>> live from pier three in san francisco, welcome to "number west." -- bloomberg west." icloud storage service hacked? how? they are trying to answer these questions after nude photos of jennifer lawrence and 100 celebrities wound up online. we will look into whether apple is doing enough to protect user data. alibaba group has postponed the roadshow by a week, meetings are expected to start sometime next week with tentative ricing on

september 18, according to a person with knowledge of the matter. the extra time is for them to answer some questions from the fcc. let's call it the extreme selfie. sending a drone into the sky and using it to take a picture of? yourself, of course. we take our very first droneie as nasa starts developing an air traffic control system for drones. to our lead story, the key icloudn, was the apple service hacked? did that lead to the posting of nude photos of celebrities? the fbi and apple are investigating after an anonymous hacker claimed the images were taken from their icloud account. if this is true, what does it say about the ability of apple to protect user information with its highly anticipated iphone event just one week away?

joining us from los angeles, a security officer from senate -- symantec. joining us from san diego, are bloomberg contributing editor and contributing editor, paul kedrosky. what does this mean just one week before this big event for apple? >> pretty terrible timing for apple given that this is one of their larger product releases coming out. terrible top -- terrible timing from their standpoint, but a reminder that there is a huge -- and even if it doesn't turn out to be icloud related, because the initial reports are kind of all over the map on this, there is a lot of sensitivity and a general sense that apple does not know what it is doing with respect to security for cloud services. people want to believe there is something wrong with icloud, even if it turns out there is nothing wrong with icloud at all. >> i know you are an expert on

the cloud. what you can tell, how did this happen? >> everything coming out of the news right now is pretty much speculation. reports came from some people posting on the image board service for chan. people are speculating that it fuel a lotnd it will of scams claiming to be from apple to users trying to get their login credentials. >> i know you are going to take us into the weeds a bit, but perhaps that is necessary with this story today. from what you can tell, how did this happen, how could it have happened if we don't know? >> this type of vulnerability, i would not say it is explicitly on the apple side. other cloud services have similar vulnerabilities. christopher cheney was the hacker that was caught a couple of years ago doing similar activities, where he was able to

compromise the e-mail accounts of 50 users, various celebrities, including scarlett johansson, for example. this kind of thing where people can go in and rely on social engineering, if they know a lot guesscelebrities they can passwords. i believe that that is what happened here. one owner ability was discovered where hackers were able to force the passwords without having the account blocked. that is one potential attack vector. onther one would be relying social engineering. sending links or malicious urls not only to the celebrities, but their peers, their inner circle. it could be their friends, their boyfriends, trying to compromise their accounts as well. celebrities often don't realize that they themselves as targets make the people around them targets as well.

is this the only bug that needs to be fixed? it is unclear. was it a direct factor in the case? one of the reports that i read was that hackers, as you mentioned, tried multiple passwords, potentially hundreds of thousands of passwords. shouldn't apple have some sort of preventative measure? sometimes i forget my password and i get locked out of certain websites. >> that is a vulnerability that was found. it allowed them to try to force these passwords. these tools that allow you to re-force them, i could do millions of passwords and if i don't get blocked i will be able to do that unimpeded. that is one potential attack vector in this case, something that apple has patched, but you know, other cloud services have similar vulnerabilities. say that this is exclusively something in the apple domain. clouding that all

services and providers need to be aware of. they do provide authentication as well, something that people need to be cognizant of, the feature is available to them and it provides additional layers of security. >> we are now of course waiting for two new iphones to be unveiled in a week, as well as a potentially mobile sales system. apple has reportedly partnered with visa, mastercard, american express. is this indeed going to reveal a mobile payment system where is even more important? can we trust apple with the information? >> at think it is something you have to be very apple about. the idea that you could the making payments within a closed i can want, but when your smartphone device victims this all-purpose wallet that you can use it for all kinds of transactions, that is a big deal again, the change,

attack vector in terms of how you can compromise evils financial information. the take-up is always going to be slow and news like this makes it slower. from that standpoint this is even worse news for apple. that this turns out was not a direct compromise. there are even allegations that these pictures have been floating around for a long time dark webs a separate archive of the pictures that was compromise. there are all kinds of stories going around but apple is going to be the ones who are heard as it affects them directly. do wethat note, where keep our photos, if they are not protected on our phone or on our maybe we have? dropbox on our phone as well? what are users supposed to do? >> i think that celebrities and the general public can learn a

lot from this. images that we capture on our that weother data capture on our devices no longer just resides on the device itself. a lot of times by integrating with cloud services there are automatic uploads that happen. even if we delete them, that data may still be in a backup. image ande have that it gets out there, it is really difficult for us to control that. and you know, being aware of the accounts and services that you have running on your phone, if you are going to be taking private photos a big thing with kids right now are things like snapchat. they think that these photos will not be shared. some of those windup online. really about being aware of what is on your device and the services you are running. just being cautious of the services you upload those images

to. >> aside from what we know and what we don't know, how would you answer the question -- can and should we trust apple with our information? >> people are again speculating that the icloud is at fault here, but we can go to that. we can speculate all that we want the consumer at the end of the day should be aware that there information is stored online and they should take the mind, strongs in and unique passwords, the basic security steps that we would want to take when we are using these online services are really key. another important aspect is that people should be aware, because this is out there and people are talking about icloud security, you should be watching out for messages potentially try to scam you out of your credentials. >> all right. us., you are sticking with

gentlemen, thank you all. on youred with selfies phone. now people are using drones to take moving selfies, calling them droneies. give it a try, later. ♪

highly anticipated initial public offering of alibaba has been delayed. it is expected to be the largest offering in u.s. history, they are expected to raise about $20 billion on the new york stock exchange, but the company's roadshow was expected to start this weekend has been pushed to next week he does the fcc wants some questions. again, paul kedrosky is with us from san diego. also with us, the founder and --sident of chico waltzed

walsh management in new york. and leslie, you were reporting on this through the weekend. what, exactly, does the fcc need to know? , weccording to my source were told the fcc would come back for comments late next week. depending on the detail and information in the comments, that would determine when they would start the roadshow. it was clear from this source, who was not able to tell me exactly what the fcc was looking for, but it became clear that what they were requesting was much more he tailed and information heavy than what they had anticipated. >> does this have anything to do with the pay situation, for example? that they spun off a few years ago? >> it is most likely something different. they have addressed that to amended filings previously. on that extended the detail

the history for investors and the most recent, where they lifted the cap if it were to go thatc, the amount of money the parent company could receive and proceeds. it is most likely something else. it looks like the sec has gotten those questions out of the way. does this raise red flags for you? >> i think that it does. keep in mind, alibaba has been able to operate, survive, and thrive in this cloud of secrecy. they have been able to execute a business plan that seems like flawlessly without anybody really knowing or understanding the model that they are able to achieve these types of results. it does concern me, because transparency, if you look at the clouds on the horizon, transparency is clearly one of them. analyst for were an many years.

any more? i know you have been nervous anyway.ibaba >> yeah, i am nervous to the 10th power now. we can speculate about what the particular day delay was, but surely there were some things in their most recent filing. when we talked about it, for example, there was this whole .rocession of one time items examples are they fairly radically revalued their investments and then treated that as income for the purposes of their income statement and cash flow, which seems capricious in terms of how they did that, not a lot of justification, but it will continue to be a pattern that you might expect given the number of investments they have made over the last 18 months, raising questions on how they plan to account for this. with a lot of capriciousness in terms of how they treat income. what is income in a company like

this? top westjett is the on the minds of investors as we get closer to the roadshow? but the are a number, first is -- is alibaba going to under the operate standards of the new york stock exchange? will they be able to provide enough transparency that investors will be confident and willing to invest? also, what is the sustainability of the model? that is very important, we are dealing with a model that is somewhat untested, with a scale that is much larger than anyone anticipated. it is really to see if this company that has done very well in china and has had potential in europe, whether it will carry over into the u.s. and whether investors are going to embrace it with very different ideas about transparency. >> we cannot forget that this is

the second ipo for jack mock. hit the hong kong stock exchange, it did not go so well. what are the similarities and differences here? >> the market backdrop is very similar. skyrocketing, similar to the records they reached every day, now here in the u.s.. he sure knows how to time a rally. as you remember, it was many, many times oversubscribed. we might see a little bit of a different situation from the parent company here because it is so massive. it is hard to get multiple times subscriptions on a first-day pop , but there are some interesting similarities. >> unfortunately it did not continue back then. we will of course be watching this time around. leslie, thank you so much. , thank you.

paul, you are sticking with us, more with you after this quick break. we will be talking about hoover, which has been banned from operating in germany. will other countries follow suit? that and more when "bloomberg west" returns. ♪

♪ >> welcome back to "bloomberg west." i am emily chang. our ruling that could halt huber -- uber operations in germany. they do not have the correct permits for the country. uber plans to appeal.

how big a blow could the for the company? paul, this is the first nationwide ban of uber. been bannedber has in various cities. how big a deal is this? >> it has the potential to be a big deal. the thing that is reassuring about it is that germany is already being scolded for this a little bit. the digital commissioner who has been strongly on their side throughout most of this came out saying that this is not the way we want to some organization, digital or otherwise in europe, that it is the wrong approach. they are already being ostracized a little bit, which strikes me as indefensible. >> in a statement they said that you cannot put the brakes on progress. sounds familiar to what they have said when they ran into regulatory issues elsewhere. in fact this court has no enforcement capacity, so as i

understand that they are still running in germany? >> they are. that is key. uber continues to run. german officials are drunk -- doing themselves no favors here, jumping up and down, shouting about libertarianism, claiming that this is a startup but it is just google and goldman sachs -- it is kind of remarkable rhetoric in terms of trying to make this a very charged idea instead of being the defense of a very expensive taxi cartel. germany has some of the highest per mile rates in europe and even the world. >> this is actually affecting uber pop, not the black car service. and pop is something that is only available in europe, i think. does this impact expansion plans takehere? uber wants to over the world, i mean. >> yeah, they do. if you travel as much as we both

, this just emboldens them. this is that old line about the west wing with the peg. they like this stuff. this is exactly what he expected the reaction would be and he is getting what he expected. i expect some concessions as we go down the path, maybe some more concessions towards training and other regulatory things, but they will be not -- not be stopping the run in europe. >> paul, quickly, we have been talking about operation slogged and the aggressive efforts that they take to recruit other drivers, not favorable to the competition. could this impact their brand? or at this point is it clear that people will be using it and they don't care? >> i don't think that people care. the service is so useful, the competition so woeful -- not specifically left, but the incumbent taxis, this will just

continue to be the kind of sledgehammer to the market that it has been. >> all right, paul. thank you so much, as always, for joining us. enemymicrosoft's biggest right now may not be apple or samsung. why did china raid the company's offices? next. ♪ >> it is 26 minutes after the hour, meaning that bloomberg television is on the markets. stocks trading right now in a little bit of a pullback from the record levels that we reached last week. the s&p is down 4/10 of 1%, almost, hanging onto games where energy stocks lead the declines today. two stocks to watch today, the dollard --ral and family dollar.

the sweetened offer comes amidst competitor. their dollar general said that they would be willing to sell up to 1500 locations to relieve antitrust concerns. more on the markets of it later. ♪

>> huron "bloomberg west," we focus on innovation and technology. microsoft is facing an type trust pressure in china. they are looking into how microsoft sells windows software and office applications. they raided microsoft's china offices in july. the ceo will be traveling to china later this month. a microsoft spokesperson says that the trip was planned before the chinese government investigation began and that they are committed to applying with -- comply with laws and

addressing the questions and concerns. so, what could the anti-monopoly probe mean for the microsoft business in asia? from new york we have the author of "the coming collapse of china." we also have david evans, by skype, from boston, who teaches antitrust laws at the university of chicago. david, i will start with you. being challenging towards u.s. businesses is one thing, but raiding the offices of microsoft is another. how serious is this? >> for microsoft it is pretty serious when you have one of the chinese anti-monopoly agencies launching a significant investigation like this. certainly it is something that if i were running microsoft i would take very seriously indeed. >> what, exactly, is the chinese government so upset about? >> it is not clear. one of the difficulties with the investigations taking place in

china is that it is not clear, at least, in the early stages of the investigation what, exactly, the allegations are. in the cases of microsoft there are various claims flying around concerning windows and internet explorer being tied together, a very old claim. various claims about microsoft being particularly aggressive in terms of how it deals with anti-piracy issues in china. the full array of claims, i don't think we entirely know at this point in time. visit do?h good can a we know that ceos like tim cook go to china every year. , as chief executive, has been making an annual pilgrimage to china and it has not helped his company. attacking apple at every particular opportunity. people say you have got to go to

china, got to show that you want to be the foreign paying tribute, but i think there is a little bit in that. on the other hand, once you start to do that, you show weakness. the chinese authorities always jump. look at what happened to google. look at what happened to apple when they went to china. this is not a good story for microsoft. >> microsoft is not the only u.s. company facing an antitrust probe. you have dealt. you have qualcomm. david, i believe that this is about a law that was put into place in 2008. why now? >> i think the point is exactly what you just said. 2008.w was only passed in it has only been in existence for six years. in the world of antitrust, this is a baby antitrust law. it took about 50 years for the

european commission antitrust authorities to really come to life and act as a professional agency. antitrust in china is really a very new thing. one of the advantages you are seeing now is that antitrust agencies now need to take some time to learn antitrust and we thought their staff and figure out what they are doing. relative to how it is developed in other parts of the world, this is actually fairly quick, for china to take the antitrust law seriously and be using it so aggressively. if anything, it is surprising that they are doing this as early as they are. >> you are vehemently disagreeing. what do you have to say? >> this is not a system of laws. the problem here is that state enterprises have become very

powerful politically inside the chinese political system and they are undercutting foreign business. this has been going on for quite some time. plus you have political distress among senior leaders fighting among each other and you can't revise the foreigners. this is the closing of china from the rest of the world. we have seen it across so many different platforms. i think that this is something fundamental, not just an issue with anti-monopoly laws. >> david, is it that serious and fundamental? early days. very obviously there are a variety of political things going on in china. they obviously have some serious issues with the united states as a result of this blowback. think it is too early -- while i understand gordon's concerns, it is too early to be making these kinds of sweeping statements. if i were an american company at this point, i would certainly be

cautious in dealing with china. there are certainly some issues i would want to pay attention to. in terms of making a decision at this point in time that we have reached the point of no return that that ishink quite premature. the other point i would make is that i really think that we need to give china some credit in that this is a vast communist and as of 20, 30 years ao they are now in many ways capitalist society. not in all the ways we would like, but certainly in the ways that we can respect. is just a bump in the road. >> the american chamber of commerce is calling this a crackdown. how often do you hear that kind of language coming from the u.s.? like this is rare. american companies and trade organizations have been cautious

about criticizing china, but we have seen them going after multinationals for five years now is serious way. chinese authorities having going after microsoft since 2007. we don't see this just as anti-monopoly, we see the bribery laws and everything else , the discriminatory enforcement against foreign companies, which are now starting to say something. i think we have created a reflection as people realize how serious that this is. this is not a one-year problem, it is a problem that may take the kids to solve. >> we will be closely following the microsoft ceos trip to china later this month. thank you both. companies like amazon and google, developing drones. how can you make sure the drones travel safely in the sky? enter nasa, putting together a

drone air traffic control system. we will tell you all about it, coming up.

>> i am emily chang. this is "bloomberg west." with rising tension in the san francisco bay area over inequality, one company is trying to lessen the divide. they connected donors with individuals in need of funding for medical care, shelter, and other basic needs. cory johnson sat down with up -- hando at hand up's ceo and cofounder. is this a technology business? >> we are a software company. we built the donation system platform and then partnered with nonprofits who are serving the

homeless and at-risk communities who use our -- use our software. >> it is intriguing to me. as we look at the one income that follows the ipo perspective, it is completely not ultra-mistake, but here you have this ultra wristed way to connect money to people that need help. >> we have seen places like kick starter, other companies like that for a long time where people can post the videos they are creating and so far there has not in a way for people to help fund raise for food, housing, medical care. a lot of what we see is that these organizations are moving into sites like kick starter. but those sites were not tailored specifically to this case. that work, exactly? >> someone comes in to visit aeir case manager at nonprofit service organization. one of our members came in and she wanted to sell these dolls and hats on the streets but

needed a street vendor license. the nonprofit did not have the funds to cover that for her, but told her that they could put her on hand up for the community. they put her profile on the website, put out some tweet and in about a week her campaign was filled. she went back to the nonprofit, they wrote a check and got her a street vendor license. >> do you find that people making these investments or contributions have a different kind of connection to follow the success of the person? >> what we heard from donors is that we want to update, send messages, and communicate directly with the people we are helping and at the same time beneficiaries on the site are asking -- who is helping, how are they helping, how can i thank them. >> i imagine it helps the person who has got the money to encourage them positively and

negatively. i really have to make this work, these people did not just make an anonymous contribution. they are rooting for me to make us money. >> there is an accountability and structure their. people have goals and it helps them to save to reach those goals. >> it is interesting to me, the criticism of the google buses, the notion of the instant wealth being created by people and technology. this is an example of technology giving back. >> right now there is a lot of awareness of poverty in the u.s., whereas for a long time there were so many internationally focused armored efforts. what can we do about it right here? how can we use technology to make a difference? >> how bad is it when the kardashians get more page views than poverty. >> across the u.s. every year we hear about 3.5 million americans

who experienced homelessness. more living below the poverty lines, about $30,000 per year for a family of four. >> amazing. talk to me about the business is so far and the people you have worked with. >> we launched the pilot here in san francisco. we really tested out the system. we have signed up about 100 of their clients. we saw that the average client was about -- able to raise about $200 per month. security deposits, technology is pilotneed, and since the completed we have started expanding. we have three new partners in san francisco and we are now going across the nation and we are open to working with new organizations. >> all right, that was cory johnson with rose room.

on the top ofg up the hour, let's bring in our "bottom line" anchor, mark crumpton. >> the u.s. and russia are going at each other. president obama heads to eastern europe to talk to nato members about security while russia accuses the u.s. of inflaming tensions. ryan chilcote will join us with the latest. >> we are following a bankruptcy story in detroit? >> opening arguments are under way, that's right. it is a historic trial. they have to decide whether to improve -- approve a plan that would wipe out billions in debt. joining me in the next hour. back to you, emily, in san francisco. >> all right, mark crumpton, we will see you at the top of the hour. next, i take a drone for a selfie.

we talk about the latest craze, uber -- dronies. ♪

>> welcome back to "bloomberg west here go home depot may be the latest --." home depot may be the latest victim of credit card breach. they may be the source of a breach according to a blog claiming that stolen credit cards and debit cards went on sale this morning. known for his scoops on hack attacks, the shares of home depot to good big tip on the news. be beingrobots will sold in the u.s. by next summer. the robot is called tepper. it dances, makes jokes, and estimate human emotions. it will go on japan -- go on

sale in japan in february 4 $1900. january, for $1900. enter the newest craze, the uber a drone to using take a skyhigh selfie. brad stone and i took it for a spin. >> let's do it. what have we got? inexpensive,mewhat somewhat dangerous, but a fun toy. it is the phantom to vision plus. it costs about $1300 and is a drone. you have a camera on the bottom that you fly, you have a great controller here and you take videos. >> so, tell me about dronies. those seem to be the next big thing. >> perhaps here in silicon valley. it is the drone version of a

selfie. you fly your expensive drone into the air and take a picture of yourself. >> it is not the easiest thing to do. you have been working on this for a few weeks. [laughter] >> it is not easy to configure. they could make it more user-friendly. practice is rewarded. i have made the mistake of flying it without practice and i have had some unfortunate crashes. >> i have heard of others who have lost their drones in the bay. >> i think that there is a whole class of journalists who bought these, did not take the time and experimented with them and lost their investment as a result. >> what about as marketing? >> i have seen dronies from burning man this year. i would call of -- call it more of a fad than the thing. i wonder if we are going to be doing this next year. >> all right, let's give it a try.

i'm impressed. [laughter] ok, ok, landing. >> here we go. woo. captain, drone pilot reporting for duty. [laughter] seriously, are these things just gimmicks? do they have real commercial appeal? >> they do. real estate agents are using them to do flyovers on properties. these are small and relatively affordable. mining companies are using them. the military, of course, and this is just a low-end. >> not to mention the enthusiast who are buying these. >> i will say that i tried to deliver an amazon package with this and it does not work. >> all right, here is to our first drone.

joining me now, the drone pilot himself. brad stone, we did it. you did it. >> i'm glad you didn't use the footage of me claire -- me crashing. >> it is just a gimmick, right? >> these things are irresistible. i keep bringing it out and playing around with it. i am not going to say that it is worth $1300, it is an expensive toy, but it is a lot of fun. >> nasa is apparently working on a drone air-traffic control system? >> you have prime air, google announcing its project. they want to enable the drone delivery of projects as well. just like the faa air traffic control system, we are going to need some kind of autonomous system.

candidate trying to push new regulations and drones. >> right, her candidacy is, hypothetically she is a leading candidate for the position. they are considering others as well. whoever gets the job will have to be careful. she has to separate herself from her previous agenda. she will have to be careful in the lobbying for the initiative. >> what else have you got for us today? >> 2.7 million, the incredible number of views that a youtube video is getting that shows aerial views of the new apple headquarters. taken by a technology executive, incredibly if you go to the site you can see it. >> is this legal? >> it is. it is legal to fly these up to

400 feet. incredible, it looks like a cross between a piecrust pan and something else. >> it looks like another century or something. circular and spaceship like, it is turning out me that. six,ere are about 1000 some comparing it to the millennium falcon. stone, earning up all things drone today. thank you all for watching. we will see you later. ♪ >> never again. >> extraordinary claims. >> we need much more.

and . .

♪ >> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a main street respective. goes to estonia and sends president putin a morning, and a bankruptcy trial gets underway, and a look at some unconventional ways airports are trying to make money. ♪ to our viewers in the united states and for those of you joining us around