New Board Members, and one of them is the yahoo co founder. Another is the chairman and director of the Charles Schwab corporation. Shareholders will be voting on the nominees at the companys annual meeting june 25. We will have more on this later this hour. First, the Top Technology headlines ibm has posted an eighth straight quarter of declining sales. Sales fell almost four percent in the First Quarter while profit tumbled 21 . The hardware and consulting spots, butits were cloud revenue was up more than 63 . New York Attorney general Eric Snyderman has sent subpoenas to six highfrequency trading firms. He is seeking information on their trading strategies and the arrangements firms have with the exchanges. He says he is concerned some trading platforms may Sell Services that are giving high for traders an edge in the market. Plans to on rehabilitate its business, instead the once prominent Bitcoin Exchange will ask a Japanese Court to liquidate its assets, saying that a rehab plan was too complex. In gox filed for bankruptcy february after losing 860,000 bitcoins. The lead story of the day, mobile is having a big impact on google. It is driving down the prices of ads. Google says its cost per click was down nine percent in the First Quarter. Paid clicks rose 26 . Overall, google report a First Quarter revenue of 22 billion, up 11 , net income up three percent, and in one other sign 23 oncern, expenses climbed in the quarter, more than 11 billion. Google has been on position spray, pursuing some of its moon shots. Google stock is down in afterhours. Is the chairman of ad exchange, and paul, your immediate reaction, cost per clicks are down, but clicks are up. Is this all because of mobile . It is. Google, like most other Companies Come is trying to manage his business from the desktop to the mobile environment. As the usage moves to mobile, two things happen. Number one, the actual usage of the site goes up. As you mentioned, clicks were up 26 at google. The flipside of the coin is advertising pricing on mobile devices comes at a lower price point than the desktop. In the case of google, the cost per click pricing was down nine percent. Of mediaike a lot companies, needs to manage the pricing on the ads versus the actual number of ads themselves. How serious is this . Doesnt matter that cost per click is going down . It is relatively serious for google. To keep in place the growth, they need to start winning in mobile. It will take a real serious effort for them to put in place the technology and the people and things that need to be done to take to the next level. What more do they need to do . Helpgure out how to advertisers convert, which means making money in mobile. Only a few categories in mobile are doing well. Andhe offline retailers travel advertisers are figuring out how to use mobile. Cool knees to help them take it to the next level. Google needs to help them take it to the next level. How is this different from facebook or twitter . Thats right, the migration to mobile was the number one issue for facebook after there are ipo. Facebook had virtually none of its revenue coming from mobile devices, and now they will report well over 50 , much like google is over 50 . A lot of these Internet Companies are making some pretty Good Progress on mobile advertising, but the reality is they have a long way to go to catch up to the usage. A lot of usage for facebook, over 75 of the usage is from mobile devices, yet only 50 of the revenue comes from mobile. There is a a gap there. There is a bigger gap for google. This is a challenge for all of these Internet Companies. They have to figure out products that work well on the mobile device. Those products, Advertising Products may not be the same ones that work well on desktop devices. Investment andh strategy investment. I think the numbers are proving themselves out over time, but as google said today, it will be a longerterm pole to fully monetize mobile. Zach, you have worked closely with facebook and other Companies Based on where advertisers want to place their ad. Do these trends heard google more than facebook . In a toughgoogle is spot. They have a gigantic cash machine in search. They have really done well. Investors believe in that strength. They have to keep that running and keep that printing money, and at the same time transition to an entirely new way of advertising and helping investors buy and sell things. That is really hard for big, slower companies. Younger startups are basically able to move much faster. Google will be challenged in the next years to really continue the growth it has had. Google has made a big acquisitions, facebook has also with oculus, and a drone company, google buying a drone company, a lot of robotics companies. Paul, are the moon shots and acquisitions hurting googles bottom line . When google became public, they said, listen, a certain percentage of our expenditures both and operating expenses will be for moon shots. We will have speculative investments. Larry sir gay has said that from the day one, and some of these will pan out, some will not. Of theirt is part strategy. They have the n cash to not only invest in their core search business but also swing for the fences. You compare that with facebook, the whatsapp deal, 19 billion, people in the valley and wall street are still scratching their heads on the number. Not that it is not an outstanding platform with a tremendous user base, but 19 billion is a little hard to swallow. Some of the folks on the street are trying to get a good handle on some of these big acquisitions that dont have a nearterm payoff. , i was speaking with mark mahaney of rbc capital markets. His it comes to google and acquisition, he is giving them the benefit of the doubt. Would you give them the benefit of the doubt it will all work out . That is what this game is about, figuring out how these will turn into winners. Or are they getting excited by new technology that is cool and interesting for an engineer but not necessarily turning into a business. As an investor in google, i love where they have gone, but it is scary to look at transitions. There are clearly transitions that you only need to do moon shots when you dont think what youre doing now is the future. I think as investors, there are questions there. Triggit, as well as paul, bloomberg industry analyst, thank you both. Yahoo has nominated three new Board Members. How does this play into ceo Marissa Mayers turnaround plan . That and more when bloomberg west returns. Welcome back to bloomberg west. Im emily chang. Nominating three new Board Members. Jon erlichman is in los angeles with the details. Names andhing million some names that Marissa Mayer has presumably gotten to know well . You highlighted at the start scott,show that h. Lee potentially someone she got to know from walmarts board. We know that yahoo and Marissa Mayer have been on the hunt for Board Members for a long time. We learned in recent days that another board member would be leaving, not staying on, past the shareholder meeting, john hayes also leaving. This was beginning to be an awfully small board of about five people when you include Marissa Mayer. They have been looking for people for a very long time. In picking the three they have selected, lee scott, Charles Schwab, obviously a name that probably needs very little introduction, and david filo, cofounder of the company, you have two things. Number one comic in scott and schwab, we have heard a lot about the possibility in looking for new people to come onto the board, they wanted people who had operational experience at big companies. Certainly those to get that check. They are ready have a tech flavor on this board. David filo is somebody who is still very active at yahoo , somebody who has a Good Relationship with Marissa Mayer. We know jerry yang, the other cofounder of yahoo , has pretty much moved on, but david and reset have a Good Relationship, so that helps david and marissa have a Good Relationship, so that helps explain these picks. You wonder how each of these people fit into the vision of the future of yahoo she brought on the cofounder of paypal, very much a product guy. She promoted maynard webb, who we speak too often on the show, if former executive at ebay, longtime executive, very respected person in silicon valley, now the chairman of the company. What does each of these people bring to the table . I think the fact they have a lot of traditional Corporate America operational experience is what they are looking for. As you highlighted, with people like maynard, there is no shortage of good tech ideas that are fired around inside the boardroom. Very clearly, Marissa Mayer has a very astute views on where the industry is going. But if you think about some of the challenges ahead for yahoo , they are not actually the worst challenge is to have. A lot of cash coming into the company through the ipo of alibaba, and the decisions they have to make on how to use that cash. Yahoo had earnings this week. A lot of questions centered around the corporate wall street types of issues, as opposed to the underlying yahoo strategy, which is clearly already underway. Another thing is, you look at the yahoo business, and on its own, beyond the excitement surrounding alibaba, you have a business that struggles to grow its overall revenue from advertising. 1 billion per quarter, but it is the same old challenge the company has had. I think the first step was, lets go out and see if we can round out this board, its got a lot smaller when dan loeb, the investor, sold some of his stake in left, along with two others. Its hard to run a company when there are only five Board Members. A lot of stuff has to be addressed. Up to this,ng before mercer mayers took over, yahoo was really plagued by leaks. We dont know where the leaks were coming from, but Marissa Mayer came in and sort of locked it down. She not only overhauled the board, but she somehow gave her employees the confidence not to leak stuff to the public in the press before they were ready. You are absolutely right. This board has changed a lot over the last few years. Effort to, in an crack down on leaks, you are also looking to sort of make people excited about the place they are working. Sometimes you have leaks come from Companies Like yahoo because of people being disgruntled about what their role is. A lot of what Marissa Mayer has done over the last stretch as ceo is try to put a team in place that would sort of be on the same page about where they can go. Anecdotally, employees i have talked to are a lot more excited than they used to be, although a lot remains to be seen as to whether her plan will pan out. Jon erlichman, thank you so much for giving us the context on the new board nominees at yahoo he is a rockstar and former judge on the israeli version of american idol. Now he is transforming the video viewing experience. Up next, video technology. Watch us on your phone, tablet, bloomberg. Com, apple tv, and amazon fire tv. That is a clip from one of the winning entries to be unveiled tonight in the nonlinear film category at the tribeca film festival. They challenge film makers to use technology from Digital Media company interlude. The technology lets users create an interactive music video that allows viewers to create their own outcome. Joining me from new york with more is the interlude cofounder and ceo, yoni bloch. I have been watching some of the videos. They are really interesting. What do you mean by create your own outcome . How can i create my own outcome from a video . All videos from tv to the internet, nothing changed. What are Technology Allows is to take advantage of the fact this is a two way channel and it lets users actually make choices inside the video to change the outcome of the video. Creatingor, instead of one linear timeline, builds a playground and lets people play in it. Does this mean i could choose my own ending to a movie . Yes, basically, that is what you would take from it. The idea is the creator would decide not to decide. To make different scenarios and let you choose what it would be. The basic ideas could be changing the outcome of the story, but it can also let users decide how they will actually engage with the video and what will happen, change the music, change the story, change anything. Its all in the hands of the creator. Forhis would be useful advertisers, im assuming, because they can pick up on what the viewers interested in, right . Exactly. A lot of traction comes from advertisers like pepsi and subaru and lincoln. Of,what we are very proud because the company was founded by a band of musicians, we are very focused on creativity and storytelling capabilities, not necessarily he comes naturally because of something you can tell a better story and engage the user much more. Mentioned pepsi, lincoln, looking at a subaru commercial. Tell us about your clients and what they are asking for. Our clients come because of the creative abilities mostly. Virale a video that went for Rolling Stone a few months ago. Directors andly script writer see new ways they can actually tell their story, and viewers are enjoying it much more. It has over 70 million views. It was never on youtube. It is a big accomplishment for such a thing. I have seen this video. It is pretty amazing. Now, do you need any special hardware for this to work . If you have a regular phone or tv, doesnt work for you . Yeah, it was very important to make it the most comfortable and fun experience. ,t will work on ios, android multiple platforms. It allows you to build your own story inside our website. Toallows you to publish it any world that you like. It is crossplatform, right outofthebox. You dont need any hardware to the old it or play afterwards. You dont need any hardware to build it or play afterwards. You are working to creativity you where you monitor what a viewer is looking at, they dont necessarily make conscious choices about what comes next . In general, we dont limit the interface of how people in direct with the video. We are testing things from the eyetracking to software that lets you choose gestures,e to touch anything. We dont want to limit the way that people are able to transfer the stories. Backed by some of the biggest names in silicon valley, sequoia, eric schmidt chairman of google. How have you convinced these guys to get on board . Ofi think we have a lot traction in general from a lot of different companies. Creative stuff, like what we are doing tonight with tribeca, to , big universities around the world are using this to create interactive courses, to even Real Estate Agents making build your own tools. Interactive building videos. I think the vastness of what this can be used for, we hope it will be like a real revolution and how we consume content and create content. I want to put this into context for viewers. You are like a rockstar, especially in israel. You are a judge on the israeli version of american idol. Only in israel. How is it different being a rockstar in israel to being a rockstar in the United States . Is it different . Im not a rockstar in the United States. Israel is a small country, and it has less people than manhattan, i think. We areright, yoni bloch, honored to have you on the show. Thank you for stopping by and congratulations on this award from the tribeca film festival. Coming up, have you ever lost your smartphone . Phone makers like apple and samsung will help you find it with a kill switch. That is next. You are watching bloomberg cover where we innovation, technology, and the future of business. Im emily chang. The biggest name in electronics and phone Carrier Services are signing on for a kill switch. Of july 15, models built for retail sales in the United States will offer an antitheft tool, making the phone inoperable if it is lost or stolen. Apple, samsung, and at t have volunteered to participate. How much will it prevent theft . Are these Cyber Security supporter of bloomberg news. What does the kill switch mean . What is interesting about the announcement, a lot of the companies have had this capability, handset makers have had this capability since fodor is her dues. Since the phones were introduced. They are allowing consumers to access this feature. It allows you to wipe content remotely from your phone. If you want to brick the phone and make sure it does not work at all, you can do that. The interesting part is the phone companies have been able to do this until now, and now they are allowing consumers to do it. Will this prevent the ball from actually stealing phones . If i steal a phone and it is wiped, can i still use it . What we have seen, we have seen the robbery statistics involving smartphone spike in major cities, San Francisco, new york, oakland. These are crimes of opportunity. The criminals are not checking whether the user has a kill switch enabled on the phone. Its a crime of opportunity, they see somebody with a fancy phone in the wrong part of town, the wrong time. If they do enough robberies, they will find enough phones to sell on the black market. It will help peoples peace of mind, but it will not stop standard street robbery. Is it really possible to wipe a phone comp