The esprit de corps seems very this makemoves like you wonder. Are they moving quickly but not necessarily intelligently. We have someone who might know about this. The former microsoft ceo. Went wrong . Think is this a personality thing, or do the numbers just not look good . I think there is a realization that things are not that rosy in regards to the business. If you look at the display revenue being down, 31 of their revenue comes from microsoft supplying the search engine. Most of their value is in alibaba stock. A company that is frankly in a lot of trouble. They are really struggling. The issue is the core model. Dated company, and they havent resurrected it. Is part of the question, it is not clear what yahoo is . It is the collection of things rather than one mission. If you go to their finance site, it is eason. If you go to the sports site, it is fine. There are many alternatives. How do you think this reflects on Marissa Mayer . She has made attracting tough talent a big part of her focus. How does this reflect on Marissa Mayer . Higher topd to notch people, but we are waiting for them to put a Business Model on the table that creates real excitement for yahoo . The buck stops with her. Person may make everyone feel better in terms of isating energy, but the fact where is the new Business Model . Where is the sizzle that is going to make it more exciting . Lets move the focus more broadly to the valley in general. Do you feel like there is 109 million for 14 months of not good work is this indicative of a race for talent that has gotten out of hand . People are throwing around money and it needs to come back down to earth a little bit . I could not agree more. I kind of trick is something that you wouldve expected on wall street. Not out of Silicon Valley. What you usually count on them doing is coming up with some ingenious idea from surprising people. It is not hiring allstars. It is the person who suddenly stumbles on something. There is a culture that enables that idea to grow and achieve some notoriety. It is a sad tale for yahoo . You said that this is not what Silicon Valley is about. It sounds like professional sports, where you wind up with a player on your roster. More like an allan houston, james dolan situation. You are stuck with this big pile of money. It seems like this cannot continue. Absolutely right. This is not the way to do it. We need some ingenious thinking. I do not think you will hire allstars, so to speak. You get good, talented people. They need to find some magic here. Move to the next level in terms of what they offer the public area baseball needs to have some changes too. What about the acquisition spree . Marissa mayer has been buying these companies. Is that the right way to go . A lot of these companies are defined, not doing well. This is about bringing in new blood and new talent. To tell you the truth, if you look across the acquisitions that go on in the industry, acquisitions are tough. Rarely do they really represent the powerhouse behind the engine, so to speak. That will drive you to the next level. Some of these are solid. They are good acquisitions in some cases. In others, you scratch your head. Usually, the batting average is not that high. All right. Bob herbold, we will talk with you more after the break. We will talk about microsoft and their ceo search. A new candidate we will tell you more about him coming up. Welcome back. I am emily chang. Im here with sam grobart. Were talking about the search for a ceo at microsoft. A new candidate has been put into the mix. That is the ceo of ericsson and company, based in sweden. I went to bring in at our senior west coast correspondent. Jon erlichman, what can you tell us . When people read this story and saw Hans Vestberg, who is that . What is going on with the ceo search . On paper, this actually makes some sense. They operate in a ton of different countries. This is a company that deals with consumer side and business side. Microsoft is doing that as well. They have a history of telecommunications and mobile. Microsoft is trying to think about mobile. Those are a few of the reasons. And he plays handball. The thing is, he has been in ericsson for so many years. He has been around the world and worked in different departments. What makes him qualified to run microsoft . The company has a lot of work to do. He has worked in every part of ericsson except r d. That is a huge company. I want to bring in bob herbold, the former coo of microsoft. You have been watching this from afar. What do you think of Hans Vestberg and the other candidates that have been thrown out there . To be clear, emily and sam, it has been a while since i have been a microsoft. It was the 1990s when i operated there is the coo. It is a company that i follow closely. It is a Great Company and has a bunch of powerful franchises that some struggle. Others have been towers of strength for some decades. This job is tough. Im glad the board is taking their time. It is terrific that theyre coming up with candidates that are a bit different. Vestberg represents that kind of candidate. Who knows. Who knows where it will take us from here. They are doing their job and taking their time. Hopefully they end up with a great candidate to run a Great Company. We have been doing a bit more research on Hans Vestberg. We actually found some video of him speaking about him on the ericsson website. We want to learn a bit more about him. I think that motivation is what drives me. The motivation to be in a Company Working in the industry with employees and customers. That is driving me. You know a bit more about hans. What is interesting about Hans Vestberg is that he has been at ericsson were quite some time. He has presided over a time in their history where they have moved away from consumer products. They used to have a partnership with sony to build smart phones and cell phones. That has been unwound. I am just curious about your thoughts jon, feel free to jump in. Microsoft is at a crossroads with its consumer business and the enterprises. What does the consideration of someone like vestberg mean for those tensions in the company . That is an important point. People often do not realize, but the real engine for microsoft is the industrial side. Their relationships with large and mediumsized organizations, providing the kinds of tools that they have for decades. That is the heart of the business. It is one that must be protected. Microsoft has a good top of that. There are consumer activities that could help. They are powerful forces. They need to manage both very well. If you take another company the blackberry, i think that they forgot about the fact that the industrial part was the heart and soul of their business. They tried to act a bit too much like a consumer product. They did not do a good job of managing the two sides of the street, so to speak. Both sides are very important for microsoft. Do not forget the industrial side. I want to bring you back into this. There are a lot of other candidates out there. Tell us about the status of the search more broadly. The board member who is running said they want to make a decision and the early part of this year. What progress have they made toward truly narrowing it down . To answer that question, i would say that one of the Biggest Challenges they have faced in this search we have a list with a lot of people. They have reached out to some big names, if you will. Steve ballmer laid out the strategy. He did it in the head and organization. If you are the visionary coming in to say i am to do something different, is Steve Ballmer going to be happy about that . Is bill gates on board . That is one of the biggest challenge of getting this nailed down. How much can they do in this position . That is one of the factors that will affect this. All right, Jon Erlichman and bob herbold, and she so much for joining us. This is something we will continue to watch. We have got until june. We shall see. Coming up, everyone is talking about smart cars and smart thermostats. Does anyone want to use them . We will talk about that with the ceo survey monkey. Welcome back. Were talking about connected cars and thermostats and homes. Theyre doing a lot of things. Do people want their Coffee Makers to talk to them . Sometimes industry is ahead of consumers. I have people talking to me at work all day long. Maybe i dont want my coffee pot to. We asked 760 people in a survey monkey shakedown. Here to talk with us about the results is their ceo, with us from san francisco. Do customers and consumers really want this . Do they want connected cars and homes . I think that people do want this. I do not exactly know what it means when they get to the reality of it. It looks kind of confusing and expensive, except in places where they have adjusted to it. It is like the jetsons in what we imagine and science fiction, like the movie her. Theres the reality of it, and the reality has not caught up with fiction. I saw her a few weeks ago, and coming out of ces, you see reality and fiction merging. Im curious to see, from your research, what have been the obstacles that people feel toward Something Like a connected home . What is the main reason they dont want it . Some of the biggest of the came through is that people felt it was too expensive or not worth the investment. I think that when you really get to the connected homes, they are a large investment. Where people are tinkering is around the edges. What they said is that the most smart device they have as their television. Some of the televisions you can talk to. The xbox 1, there is stuff that is starting to get there. The rest of the home is not there yet. People did say they wanted in their kitchen. That is interesting. But, again, complexity and cost and all those things it is not like you walk into an apple store and buy this thing and set it up and away you go. Entertainment, we have gotten there to some degree with streaming music and ondemand videos. The rest of the home is pretty untouched. It is interesting to see where this is going to go. You have some Big Companies trying to make a push there. Samsung announced their smart home initiative. Their attitude is that they make smart phones, they also make refrigerators. There may be some connections they can make easily. If you happen to own both products, look what you can do. Google is moving into this territory. Earlier this week, the thermostat. Where you see this going . I think were headed there. We will see individual devices to be fair, we had smart Coffee Makers for a long time. People tended not to use them. They have not been connected with everything in the house. Were getting there. Nest devices are interesting. It was the second most popular thing that people have in their home. It was only seven percent. There are a lot of Smart Systems that are connected to the home. But after that, it really drops off. I know you follow the Technology Landscape very closely. What is your feeling here . When is Technology Going to be accessible and affordable and ready for prime time . To regular people . I think it will be quite some time. I think we are talking about 10 years before people are really adjusted to this. It is a normal thing when you walk into someones house and a lot of these connected Smart Devices are there. Were just at the early stages of that. Do you feel, based on your research, you were looking at cars is that a place that might happen more quickly . Yes. I think cars are happening more quickly. You turn over your car more frequently than your house. People have smart things in their car. 10 of people have the ability to download apps into their car already. Car manufacturers are seeing that when they put this technology into their cars, they sell better. We are seeing more and more. Some of the data shows that people want to have an ios or android platform in their car. That was staggering to me. 17 wanted to have that platform. People are starting to get comfortable with it in their car. All right. Thank you. As always, thank you for joining us on breaking it down. Coming up, we will continue our Artificial Intelligence series. It is 26 after the hour, which means we are on the markets. I am olivia sterns. Best their shares are walling after a drop in holidays sales. Profits will be lower than last year. And he intends to fight the court ruling, coughing out the neutrality rule. That in loot the possible repeal. Neutrality requires internet providers to treat all traffic equally. China has a new richest man. Tony ma has overtaken baidus robin li. His fortune is valued at 13 billion. He has shares in surge. They may challenge alibaba. Now to ai, beyond robots. We have talked about how Artificial Intelligence is going to dramatically change the way we live. We talked about the head of facebook. We have somebody coming from microsoft. Peter lee is the head of their research and he joins us now from redmond, washington. You are in charge of more than 1000 Research Labs around the world. What kind of thing are you focusing on . We are really covering a huge array of things. Almost anything you could imagine in Computing Research and other parts of math, physics, computer science. A big focus right now, really on point for this segment, is Artificial Intelligence. We have been very focused. It is our largest investment area right now. One of the things youre working on is a Virtual Assistant. What could he or she do . One way to think about it is they try to answer questions and figure things out. One type of question is to figure out what questions . What did that person say or if you see a picture, what is in that picture or video . Another kind of question that is challenging is to answer the why questions . Why does this person want to see a certain person for an appointment . Why did this person asked these questions . Understand the intention of people. That is the basic subject of this personal assistant project. We are looking at the footage of what you have been working on. In the case of this Virtual Assistant, i noticed that you have a male figure on screen. From an interface standpoint, how do you choose what the administrator should look like . In fact, in the system, as we have it set up, you can choose what kind of avatar you want. Some People Choose males and some choose females. It really is something that is part of the research. Were trying to understand how people relate to these kinds of systems. What kind of symbiosis or can management make. Did you ever consider hiring Scarlett Johansson . [laughter] im going to give that to you. That is a gift. Do with it what you want. Peter, what about the other stuff youre working on . I have always wanted my dog as my assistant. Excellent idea. To each his own. It is all about customization. Personalization. Speaking of personalization, you are also working on a smart elevator. Is this an elevator that would know what for you want to go to . How does this work . Right. This is pretty cool. We set up a bunch of sensors. In front of elevators. Without any programming, we just had an ai system that watched what people did. For about three months. Over the three months, the system started to learn, this is how people behave when they want to enter an elevator. This is the type of person that wants to go to the third floor as opposed to the fourth floor. After that training period, we switched off the learning period and said go ahead and control the leaders. Without any programming at all, the system was able to understand peoples intentions and act on their behalf. There is a general theme that we have in the labs. Today, people talk about operating a computer. You sit down in front of a desk at the computer and operated. You take the computer out of your pocket and operate it. In the future, you will not operate computers, but they will work on your behalf. This elevator project is one expression of that idea. I want to settle on this for one second. One second. The idea is that the elevator system would learn my habits. Perhaps at some time i am going out for lunch and another time im going to meet with somebody. How does that break down . You can imagine a connected world. In the future, the sensors around you, on your body, in your environment, start to understand