>> live from pier three in san francisco, welcome to "bloomberg west," where we cover innovation, technology, and the future of business. i'm emily chang. is there trouble ahead for the u.s. economy? first-time jobless claims in the u.s. rose to 313,000 last week, the highest number since early september. october new home sales came in lower than estimates, and orders for capital goods posted an unexpected drop. a french food giant may sell its 20% stake in japanese dairy joint maker yakult.

a person familiar with the matter said dan and has -- dannon has had internal discussions, and no decision has been made. internal has had discussions. alibaba plans to ramp up investment in india. a spoke about mo the plans at a conference in new delhi. >> we see such a great number of indian businesses using our business, which shows our great passion -- for forpassion incapability -- the passion and capability of catching opportunities. >> jack ma will also be meeting with the ceo of india's largest e-commerce site. apple is raising the price of the iphone in russia by 25%. the reason -- the declining

russian ruble. the ruble has lost a quarter of its value against the u.s. dollar since september, prompting tourists to buy iphones on the cheap in russia here it meantime, rival samsung has just cut the price of its in russia. sony is developing a watch made out of electronic paper. the precise epaper technology is unclear, though people say the device will emphasize style over technology. now to our lead, huber -- uber shows no signs of slowing down. the right-sharing company is set to raise funding at a $40 billion valuation. potentially with t. rowe price among other new investors. if it goes through, the evaluation will have more than doubled since june.

this also shows investors are not scared of all the controversy surrounding the company from the battle with regulators to recent comments from an executive about targeting journalists. i will start with you. both of you are journalists. what do you make -- $35 billion to $40 billion valuation just a week after all of this explosive pr? >> i think convenience trumps pr and bad behavior. if you look at the very next day after all these stories came out, there was a rainstorm in you could not and get an uber.

that tells you people do believe in the convenience the service offers. i think investors are looking at that as an opportunity. asin, we cannot look at uber just a car service. it is more like a transportation .usiness from that standpoint, you have seen a lot of big investors big dollarsp down on the company. >> the number sounds extremely large -- $35 billion to $40 billion -- and yet, experts out there are saying it's worth much more. what do you think? >> it's a beautifully conceived .usiness the convenience is real. i think there's no question this company has a great product. i do think it's very tenured -- d and flat-footed and other body metaphors that are negative that this company would

proceed on this path having never made any public statement about not just one incident but a series of incidents that they have recently been accused of and that have been reported. i think the firestorm of negativity about the culture of this company is not irrelevant to the fundraising. on the other hand, if you are just looking at it on a pier which iand-cents basis, do not necessarily think is wise, i can see the justification for a high valuation for this company. >> the uber ceo has apologized. the executive in question has apologized. peter thiel calls it an company. questionable other investors call it morally bankrupt. what do you think? >> i think there are a lot of valuations flying around on all sides. i will not sate to an individual person. i do think every technology

company involved in influencing our consumer lives has to come up with what i like to call terms of trust. you cannot be changing people's lives, influencing people's lives through data or whatever without actually having a moral compass. it does not matter whether you whicher or the next uber comes along. i think it is time for silicon valley to look itself in the mirror and ask what is the right thing to do. by making one company or one person the point isson for all the problems the answer. >> i've been talking to people throughout the week, and a lot of people are talking about deleting uber, but no one actually has. someone suggested -- might silicon valley regret one day this uber giant that they have created? one day, could uber, which still

has no serious competition, just get so big a turn on them and start to jack up prices? >> certainly, that is not inconceivable when any company has a powerful business model and is plagued by a monopoly, which they do not yet have. i think the newer term concern, even if i were an investor, goes very much to what he was talking about, and i think he has a judicious way of looking at it, and that is that judgment and culture really do matter. the company cannot deal with what is really by all evidence really minor set of incidents that they have not directly addressed and do seem to indicate something is wrong with the company's interna culture.- internal it makes me worry that if they do become a global colossus, they might really be hard to manage and hard to deal with both for customers, governments,

and plenty of other entities in society, and it worries me. i really think that they have -- the companies do not have an unlimited license from society to operate. the funnyer hand, thing is there was this thing that the new york manager of uber put out saying "haters gonna hate." almosttriking that everyone of the negative articles about the culture of the company has prefaced itself by saying, "i love the service. i got to this tv studio using the service," or whatever. they have a great business. they are great business people. they need to make some tweaks, but i do not think they are relevant to raising money, going back to my point. there investors need to think about that stuff. anyone who just puts money into this company without asking what is to be dealt with, to me, i think, is beginning to suffer from a twisted moral compass. >> david kirkpatrick on the

snowy east coast. i'm feeling a little guilty about our blue skies behind me here. you are sticking with us. we're talking about twitter after this quick break. it has been a rough few months from executive shakeups to the cfl accidentally tweeting about a possible deal -- the cfo accident we tweeting about a possible deal. what can the company do to win back confidence? ♪

>> i'm emily chang, and this is "bloomberg west." boostr has been trying to user growth, but the company keeps facing one obstacle after another. the new cfo accident between without lands to buy a company -- tweeted out plans to buy a company, and they implemented changes that did not wow

investors. joining me are om malik and david kirkpatrick. are you as down on twitter as everyone else seems to be? >> being down is one way to look at it, but they have to what -- being down is a short-term way to look at it. they have to find ways to grow. it seems like people focus on everything else about twitter except the growth. how do they go from 230 million to 240 million people a month to 500 million? how do they make it interesting to people who are not on twitter just yet? i think that takes a little bit of soul-searching on the part of the company, and that's why i find it very funny that everybody focuses on poor anthony, who just send a wrong dm. >> everybody who uses twitter and they areils, painful, but it's way too easy to make a mistake using direct

message. problemly, which is the . if they knew how to fix the problem, they would have growth. if they knew that dm was something people like to use, it would be front and center and not hidden away. i think this company needs to figure out what its path to the future is and just follow it and not listen to what everybody says too much. >> david kirkpatrick, in that anthony suggested buying that company, and that company could reportedly be a selfie shots. called i had never used before, but i instantly got, like, 30 retweets on my first shot. >> it's a fascinating story that

.our experience was so positive obviously, selfies are one of the great phenomena of our era. you cannot separate growth from the product, and i think in a way, this incident with him misunderstanding how to use his own product could turn out to be very healthy for the company because i think it will force them to more seriously accept this criticism, which i think they already kind of know about, but they need to focus on it even more. that it is way too hard to use. people constantly focus on twitter compared to facebook, but twitter is very different from facebook in that my wife, my kids, my mother, my neighbors in my apartment building in new york -- they don't have any problem using facebook from a day in, day out racist. many of them just do not understand how twitter works, the way it is structured now. -- they don't have any problem using facebook from a day in,

day out basis. i have avoided twitter because i felt it was too dangerous, too confusing, and i do not like when people direct message me, and i do not like you expected to do it, which is often in my community something people take for granted. twitter is a global facility that matters. when the nigerian general recaptured that time from boko haram recently, he announced it on twitter. that is a key reality. this is being used globally by leaders to communicate with the public. that's really important, but if they want to be in service for every man, they are not there yet. >> direct messaging is easy, but i use text and e-mail when i can. >> to add to what david said, first of all, anthony is a cfo and former wall street analyst, so i would not expect him to know how to use his own product -- >> really? oh, come on. >> i know.

i just -- >> also, it's not that he did not know how to use it. it was a mistake. but,m joking about that, seriously, he could have been buying puppies for his kids. a does not say he is buying company. it is making a mountain out of a mole hill in my opinion. >> sounded a lot more -- sounded like a lot more than puppies to me. >> a think it's a mistake of misunderstanding the product itself, i think. we will see you later in the show. coming up, we talk about video games exploiting women. we'll talk about the brewing controversy surrounding the 25 billion dollar gaming industry next. ♪

>> let's call this what it is -- you and the other feminazis in the game or world are coming to cut our balls off, put them in your purse, and take them away so we have to play your nonviolent games, right? >> no. >> that was avid gamer stephen ,olbert with anita sarkeesian who has been posting about chauvinism in video games. since she has been posting, she has gotten death threats and become a central figure in the .ontroversy known as gamergate the story is the cover story of this week "bloomberg businessweek." gamergate has taken on a life of its own, but in a specific

community, in a simple term, what is gamergate? >> there's no one perfect definition, but there is a strong thread of sort of gamergate that represents people who feel that a sort of political correctness has been seeping into journalism about the videogame business. they feel that there has been sort of a liberal, feminist tone creeping into a lot of critiques of videogames. at one point, that is what gamergate was intended to represent. since it started, it has morphed into a much broader sort of boundary-less online mob of people who are targeting mostly women affiliated with the videogame industry for sort of different types of harassment and even threats. >> what is anita sarkeesian's role here? what is she trying to accomplish? what has she already accomplished? >> she has a calm pushed a lot because we are talking about it,

but she is a media critic who has spent dozens and dozens of hours playing games. she has 10 or 12 videogame consoles in her apartment, and she is looking for patterns in the way that these games represent women. she has made a series of videos called "troops versus women in video games -- "tropes versus and laysvideo games" them out where you can see the patterns of women as damsels, prostitutes, victims of very graphic violence showing up again and again. frankly, it is almost an academic sort of work. there's a series of videos on her website that are available for free. when this gamergate online controversy really started doubling up, she came to be drawn into it, and she has become the target of a tremendous amount of online , threats.

analog harassment and threats. people have showed up at her house and threatened in use where she is scheduled to speak. some of the people involved in this are some of the same people involved in so-called gamergate, so it has all become one big chaotic mess. >> i wonder at what point the gaming industry gets on board. you have take two coming out with a new game that has you -- allows you to have sex with prostitutes and then kill them. >> it's a bit of a delicate position videogame companies are in. the trade group has said that they are against online harassment. many people, though, believe that is not enough, that they need to take a stronger stance and making it clear that they will not tolerate homophobia, racism, sexism -- just online threats and bullying and silencing of people in any sort of game-related environment, and that has become a very prominent part of the culture. it's funny you mentioned grand theft auto v.

these are very valuable franchises. anything that is going to risk that is creating a dilemma for the company. >> "bloomberg businessweek," the cover story. a great read. check it out. ♪

>> you are watching "bloomberg focus onere we innovation, technology, and the future of business. i'm emily chang. netflix has sued mike hale for fraud, claiming he took cash kickbacks from two suppliers and had deals to receive stock, money, or gift cards from other vendors. he left netflix to join yahoo! as chief information officer, reporting directly to a ceo. if this is proven true, what are the implications for yahoo! and netflix? joining me once again, om malik and david kirkpatrick. david, i start with you -- if indeed he really did this, like,

whoa. i mean, really? >> really. these are really devastating allegations, and they seem to be very well substantiated based on the complaints with the e-mails that were printed, etc. you cannot expect he is very long for his job at yahoo! like it is illegal on top of having effectively stolen , based on what netflix is accusing him of. what really strikes me as have had three stories in this program about the ethical, moral, and legal behavior of the technology companies, and companies -- that devastating report you just made about the video games, and now we have the major executive of a major silicon valley company being accused of taking kickbacks, and the question of ,he ethical behavior of uber it's interesting how central technology has become to our society.

we used to cover software for pc's, semiconductors, networking, and we're talking about companies at the core of modern life and how they behave. >> can you believe this story? >> it was a bit of a shock to read the story. having met mike a couple of times, i cannot imagine, but the complaint is pretty specific. making a veryis valid point. we have come into a very different time in the technology industry. it is uncharted waters for all of us, and people are doing, you know, things which i guess sometimes which is being morally ambiguous, and i think that is what you see in the case of netflix, too. but this is shocking that he would leave a digital paper trail for something like this. >> what about how it reflects on marissa mayer, who seems to have had a bit of trouble hiring for

her see sweet -- for her c suite ? this guy who just started in august. >> she has hired a lot of people. to generalize about her hiring based on two cases is probably a little unfair. this clearly is somebody she's not going to want to keep employed, based on all the evidence. if she did not fire him right away, i think you would have to start asking questions right away about her judgment. de castro thing is more of you win some, you lose some. i don't think she has a pattern of bad hires. i think she has hired 30 or 40 people with two that may have been serious mistakes.

>> i just spoke with one of marissa mayer toss new hires, who recently took on more responsibilities when henrique de castro was fired, and she said that most of the hires were strong -- i just spoke with one of marissa mayer's new hires. listen to what she said about investor and media pressure and how good of a job marissa is doing. >> at the end of the day, we need to spend our time delivering, again, for all of those users, those advertisers, and those shareholders, and we think that people will be focused on our results as opposed to on anything else. >> do you think this latest twist reflects on marissa poorly ? you have been particularly hard on her. >> yes, but not in this case. i think this happens, and to talk seven more systematic issue. >> could she not have just picked up the phone and called

reed hastings to ask what he thought about this guy? >> it's a hot market to hire talent, and sometimes people do .ot do enough due diligence >> yahoo! cannot win. >> i think they make -- sometimes, you want to buy and believe in things we really want to believe in, right? we really want to believe in somebody we want to hire, and we kind of turn a blind eye. as human beings, we make mistakes. i don't think this is as much a .eflection on marissa >> a reflection on silicon valley? >> like we are moving so fast we do not take the time to do enough diligence on senior management. >> how would you respond to that, given your equally long ?istory covering silicon valley >> i think that the big picture reality may be that greed and

money is such the dominant reality for so much of what is defining modern technology that we may have gone a little bit over a line that has to be recalibrated. obviously, this guy was a good dissembler, although very foolish about his use of e-mail. i don't think you can necessarily say somebody should have known he was doing this. maybe we will learn he was fired by netflix because they began to suspect. that would be not at all surprising. i do not think marissa would have been able to call reed hastings to ask if she should poach a guy that he was currently employee in -- i don't know if that way would resolve it, but i think we are in a new reality, and there's a big set of issues about money and the relationship of money to business ethics and business behavior that the technology industry is just going directly into, and we will be talking about that for the foreseeable future would be my guest.

>> all right, our bloomberg contributing editor, david kirkpatrick, thanks so much. you are sticking around with us. the faa may soon introduce new rules for commercial drones. what could it mean for companies like google, amazon, facebook? that's next. ♪

future ofhe commercial drones be in jeopardy? the federal aviation administration is expected to announce new rules on commercial drones use by the end of the year. the new rules would mandate operators to have pilot licenses . they would have to fly below 400 feet and a daytime hours only. the faa has yet to respond to bloomberg for a request for comments on the expected rules. what could it mean for tech companies that are currently

developing drones? the executive director of the small unmanned aerial vehicle coalition joins me. first off, what is your reaction to these rules -- good or bad? >> it's great to be here with you. i think the reaction is that they are not optimal, largely because we are falling behind other countries -- canada, the and we areion, seeing australia making incredible advances, india. i think the technology and companies in the u.s. are doing incredible work, but the faa has been a little bit too restrictive in terms of the things you just mentioned. requiring a pilots license, having this be within the line of sight, and requiring that it be during daylight hours. i think the whole concept of an unmanned aerial vehicle is that it is, in fact, unmanned. if the sophisticated technology

is provided, it can be done safely, and that is what we believe is important. it can be done in 70 industries -- in so many industries like filmmaking, search-and-rescue, delivery. we will have to see it in other countries before we can see it here because we are looking at 2016 before we see any other operations. >> some of the potential rules do not sound that unreasonable, like you cannot fly in the dark. that kind of makes sense to me. brad stone of "bloomberg businessweek" and i recently took a drone selfie. would this mean we cannot play around like we did? >> you could still play around. recreational use is absolutely permissible provided you are not within five miles of an airport and provided that you abide by the small monitored aircraft rule interpretation. the idea is that commercial use is prohibited, meaning the companies that have the most

sophisticated technology and that are on the cutting edge of technology -- they are unable to butcommercial uav's, hobbyists, meaning the average citizen, can buy them and use them and have fun with them. it seems like we've got this a little upside down, a little backwards. >> one could argue that regulation is better than no regulation when you talk about commercial drone use. could this be a good or progressive first step? >> i say this -- i think we do need regulation. there's no question. no one said we don't. i think what we need, though, is to get outside of the current framework that the faa is working with. the faa is looking at this in terms of pilots licenses and within the line of sight, and they are being highly restrictive, and i think they need to be more creative. create regulations looking at these as devices and operators and allow for there to be

commercial operations in the near term. it can be done safely. companies will not allow for use will notor drones that be safe, so i think the reality is we can do some in between ground here, which is do something that is safe and protect consumer privacy, that could protect consumers generally, but allow for us to use uav's at scale across a number of sectors of the economy to provide efficiency. >> what could these new rules or potential rules mean for companies like facebook, google, amazon that are x there are minting with drones -- rightmenting with drones now? >> that means they will have to do testing and operations overseas because the new rules .ill not take effect until 2016 congress in the faa reauthorization reform act of 2012 mandated the faa to come up with rules by september 2015. we will not meet that deadline.

we are going to be at 2016, which means companies like google x and amazon prime air and go pro and a host of other companies are going to have to go overseas, or they will have to go to six test sites in the u.s., which means they have to transplant their entire team to the test site, which is an arcane process. the reality is they should be able to test on private property near their headquarters and see what works and what does not so they can promote safety, efficiency in different sectors of the economy. right now, we are saying to the industry, "go overseas because we are not allowing any pathway for operation in the u.s." it that theseis rules will come to fruition? >> will be introduced, and we expect them any time. there will be a notice of proposed rulemaking. then there will be comments and reply commons, and the reality is that long-term, the rule will not be in place for another 16

months. i think congress and the white house are going to act before the rules take effect because the u.s. is always -- has always been a leader in technology, and technology always wins. the reality is that the u.s. is not going to seed territory to other countries -- not going to cede territory to other countries. ,> all right, michael drobac thanks so much for joining us. of course, we'll keep our eye on these potential drone regulations. still ahead, why designer rebecca minkoff designed interactive dressing rooms. that's next. ♪

>> i'm emily chang, and this is "bloomberg west." mobile is increasingly becoming part of black friday shopping. more people are using their phones and tablets to buy stuff. here is google's industry director of retail sales. >> this will be the biggest mobile-influenced holiday we have seen so far. just to give you a piece of data, when you look at google shopping, we see that the traffic coming from smartphones to google shopping is 3.5 times what it was at the same time last year. >> anderson says the top searches on google shopping this year our toys, tech, and apparel . and shopping in the physical store is going high-tech as well. ebay and designer rebecca are teaminginkoff up to create smart dressing rooms, allowing shoppers to have an interactive dressing

experience. how does it work? >> the big goal is to eliminate the pain points from in-store shopping. 's new smartoff stores feature things like smart mirrors, so when you go up to them, you can request new sizes and colors. they also feature texting technology, so you can get a text when you're fitting room is ready, and also on the site checkout so customers can buy right out of the check -- right out of the dressing room using paypal. i asked what inspired her to launch these smart stores. take a listen. >> talking to our millenial customer, she has her phone in her hand all the time. it's basically part of her body at this point. in wanting to create an environment that was not just about a pretty space with pretty products, but about how we communicate to her on a level she is comfortable with. >> phone in hand all the time. rebecca says the goal is to

capture the omni channel shopper, the customer who buys on phone, it online, and in stores. it's about improving the customer experience and capturing meaningful data to drive sales. >> if those mirrors were really smart, they would make you look a lot better -- >> actually, they do. they actually do. they were telling me they had tested this technology in san francisco. some of the employees said, "these mirrors don't look good," so they changed them. they actually make you look awesome, i have to say. >> they sound a little dangerous to me. a lot of tech companies are getting involved with these connected stores. we mentioned ebay. what about that? >> tech companies are driving this trend. one example is google partnered with macy's to launch a new inventory search function. apple devices are being tested in bloomingdale's.

in addition to making the shopping experience more pleasant for clients, more fun, ebay is also helping retailers keep better track of their inventory. take a listen. >> every item in here is rfid tagged. that means we have 100% inventory accuracy in the store, so we can do a lot of interesting things. just for some industry context, most department stores, their 67%racy for inventory maybe . >> he think's the retail world has been on a bit of a back foot in recent years, but he says they are picking up, and we are also seeing the retailers -- e- retailers like amazon and zapp s 's open storefronts because consumers are spending more money in stores and online, so this is a big opportunity across the board. >> shelby, who got to go

shopping for work. the good life in new york. thank you for joining us. now it is time for the bwest byte, where we focus on one number that tells a whole lot. our special guest, om malik, giving the number today. it better be good. >> 53% -- the amount of shopping and rousing which will be done on mobile devices. phones and tablets this thanksgiving day according to ibm. -- the amount of shopping and done on which will be mobile devices -- phones and tablets -- this takes giving day according to ibm. >> are you going to be shopping? >> i don't need deals as an excuse to shop. >> sales are incredible. i just wonder how they can get better over black friday and cyber monday, but we were looking at a statistic from google the other day that an increasing number of people are actually shopping and browsing on their phones while they are standing in line at a physical store. >> have you tried to shop in the

real world? >> that is very infrequent, unfortunately, although i do enjoy it. >> if you go into a real store -- macy's, nordstrom -- you encounter salespeople who are not knowledgeable. they are not very helpful, and sometimes, they are not even polite. why would you want to deal with somebody like that? smartphone doesn't yell back at you. >> by the way, we look at shots earlier -- the act that twitter is potentially looking to buy -- we already got 30 retweets -- the app that twitter is potentially looking to buy. >> it makes sense for twitter to buy the app if they can use it for money. otherwise, it makes no sense. >> giving it to us straight, as always. time to go shop and eat turkey. >> thank you. happy thanksgiving. >> happy thanksgiving to you. and to all of you. thank you for watching. we'll see you a few days from

now. ♪