>> live from pier three in sampras go, that's in san francisco, welcome to "bloomberg west." the massive target it abridges but the ceo at of a job at did the retail giant learns lesson? when it comes to certain security twitter is more pressure as nearly half a billion shares will become eligible for sale. first a check of your top headlines. a shakeup at german software giant sap - the head of products and innovation is leaving for personal reasons less than three weeks before bill mcdermott takes over as

sole ceo. he helped develop the sap flagship platform and was a member of the executive board. two other executives have been named to replace him on the board. twitter is teaming up with amazon to offer shopping by #. hashtag. customers can add those items to their amazon shopping cart. a user will have to go to amazon to get the purchase and twitter has been looking for ways to boost revenue. google is expanding its google shopping express service to manhattan and west l.a. it started testing out the same day delivery service in san francisco last year and it will develop -- develop -- deliver products from a number of outlets. resignedof target has after that massive data breach. fel steps downnhof and jack mulligan will be

interim ceo. the changes come about five months after hackers broke into the target system gaining access to personal information of millions of customers and a comes about two months after a bloomberg businessweek report found that target ignored warnings about the hacking. brendan greeley has more on the data breach. >> the first time the public heard that target have been hacked was on december 18, 2013. the breach itself actually began sometime before then. what did target know and when did they know it? hackers began capturing credit card data on november 27. three days later, sophisticated security software spot of the malware target had paid millions of dollars. a security worker in india saw the firewire alarm incentive to

minneapolis. the alert was overlooked for it on december 2, security tools detect another version of malware and this red flag went undetected. had target acted on the alerts, they would not have been able -- they would have been able to prevent one of the biggest security breaches. for more than two weeks, the hackers collective credit card information and bounced around the globe to places like moscow. on december 12, federal law enforcement notified target that they cease the socialist activity. retailer finds an independent targetd on december 15, confirms it has been hacked and removes the malware. argan issues its first public starman -- statement on december 19 prevailing that up to 40 million cards may have been compromised. 22 days later on january 10, target notifies customers that in addition to the credit cart that, personal information of up to 70 million customers is also

been stolen affecting as many as 1/3 of american consumers. for more on the fallout, let's bring in cory johnson and michael riley. who wrote that in-depth investigative piece in "bloomberg businessweek." what is your take on steinhafel leaving? -- i was one of four reporters that work on it for several weeks. on one level, it's a surprise. it's hard to come up with a data one, thaten a large has gone all the way up to the ceo in terms of the cost of jobs. target had already fired their chief information officer. that is a typical move to try to deflect any of the problems. you can just stop there. it seems to indicate that there may be more to come.

there are a couple of investigations the results of which are not yet public. there is an investigation that target and its consultants are doing and another one is being handled by auditors who are looking to see if the security issues that target had contributed to the loss and if so, they will look to try to shift as much liability as they can to target. it could be the results of those investigations meant that the ceo had to go as well. >> this may well have been the biggest retail breach in history. what do you imagine the continued fallout will be? >> there's a reasonable expectation and an impact by people unwilling to handle -- hand over their credit cards to target. >> i have a second thought about it. impactink that lasting really hurts. it has been a struggling business for a while. i think this is a big wake-up

call. today is the day that every ceo in the world will be thinking about the issues of cyber security in a different way. it's the same way the it guy used to be down the hall and now the ceo has to take cyber security as an issue that will keep them in their jobs or force them to lose their jobs. >> how confident are you that target now has its ducks in a row? would they be more prepared if this happened again? >> time will tell. they have learned at least one lesson which is you don't skimp on security. they are already in the process of upgrading all of their payment systems to chip and pin system is what europe uses and is more secure. the problem with a system like cannot that the retailer change the game. the cards that the banks issue have to have the technology in

them. advances putting in the system in and has to wait for everybody to catch up. we will have to wait and see. >> don't hold your breath or something like that. it has taken years for the credit card history to get to where it is now. even though the rest of the world is operating differently. the credit card business is important to target and it's worth noting this company is had struggles. they have gone into canada recently and are losing money hand over fist there. there are expectations it will lose nearly two dollars for every four dollars of revenue they get which is over $100 million in revenue. issues.got really big as itficult as did just is mrs., you cannot screw up and cyber security. >> what do you imagine that

other businesses have learned? target wouldthat be ready for this to happen again but what about everybody else?>? >> not just every other retailer but every other large corporation in the u.s. is looking at this and the ceo's especially is taking note of the impact this can have not just on the brand or the business whichever one has been concerned about on their jobs. watershed when this goes all the way up to the top. it indicates that cyber security has gotten to a different level in terms of the impact it can have a company. willchael riley, the story continue to unfold. thank you both. alibaba gets ready to file for one of the largest tech ipos in history. how much control will the founders absolutely maintain? we will explore the options later this hour. you can watch us on bloomberg television, streaming on your

phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

>> welcome back. alibaba could be one of the biggest ipos since facebook. the chinese e-commerce giant is expected to file for u.s. offering any day now. as we wait for the official filing, we are taking a look at the unique way the company plans to structure its share ownership which is different in the structure of recent tech ipos like the spoke and linkedin. let's bring back in cory johnson. leslie dicker is joining us from new york. what exactly is alibaba doing and how is it different than facebook and zynga and other structures? >> this dual class structure is fairly uncommon with the exception of media companies. there are companies where there

has been a history of family ownership like berkshire hathaway. it's becoming more common in technology? yes, lately we have seen that more in technology. we had a lot of these companies become public that had crummy results. outside investors have been unable to get active and forced zynga and groupon and others to change their behavior because the insiders don't control the majority of the company but they control the majority of the voting shares. the alley about the situation is different that the board would have separate power than the regular shareholders. >> break it down for us, how would this alibaba situation work? >> the partnership will be given an unequivocal right to nominate the board members for the ipo

which then the shareholders vote and approve. that's where the majority of members will go. they can put up and the nordic shareholders and vote on all other measures related to this company. there will be essentially a single class of shares except for that one privilege the partnership gets to keep. rowe price did a study that dual class shares are not performing that well. it's interesting they are going against their own best advice. inc. about yahoo!, a company that does have a lot of problems for a long time with activist shareholder is getting involved because they can take large positions in the company and demands some board seats. i want to fix a company that was broken. alibaba and yahoo! are joined at the hip right now. it ise level, whether

historic performance of dual class shares or the notion that the shareholders will not fully have control the company they own, there is additional risk with a listing like this. it will be more difficult for alibaba to go public. >> what are you hearing from potential investors? how do they feel about this structure and is it going to deter them from investing? >> on the one hand, you have the investors who are growth oriented and say i don't air what the corporate governance structure is print look at the returns from google and the returns from facebook. i am in it for growth and growth alone. then you have the other side, people who like to dig deep and look into these companies and some investors say they are concerned about the transparency and this is just one other aspect that is a red flag. >> how do you see alibaba faring in the current and byron at? we have seen a selloff in tech

stocks. are they immune to that? there is going to be so much in its filing that will answer a lot of those questions. we don't know how obscure the finances are. we don't know how the investment banking fees are different. to take probably going a lot of money out of the public markets and there is not a lot of money racing into the public markets right now. on some level, their ability to show a lot of growth and profit might help them a lot. if they go with them offering that is smaller -- >> and an offering that was delay. >> they did not rush out the gates. it suggests this market is not immune to all rest. -- risk. this will suck a lot of wind out of their sales. it is coming after may. the notion that people don't want to pony up for a lot of

risk because it is no longer april will add a little headwind. in may and itld worked out in the long run. >thank you so much to both of you. stay tuned every day watching for this alibaba filing. coming up, from 480 million twitter shares becoming ella bowl for shares tomorrow, the company doing it to boost user growth and keep insiders from selling. you can also watch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

>> welcome back.

more than 480 million twitter shares are eligible for sale tomorrow as the company's share lockup expires today. dick costolo and evan williams and jack dorsey have announced they do not land to sell their shares. is it enough to boost twitter stock which has plunged 39% this year? max wolf joins us now from new york. he wrote one of the very first twitter reports on the street two years ago. we had the ceo of well front which is helping many twitter employees manage their portfolios on the show last week and he said the first cell lockup expires is the worst day to sell and most of the twitter employees they are working with not planning to sell right now. is that what you are hearing? >> yes, always a pleasure. a couple of things have changed in the market the past few years. there are specific things about the twitter story that make us feel like whatever downdraft is

in the shares and be it's not a great selling opportunity and the world has changed a bit. they're a second market liquidity in a waiter did not use to be. you're not talking about people who watch this go from an idea to a $25 billion enterprise. that has changed. twitter is a good story and a bit most -- misunderstood lately and it has been buffeted around by the risk on/risk off market. down more shares are than 38% since the start of the year but they are up today. how much of an impact do you think a lockup will have on the stock? there is a mistaken belief that lockups are law, they are merely a sick just in. twitter had a weird lockup. there already was an earlier lockup and they let them sell

shares to cover their tax bills february 15. the initial early lockup let non-executives cover their tax bills. it was half $1 billion worth of stock and that came on locked -- unlocked at this particular point in february when the stock was well over $50 per share. if you look at the performance of the stock, you can see the effect of those insiders selling to cover that tax bill and the stock got a really big bump on april 15. it's an interesting lockup strategy to let people who wanted to cover themselves get out and cover tax bill that would have resulted from the ipo. let's also remember they were able to sell in secondary markets before this ipo and there have been very few big companies like that to let insiders sell before the ipo. >> i spoke with dick costolo last week. there were questions about whether they can accelerate user

growth. listen to what he had to say. have a very specific way of thinking about the long-term plan for the company. it's about balancing investment and growth and operating leverage in operating efficiency. that combination of growth, operating efficiency can, and leverages the way i think about how we will build the business and how we will build the company while always paying attention to the market landscape. feel, max, about his response to the critics, to the skeptics? >> i think it makes little sense. it strikes me as a touch academic. i think it makes sense and they need to be careful. social,ybody with twitter is an 80% mobile story, how do you monetize your

audience engagement without driving away the trendsetters? that is always tricky. on the other hand, it's not the credible rebuttal to nasty commentary in the market focused on twitter lately. we havee his answer -- a very specific way to look at these three things plus the markets and we are not going to tell you. >> when you and i looked at the numbers last week, we thought they looked pretty good. thatne made a point to me if you take the name twitter off the earnings report and looked at it and you stripped out all that information, are they being held to an unfair standard? >> in a sense. i cannot blame twitter entirely for selling the stock up the value with which people were willing to pay for it. the fact is, they have a really high valuation for a growth story that is, part.

the fact that this quarter was a little better than the last one is good for them. with this kind of valuation, you've got to achieve growth rates and show a clear path to profitability that twitter cannot do. >> cory johnson, thank you. max wolf, thank you. back with moret of "bloomberg west." ♪ >> take a look of the major averages today. there is little change and how they are trading. people are looking to chinese economic data as well as data in the u.s. and seeing it as a wash. there is more direction in individual movers. we are looking at allergan,

pershing square is pushing the pharmaceutical company on the potential takeover deal. it would support a superior offer if one happened to come along. we will have more "on the markets" later. ♪

>> you are watching "bloomberg west." some of the biggest names in the hedge fund world are meeting up right now in new york at the ira stone investment conference, one of the most influential investing conferences of the year. our very own market makers anker stephanie ruhle is there. withdan arelli. what's is the psychology of money main? simplee is some very aspects of it.

it turns out, people think about money. when we think about money, the way we pay whether it is credit card or cash or gift certificate changes. you take the money and transfer it to something else like a bottle of wine, it feels very different. we think about money is money but the reality is the way the money is being presented to us, it influences dramatically how we think about in what decisions we make. >> give me an example. which is aa company cheap manufacture. >> let's say amazon. foreople come to work there four days and they have four days off are in on the days they are on, they have long shifts like 12 hours. have 12 hour shifts. on the first day of the ship, they give people a target and they say if you get over this target you will get a bonus and if you get below this target,

there will be no bonus. that's the basic story. imagine three types of bonuses -- one is money like $100, one is pizza, and one is a text message from the boss. which one of those will do better? >> what's the answer? it's got to be money. >> the answer is interesting. these are for days on the first day they all do the same but on the next day when there is no bonus, the money takes a big dip. motivating money is when we get up the next day you say i work for money but there is no money today, i am working last. i think i will work 15% less. word from the boss increases how people perform but does not have the same rebound. >> talk to me about the excitement of technology. everybody loves technology right now. they liked wearables.

do you buy that or do you think people will not change? >> i think there is a lot of ways to think about how to change people's behavior. i think it is about salient information. that we are not good at thinking long-term about, these are failures of thinking long-term. i think some of those devices are helpful in bringing thanks to close proximity. i really want to be healthy and 30 years but it's not motivating. i also want to do 10,000 steps today. it's a question of how we designed these products. imagine a situation like square. they are teaming up with to walks to get people by the cashier without paying. what will happen? people will spend more and not feel bad about it.

then they will get the credit card bill. on the other hand, we can design an electronic wallet that will show people how close they are to bankruptcy or how they are not doing well. the technology in which we are measuring what people are doing every moment, we can do more of it and get people to be more responsible or less responsible. >> tobacco companies can use your work, to figure out how to take that press and so more product. what you say to them? >> it is true. i got a call once for my big tobacco company and he asked me to come and give a talk and offered me a lot of money. i call the american cancer society. i said to them if i go i will give you all the money. they said go. >> no. >> but i decided not to go anyway. this is a danger. decide to change human

behavior for good or bad. there are bad usages so i try to stick to the good ones. >> there is a ton of study on human behavior over the booming business of online dating. how does it really work? >> i have done lots of research on online dating. the reality is it is not really working. >> it's not working? matt, are you listening? experienced in goods but not description goods. imaginean experiment -- i came to and i said give me a list of 20 of your best friends and 20 people you don't like so much. then i take these 40 people and asked them to fill in an online profile and i come back with those without the names and pictures and sort them into two piles, the people you love and don't love. how much do you think your online description would help figure it out. ?

the answer is not very much. think about the people you love. what about their online profile says you would want to love them for life? in our attempt to take people and simplify them to hair color and religion and height and weight and so on, we are missing something essential about the human experience. what does it mean to meet somebody? do these people say what they like and what they want to be but they are not representing who they are? >> it's a little bit that people are lying. a big part of it as we are not really good at describing those things. what is it about an online profile that would protect real chemistry, real attraction? there is not much of it. there are some ways we can do better. speed dating is a much better experience. andget to meet people

virtual dating seems to work better. get to meet somebody online and do something virtually together. i am very hopeful about the technology but the technology we have now is not that promising. >> virtual dating is not so good for kissing. thank you for joining us. we need to have a longer conversation next time. thank you so much for joining us. i will send it back to you, emily chang, we are talking about the psychology of money. >> you always know how to liven it up. thank you so much. up, marissa mayer once use this website to test more than 40 different shades of blue for the google logo. i will speak with the ceo had to make sure your website or forms like that. ♪

>> welcome back. optimizely isime, running 30,000 experiments all

over the world. it allows companies to run multiple versions of their website to help them optimize performance. the company announced an additional $57 million in funding. what are their plans for this new money? the ceo joins me now in studio. helpss a company that marissa mayer test 50 shades of grey before the google logo? the idea is running an experiment and trying different variations of your website and mobile app and see which one is the most effective in getting your visitors to do what they wanted to. >> your clients are incredibly high profile. tell me where you have seen the most success. >> crate and barrel is a great example. they have run over 650 experiments. toy use us to try

personalize the experience you get when you go to crate and barrel.com. after the winters in the northeast, they decided to show a message to people after the winter was over and said congratulations you made it through the winter so let's plan for the summer and i wanted to sell them nice furniture for their patio. >> it's interesting how many websites don't use this. crew, i feel like when i go back to the website, it treats me like anyone else. why don't more companies use you? it requiredst, engineering resources. for many businesses, that was a very bottlenecked area. enables them to drive the process of experimentation and that shift enables businesses or not doing a-b testing to do this. >> what are you planning to use $80 million to do? >> we want to turn data into action raises money to build toward that vision. the first step in that vision

was website optimization and two weeks ago, we launched our ios product and we see an opportunity to improve their experience a user has. >> you have been one of the hottest companies to come out of late. got interesting how you people to invest in you. >> i had dinner with my management team and to folks on my team had worked for scott when he was the ceo of ironport and they said he was one of the best ceos. as the current ceo, i did not take it personally but i had to meet him. i was impressed with the way he built a company that was built to last. to be aroundzely for 100 years and that starts with culture and he was great to help us build the right culture. that that big, is an opportunity? testing is a way

of turning data into action. think that opportunity is tremendous and that's why we raise this money to go after that bigger opportunity. >> when doesn't testing work? >> it sometimes won't work if you don't have much traffic or you don't have a clear conversion goal. as long as you got traffic and you want them to do things on your site, a-b testing is great for you. >> you guys have big competitors like google. how do you handle that kind of competition from giants and different di -- and differentiate yourself? >> we haven't flattered to see the competition go after the same market. what we do is the ability for non-technical business users to do a/b testing. we did not invent it, which is made it easy for everyone to do. >> do you have a huge sales team? >> actually, most of our

customers come to us. we are lucky to have been the benefactor of a lot of tailwind where businesses want to become more data-driven. what is the most surprising thing you have discovered through a/b testing? our own website under the software quite a bit. we ran extrema on our homepage and we were surprised we got more questions than answers from the experiment. there are opportunities to do geo-targeting and personalization popped up. >> we will keep our eye on you guys, ceo of optimizely. one of gaming's biggest urban legends was recently uncovered. we sit down with the man who found that mass grave for atari's et videogame next. ♪

>> welcome back to "bloomberg west." charge points, the largest installer of electric the eccles charging stations is a ending its network aimed at helping electric vehicles break through. they say the newest partnership could be a sign of things to come for american carmakers. >> we hate paying for gas electric cars don't have the range we need. ambitious companies like california's charge point have taken on the charging challenge to make it easier for drivers to ditch the gas, installing more than 16,000 charging stations nationwide. about 170,000re's cars on u.s. roads going to about double within the next 12 months. as those double, our network will at least double. >> charge point is partnered

with some of the biggest carmakers to try to expand the market for electric and plug-in hybrid vehicles. their most recent announcement is a deal with cadillac. each car comes with the charge point guard and drivers can download an app to track stats in their drive and find the nearest station to see if the charge is available. x has the luxury feature could be the next big thing for gm. >> we will be able to take the learning from these programs and apply them to other brands within gm and be able to reduce costs and make higher volume brands and get more ev's on the road overall. >> they need to get the technology into the car itself. >> this display here is completely customizable and you can change the information shown here based on what you want to know. >> driving down the cost remains a challenge. ev's are still more expensive than traditional vehicles. will goess that cost

down as supply goes up. with a growing network of partners, stations, and data, the ev hopes to spark more electrified urban commutes. if you have an idea you would like to submit, visit planet forward.org. for more environmental news, check out bloomberg.com/ sustainability. the truth about one of gaming's biggest urban legends was .t.overed last month when e atari cartridges were dug up in the new mexico desert. it was called the worst videogame ever made. there was a story about them hiding the game that became an industry legend. cory johnson has more. >> what a great gaming legend. penn documented this is part ox his new original xb

documentary. he is the producer, not the director. >> i'm actually the writer. >> there we go. what attracted you to this story of these atari cartridges? >> i grew up a gamer. my dad got us pong when i was sick so i have wasted an inordinate amount of time playing video games. atari probably took up a good 1/3 of my childhood. i also happen to like these kind of urban legends, strange stories that perpetuate themselves. no-brainer.of a >> to me, this story touches so many of my favorite things. you have the excitement of technology and the failure of technology, this incredible growth of this company and you've got this bombastic

amazing character in steve bross , the ceo and chairman of warner brothers and you have an accounting fraud all in one. what in particular about the story drew you to it? -- there isy think definitely a corporate story here that is very interesting but there is also a larger story about why people are so attached to atari and what kind of cultural importance it has for them. why did 300 people show up to watch us dig up garbage that was buried in a dump? i think the answers to those questions are interesting. it's not exactly what i expected. mentionedpong. there is something about gameplay that wires into your brain in a different way when the game is great. people might experience a great

" call of duty" game or its "tetris." >> that was a spoiler. bushnell and a whole bunch of people who are important figures in the videogame industry made exactly that point and talked about how you could drop asteroids in a group of kids today and they will still play it. certain games, there's a reason people still play checkers. tarted up and looks as good as halo, there is a reason people go back to a game and that's gameplay. those early atari games were all about gameplay. that's all that mattered, really. it has been a very pure vision of gaming. >> i was more of a battle zone guy area of i think you are right about that.

it was that i know a dealoss wanted to do with steven spielberg so did this $24 billion deal with the torantee and presented it the atari guys and said we have athave a new game about e.t. it's got a be out for christmas which gives you forward to develop this. is that the true story? >> every single person who quotes the dollars that were given to steven spielberg has a different number that ranges between 17-26 million. some version of that is true although it was paid to universal, not to spielberg directly. that they gave howard scott warshaw, the designer, about five weeks to design the game which is not enough time. involved inements

this that are accurate and they wanted to get it out for christmas. there is also parts of the story that are not exactly sure. -- not exactly true. spielberg picked howard scott warshaw and liked the idea for the game and played the game before it came out and he liked it a lot. a lot of that kind of neatly fitting pieces here when you pull the story apart, they are very different than you might imagine. thingyou see this kind of as an inevitable result of a boom that something that is not going to work as too much backing and falls apart and ends up in a landfill? part, i don'tl know if that is inevitable. i think that atari was way ahead of its time in terms of a company that started in industry, literally. there were no video games. to wrap this up,

thank you very much. ♪

>> i am mark crumpton. this is bottom line. today, we have live coverage of the investment conference here in new york city, where the biggest names in finance represent market moving ideas. stephanie ruhle is at the lincoln center with the latest very quite a lineup today. one speaker is set to speak in a few minutes. five indeed. earlier, i spoke to the