>> from threefrancisco, welcome to "bloomberg west." in san we focus on technology, innovation, and the future of business. every weekend we will bring you the best of west, the top interviews with power players in global technology and media companies that are reshaping our world. for the second time in less than a month, there is a major shakeup in the twitter executive ranks as the company tries to boost user engagement. this time twitter has named a

former goldman sachs banker is the new cfo. he led the twitter ipo and has a varied background, including cfo of the nfl. he is also a west point graduate, spending time in the middle east while in the army. gupta will stay on as senior vice president of strategic investment. this is less than three weeks after the coo resigned amid reports a power struggle between himself and the ceo p meantime, twitter is also active on the acquisition front, reaching a deal to buy the mobile ad targeting firm for $100 million at what do these moves say about twitter's future? i spoke to a partner at red point ventures he was previously twitter director of platforms for four years. i asked about this" i have heard amazing things about anthony. i know they had a great experience working to the public process. there were a lot of fans inside of twitter. i think about what it means for twitter.

i think bringing someone in like anthony to help translate between the two worlds will be very effective for them. >> what do you imagine is happening inside twitter? obviously mike gupta is moving to another position. they have had a lot shakeups in the product department. what is going on? >> it is about finding the right leaders at the right time to grow and continue to expand the opportunities they have to do with around 300 million active users, i think that could because two one billion. they have to find the right people help them to get to the spot. i think they think they have found those people. >> how is dick costolo regarded in the company? by employees? >> i think he is an amazing ceo. i love working with him. people are inspired by him. >> from a culture perspective, is there anything to worry about? >> every company has its challenges and growing pains. twitter has thousands of employees and is now a public company.

there will be some growing pains, but i think it is healthy nd growing like crazy. >> why are they buying this acquisition? >> twitter is doubling down on mobile advertising it we see tons of ad dollars shipping into mobile. we see tons of companies being billed mobile only. to keep doubling down on mobile advertising is very smart. it is some the gulf region targeting. there were companies trying to get in stalls and bring new users, but now they will have audiences, and they can build advertising products to bring people back. if you want to buy something or you use ebay, ebay can target an existing user with a product they want to buy the time they ant to buy it. >> not long ago, twitter hired ahead of commerce, but nobody really knew what exactly twitter was planning to do in commerce. do you have a better idea or they are going with this?

>> there was a little bit of news leaking out today. the ceo is a total rockstar. i think he is the right guy to lead and figure out what commerce is per at if you think about the evolution of how twitter is built out him of their building stuff in stream. they're consuming something. they are putting a "buy now" button right next to products or click's you think they will do that? >> that is my guess. >> how is this going to help user growth? >> the thing that is most important is building more use cases so people understand how to use twitter. the more way they can get twitter out outside of those active users means a lot to them. if you think about the global reach, people are undercounting the reach that twitter has. >> one of the things dick

costolo said to me is a does not matter how many people are actually using twitter, because you see tweets everywhere, on tv and in magazines done is that true or do they really need people to be signing p? >> i think that is where the public market misunderstands twitter. it is not like facebook. it is not just about the monthly active. it is about the one billion plus users they can reach on a monthly basis. it is media. it is such a part of the culture now. in many ways it is bigger than facebook or do you hear about it more on a daily basis than you do about facebook. i think there is a huge opportunity. >> you have been at red point now for a year? >> not a year yet. >> almost a year. how is it going? what trends are you following? how has your twitter experience help you pick and choose where to place your bets? >> i am loving it.

it is a big change from operating. there is a lot to learn still. good thing i am learning from twitter is looking at user behavior and continuing to motivate people to use the application. what will get people to log back into your application pier you look at the behavior for twitter, it is the thing that people open up every day to see new real-time information. my job is to look at those things and figure out which ones ill be the next twitter. >> so which businesses are looking cool or like they will keep people coming back and opening the app every day? >> yes, that repeating behavior. it looks like, place behavior, like somebody taking public ransportation. >> how are you guys being affected by valuations and what is happening with -- you mentioned uber, and what is happening in the broader environment -- are these valuations trickling down?

>> it had been fluctuating for a while. i think enterprise has stated little bit higher the consumer has probably been a little depressed. it affects the valuations in the early stage. it is import and for us to still try to find the winners in those markets, because those winners can have outside values. >> that was a partner at redpoint ventures, former irector of platform at twitter the investors want to find next big disruptive technology, but what happens when legal challenges like what happened to aereo that these new companies on the defensive? we talked to a top investor about the pros and cons of investing in disruptive tech, next on "the best of bloomberg west."

>> welcome back. i'm emily chang. after the supreme court ruled that the area business finally

it's the rights of broadcast networks, they have suspended operations. in a blog post, the ceo called the ruling a massive step back for consumers. he says the journey is not done and aereo is busy mapping out its next step. how do investors know when a disruptive tech committee will be a huge success or when they might lose it to government regulation? we spoke to a venture capitalist who has weighed these risks over the last decade to started by asking how he makes a decision to invest in companies with regulatory concerns. >> you think about commercial drone, as well, so everyone chooses the market they are going to either create or disrupt. when you disrupt, you have things to deal with it when it comes to aereo, they must have chosen to go after the cable providers thinking that there was a shot. personally, we would not have taken that bet because they're very litigious. that is what happens good with

commercial drones, we made that that. we have a service which is sort of like uber, except it is the driver, not the car, that is available to you do have to figure out the risks. you have to hope that the regulatory one will be addressed at some point in your favor. >> is the notion that there are certain of different types of industries, things like federal, finance, health care, obviously, communications with aereo, that hat is federal income and spot checking -- protecting themselves? with municipalities, they're dealing with a lot of regulations as well, but they can't take them one day at a time. >> i would go after the local ones, even though you have to tackle them one after the other. the federal ones are always more challenging. we hope that progress will actually win eventually. >> hope is not a plan. >> i know. look, there is a lot of luck

because into this, especially in the early stage. in the case of regulation, you talk to your counsel and they say, look, this is sort of what has happened in the past, sort of the way the agency is looking at those kinds of things, and you hope for the best. >> we have talked about evaluations. uber at $17 billion. do you think these issues could truly slow them down, become heir fatal flaw? >> i do not think so. in the case of these two companies, they have reached a scale where they can actually go to the local government. they can go to institutions to make their case. in the case of aereo, they were just too small and they had not made a dent in the marketer they were slaughtered by the cable industry. >> airbnb, where regulatory concerns the reason why you assed on it?

>> when i was looking at that, it was called air bed and breakfast. you could go stay with someone o make it cheaper. i thought, yeah, right. >> you are not the only one. >> when uber -- >> them, too. >> when they got their valuation, you could feel the funk in the ecosystem where everyone who passed on it was like -- >> what is that feeling like when you know you have passed on something that you could have made so much money on? >> that is our job. our job is to see everything that is sort of interesting and then make a decision. hopefully we will make the right decisions and make money for the ext one. in the case of linkedin, uber, and airbnb -- the thing is,

airbnb and uber are on paper. inkedin is real. >> you just raised more money to have been talking about valuations and how money rushing into the market is driving up valuations. you are trying to raise money, but it is not rushing in yet but you actually raised a lot of money or commitments to money. what was the fundraising process like? how are the rest of the world investors seeing early-stage investing? >> despite the lows that exist today in the market where you have literally 135 funds that are out there investing -- when i started, there was one. it is a different landscape. people look at the brand is built. the portfolio is with 150 companies spirit we have actually made quite a bit of

progress, and we have a lot of winners in what we have invested, which will make a lot of money for investors. so we look at the brand was billed, and we say, yes, we want to be in that court. >> it does not end well, he said to do you think this will end well, the capital chasing deals right now and the prices going p? >> you have a lot of capital-chasing deals. people will lose a lot of money. but i think that there is a lot more discipline, and prices have sort of gone up and sometimes in crazy ways. but if you look of the market, there is just a finite amount going in, and that is worthy regulation is happening. even though some companies get high valuations, the mean valuations have not moved up that much. >> cory johnson with our

guest. is it time to change patent law? washington looks for a little help from silicon valley to clean out the junk. that is next. ♪

>> welcome back. legislation to kill patent control died on the senate floor this spring, so the patent trolls live on for now. but the u.s. trademark office is not giving up its fight to reform the patent system. what is a patent troll and why are they causing such takes for technology companies? cory johnson has the answer. >> they are called patent trolls, committees who acquired the rights to a patent but do not have to sell or produce anything. they build patent arsenals, often collected from abandoned stockpiles of universities, failed startups, and defunct big

tech companies be at once they build their war chest, those trolls go out for blood, targeting committees whose technologies are similar to those outlined in the patents. they threaten costly lawsuits unless licensing fees are paid up in most troll attacks are settled out of court through nondisclosure agreements. in fact, of the 4700 patent laws filed since 2012, 3000 were from these so-called patent trolls. >> cory johnson also spoke about ways to fight heightened trolls with the deputy director of the u.s. patent and trademark office. he started by asking her what she sees as the fun a mental -- fundamental problem with patent trolls. >> that is a pretty complicated question. the biggest question to ask is -- what can we all do to better improve the patent system, to make it the best it can be? there are lots of initiatives being undertaken. they are being undertaken by the court, the congress, and by the

administration, by the u.s. trademark office. happy to go into those in as much detail as you would like. >> you have worked in silicon valley, worked with lawyers, worked on the apple-microsoft case which was very important. how do you sort of explain how different things are now than they were even 10 or 15 years ago? like i think our companies are just as innovative as they have always been. but studies have been done, and there has been an uptick in patent litigation and abuses litigation to the goal of the administration is to help curtail the patent litigation and create a system that promotes and encourages innovation. >> what kind of litigation is being abused? >> starting a patent when you have no ownership rights. stretching the meaning of what it covers. using a tactic where you send demand letters to a lot of folks and you are saying to not look

too much into the details of it and you can settle this litigation for just $3000 to my lot less than hiring a lawyer. >> what has to change? >> the offices undertaken a huge priority to increase the quality of patent issues. the less ambiguous the patent is, the less the likelihood of that patent being used in litigation. the more likely the companies are able to focus on innovation. >> how do you make the patents better? is it a matter of coaching your people so they can do better? >> they are already doing a tremendous amount. the examiners are very hard-working and do an excellent job searching. however, we are actually using silicon valley techniques, such as crowdsourcing, now. we're going up and asking experts to say, look, you are experts in your field, so what should our examiner be considering as they are determining whether or not the patent should be issued?

we are also bringing in experts from the industry, from academia. we have some of the best experts in the world that sit outside the walls of the pto. >> how do you bring those people in? >> we say come on in, come to the office, give a one hour presentation on semiconductor technology, whatever the expertise is, get that training to our examiners and we will broadcast into all of our examiners. smart examiners are up to speed on fast-moving technologies lead to better quality patents. >> what about innovation? >> there are many factors. the key is that what we want is we want to curtail patent litigation, but we also want to preserve the rights of legitimate patent owners be to have a balanced set of reforms that promote innovation, there are a lot of issues at stake. that said, the administration has stalled, but we're not waiting to move forward to it we have a number of initiatives under way. we had the crowdsourcing

initiative to it we are tapping into experts in the field. we're also using data that so many of our companies use. the uspto has a lot of data. for the first time, we're able to go over that data, review that data, and see how the examiners reviewed the patents at every phase of the examination. >> there was a time when patents were not seen as such an incredible, obvious challenge. president obama actually mentioning it in the state of the union. that highlighted -- take a listen. >> let's pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation. >> it is kind of amazing how relevant this issue is. i wonder if the 20 have in your timeframe of patents needs to change now because innovations happen so quickly. >> that is true.

it is occurring quickly. but you have to keep in mind that there are many industries for which a 20-year term is justified and needed. for example, lot of the biotech and pharmaceutical companies are they put hundreds of millions of dollars invested into developing and getting fda approval for new drug. in order to recoup their investment, they need longer-term protection. >> longer than 20? >> well, 20 is probably long enough to her they seem to be operating just fine with that amount of time. you do need a certain amount of time of exclusivity so that people take the risks so they can then also have the opportunity to recoop their investment. >> cory johnson with the u.s. patent office deputy director. rotesters gathered outside as book's office in london the committee faces scrutiny for ads it ran promoting the reelection of syrian president bashar al-assad. a group is demanding the social network give back or donate

money made from running those ads. ♪ >> welcome back to the best of

"bloomberg west." i am emily chang. forbook is under scrutiny ads it ran promoting the reelection of bashar al-assad. the ads ran for a few days before the site to come down. a proteste, there was at the facebook london office demanding they return or donate the proceeds they earned. cory johnson spoke with the campaign director and asked how the protest went. >> it was good. there was strong support from the public. people in the offices at the facebook building who were showing a thumbs-up. people were sympathetic. the question we are asking

facebook is if you have done business that promotes such a terrible regime, the thing you should be doing is making it right and by making it right we mean give the money, the prophet you have made to remote and atrocious regime, give it back to the people that it belongs to. in desperateians need of medical assistance. there are many aid agencies that could provide assistance. >> facebook says they took the ads down and they don't know who paid for them. a money did not come from syria. anyone who knows a little bit about this regime knows that its tentacles spread far and wide in the region and beyond. speakyrians still cannot out against the regime. it does operate outside of the borders. it is not going to be a

philanthropist who decides they want to buy facebook adds to promote bashar al-assad on facebook. it is disingenuous to suggest that the money doesn't come from an element of the regime. gott is amazing that this 200,000 likes, this campaign had some effectiveness to it. >> that is what is worrying. of propaganda matters when it is a crisis and a conflict of the scale. theyany ordinary syrians, believe that the world has forgotten them. the idea that facebook and do business the promotes a regime that is besieged entire cities and used starvation as a weapon of war and dropped bombs on schools and hospitals and just say that well, we took the ads

down but we are keeping the prophet. this is a time to show solidarity with syrians and say we have not forgotten what is happening. this is unacceptable business. there is a very simple way of putting this right. >> what does this tell us about the bashar al-assad regime? this tell us about them in the use of technology at a time when the country is in the middle of a civil war and there is international condemnation of the leadership? done at thebeing time of the sham election. the ads were primarily focused outside of syria. it was an attempt to legitimize the regime and to legitimize the election. syria thelook at moment, people are talking about

isis and iraq. responsible for the things that have unraveled. if isis were advertising on facebook there would be uproar. we are just astonished that there is not more uproar about assad who is responsible for what has happened in sit -- syria. that was john jackson with cory johnson. will have to face a class-action lawsuit over its data collection. the supreme court refused to consider their appeal a lower courts ruling. the plaintiffs accuse google of collecting e-mail and user names shooting images for street use. google has apologized for collecting personal information and say it was a mistake. they say it did not violate

wiretapping law. cory johnson i spoke with an electronic privacy expert. how bad is the situation for google? is a seriousis decision. the supreme court left in place a decision that found that the company had violated the federal wiretap act. these street view vehicles that were supposed to be taking pictures of houses were also capturing wi-fi communications. and people learned about that, they charge them for violating wiretap law. >> what are they doing? it sounds ominous. this is all unencrypted. >> they were having cars patrolling the streets in the world. they have these street view cars and they were driving on the street in taking pictures of everything around them.

they were also secretly , notring wi-fi hotspots just locations but the actual ip addresses. they want to know what computer you are using and what your home routers ip number was and where it was located on a map. usernames ofo know the actual devices and was running them. courts on both sides of the atlantic have declared that this is illegal. >> they said it was a mistake. does that mean it was an accident? >> they did not say it was an accident. this is not just an isolation. the herb in incidents where google has been involved in gathering information and sharing that information with the world. think of the original mission statement. since thele employee beginning of the company has

been on a mission and it was clearly defined. they wanted to organize the world's information and make it accessible and useful. some of that information does not want to began at. you might not want your personal information gathered. if the mission is to go out and do this thing, they will run into this problem and have to address it. going tor court is hear this suit. one of the consequences? it could be substantial. the action that was brought under the wiretap act was a lass action lawsuit. money people have been brought together to bring this claim. the supreme court has left in place a legal basis for the claim. google could be looking at substantial monetary fines. i think it is unlikely that they will go to trial in a case like this. up the facts are not favorable to them. it would be easy for the plaintiffs to show that the

wiretapping activity had in fact occurred. caplegal basis was well in -- lace and they would prevail in trial. you will likely see a settlement. they will figure out what a reasonable amount is to dispose of the various claims pending against the company. look at the acquisitions that google has done over the last six months, acquiring satellites that can send signals. drones, military robots, home sensors, nast. -- nest. does this make those acquisitions left valuable -- less a valuable? >> i think the decision is a good reminder that there are actually some boundary lines out

there for google that they really cannot cross. a lot of the data collection they are able to do is internal, but when they violate the wiretap act by collecting information through wire the aresion, live in creating a business model that is going to subject them to liability. i think it will cost the company. they will hold back and look more closely at limitations and privacy laws. run the user perspective, that is not a bad thing. protectingare important interests. we do want to use wi-fi at routers in our homes. at the same time, companies should be free to innovate. we will have to find a way to find companies like google to innovate while respecting these privacy safeguards. can you create a powerful

story using your pictures and a video? there is a new app promising to help you do just that. it has already won a design award from apple. the ceo joins us next. ♪

>> welcome back to the best of "bloomberg west." i am emily chang. most people consume content on their ipad. now there is not trying to help you create content for the ipad. storehouse is a visual storytelling app for the ipad. it is one of nine apps that won awards from apple. it raised $7 million in a funding round. i spoke with the ceo and founder and asked him how people use

this app. it lets people share stories of the men of photo and video and text. we realized there was an opportunity were people wanted to tell stories that went beyond a single photo that did not want to write a blog post. they would put photo and videos together and lay them out in an interesting way. >> isn't like imovie? >> it is more of a magazine article. it allows video in their and --t adds a multimedia, element. ipad. guys only on the is that a concern to be on -- expand beyond that? we are very bullish on the ipad. the youngerat generation in the way that they have adopted it, this is going to open up creation for a lot of

people. >> you were at apple for eight years and you were a designer and user. you helped other companies design apps for ios. didne of the things that i was help people take advantage of the technology and unique hardware to push the boundaries of software design. that is what we have tried to do with storehouse. we wanted to think about what publishing could be on an ipad. >> people are using this and some unique ways. >> we are seeing everything from a girls night out to backpacking trips. some of the more interesting are the way professionals have adopted. there are award-winning photojournalist using it. there are deep photojournalism stories and cooking recipes. do-it-yourself stories.

the exciting part has been seen the variety of stories told on the platform so far. > what do you think about ios 8? they are setting down a nice foundation. i think it follows up and gives a lot of hollis that was not quite there. as an ipad and iphone user myself. >> the coolest features aren't there yet. what are the cool features we don't know about yet. know about what is going on behind the scenes. aboutsly a lot of talk where other types of things. i really don't know. i am always hopeful and excited about my colleagues and what they're cooking up. >> there has been a lot of talk about the state of innovation at apple. how optimistic are you that they've still got some more

great world changing products that are coming soon? >> i am very optimistic and my friends are very excited. they are very quiet, which means they are working hard on different things. >> you raised $7 million. how are you going to spend that money? >> we want to build up a world-class team here in san francisco. we want to be able to expand beyond other platforms besides the ipad. space, there are not a lot of people working on the photo storytelling space. there are people working on storytelling for writers and products for the web. we are not seeing other apps doing the same thing on the iphone or the ipad. next, the senior vice president at oracle talks about his second love and life. setting off fireworks.

he is created some of the largest displays in the country. we will meet him coming up next on "bloomberg west." ♪

>> welcome back to the best of "bloomberg west." i am emily chang. the world cup has proven to be a ratings success. the first two usa games are so popular on espn that they cause services or options. why are americans so into the world cup? director ofh the surveymonkey. what is so special about this year and why so many viewers are tuning in? did says thatwe soccer is seen more interest. it is ahead of golf now in what people say they are watching. that might be skewed by the fact that we'll asking during the

middle of the world cup in golf is definitely on the decline. soccer is on the rise. it has a long way to go before it catches football and basketball. >> there is a huge spike in viewership. >> every world cup is seen that. the numbers for the world cup have blown people away. we greatoes to show soccer with all of that passion. mls ist know that the quite that for people. that is part of the issue. we didn't see that soccer fans tend to watch more online. it is a very small amount. it is 4% versus 2%. it is because they have to go find the manchester united games

that are streaming early in the morning or something like that. they have to search for it. >> i just got a number from nielsen on ratings. viewers up from 2010. >> there is more streaming because the games are on during the day. it is not just the technology, it is the fact that people are at work. >> we are all trying to figure out how we're going to watch it today. >> i will be doing that on my tablet. we still found that most people watched sports on tv. most people watch it live. sports is on at night and on the weekend. it is easier. when you think about your device, it is longform content and a lot of streaming. it is a lot of battery and data

usage. it is not mainstream. >> dave goldberg with cory johnson. while most of us only think about fireworks on the fourth of july, some people think about them all year long. he is the senior vice president of development at oracle. by night, he is in a homemade fireworks factory. of thecurated some biggest fireworks displays in -- country, even the signing designing a show for his boss. take a look at this unusual hobby. >> i am senior vice president for development at the oracle corporation. people can often find me on here in the desert making fireworks and blowing things up. i started making fireworks when

i was a kid. can't beare 12 you serious because no one will let you. as i got older i could afford equipment and chemicals to make fireworks. fire in the hole. there are a lot of parallels between developing something that people like to see in the sky. audiences expect a particular thing. they like loud noises and a different kinds of textures of colors and sparks. it they like a lot of things going on at one time. when i explain to people that i make fireworks, they assume that i am not. that is partly true. it does take a lot of areas. they are dangerous. things that is fascinating to me about fireworks is the blending of it ishysics, chemistry, energy you are able to control long enough to make something

very pretty after something that is very powerful. like watching fireworks. it is universal. some people get emotional. i get very emotional. if you take a good music and an artful display with timing and colors, it does something that really affects me. i like to see what i built have the a same -- the same effect on others. viceat was oracle president of development. that does it for the best of "burlesque." you can catch us monday through friday. we will see you next week. ♪

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