Troubled schools is leaving the job earlier. He completed work ahead of his 18month schedule, with Governor Snyder pushing the legislature for state funding to address the state debt. Thats global news. Im mark crumpton. Im emily chang and this is bloomberg west. Ating up, slash and burn yahoo , cutting jobs, winding down legacy products, and addressing Strategic Alternatives, but what does that mean . And we hear from oracle ceo mark hurd of what it takes to be a leader and what it takes to keep competitors at bay. We check out how mega cabs compare with the Biggest Companies over time mega caps compare with the Biggest Companies over time. But first, to our league alternativesing for the core business. Is that the company putting the for sale sign on the door . For the time being Marissa Mayer exploring aosts and spinoff of the web business rather than sell now because they feel it is kinder late it is currently undervalued. Is up 12 . Revenue but here is what chairman maynard webb added in a news release the board also believes that exporting additional Strategic Alternatives in parallel to the execution of the Management Plan is in the best interest of our shareholders. I want to bring in our Bloomberg Intelligence analyst to breakdown the numbers, but what does this mean . What exactly are they trying to say here . First, ao things spinoff will take nine to 12 months and the Strategic Options were with with respect to the alibaba state and not the core business. You are saying they are not saying we are going to sell. Reporter yes, and they talk about patent sales, corporate headcount reduction they are trying to simplify yahoo is mercer mayer here . Is she saying she can turn it around . Or is the ship going down . She is trying to basically simplify the company as much as try to focus on the division that has been growing and inspire growth. This mobile and video is an acronym she made up. How well is the is missed doing . Is the growth enough to sustain this for the future . Reporter that is exactly what their needs to be more transparency on from yahoo . What is the user activity . Grown froms has almost nothing to 34 of gap revenues in four years, but if you compare that to Something Like a facebook, now they have 80 of their ad revenues coming from mobile advertising, and they were very low four or five years ago, too. On a relative scale, its not growing as fast as competitors, but if you look at absolute numbers, yes, there has been strong growth. I think programmatic is doing well. Shares are down in afterhours trading, so of course we will be talking about how investors are looking at the announcements here, what they want if they still want to pursue a proxy fight. Taking it down for us. Now we are going to get back to yahoo in a few, but i want to turn to competition in the cloud where microsoft, amazon, and google has been gathering steam. Our editor at large cory johnson is standing by at the headquarters of another cloud contender and that is oracle. He has an exclusive conversation with oracle ceo mark hurd. Cory . Thank you, Emily Chang A Bloomberg tv, Bloomberg Radio as well. Were sitting down with mark hurd, ceo of oracle. Thank you. Youre going through an interesting time in oracle. You have gone through changes. You have gone through a ton of acquisitions. Now we have this huge change, the move to the cloud. Lookso me about what that like for oracle which has a strong footprint in on premise software. The development of Cloud Software has been targeted at oracle. What does that mean for the industry . Mark it is a big shift. I think you will see a majority i. T. Shift to the cloud. For us, we look at this as an opportunity. Premisesuch a strong on based, it will be important to make those worlds were together. Building a whole new stack of capability through platforms, infrastructure that can work with that on premise base, thats a huge opportunity for us. Cory some of the contenders say they dont have to work together. Throw out the baby with the bath ater with the Cloud Software. Newer companies, why are they not just starting with the slate clean . Vendors are interesting, but customers probably have a different answer. Have a long set of applications on premise and they have to run their businesses every day. Dont get me wrong. The bulk of work is moving to the crowd, but for a long time, you will have to get applications that work together. The ability to share information. I think it becomes a key advantage. Most of our competitors are. Or purely on premise or purely on the cloud. The cloud, the argument is it is so much cheaper. You guys also have a difference of the pricing strategies from what is going on. Work . U make that how do you make that work . Mark i do not know if i would call it cheaper. It is more variable. To be able to shut something off when you dont need it, to get a variable price i would not say that is cheaper. Betterallows you to have control of your costs. For us, we love the cloud world. We love the on trend world. Both Business Models are extremely attractive. We are about as agnostic as you can imagine. We are invested in driving our cloud stack and that is what were focused on. That transition to the cloud. Cory your competitors like to talk about what youre not doing. Talkingn particular about how they are stronger, cloud growth, comparing it to what you guys are doing. How do you view s. A. P. Is a competitor . Mark idol think they are doing very much. To be very frank, they have acquired some properties. Cory do you mean things like concur . Arriba is a, property they bought. The core franchise is really erp. That is the core franchise that company is built on. They have not done any work from the bottom up to the architect architect to the club. Long run customers want to move those rps to the cloud. Just to give you a quick view of our progress, we have sold i guess by the end of the year, we will probably be between 2000 Erp Solutions in the cloud. Its a Staggering Number from zero a couple years ago. Erp solution pure colleagues have referred to their acquisition of what are we going to do next, buy dairy queen . Completely agree with her comments. Strategically, it did not look interesting. Strategy, ande a then build to that strategy. It has to make sense to us. A dairy queen would make as much sense to us as buying concur. It did not align strategically where we saw the market going our what we thought was important for our customers. You think we will see oracle doing a serious acquisition sometime in the next year or two . Mark i know you know im not going to comment much on forwardlooking just wonder your philosophy. How do you make those decisions question mark you guys are famous in the m a world, giving answers. You do the diligence, given answer whether you are interested or not. Mark we know what we are doing. We will do what we always do. Something will have to make strategic sense for us to acquire it. It has to make financial sense. We have to be evil to operate it we have to be able to operate it. Disciplined acquirers. We dont buy something just to buy it. Some ofen you look at the Fast Software companies, those valuations, i would say, are really high right now . Do you look at that . Mark they are high and they have been high for a long time. We have tended to be a first mover. We do not buy a company on the cheap. We buy the best property in that important. Use its whether we build it or whether we buy it, we want to be the best. Cory do you think it is the time to sit back and keep some powder dry in case some things go on sale . Mark its always an advantage when that happens. Its always better when things cost less. If you look at our history, that has not driven every decision we have made. We make a decision based on the right thing to do at the right time that fits with our strategy and we made a lot of acquisitions back in these days may be wrong, but the end of 2010, 2011. Leo, a couple others. It was so important. Our future product line was just now coming to market. Were buying multiple companies and learning so much about the business and taking leadership positions. Learnwhat you think you from the sun acquisition . Surely you tonight at the numbers to be as hard as theyve been. If you look at the sun acquisition, which predates me a little bit. Think you have java, the most popular programming tool in the world. Just that asset in isolation was really important. On top of that you have solaris. Youve got probably the best operating system probably the abrasive to me world. You had an increase little system that came with it. It was an acquisition that brought a lot of technology with a lot of customers. Cory when i look across the some at your competitors, are struggling, some arent. If i had to pick which companies were in more trouble, sap, ibm which companies have the wrong strategy, wrong products, most wrong . Great question. I think i will stick with i would rather have our hand than any other hand in the industry to make thesed transitions. There is a reason why every company does not get to the other side area its hard. Its hard to do it in the Public Markets. Look at the investments we have had to make. When i got to oracle, i think our r d was 3. 8 billion . We are probably only path to 5. 2 billion this year. Cory huge numbers. Mark huge numbers, but we have had to invest. Investedad to transition. We have to keep the capabilities and play at the same time we invest in new cloud capabilities. Think about this, cory. Cloudou get into the business we have to build data centers in 20 countries around the world. Thats like Building Hotels before you can rent a room. We have had to invest in that capability. Simultaneously we have had to build out a larger go to Market Organization and make all of those investments and if you are in the Public Markets doing all of those at the same time, it can be a challenge. Theres a lot of companies and you have mentioned a few, that it is hard to get from here to there and i can tell you why. , ceo of torque will, thank you for your time. Back to you guys. Editor at large, cory johnson, thanks so much there, with mark hurd. Still ahead, weve got to keep digging into the latest news from yahoo as the company cut its workforce and explores alternatives for its investors. Will it come investors or trigger a proxy fight . Emily lets get straight back to yahoo , shares ticking down in afterhours trading. Marissa mayer planning to cut 15 of jobs, leaving yahoo with about 9000 employees, and winding down a legacy of products, closing offices, and yes, looking at selling parts of the company. I want to bring in our deals were alex sherman and our guest eric. Will start with you. How do you translate what they say about Strategic Alternatives . Are they exploring as sale of this company . Ambiguous at best. At some point she did say that board was going to explore the sale of Strategic Alternatives, which means the sale of the company. She was not very specific about it, and i understand from other reporters the board has said they will explore the sale of the business. The core business. Emily at least in afterhours, not reactingrs are kindly to this. Is she asking for a proxy fight . Alex it depends on what we see between now and april, i think, emily. With theg goes forward sale of the company or perhaps sale of nonstrategic assets, i dont know that i fully believe we will see what happens with yahoo i think the discussion will probably be based around the entire company. If nothing moves forward with that between now and april, yeah, i think Marissa Mayer may be in for a proxy fight. I think be included in that language and all you have to do is read our story from three weeks ago when we reported that the board was warming to the idea of selling the entire core business. That is the way to appease angry shareholders at this point. A think we have probably reached the end game when it comes to selling the entire business, and theres a lot of confusing language today and certainly morris is going to move or word with a turnaround land because whether you sell the company or not turnaround plan because not,er you sell the youre writing the ship is probably good idea. I know my job is going to be trying to figure out who they are talking to and when they are talking to them and exactly what they are talking about, if in fact they are going to sell the entire business. How much money you they would give her that business . Emily alex, i will try to help you with that. Doing the best i can. Talk about where the business is now and what the business is doing. Take a listen to what Marissa Mayer had to say about the mobile business. Marissa mayer we will continue to drive native through same time at the we will stabilize and slow declines in our legacy revenue. When you look at the mobile and video part of the as is, how well is that doing . Eric not well. If you look at the waterfall that they offered to us during voiceall to show us where revenue is going to go from this year to the next, the maven revenue is only going to 200 million dollars. Its not doing well. This is not a credible plan. This is the turnaround of the turnaround, and its a little that today is groundhog day because its groundhog day for yahoo emily deja vu all over again. And our ownpeau alex sherman. Iswe had to break, uber rebranding. Many critics taking aim at the new logo on twitter, saying it looks like a doughnut, and basketball court, even a pokeball. Emily the European Union and the u. S. Have reached a deal on data sharing. Agreement replaces an earlier accord ruled illegal in the wake of Edward Snowdens revelations. The eu fear that personal data stored by u. S. Companies might be exposed to spying. Officials in the eu say that they can be sure that data is protected. Coming up some of from a garage in menlo park to the worlds Biggest Company by market cap, we look at alphabet. Biggest Virtual Reality funding round of all time. Bloomberg news check us out on the radio. You can listen on the Bloomberg Radio at, bloomberg. Com, and sirius xm. Emily im emily chang and this is bloomberg west. It is 3 30 p. M. Tuesday here in san francisco. 7 30 thursday morning in hong kong. Where were joined by sherry with a look at the stories making headlines in air asia. Good morning. Good morning. Kim china is set to complete the biggest acquisition ever by a chinese company. The deal said to be worth 43 billion and county announced later today. Sources also saying kim china is considering delisting after the takeover. An independent panel has told an r bag maker, tecate to prioritize control to avoid further safety defects. It was told to form teams to investigate reports. The cause of the air bag crisis is sought, linked to 11 deaths and the recall of millions of vehicles. Shares have plunged more than 50 over the past year. Nissan and hyundai kia are enjoying the best january auto sales in a decade. Along with g. M. , they posted gains while losses of toyota, honda and ford were smaller than feared. Still, investors didnt like the uneven nature of the results with some up and some down. Indias startup scene could traket more overseas money. The reserve bank of india is giving foreign Capital Funds more options. Theyre allowing to invest in india startup companies. The r. B. I. Is also letting startups file reports over the internet and is easing the rules governing shares transactions. Emily . Emily wednesday in hong kong, not thursday. But what is this going to do for the startup scene in india . Well, in the past decade, most of indias best performing internet startups chose to establish themselves in places such as singapore, even though all of their busy business was in india. Ecommerce businesses. So with this package, making life easier for investors, internet is expected to become more attractive and the government is helping them out too, promising tax breaks as ll as a 1. 5 billion fund to increase boost. Some are already raising questions about valuations. Emily . Emily thanks so much. Shery in hong kong. Emily a changing of the guard, at least when it comes to the most valuable companies in the world this week we saw facebook surpass exxon mobile to become the fourth Largest Company by market cap in the world and apple cruised to become the number one spot. We look back to another age, 1993 for this week back in bloomberg and the rankings were much different. Exxon was the worlds Biggest Company followed by general electric. By the eve of the dot. Com crash in 1999 exsons was replaced by microsoft but companies lining g. E. And microsoft still loomed large. What caused the change in the rankings . Here to join us Stock Traders almanac editor and chief jeff hish. And paul, ill start with you. As a formers equities analyst on wall street covering technology, are you concerned that so much on wall street today is concentrated in the tech center . How can that be wrong . So yeah, it doesnt really, its not particularly surprising. Its a sectsor thats seen more growth teaver last 30 years, 40 years now, dating back to the semiconductor and its seeing increasing market captainlation captainlyization flowing in that direction and it is a bigger share and it shows up in the rankings you showed. Emily Tech Companies comprised in 2004 on september 1, comprised 32 of the s p. Today theyre more like 17. 4 of the s p so not nearly as much as it accounted for back then but still, four of the five most valuable companies in the world. Jeff, what do you make of that . Jeff i think this is the beginning of the future here. Back when i did the superboom book in 2011 our contention was that technology would b