>> 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. here's a check of your bloomberg top headlines -- a report by senate democrats found the cia misled congress and the white house about its interrogation techniques of terror suspects. the report found harsh interrogations were not effective and did not produce key information at lead to the killing of osama bin laden, contrary to claims by the programs supporters. uggla picks the best days are still ahead for cloud computing. the company's cloud chief for

europe, the middle east and africa said the pace customers are moving their data to the cloud is picking up and assured customers google can keep their data safe. >> the economy of scale something like google can achieve is a bit more difficult in terms of the investments you can do and we deploy an amount on cyber security beyond your imagination in order to protect your information. price of cloud services will drop at a slower pace in 2015 than previous ones. the u.s. supreme court ruled today amazon workers do not have a federal right to be paid for time spent in security searches after their shift ends. the justices rejected claims that they should be paid back wages for time spent in the antitheft searches. that will health -- that will lawsuitson fend off seeking 100 million dollars. how does president obama respond

when people say he is acting like an emperor? during his appearance on "the colbert report" he said are plenty of checks on his humility . >> when you are in it, you are not thinking about it in terms of titles. you are thinking about how do you deliver for the american people. also, when i go home, michelle, melia and saw should give me a hard time. there are no trumpets and they tease me mercilessly for my big ears. ofthe president is one colbert's final guests as the show ends on december 18. uber is now banned in new delhi after a passenger claimed she was raped by the driver. the driver was arrested three years ago in a similar case but later was acquitted. the driver, who has since been arrested, appeared in court

yesterday and is still in custody. the ceo issued the following statement come a saying this is and how boring crime. our thoughts remain with the victim who has shown tremendous courage under the circumstances and safety is our number one priority. we will continue to cooperate to bring this crime to justice. the prime minister of india had this to say. >> we are very sorry for this. this is an ongoing investigation. i cannot answer any questions. >> just how damaging is all of ?his for uber joining us is cory johnson and the new york chapter president of the national organization for women. sexual assault and rape, violence against women is a huge problem worldwide, and in india in particular. i read an interesting headline

"bloomberg businessweek." it says india's problem is with rape and not uber. >> rape is a problem everywhere, globally. at the thing we're here to talk about is uber and as this company grows, they have hit on a market trend, but will they put finding supply of drivers ahead of passenger safety? that is the real question here. as they scale up, are they going to do it right or will they be like so many other companies that implode? you can open a cupcake shop and open to many of them and go out of business. but we talking about real lives and the safety of people. everybody should be aware of this. consumers have to start thinking about that. when you open the door and get into any car, don't have a false sense of security. we have to hold them accountable. checksnd of background

are they doing? a background check is basically what you decided is going to be. if the company wants to spend $10 on one, you're not going to have much information. at this time, yellow cab companies are regulated by major cities everywhere. they use a service called live scan which is a background data service that goes straight to the fbi and department of justice. if it updates companies crimes are committed by any of these drivers. thater is seeing criticism they did not do a good enough background check. on the other hand, you have people saying uber could immediately give this guys name to authorities and maybe it's safer than riding in a traditional taxi. how do you respond to that? >> it is an impossible situation. but iin a boring crime was looking at statistics at it is an aborted crime, but i was looking at statistics yesterday

and in london alone, 22 sexual related assaults involving cabs -- 20 20 week in probably one of the most regulated and tightly controlled taxi markets in the world. it is a widespread problem in the volume of the self is horrific. uber is hardly alone and there is a suggestion that even using official sources were background checks is impossible because you can buy the reports you need and put those forward. needsit on the scale uber is difficult, so maybe they can't grow as fast in india as they would like to because you cannot use official channels for background checks. >> it makes me wonder if these issues are so different because the service involves people in ways that google doesn't or facebook doesn't. when we have businesses like google and facebook growing in

countries where the values are very different -- whether it's google being shut out of china or yahoo! deciding to do business in china despite censorship there, that is somewhat more serial. this is a physical person and is a different kind of service. i wonder if the globalization of these u.s. technology companies is going to require u.s. values and standards seeing imposed on these countries that are not comfortable having them? >> i think that is entirely likely. suggestion i saw yesterday were somebody suggested the only way around the problem with respect to background checks would be to go out and find friends and family and start interviewing directly because you can't trust the official sources. it's an impossible problem and one that's antithetical to the way we think about ground checks this country. no one is running around interviewing you to see if you are a cab driver or not -- it

begins to sound almost condescending with respect to introducing a service. on the other hand, the consequences can be horrified -- can be horrific. widely can spread more if they adopt local standards. on the other hand, they could adopt the highest standards in the world of background checks, of making life safe for their customers in ways we would expect in the first world and spread this global level of safety, but hurt their business prospects. is that the trade-off? could a competitor say we're going to use the locally allowed method for checking backgrounds and thereby gain market share against uber? >> they could, but at the end of the day, have to enter their customers. it's going to be customers holding uber and other companies accountable for the type of safety they put into the service.

you can't get away with saying we are just a platform, not when you are dealing with people's lives and stop right now, uber has a lot of things to think about. will they be able to compete with yellow cab or will they implode? this is a situation that could drive down customers by a big margin because women are going to think about this. a lot of times we don't think about this, but at the end of the day, you are opening the door and getting into a car with a stranger will stop -- with a stranger. >> you're talking about real people getting into real cars in the real world. i wonder how does uber manage this moving forward, moving fast versus moving smart? these are completely different kinds of problems than companies like facebook or google face. driver had an uber

charged in the death of a six-year-old who was walking in a crosswalk. become -- and it's partly their own fault -- they have become a lightning rod for the rapid growth of these kinds of services. almost any suit that comes up that may not be widely publicized were it to involve yellow cab becomes a giant story when it involves uber. there must be something wrong because the story involves uber, talk about the ongoing story of sexual is all -- sexual assault involving yellow cab. i don't see any stories about the two dozen cases of sexual assault that it are there. it's a species of double standard that uber brings upon itself because of its brass knuckle tactics. a story wey, this is

will continue to follow. thank you both for joining us on a very important topic. the yahoo! chairman, maynard webb, served as a top executive at many silicon valley startups will stop what advice does he have for uber? we have office hours with maynard coming up. ♪

>> i'm emily chang. this is "bloomberg west." plusre talking about uber struggles breaking into the indian market and a recent claim that a driver raped a passenger there. now the government is saying uber is not only not welcome, but it will be blacklisted the future. it's just one of many challenges facing the ridesharing company these days. uber how should and its

executives handling the situation? that's the subject with maynard webb, currently on the board of salesforce. as well as yahoo!. what would you say to the ceo right now if you had him a room? >> i would say i feel for you and i wish you well. travis will have to give great coaching advice, but i think problems like that are opportunities to make your company far better. while it is horrible that a woman got raped and we should do everything in our power to make sure that gets prosecuted well, we should find a way to build friends in the government and figure out how to make sure we can still conduct business in an appropriate way. >> what about in terms of attitude -- there are people who love travis and believe in him and it certainly did not hurt their last funding round, but

there are people who say he is arrogant and brash and has some work to do. speak to travis because i have not personally met him -- >> but as someone on the outside -- >> here is what i would say. i do know bill burly extremely well because he helped us at ebay and was a board advisor. i guarantee he will be giving travis great, sage, brilliant advice and be totally dedicated to trying to make him better. >> when you were at ebay, you had your own challenges. i believe one of your employees was arrested. >> the person in charge of our indy office was arrested. would you like to hear that story? >> i would love to hear that story and how you handled it. >> it was not on the plan for us that they to be doing with our head of india in jail.

an illegal tape of two teenagers making love on the site and it was quickly taken down. the police heard about it and asked him to come down to the police station in a friendly way , to give them updates on how he would deal with this in the future, and they locked him up. he stayed locked up for weeks and we worked with condoleezza rice at the time to try to make night and dayrked to try to get him out and make sure we modified our policies to have this not happen again. but whenever you are in a new market, you are learning your way and you should expect there will be some things that happen. >> should you go into a new market before you are prepared for all of those challenges? how does uber balance moving fast versus moving smart? india's huge market everyone want in.

>> i think you have to do both. you have to be in the country and you have to iterate and change and you have to have enough of the base to understand what would be issues. frankly, as bad as that situation is, that same thing could happen with a driver in the u.s., here. i think they have to take a look at what are we doing to make sure passengers are safe, wherever they are, to make us the safest, most trusted way to get around will stop >> how was the anti-up here? around. >> when you use facebook, you screen.nd your computer here, i am getting into a stranger's car. >> you are getting into a taxi, a stranger is driving. drivers just uber as much as taxi drivers.

you are getting into someone else's vehicle and the company who provides that service needs to make sure it is safe. just like getting on the plane and somebody is flying the plane , that they have been certified and they are safe to take you where you are going to go. that is something that, if i were there, i would be working on in a very big way. next always great to have your sage advice here on "bloomberg west." nice to see you. coming up, amazon take -- amazon threatens to take its drone development program overseas if the government doesn't change its policies. those details, next. ♪

>> i'm emily chang. this is "bloomberg west."

the hackers who targeted sony pictures soon to be far from finished. they just released publicity bibles, including brad pitt's phone numbers and aliases for actors like daniel craig and natalie portman. yesterday, the hackers demand sony not show "the interview" a comedy about a plot to assassinate north korean leader, kim jong-un. what kind of impact could this have on the future of sony pictures? i know you have been watching this story with a breath. sonyig a deal is this for and its place in hollywood? how upset are these actors going to be? why bring a project to sony and the future of it cannot be protected? >> this has been huge for sony. it has been devastating to some effect -- they have been paralyzed for weeks to stop all of their personal information is

everywhere. business-related, individuals have had social security numbers out on the internet for people to find if they wanted to. it gives a great insight into what has been going on there to some degree and there's more and more information coming out every day, a vast amount of it. through, soot to go we are probably only scratching the surface. there's a huge variety of information out there. there's a publication that has a breakdown of "the interview" and what the actors got paid, what they spent on props, what the film is costing sony. that's the film people think might be at the heart of this whole attack. >> we also know why sony abandoned the steve jobs movie. we know what different actors are getting paid for different projects. how big a problem is that? the personal information of all

of these people being put out there is an incredibly difficult issue and we know how devastating the impacts of this can be but what about these company secrets? how bad is that for sony? it was only yesterday that we really saw an effect of the stock price, and that was when playstation was down. it was really only that day that we saw a major fall in the share price, down about 4%. when i talk to people in hollywood, i get the impression that it obviously speaks to a lot of people but this could have happened to any company and this company is being targeted. that is still up for debate to some degree. some important voices in the cyber security world have said no industry software could have protected a company from this. so to some degree, it's a question of could this have

happened to any studio? i don't know that it would have stopped anyone working with sony. what comes out in the coming days as more information into their workings come out. so far, one of the things people what might about is happen to other studios in terms of green lighting projects. that's one other question. >> interesting. thank you so much. we will be watching every twist and turn here to see if any more information comes out. still ahead, the early days of apple -- steve wozniak remembers what steve jobs look like way back then. >> it is 26 minutes after the hour which means bloomberg television is on the markets. i'm matt miller. we are looking at a route -- a

rout overseas, but here, the nasdaq has turned around. the dow jones industrial average down less than 100 points. ♪

>> for its 85th anniversary, " bloomberg business week" is chronicling the most disruptive ideas of the last 85 years. on apple one computer went sale for a retail price of $666 and $.66. steve lesniak, who cofounded apple was steve jobs, remembers the early days. >> we've got the very first computer we ever built, the one before we even started the company. i had wired the entire bottom -- that's the first apple computer ever. >> does a get boring to tell the story? >> never. those are the most incredible

times will stop the summer i built the apple one computer, i was totally aware a revolution was close to starting. i've been showing off my computer at the homebrew computer club. i had given away my design for free. steve jobs came into town. he would hop into town and see what i would do and he would somehow turn them into money for both of us. paul terrel owned a store in mountain view. he had seen me demonstrating my computer, so steve jobs went in to sell him some of our little boards that we build for 20 bucks and he said no -- people want to buy it pre-built. they want to buy it ready to go. build, we$250 to would sell it for $500. the retail price was $666.66 because i come as a method edition, love repeating numbers.

-- as a mathematician love repeating numbers. we would drive the finished products to the garage come make them work, then drive them to the store that paid as cash. we outgrew the garage very quickly. disruptor special" airs tuesday, december 9 at 9 p.m. eastern. we look at seven innovators whose lives have changed the world. don't miss our interview with another innovator who started apple was steve jobs and steve lesniak back in 1967. that interview is tomorrow right here on bloomberg television. amazon is threatening to move more of its drone research outside the united states. in a letter addressed to the faa, amazon urge regulators to grant the company permission to test drones outside of labs in washington state will stop

amazon proposes to fly the drones on private property in a rural area supervised by train ,ilots, according to the letter which was a response to questions from the faa. joining me over skype is the senior manager for the association of unmanned vehicle systems in new york. first of all, what is your reaction to amazon's response here? >> we are sympathetic. we understand what the frustration is with their submission. it has been delayed for a number of years now and many companies -- been grounded while the >> looks like we are having trouble getting the shot up. we will try to get back to that story with amazon saying it will use its drone operations

overseas -- move its drone operations overseas. do we have mario? >> i'm here. >> there you are again -- you got cut off in the middle of your first answer. let's restart. what is your response to amazon's reaction? >> amazon is not alone. the small rule has been delayed for years while many companies remain grounded in the u.s. has delayed its rulemaking process, other countries have put in more permissive regulations to capture a piece of this growing industry. certainly in danger of falling behind and there's quite a bit of tape. the u.s.o you want government to do? on one hand, there are safety issues. what should the government be doing at this point? anthere will likely be

incredible of process to ensure the safety of the airspace. safety is paramount and our companies understand safety and liability for a well. what is important is that the faa begin the process of analyzing rules as soon as possible. 455nderstand the small rule pounds or less should be published by the end of this year. >> where might amazon conduct these tests, if not in the united states? article read the press and i believe they are talking about possibly moving their operations abroad to the u.k. >> do you think the faa is being unfair to amazon? they have granted permission for hollywood production companies to make movies, for example. >> i don't think unfair is an appropriate adjective. i know there are over 150 submissions that have been made and all -- >> looks like we are continuing to have problems there with

mario's shot. for amazon situation and the unmanned vehicles association. it is a story we will continue to follow. we will have more "bloomberg west" after a break. coming up, how one for-profit company with a nonprofit mission is winning money from bill gates and richard branson. on can watch us streaming your phone, tablet, bloomberg.com, apple tv, and amazon fire tv. ♪

>> welcome back to "bloomberg west." i'm emily chang. change.org, the mission drifted -- mission driven, for-profit website has just had a victory

of its own. the company raised 25 billion dollars in series b funding from two dozen different high-profile investors, including bill gates, area on huffington, richard ranch in -- richard branson and others. i spoke with founder and ceo of change.org and i started by asking about its unique investment strategy and why the company decided to raise a little money from a lot of people. >> we want to a large group of people with amazing experience across a number of different domains -- tech, business and media. to those people for advice and support. that's why we wanted a large group of what we think are remarkable people. >> you're are talking to sell me different people at once. for the kinds of people, this is a drop in the bucket, but you are talking to a lot of people. >> a lot of investors invested the same amount as if it were any normal company.

it wasn't the size of investment, it was just the investors involved. set it --printing to to spend money as possible, we wanted to do it as smart as possible. >> this is a for profit company, and isis mission driven unique in the world of silicon valley tech startups that we go. >> we are about increasing the movement of people who believe business can be used to make a social impact. unique, butmay be in the next couple of years, there will be an increasing number of companies that take this approach. >> what kind of return can these investors expect? >> we want investors to take a long-term perspective. to provide model is investors were turned over the long term annually way we can demonstrate it is possible to

use technology to build a real business is to validate the model and unlock additional capital is by showing financially it is successful as well. we plan to do that not by sprinting toward the exit. >> what does the exit look like for you? are you going to go public? >> the plan is to have private secondary offerings. any increasing number of valley companies want to be able to do that. next is that mean you will never is usually>> important part of our model is providing investors return. our plan is not to sprint toward an ipo but think incredibly long-term. part of that thinking is how do we provide the financial return necessary to demonstrate building a company for social impact is both impactful and financially successful. >> you are saying your investors can expect a return without an ipo? >> it's a possibility. increasingbe an

number of companies that want to stay private over the long term but can be financially successful. conversation with a number of investors in the biggest sticking point has been you decided you want to think long-term. we talked a lot about the plan through private secondary markets and we think that's one of the biggest opportunities for enabling companies to think long-term. >> how does change make money and how much money do you expect to make this year? simple --el is very very similar to what you might have on facebook -- sponsored campaigns in the same way you might have sponsored post. oranizations like oxfam large clients planning to build their movements and we will make enough money so that more than half of our customer covered by revenue. it is really significant. >> when you are taking money from these organizations putting

up petitions or that have an interest in the petitions, does tot create a lack of clarity your position? >> one of the important things is being an open platform where anyone, anywhere can start a petition around any issue. like youtube for online campaigns. we do not take a position on these issues. andnable 20,000 people there are probably a few hundred sponsored campaigns that we do not endorse but enable them to pay to promote. isi think change.org perceived as a more liberal organization. can a conservative organization started petition? >> the ideals we have are not around pollock -- around partisanship. we don't think there is a left/right divide in this country. among a smallde number of people who have power at the top. what we are about is the disruption of that model, to

democratize democracy regardless of affiliation. >> what have in most -- what has been the most popular petition? >> one of the most popular one was trayvon martin's case. there was so little awareness about his case at the time and to make a private injustice a public narrative. are most viralat also end up being the most successful. >> you say you want this to go beyond petitions. what is the second or third act? what bookss are like were to amazon. the method by which we acquire a gauge users and leverage that toward things like elections. there's a huge movement to transform the way in which elections occur. the user experience has not changed for hundreds of years and that is both a tremendous need an opportunity for us to us. >> -- opportunity for

>> "bottom line" with mark crumpton is coming up next hour. what do you have for us today? >> the senate intelligence committee has released a scathing report on the techniques used to interrogate terror suspects in the aftermath of the 9/11 attacks. the report says the cia misled congress about the methods used and the techniques were more brutal and less effective than the public was led to believe. the cia director during the clinton administration will join me when i see you in a few minutes. act to you in san francisco. advertisers. they were getting customers, but instead, they were getting scammed. we will be back with an in-depth look at the dark side of digital west."xt on "bloomberg ♪

>> i'm emily chang. this is "bloomberg west." 6.3rtisers will spend billion dollars advertising to robots. the association of national advertisers revealed that one in four video ad clicks are fake. cory johnson is back with more. >> this is amazing stuff. this is the largest public study on bots and digital advertising ever. companies that have been paying for advertisements are being ripped off to the tunes of billions of dollars, possibly. the man who invented the technology and oversaw the results joins me now to talk about this issue. me, we have this endless discussion about is this a bubble or is missable, are the numbers real or fake? your numbers suggest there are dozens of debt -- dozens and

dozens of companies whose results are actually bogus. >> i hate to admit it, but it's true. i want to be clear that there are actually real people on the internet. it is not all fraud, but not none of it is either. to six were very opportunity to work with 36 of the largest brands in the world to really find out what is real and what isn't. >> and you looked at a lot of campaigns and domains and what you found was the number of impressions -- advertisers thought they were getting ads and there were computers logged on an individual computers taken over. the result was there was an enormous amount of fraud being covered. >> absolutely. across the board, but a quarter of the video ads, at least a quarter of the video ads or fraudulent. a little more than 10% of overall display. but it is not evenly

distributed. absolute hotspots, areas where 100% of the traffic is completely bogus. >> from an aggregator perspective, the numbers you money wasth, how much being wasted by advertisers who bought and and were thinking they are getting clicks but they are not being clicked on by people? >> our conservative estimate is $6.3 billion of the global advertising spend is going directly to fraudsters full -- to fraudsters. someone clicks on the ad but no one is home. >> whether it is demand media or facebook or google or media companies -- not that buzz feed is fake, but the editor of the "new york times" is fired because she rejects a report

from management that says she should be more like buzz feed and now we find out a lot of the clicks on sites like's feed, if not buzz feed itself, are fake. >> this is a problem for everybody. one of the key findings we have is over a quarter of the fraud wasn't on these tiny, but your sites but in these top, premium sites that a lot of people use will stop -- that people use. people sell a million clicks -- a million people viewed this, but only half a million people can be expected to show up. what makes up the difference? someone pays the guy who pays the guy who pays the guy to get millions of infected machines to click ads fraudulently. the biggest surprise was when we found out the actual crime isn't done from the cloud will stop they break into people's homes and have those homes computers click all day. this is the basis for why so

many people's computers are getting broken into. >> i left the house this morning at 5 a.m. and i saw my wife's computer was still on. maybe her machine has been taken over. but there's an advantage to some of these companies -- someone boosting their career by going to a third-party site, getting all of these fake botnet clicks and saying i got my numbers up by 50%. i want my bonus, i want to do my ipo and move to a company with a better office because of these short time bogus results. >> when you rob the bank, some eventually notices the bank account balance at zero. when you rob advertisers, a numbers people get going up and it's rewarded. it is a perverse incentive and it's exactly like you described. >> thank you very much. >> i can't be excited about all of these on our bloomberg videos?

>> i do think this may emerge as one of the guest fakes of this era of technology and could be a real problem for a lot of companies whose numbers proved to be fake. >> it's time now for the bwest byte. what do you have for us? --speaking of fake numbers 250 or 242. when elon musk announced the dual motor tesla model s, he said it would have a range of 275 miles, better than the current model. in a few weeks later, they actually increase the estimate to 285 miles. at the epa that with a real numbers today and it turns out justew, improved model has 250 miles on standard wheels will stop -- standard wheels. tesla is taking orders on these cars whose buyers were told they were going to get 285 miles -- they will have to pull over for gas. you can't blower for gas in a tesla.

>> pull over a charge, hopefully if there is one. what has tesla said about these numbers? >> they always put out an estimate and when the numbers are a lot less, it's part of the tesla narrative to be careful what you are buying into. it's still a really cool car but the dual motor machine, which is very interesting, has a lesser distance than the last machine, according to the epa. >> do other carmakers have the same differences of opinion when it comes to epa standards versus miles per gallon? >> companies don't come out with this information before the cars actually out. the distance you can go to a charge is a big difference for tesla in an era where you have to go home or find a place with a charger. that's why we see tesla sales concentrated in just a few areas , like this in northern california. >> thanks for watching this edition of the show.

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>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this tuesday. looks at the senate's report on the cia's and interrogation program. the republican party possible ratings. -- publican party's poll