>> live from pier three in san francisco. welcome to bloomberg "west" where we cover innovation, technology and the future of this mess. i am emily chang here with cory johnson. for-profit colleges heading online. questions about what kind of education you are getting. at technologyk and education. billions of dollars flowing into for private institutions online.

education results have been disastrous in some cases. we will talk to the attorney general investigating the processes. >> ed stone talking about his new book. about his new things and twitter. >> great, thoughtful guy. has launched a bunch of different companies. topre going to take the headlines, starting with samsung. projecting its second straight year over year decline in quarterly profits and sales of the high end smartphones blow down. a profit of $8 billion, down four percent from the previous year. thatg that the galaxy s5 comes out on friday and 150 countries will re-energize sales. twitter started rolling out a redesign for web users and a larger profile picture for scanning -- and filters. they can pin a tweet at the top

of the page. it will be rolled out to all users in the coming weeks. cutting prices after raising 200 50 million in new funding. announcing a price cut in 20% of all of the markets in which it operates. huber -- uber similar cuts. >> uber expanding. courier expanding to a service in new york city. >> cars where there is someone peddling. basically it works like a typical courier service. josh bernstein tried it out. 90 minutes later he has

something delivered to battery park city. it costs a little bit more than standard courier rates but less than rush rates. >> a fascinating business for them. really weird when you think about the competitive sediment. they have taken on taxis and black cars but a revolutionary business model that is being imitated across not just technology but lots of different companies looking at uber. not the place you may have expected them to go next. >> i do not think it is weird at all. if you can get a car in five minutes, you can get anything somewhere in five minutes, why not make delivery the next step? they had delivered christmas trees, kittens. of this isg price $15. it is cap at $30 and search pricing will not apply. we have the general manager of new york, josh more on the with us to tell us more about it.

how long have you been working on this idea and how exactly does it work? you can tap a button and get a car, and now you can tap it to get a courier in five or 10 minutes. you will see the courier approach and he will take it anywhere in new york city for as little as $15, as much as $30 depending on how far he is going. we have been doing these kinds of experiments for a while now. we have done on demand christmas trees. >> i understand you can follow it on the app. just like you can follow your car as it is coming to you? >> yes. you can share with the recipient the progress so they can track it as it is coming. direct to you, dedicated.

they will not do pickups and deliveries. we think we can deliver anything and basically under an hour. >> i think that this is a big ata play that you guys have true understanding with traffic and where bottlenecks exist. does this build on big data in that regard? >> we found people were using uber cars for this. people were sending a pass for two people at the airport who --got or sending a passport or keys to her roommate. we are doing something they are are ready doing and giving them a dedicated way to do that. through the experiment i think we will learn about all the ways they might use the service. >> you just said you can get anywhere in about an hour. it took us about 90 minutes to this to the rest of the

nation. at any point will you guarantee of time? unpredictablee elements to it. traffic and subway delays. we did yesterday was on the test day for the test period. kinks butping out the i am very confident we will get it done. use thisuld old instead of the standard courier service instead of ebay now? is getting no one this particular thing just right. this is not to go and buy something. you have an item and want to move it across town as fast as possible. with traditional courier services you are calling and put on hold. if you are getting the rush service, come to me right now, you are paying $60-$70 for it. we think we can deliver faster

service for better money. we think people will be into that. >> you talk about the difficulties of my home, new york, and i wonder how much of what you learn applicable to other cities that have great similarities to new york? los angeles is a completely different animal. what do you know you will have to learn and what we you have to ignore? >> uber is local. we have folks in every city dealing with the challenges in every city. bike messengers going from santa monica to the valley will probably not work. i think the general principle that we have been moving people successfully for a few years in so many cities around the world, that we will give it a shot to move things. this is just an experiment. we do not know for sure this will work. if it does, i can see it expanding to other cities. >> right now they will not make purchases for you.

line?that come down the something with more of an e-commerce twist? >> we will see how users want to use uber rush over the next few weeks and months. this is the first step in many things are possible for the future. new yorkmore, uber general manager. thank you for joining us. coming up, we are talking about technology playing a bigger role in improving online education on or we have been. but maybe it is not always doing good. >> we will take a look at how some of the companies have made a big whoosh to online, leaving students with lots of debt and no degree. interesting look at the online education space when we continue. ♪

>> welcome back to bloomberg "ewest." i am emily chang. talking about a handful of companies are coming up with new solutions and education to give teachers better tools and outcome. technology does not necessarily help. you have been working on a big investigation about how some for-profit education companies may not be doing the job they claim to be doing. and that is education online can have worse outcomes than traditional. >> one thing you look at is how the companies have spent billions of dollars moving the operations online or growing them online. the education results have been worse, drop out rates have been worse. talking specifically. the failure to get a degree. the center for degrees from 64%

of the students online did not in fact complete their degrees. 46% offline did. .he online results much worse add to that the student that. none of the companies were willing to provide the senate committee with -- with specific results from online to off-line. 22% of the students in the for-profit schools default. enormously large default rate. 46% of the for-profit students default over the lifetime of their loan. rate is higher, and dropout rate is higher, and it is a disconcerting number. >> how do you know if those kids attended a traditional school that they would not dropout or default? >> what we have seen is there our dropout rates of traditional schools that are in community colleges, associate programs and

four-year schools. dropout rates tend to be a lot higher. site the money and default rates being higher, there is the ultimate question about the value of degree and what the students are really getting. the companies have spent a lot of money to move businesses online. the interesting thing is there have been a lot of things driving this. there is a lot of market saturation. schools.ago very few summoning publicly traded schools that in certain markets they are chock-full. they try to find places to grow where students do not live. at 2006 law that they help to get through congress allowed for online only degrees. suddenly the whole world was the marketplace. they do not have to spend money for rent. >> i know the federal government

is looking more closely at tightening regulations on these online institutions. you wonder if not having them would be denying some students access and opportunity for education. >> when you look at the marketing dollar spent by these companies, spending upwards of 20 five percent on marketing to new students when they know 40-60% of drop out, they taking the tuition to get more students into the system it is a disconcerting thing that the feds have looked at a little bit. and fall of the attorney general's are looking at this as well. all four of these goals are being investigated, among others, by the kentucky attorney general right now. i think the kentucky attorney general is joining us right now from kentucky. jack conway. a group of 32 attorney general's investigating joining us from

louisville, kentucky. thank you for joining us. what is the worst abuse or worse concern about the schools? taking this for issue up. one in my opinion that has been underreported. you really hit the nail on the head of regarding some of the schools. the thing that is most concerning to me by the amount of the tax dollars going to the schools. over 30 billion per year. at anotheryou look traditional school, most of the money will go to education or not for-profit purpose. you look at the for-profit college model, another 20% going to profit for the schools, you are leaving at the 5-60 cents on the dollar to try to stretch for an education thaoften times the credit do not transfer in students are left with that they

cannot discharge in bankruptcy. also, the high-pressure sales the students of are subjected to. >> these institutions probably have tracked a certain kind of student -- attract a certain kind of student. how do you know they would graduate if they were at a traditional institution and what not default on their loans if they were going to another school? >> i do not know that you know they would not default. the problem with this particular is from a consumer protection standpoint, we want to make sure we do not have unfair false and deceptive advertisement in terms of selling a product. when you're in the for-profit rome, this is a product. what we see is we see boiler rooms where people are engaged in telemarketing. down the particularly

he can. they are spending a tremendous amount of money. thinking the papers on the student loans they are hooked. they cannot discharge those in bankruptcy. that is not to say some other student may not fail. i am hopeful that at least as people sign up for an education, they will comparison shop and recognize technical colleges in kentucky, they tend to be three times less expensive than some of the for-profit colleges that we're seeing here. i cannot guarantee you every student will graduate but i can guarantee you if someone is preyed upon and high-pressure time and does not have adequate disclosures, that is a broad -- bad way to sell any product. >> when i look at this from our point of view, these businesses made a very concerted effort to

move the business is online. without online, there would be no growth in enrollments. that is really the function of the for-profit schools largely. if that what you found in your work and what have you found specifically? think the online education aspect has been a significant area of their growth. my whole thinking is technology, it ought to lead to more efficiencies. there is nothing wrong with distance learning. if you are in public education in kentucky, if there is an outstanding regional university, the other regional intercity should offer the class and you can use it for distance learning. online education is not necessarily bad. moreonline education is expensive than public education, and not leading to a drop in cost but padding the bottom line of the for-profit, i think that

is a problem. of the students are nontraditional students. they be a single mother holding down another job, trying to better herself for the future by taking an online education, i think there needs to be more safeguards to make certain if you're going to take a class online, that you have certain metrics that make certain the product gets delivered in the end is one that will advance the student. kentuckyontract -- attorney general jack conway. thank you for joining us. we will be right back. ♪

>> i am emily chang. back with kentucky attorney general jack conway talking

about for-profit colleges moving online and whether they are providing what they promise. they are moving the sourcing of student and marketing efforts. what do we know about the online practices. had an investigation a couple of years ago. we investigated a company called queen street, based in california. they had about 800 different domain -- domain names. think someone should have known this was not a government website. used to mimic a government website. we had a lot of veterans coming back wanting to know how they could use the post-9/11 g.i. benefits and would go on and they have the yellow ribbon

schools they were highlighting and made it look to veterans they could only use benefits of for-profit schools. aggressive online marketing campaign through the lead generators. a lot of the schools have gone off the veterans -- gone after the veterans a cousin of the 90-10 rule. >> the 90-10 rule says schools can only have 90% of the money coming from loans. are you sensing a change in that malt? >> absolutely. and never have written to calm -- congress asking them to change the law. they exempted the veterans benefit. they have gone after the veterans benefits as a way to leverage the ability to sign up more students. we're very concerned about that. that is the reason you see not just the 32 states i've lead but 15 ag's partnering with the

federal government to start to issue subpoenas and institute several lawsuits. >> jack conway, thank you. obviously a story we will continue to follow. you've reached out to the companies and got the responses. >> read reached out to all of the companies, as well as apollo group. itt educational services. alwaystistics do not take into account the unique union -- unique student body. graduation rate is 30%. 92% are seeking associated degrees or diplomas. the company intends to cooperate with the states involved. student achievement is the top priority.

>> sometimes they are looking for certain job-training skills. >> the degree is what is often marketed. lex thank you. biz stone coming up after the break. ♪

>> you are watching bloomberg "west" where we cover innovation, technology and the future of business. speaking of business, this stone is the cofounder of twitter and cofounder and ceo of jelly. -- biz stone. now the author of a new book, " things a little bird told me." has moved tonicle silicon valley and offers advice to entrepreneurs and joins me now in studio. great to have you. part advice/part memoir. of all of the things you do, why

did you write this? a decade ago.ver i was invited to teach a master class at oxford, which is a fancy term for lecture. a racket leslie they invited me back so i started doing that every year. other groups started inviting me to lecture. something amazing happened. i found that everyone from high school students to ceos would come up to me after and say that thing you said about creativity or your perspective on opportunity really resonated with me. that is a wide group of people to come up to me after and say they like it. someone suggested writing a book recently. i thought i will attend the lecture into a book and will not have to lecture anymore. then i realized i will lecture

even more. i wrote it a sickly because it was honed over a decade. people thought it was worthwhile. >> the audience quite broad as you said. what do you want people to take away? what is the main thing? >> my view of the world is i have described it as a hallucinogenic optimistic. to take awaypeople from the book, some of the hard learned lessons. it is only one thing they take hopefully the chapters on creativity and the idea that everyone is creative, not just artists. creativity is as a renewable resource. take awayke people to a fresh perspective on the idea of giving back. so many people do it wrong.

they think they should wait until they are comfortable and old but really if you get started early with volunteering, donating five dollars, the impact you will have over your lifetime is a much greater. i talk about compound interest. aspirational stories. >> speaking of money, you do not sugarcoat how broke you were in the early days like living in your mom's a smith with your girlfriend, could not even buy a bed. what drove you then and what drives you now now that you do have money? >> there was always a belief in my future self, like futureb will be future biz smarter and we'll figure it out. the work i was doing was engaging to me.

i always found something i was excited about doing, like when i started my first design studio and then that lead to learning web design and that led to my first foray into being an entrepreneur, tech entrepreneur. just really believed in the idea of democratization of information. really decided to work out logger. -- blogger. money does not matter because it was more of the mission. >> doesn't still drive your? >> yes. especially with jelly. i left twitter on a day-to-day basis a few years ago and that to look at things from a higher level. about theilosophical amazingly connected world we're living in now. i ask myself come a what is the

true promise of a connected society? yes, there is someone waiting to play right now and wonderful things that come along with and connected that could not help but think the true promise of a connected society as people helping one another. is a platform for doing just that. i feel like i cannot go wrong working on this. >> how does it feel a few months into being a ceo for the first time? >> it feels great. i have learned so much from being on the sidelines. an oscar-winning supporting actor to now one of those great guys. and i have such wonderful support from my team. i listen to them. i tend to pick up traits and i like them. growingally fantastic into this role. i am plenty of mentors.

have plenty of mentors. jack dorsey, people i know. each one of them is different. has almost been serving as my executive coach almost at this point. he has grown so much in the past four years it is unbelievable. meet every wednesday and socially in between. very specific questions like this guys has -- this guy has been at jelly for a year, should i offer him more money or this and that? what would you do in this situation? sometimes it is specific, sometimes it is very high level. sometimes we just joke around. it is interesting because this book really questioned the

assumptions about the founding of twitter and what we are in a new. of things jack is not the product of genius but more marketing genius. how do you respond to that? >> jack is very talented and marketing. look at square. he is like an artist at heart. maybe that is where the confusion lies. when he first describes square to me, and i invested in it, which i am very glad about, he -- i was like really, payment? wide payments? payments? > he said because payments are a form of social

interaction. this is a social transaction. i sort of saw the light. -- he is taking that thing we have been doing for centuries and making it into a beautiful experience. tellingave your own about your own telling of twitter. >> i lived it. you seem to have done such a great job -- job of maintaining deep relationships with everyone. you said one of the problems you saw early on is maybe evan jax did not communicate enough. are they better now? >> like i said, i meet with them all the time. now.s kids i have a little boy. we get the boys together and way. jack and i meet socially.

forced them to communicate because i had a birthday party recently and they both had to come. so thing is, they are similar. when spoken to types. ithout me in the middle would be like two guys in a room. >> who knows. it could be a cartoon. i want to talk more about twitter and division. i also asked the jelly verse four questions like you. more with him after this quick break. ♪

>> welcome back to bloomberg "west." welcome back with biz stone.

cofounder of twitter and now author of a new book. i want to talk to you about twitter. new profile design and a background images are bigger. some people say it looks like facebook. mine is not updated yet. that is funny. you're the cofounder. >> i think it is great they are innovating. it is difficult for publicly traded company to be bold and make changes. that is what you have to do in this business. i applaud them for that. -- may many more changes to come. i am looking at twitter now in decades. i have every confidence that twitter will be a timeless company of enduring value. in order to do that, there is a lot of work ahead of them.

that involves making big bold changes when necessary. >> i talked about the experiment to make twitter more user-friendly. some people say twitter is still more of a niche product. do you think it will be bigger than facebook? >> i think it will be really big. people tend to think of twitter -- i have always said you do not know -- need to know how to code a website to know how to use the internet. necessarilyave to tweaked to be considered a person who uses twitter. you see tweak everywhere. -- tweets everywhere. i think it is a matter of saying how do you think about twitter being used cap go it is not just about composing a tweet. it is about consumption of the fantastic content that exists on

twitter. so i'm walking that and freeing that is something going forward that twitter has a really great opportunity ahead of it. >> a lot of people compare facebook and twitter. you about the ask acquisitions facebook is making. what do you think of all of make sense to you. >> yes. m&a is for different reasons. they are making best on what is next. making great talent. ar>> are they good bets? that is the nature

of the bet. if they have the means and the drives, why not? >> twitter of 65% since the ipo. down 40% from the peak. how much do you follow the stock? >> they tell you when you try to lose weight, do not look at the scale every day because it will go up and down. you have to take it way back. when i say all kinds of different people in different industries are getting value of twitter, then i know it will be a valuable company. eagle are getting value out of it. television networks are getting value out of it. regular everyday people are getting value out of it. when there is value created out of it, you have something there. >> so maybe you're not watching come --k ice every day

stock price everyday, but there may be our employeres doing that. >> that is stressful. about that at all. in thecomplete faith deep executive branch we have built at twitter, the incredibly talented team in place there. this is a reason i felt like it was an appropriate and was comfortable leaving day today because the right people are in the right spot. .here is no worrying for me >> how about the inequality >> in san francisco? >> the tax break and the protesting against google buses. protesting twitter in a week. yes. exactly. in the united states.

again, i have left day to day operations so i do not have authority to speak on what twitter's responsibility is, that i am starting to look into this now. just personally. get involved with various tech industries. in a boom time when so many jobs are created, there is so much and if it is not, what can we do to fix that? solution.a weekend a lot of people have to get together and think long-term about how to make it work. it seems to me there has to be a way to solve the puzzle. questions from the jelly

verse. -- responsess within seconds. argan asks when will you merge jelly with twitter? >> it is our it he working with twitter. we work with twitter and facebook. we blend the networks together and that is one way we can your answers. will youe is asking ever sell? >> jelly is the company we are trying to build and work on for the next several decades. this is what i am doing now. there is no sell date. >> what our current use cases, and what do you envision as the best for the future? >> so far we have noticed three cases. we have noticed recommendations are big. out to people in your

network is good. trusted people. obviously because there is a camera involved, we interpretation questions. what is this? is this snake poisonous? we have seen troubleshooting tech questions like evil are taking pictures of the back of their tivo and saying how do i set this up? you have to put this here and there. it is just great. those are the three we're seeing. recommendations is really breaking out. it is increasing. we have redesigned the interface for composing a question.

we really feel it is the best way to ask the question now. thank you for stopping by. great to have you here. more after this quick break. ♪

>> welcome back to bloomberg "west." time for the bwestbite. jon erlichman is in l with the bite today. havehave you got? >> i three. when it comes to streaming video content in the u.s. -- in the u.s., amazon is in third spot behind netflix and youtube based on tracking of all of this by a itpany called quill on and would suggest amazon video service has surpassed those of for being very

busy with streaming traffic online. amazon put out a press release highlighting that today as the streaming wars continue. i am a big amazon customer. they are pushing prime video all the time. we have gotten letters in the mail. >> it is so amazon of them not to tell us what the numbers are. are having great success. >> talking about this company q wilt. how much do we know about them? >> talking about overall amount of traffic. whether it is a video delivered over the internet, watching the whole thing. part of the team used to work at cisco. amazon is not -- apple is not

offering the same kind of service. amazon is streaming. it raises the question, if you are putting content out there like amazon is for free. we know apple makes a lot of money from itunes every time you buy or rent a movie. everyone trying to position themselves in the story. obviously the physical infrastructure of companies online whether it is apple or google or netflix of course. interesting they are trying to save the dying dvd business. the new hardware device and the victory with nairobi as well. >> certainly the rankings will shift around. the end.no means jon erlichman, cory johnson,

thank you. thank you all for watching this edition of bloomberg "west." we will see you later. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line" the intersection of economics with a main street perspective. president obama gives a negative -- executive order on equal pay. and made in america, some of the coolest oats you will find. you will find. ♪ asked to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making heads