>> live from pier three in san francisco, welcome to "bloomberg west," where recover innovation, technology, and the future of business. i'm emily chang. ahead in this hour, will a smartphone reignite growth for samsung? the smartphone maker has just unveiled its latest smartphone, the aleksei ultra. will it be enough to trump the iphone coming out in a few weeks? zelda williams says she was on the receiving end of offensive tweets after her dad apparently

took his own life earlier this week. twitter says it will not tolerate abuse of this nature. and the ice bucket challenge has been spreading like crazy across social media. zuckerberg isk the latest. he dumps a bucket of icy water over the -- over his head and he todaring other tech titans do the same. we just heard president obama speaking from martha's vineyard. he just addressed a rock, and the protests unfolding in ferguson -- he just addressed iraq, and the protests unfolding in ferguson. the first, to our lead story of the day. it didn't have the usual fanfare of a samsung launch, but revealing its newest smartphone ahead of apple's new iphone coming out in early september. and this new samsung is a departure from the older phones. it's called the galaxy out for.

it's got a metal casing into the plastic. it's got a 4.7 inch screen and comes in five colors. the alpha will be available in september. the smartphone maker has seen its worldwide market share the klein to 25% in the most recent quarter. joining me, michael gorman. released this secretly, just a press release on their website. not a lot of fanfare. what is your reaction? looks like a decent phone. it is kind of what we would expect. it just shows how often samsung really does -- i hate to say it -- slavishly copy apple. look of theat the general phone, it's very much like what we have seen apple do. -- tol be interesting it see if apple will do a bit of a

twist where it might be a bit more curved. samsung will be a step behind. to beplastic on the back, clear. it is metal on the edges and plastic in the back. it will still look and feel very nice. it is a big challenge trying to compete these days, because these phones are big -- are getting to be so similar. read, is news that i it a flagship phone? it has some flagship specs. the cameras not as good as the galaxy s5, for example. but i still think they -- >> i still think the flagship phone is the galaxy s5. the screen is not as big. i assume that was made for battery purposes. it is using less power because of the thinner chassis that they have put in the phone, and they've had to put in a smaller battery. that is a concern.

from a hardware perspective, it looks like a hot -- like a flagship. it fits in a bit better with what we have seen from lg and, of course, apple. >> the question is, why echo we know they have been -- why? we know they have been struggling in market share. they are giving it the galaxy name. why bother? why not try to make the s five better? >> i think what they are trying to do is sit into more segments. as the smartphone market has matured and started to fill up the market, the need to really havegment to a degree we not seen before. now virtually everybody in the u.s., for example, everybody arnie has a smartphone. you are talking about getting people to upgrade. -- everybody already has a smartphone. you're talking about getting people to upgrade. they will be very specific in their choices. error all of these minute differences. -- there are all of these minute

differences. inin, they are trying to fit between these different markets. unlike the u.s., many other parts of the world do sell unsubsidized phones. they actually have to hit different price points. that is part of what they're doing with this as well. >> is samsung doing too much? >> samsung has always done the shotgun approach. throw a bunch of stuff against the wall and see what sticks. this seems like a continuation of that. it is kind of like copying what apple has done. have seen where these other hardware manufacturers have would've bigger focus on a premium look and feel to the hardware. that has long been a criticism for most people with samsung's phones. it has not heard them before, but now that they have seen their sales drop, they are like, we got to try something, so maybe this better, more beta for hardware will do it. >> there has been some discussion about the glass. samsung uses corning and apple

uses sapphire glass. what is the different? all i want to know is whether it's going to break. >> sapphire glass -- and it's not technically glass. it's kind of a sapphire crystal. it's more scratch resistant, and theoretically, potentially more brick proof. we will -- break proof. we will see what happens in the real world. and you say sapphire, everyone think it is a jewel. it is chemically manufactured. nevertheless, it is one distinguishing point. when we think about the smartphone market in general, most people in the u.s. have smaller screen phones. a 4.7 is on the large size for the u.s. market. be important, because not every one has made that transition. apple will drive a lot of transition with that. i just did a survey of 2500 people around the world on things they plan to purchase in the next year to all kinds of gadgets, and number one by far was large smartphones.

that is what people are looking for. >> a 4.7 inch screen, to me, having been using an iphone, mostly seems reasonable. 5.5 seems just too big. how do you think the new iphones will do compared to the new options from samsung? >> for me, it is about hand side. the sweet spot with the iphone and why it has been so popular with women in particular is the smaller size. when my girlfriend was shopping for a phone, she had no allegiance either way, but it was uncomfortable for her to hold a wider phone. she got an iphone because it was more comfortable and she could fit it where she wanted it to be. bigger, butle to go i don't think we will see anything over five inches. because i think you get into a moribund niche market. -- more of a niche market.

i think that is a better sweet spot. it lets people see video on their phone. people have been clamoring for bigger screens to do media and that stuff. i think that is probably where we will end up. >> what do you think echo >> we will certainly see the 4.7. the 5.5 is interesting. again, apple needs to grow another markets, notably china. in china, the 4.7 is actually not so big. it is kind of on the smaller side. they like five plus. part of the idea is, let's build products we can sell around the world. yes, maybe they are a smaller piece of the market in the u.s., but they might be significantly larger in other parts of asia where they want to grow. samsung sneaksa in anymore announcements. , thank you.an thank you both. what role is social media playing in the protests

unfolding in missouri surrounding the death of 18-year-old michael brown? more on that when bloomberg west returns. ♪

>> welcome back. i'm emily chang. just moments ago, president obama took a break from his vacation on martha's vineyard to address the situation and humanitarian crisis in iraq, and simmering tensions over the death of a black teenager outside of st. louis. our white house correspondent phil mattingly joins us now with more. let's start on a rock -- on a iraq. what is your take away echo the

president did not mince any words. he said the situation on the top sinjar has improved. ready much what we've heard in the last 12 to 16 hours is they believe the siege that has been surrounding that mountain has been broken. a major step forward at least on that issue. the bigger issue as the president underscored again inay is the political things baghdad. there are modest gains there, but at least some steps forward. president's take on what is going on in ferguson, missouri. the president said he had spoken to the governor in missouri shortly before coming out and you said there is no excuse for the escalation of violence that has been going on, on both sides of the situation. , there's a parallel

investigation with the local police and the fbi and justice department on the federal side. there is the determination from the administration to try to get to the bottom of what happened. >> he said he did asked the doj and the fbi to investigate. let's take a quick listen to some of the things he had to say. >> when something like this happens, the local authorities, including the police, have the response ability to be open and transparent about how a are investigating that death and how they are protecting the people in their communities. air is never an excuse for violence against police -- there is never an excuse for violence against police, or for those who auld use this tragedy as cover for vandalism or looting. there is also no excuse for police to use excessive force against peaceful protests. also said that police should not be believing journalists. what do you make of how he came out, sort of defending both sides in the situation? is interesting,

emily, you compare this to his remarks a little over a year ago on trayvon martin, which were very from the heart, trying to take a look at the issue of race. this was not that. this was an effort by the president -- i think he was very cognizant of the fact that leadership from above has not existed in ferguson in the past for five days. two washington-based journalists were arrested and detained for a short time frame yesterday. that is terrifying to a government official when you look at things going in that direction. the president is trying to establish leadership from above, trying to get federal officials in there to get some control of the area. then they will deal with the broader underlying issues. >> it definitely sounded like he was trying to find some middle ground. phil mattingly, thanks so much for that update. as unrest continues in ferguson, missouri, a hacker group anonymous, and interactive group of activists has urged peaceful

over the death of michael brown. this morning, they released the name and photo of the alleged shooter. the police has said the reports are inaccurate. we are joined by professor of endocrinology -- of anthropology at mcgill university, and author. she joins us via skype from montréal. thank you for joining us. how would you describe anonymous's role in this -- these protests and the situation in ferguson so far? has laid a couple of rolls. they have amplified the role that the media played, which is getting the role -- the word out , having people be able to participate and know what is going on. and they did this largely on twitter by providing live updates and pictures and

rallying calls, but they go no further than that. by releasing names of officers involved, whether that was the name of the chief of police in , releasing his name and that of his family, and then noted, theg as you supposedly said who shot mike brown. >> i wonder, behind-the-scenes, how are they organizing themselves? how will they discuss whether to release this information once they have obtained what they believe is correct information? historically, in some operations where they have been releasing names or incrementing evidence, they tended to organize by very small teams. and they would work with locals in the area, and really, only release information once it was pretty solid. i actually watched this morning as members of anonymous and participants were discussing whether to release the names. it happened but a public channel, which was quite

unusual, and it was quite chaotic. it was clear that while many felt the information was suggestive, it was not definitive, people were saying nevertheless, in the heat of the moment they called for a vote. the people voted yes, and next thing you know, they release the name. >> how would you compare their role in this protest to their role in other protests, and wide-ranging protests from issues surrounding the founder of wikipedia and situations like that? >> this one is interesting, because some of their previous interventions -- a really good example which has some parallels to operation part in 2011 where some bart police been killed charles hill. there were some protests at the bart station and bart was going to set -- to shut off cell phone access to quell future protests. anonymous got involved at that

moment where there was censorship. i'm pretty sure that issue would have stayed a regional or city issue. because anonymous got involved, it transformed into a national issue. with this case, it was national from the start. it was so heated. what anonymous has done is reached different audiences, .mplified things but also really stirred the pot of controversy because they keep claiming they will release the name of officials involved. and again, this has really been controversial, within anonymous as well. >> talking about the role of social media, it is amazing with these protests, as with so many in the past several years, the power that social media has. it is being live streamed for all to see. is it good or bad? on the one hand, it gives power to the people.

on the other hand, it can spread misinformation and lead to even more violence. >> absolutely. andicipating online watching things unfold is a very powerful vehicle for "witnessing " the event. you are not there, but a lot of people feel like they are there. lines of solidarity get else up -- get built up because of the kind of dimension and rich elements that happen on social media. it is certainly the case that it up the ante for misinformation. generally, i think that misinformation gets corrected quickly. the problem, of course, is the person who is misidentified in the process definitely suffers consequences. again, i think misinformation is corrected rather quickly on social media, but there is definitely collateral damage for the target that is misidentified. >> earlier i misspoke, speaking of misinformation.

i said wikipedia and i was talking about wiki leaks. thinking back over decades, i was thinking of the l.a. writes, for example. how would those have been different if social media, if facebook, twitter, and the internet existed? >> that is a great parallel. those are pretty exposes -- those were pretty explosive, pretty profound. i think they probably would have been bigger. i would not of been surprised if they had spread to other cities as well. there is something very infectious about what happens on social media. things spread very quickly. i think we saw that quite a bit with occupied. it was a movement very much grounded in place. it had to do with new york city and wall street, but social media allowed it to spread in ways that i think really surprised even the organizers. i think that was the case with the rodney king riots as well. >> how do you expect these

protests to play out. -- to play out? >> i think there will be continued pressure to get the name out, and i think the police department will be forced to release the name, kind of against their wishes. there is a lot of pressure coming from advocacy groups, from journalists, from anonymous, from people in the community. and that kind of ongoing pressure and demand is not going to go away. it is going to intensify and it will force them to release the name. >> we will continue to follow the story. mcgill university professor and .uthor, gabriella coleman thank you so much. we will be right back with more. ♪

>> welcome back. i'm emily chang. twitter is taking action after offensive material was posted on the twitter account of zelda williams, the daughter of actor robin williams. people sent her cruel images of her father who apparently took his own life this week. twitter said it will not tolerate abuse of this nature and said it will improve its privacy rules. the company has also suspended the accounts of those who sent her the offensive material. green may be good for wall street, but his arrogance good for silicon valley? -- is arrogance good for silicon valley? westis next on "bloomberg ." >> it is 26 at the hour, which means bloomberg is on the market. i want to get you caught up on where stocks are trading. we have seen throughout the morning gains across the board. that continues with the s&p up more than one third -- more than .3%. to keep an stocks

eye on, dollar general. bill ackman file documents that showed it increased its holdings the company. that is it for on the markets. ♪

>> you are watching "bloomberg west." i'm emily chang. silicon valley has become synonymous with arrogance. it's that success that has translated on the backside. ist is exert acted -- rent expected to surpass manhattan for the first time ever next year. the digital diversity report shows a heavily white and asian male workforce. does silicon valley have an arrogance problem? sanmore, i'm joined by

francisco mayor and current california lieutenant governor. thank you for joining us. but how did i get involved in this? this is a lose lose. think about the age cohort we are dealing with. so many people in their 20's. find me an industry, and age cohort within that industry in their 20's were there is not a large percentage of people that think they can dominate the world. most of the big breakthroughs you see in the world am i going back to the 1960's and the engineers that got us 45 years ago apollo, most of them were in their 20's. there is an eric and then there is an arrogance -- an arrogance that sometimes comes with age and then there is an arrogance of another kind. >> if greed is good for wall

, is arrogance good for silicon valley echo is that what you are saying? >> some of the greatest leaders have changed the world dramatically. they were not always the nicest folks. about motherlot theresa. she was not always the most friendly to those closest to her. look at real change agents, from gandhi to mandela thomas chavez, king, they were strong-willed and strong-minded people. steve jobs was legendary for being strong-minded and strong-willed. >> some people called him evil. >> my point is, a lot of are marble people who believe in themselves so much, the folks that really do change the world, do tend to have an arrogance at , and ability to see through the critics and through their vision. that is not an unhealthy thing. >> sergei brin, cofounder of

google, has said multiple you want to have it all connected to your mind. and then elon musk. the holy grail is we would like to make life multi-planetary. fixingwe have them things like racism and gender inequality? but they are stretching our capacity to dream and believe and imagine and that is a healthy thing. they are pushing past the boundaries of status quo. i love it. the idea that i would be driving an electric car is extraordinary. what is more extraordinary is what esm was spacex. what month -- what might be even still is you might have a round-trip ticket to mars in 10 years because of that doggedness. google is a company that has changed the world in so many respects because of that intense passion that sergei and larry have had in the process.

i don't think this is necessarily a bad thing. this situational context, where people have to be not oblivious to the problems around them. they have to be self-aware. willie brown, another former san francisco mayor, was on the show talking about how the tech community is self-centered. if they are not necessarily all of them arrogant, are they self-centered? are they to self-centered? >> there are good people and good politicians and folks in the media. and then there are arrogant people where you are like, who were your parents? they exist everywhere. the guy named craig comes along with a list and the entire newspaper industry did not know what hit them. itunes.thing called virgin, a megastore, didn't know what hit them. a guy named chuck comes along and all of a sudden, the old fancy strategies around stockbrokers getting $100 for every trade are radically train

-- radically changed with e*trade and schwab and others. there is some evidence to suggest that what these people are preaching, they are also practicing. something radical is changing. something old to something new. a lot are doing useless things, but there are some doing extraordinary things. and we ain't seen nothing yet. >> you know better than anyone how much the tech amenity is doing to help the rest of the community. are they doing enough? >> no, not even close. >> everyone singled out marc benioff at salesforce, but no one else gets the kind of praise. >> because mark is extraordinary. he is exceptional in his approach to call out his friends and colleagues to do more and be better in terms of reconciling this fundamental fact -- businesses cannot thrive in a world that is failing. we are all better off when we are all better off. that fundamental value is something he believes in and preaches and actresses not only

in his company, but individually. and on that perspective, he's having an impact. a lot of folks are having private conversations that, trust me, they would not have had if he had not called out for a much more enlightened approach to deal with real world problems. and not just to go public and make $10 -- $10 billion or $20 billion, but really figure out how to interview back and make society better. you are seeing it a backlash in a context that is understandable. you're seeing people like marc benioff trying to get out ahead of it. some are saying, we are creating jobs and people should just calm down, because we are job creators, which some people in the tech and unity have instructed as -- the tech community have instructed as an approach. i think you will see more marc benioffs in the future. just heard that rent in san francisco will be the

highest in the country by next year. people are getting pushed out of the city, 98-year-old women getting pushed out of the city. they are getting evicted by people who often made their money in technology. what is the solution? an easy question for you. >> yes, an easy question. i dealt with this as supervisor, as mayor we had the dot com boom and that's. you don't want to stifle that success, but you have to protect those that cannot necessarily participate in that success. that is why san francisco has the highest nonwage and we will increase that again soon. it has the only universal health care, regardless of pre-existing conditions. it has very aggressive strategies to deal with affordable housing and inclusionary housing, and it has strategies to protect nonprofits and deal more substantively with a more affordable housing trust the mayor is promoting. but all of that is not good enough to deal with this gatsby just we all recognize not

in san francisco, but across this country. social mobility and the growing income inequality. i would like to see the tech community begin to orient themselves around strategies to focus substantively on those things. as we connect evil, we connect -- as we connect people, we connect people to great ideas. but a lot of people are can i -- competing in the ice bucket challenge. is that a solution echo >> no, but that is good viral philanthropy. study.an important but how was it? >> it was freezing. >> but people don't live long enough with als, so this is an appropriate response to the problem. but it is an example of where i think you are right -- a viral, technology platform thinking, civic engagement, more choices. the tech immunity can begin to solve these problems. >> i think i have a video of you. california governor gavin newsom, always great to have you

on the show. up, edward snowden claims the nsa is working on a machine that can automatically counterattack cyber hackers. how does the program work echo how legal is it -- how does the program work? how legal is it? we debate next. ♪

>> welcome back. i'm emily chang. fans, butauburn foreign hackers who targeted the phone lines of the tuscaloosa, alabama police department. department with irrelevant calls earlier this week, briefly stopping call -- the police from receiving legitimate calls. a nearby business was also targeted. the police department is taking steps to prevent the situation from happening again, including blocking certain international calls. edwardnsa contractor

snowden is making more claims in an interview with wired magazine. is developing a machine that could have the capability of lounging -- launching cyber counterattack. as how does this monster mind program work echo it sounds like a network of robots that can automatically stop an attack before it starts. >> the details are a little scarce, but what it looks like traffic, is scan packets actually, across the internet and look for patterns that show a malicious attack, a disruptive attack. this is not espionage or the stuff we been hearing so much about. this is attacks and decorative go infrastructure or other things. as snowden points out in the interview, though, in order to do this, you would have to scan packets at a national level. it would have to take into

account a huge amount of information that comes in and out of the country every second. that is where some of the interesting questions get raised. prism. nowhere was there is monster mind. what do we think of these codenames? >> i think as michael hayden, former nsa director himself said, if you got some of the stuff was going to become public, these are probably not the names you would have given. monster mind is probably creative and interesting, but not something you want to put a nice warm, fuzzy moniker on a program that is around cyber war. ,t raises interesting questions as snowden points out, about how they would do this and whether it violates certain privacy concerns. but one of the things we know now is that the way the white house has kept the decision to strike back in cyberspace, to do a cyberattacks at a very high

level, it has to be done at the level of the secretary of defense or the president. what he's talking about is something that might happen in the future, that the nsa has been worried for my that the white house has been worried for a long time about what the administration calls attacks at the speed of light. these are cyberattacks where there is no warning at all. it is not like even a missile were you've got 15 minutes to make a decision and decide a counterattack. this can happen literally in microseconds. apparently, what this program is decide to do -- designed to do is to provide answers to that trafficat, to scan automatically and automatically create a response. right now, the way the presidential authority works, you could do it. a big article in bloomberg businessweek about a foreign attack on the nasdaq. it took years for the government to understand. how realistic is this type of technology echo -- this type of technology?

sense.s realistic in one it looks a little bit like programs in use now, like einstein three, which is an automatic way of trying to protect government networks from malicious network, special -- especially cyber espionage traffic. they have to hit all of the packets of the government networks going in and out. and they cannot do it at the government door, but at the isp door. it took a lot of technical adoption and a lot of legal thinking through these steps. essentially, what this would do is expand that to a national level. the kind of algorithms and examination of traffic that they are talking about can be done. the political implications of this, who has the authority to decide whether this is really an attack and what we should do about it, that is much work obligated. these are questions that vacate down the road. -- that is much more complicated. these are questions that get

kicked down the road. >> thank you. i want to get a look at what is coming up at the top of the hour. mark hampton joined me. you have been following latest department out of the middle east. truce does appear to be holding right now, the longest cease-fire since the fighting broke out last month in the gaza strip. the international community is still concern about the mounting death toll in that region. tension are reports of between the u.s. and israeli officials almost since the beginning of this conflict when secretary of state john kerry visited. officials expressed concern about what they call a humanitarian catastrophe in gaza . some concerns as well about the economy and how it is affecting the region. our correspondent william marks the region.rx is in he will join me at the top of

the hour. >> looking forward to it. mark crumpton coming up at the top of the hour. chris christie issues a challenge of his own. find out to whom next. ♪

>> welcome back. i'm emily chang. the ice bucket challenge to help fight als is the latest viral sensation. and even facebook's ceo mark zuckerberg is taking part. he tells us why he is doing it and then dumped ice on his head. >> hey, everyone, yesterday, governor chris christie challenge me to the als ice bucket challenge. governor, i accept your challenge. after i dumped this bucket of ice on my head, i get to nominate three new people. i will challenge bill gates, my partner at facebook, sheryl sandberg, and netflix's founder

and ceo reed hastings. you have 24 hours to do this or donate $100. here we go. that was really cold. >> he was remarkably calm there. i'm impressed. the clock is ticking for sheryl sandberg, bill gates, and reed hastings to take the challenge. we will be watching. today on bloomberg television, live from atlantic city where it is like out -- lights out for three more casinos in the next few weeks. casino revenue has been sliding for years, dropping another 11% last month to $274 million. online gaming only accounted for $10 million of that. trish regan joins us live on the boardwalk. you have been talking to everyone all the way up to donald trump and the digital boardwalk, as i understand, has not really lived up to expectations.

>> online gaming was seen as a panacea. there was next vacation it would really help atlantic city and new jersey in terms of the tax revenue we could bring in. the rest amidst that predicted the revenue had around $1.2 haveon, which would generated 180 million dollars in tax revenue. it looks like that tax revenue is going to be somewhere around $34 million to $55 million. really, nothing like what the state had anticipated. stage,s like at this online gaming is not going to be what saves atlantic city. >> what else could save atlantic city? talk ofnow, there is maybe bringing the convention business here. given that the casino industry has really struggled as much as it has. one of the reasons it has struggled is not just because of the online platform, but because it has become so much easier to gamble anywhere you want. in other words, state after

state has basically moved to legalize it, thereby making it right there in your own backyard. you don't need to come to atlantic city anymore. you can gamble in pennsylvania or wherever you are. you can also gamble, obviously, at home in some cases, online. justd chris christie, who challenged mark zuckerberg to the ice bucket challenge, has been one of online gambling's outspoken proponents. who are the critics? >> you just have to look at sheldon adelson. he was going to do absolutely whatever it took to fight this, he said recently, and he has sponsored legislation to physically put an end to online gaming. he fears it will cost people their house, their home, their livelihood. of course, this is a guy who made all his money, and still does, off of gambling.

>> trish regan in atlantic city today. thanks so much for joining us. for the bwest byte, where we focus on one number that tells a whole lot. guest today.cial former san francisco mayor gavin newsom is back. it better be good. >> 1966. think about it. >> a lot of things happen. concert the last live ever that the beatles performed was right here in san francisco at candlestick arc. >> really echo -- really? >> you know what is happening tonight. >> i know what is happening. how appropriate. -- they0 square estimate 49,000 people coming everfor the last concert to be performed at that iconic venue, since we are tearing it down shortly after. >> are you going? >> i have to be there. >> my mom is going.

she has been excited about this for months. >> beatles, paul mccartney, and by the way, he was thinking audaciously of not doing candlestick, but instead doing the new stadium at the 49ers that left san francisco to go to santa clara and wisely reconsidered. >> while you are waiting to get on the show, we contacted anonymous and got the ice bucket challenge of you throwing ice on your head. we have been feverishly trying to cut it. i hope it works. come on. let's run. >> i love it. it's not working. >> it's frozen! >> it's a great song, "frozen." mark did not even have any-is bucket. it looked warm. -- did not even have any ice in his pocket. it looked warm. >> ok, here you are. i'm hope -- i hope we're going to get to it. you are talking too much. >> politician. what do you expect?

>> we will get it online. california governor gavin newsom. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton and this is bottom line my the intersection of business and economics with a main street restrictive. today, a cease-fire deal between israel and, spain is extended -- and hamas is extended. and we cover atlantic city. and we look at how the heat shield will protect nasa's mars castle. -- capsule. to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making