♪ >> from pier three in san francisco, welcome to bloomberg west where we covered innovation, technology, and the future of business. here's a check of your top headlines. u.s. stocks closed nearly flat after major selloff around the world today from china to greece. is optimistic about u.s. markets. >> we have a dramatic increase in prices. to moderatelylue above fair value today. we are not at the levels we saw in 2000. we are not saying the same p/e's

where you had true bubbles. >> the stock rally will continue into 2015. jpmorgan may need the -- more than $20 billion in next or capital to meet a new requirement by the fed. jpmorgan has already had a highest capital surcharge under international regulators recommendation. the u.s. supreme court says amazon workers do not have a federal right to be paid for time spent in security searches after their shift ends. the justices were -- rejected claims by former employees who said they should be paid for time in antitheft searches. hired a chief strategy officer. he led the team that worked on alibaba's ipo. we spoke to him in november to on the get his take

future of tech investing. >> investors are excited about the technological opportunities and of you think about internet, it is a volume game. users are coming from emerging markets. the investors are looking for companies that have very high emergent market exposures. now to the lead. is banned in new delhi after a passenger alleged being raped by a driver. run say that the field to the ground checks. the driver who has since been arrested appeared in court and is still in custody. the ceo has issued the following statement.

the general manager of india had this to say. a horrificactually event that has happened. we are very sorry about this. this is an ongoing investigation. i cannot answer any questions. >> how damaging is all of this for over -- uber? i will start with you. sexual assault and rape, violence against women a huge problem worldwide and in india in particular. i read an interesting headline in bloomberg businessweek. india's problem is raped, not u ber. problem globally

but what we're here to talk about is uber. they have hit on a market trend finding they -- supplies of drivers ahead of passenger safety and that is the real question here. as they scale up, are they going to do it right, or will they be like other companies that implode? cupcake shopthe and open to many of them and go out of business. we are talking about real lives in the safety of people and everybody should be aware of this. all consumers have start -- got to start thinking. when you open the door and get into any car, do not have a false sense of security. we have to hold them accountable . what kind of background checks or the doing because you can check is background what you decide it will be. if a company wants to spend $10 you will not have much information. yellow cab companies are regulated.

my agencies in major cities everywhere, they use a service called live scan which is a background data service that go straight to fbi and the department of justice and it do part -- updates companies as they -- if crimes are committed by any of these drivers. >> uber is facing criticism that they did not do a good enough background check and others giveg they were able to authorities his name and maybe it was safer than riding in a traditional taxi. >> it is an impossible situation . it is an abhorrent crime. i was looking at statistics yesterday from the study and 2012 and 2013 showing in london, something like 22 sexual assaults involving cabs in that city in that year. of20 week in probably one

the most regulated and controlled taxi markets in the world. there is a widespread volume and the volume is horrific. is -- there is a suggestion tot using official areas investigate [indiscernible] maybe the problem is they cannot background checks. >> it makes me wonder if these issues are different because of the service involved. all the ways that google those in their facebook does but when we add businesses like google wereacebook, there issues bigger. that was somewhat more cereal.

this is a physical person and there is a different kind of service. i wondered if the globalization will require u.s. values and standards being imposed in these countries that are comfortable having them. >> i think that is entirely likely. there was a suggestion i saw yesterday were someone in country was suggesting that the , youway around the problem can go out and find friends and family and interview them directly because you cannot trust the official sources. it is an impossible problem. weis antithetical to the way think about background checks. no one is running around interviewing friends and family but the suggestion is that is maybe what is necessary and other markets. that begins to sound almost condescending with respect in producing gas introducing a service but the consequences can be horrific. be spread more

widely and make more money if they were to adopt local standards. they could adopt the highest standards in the world of background checks and making life save for their customers in way that we would expect in the first world and spread this global level of tonight -- safety but hurt their business prospects. a competitor will come in and say we just will use this on the locally allowed methods and thereby gain market share. >> they could but they will have to answer to their customers. it will be customers that are d other companies accountable for the type of safety they put into the service. you cannot get away with saying we are just a platform. not when you're dealing with people's lives so that is a question for them. ber's next steps are really

important. will they be able to complete with yellow cab or will they implode? this is a situation that could by a bign customers margin. because women are going to think about this and it is coming out. a lot of times, we do not think about this but you are opening the door in getting into a car with a stranger. >> you're talking about real people in the real world getting into real cars. it is different from using facebook or google. how did they manage this moving forward, moving fast versus moving -- moving smart. this is a completely different companiesoblem then like facebook or google faces. there was the death of a 16-year-old who was walking in a crosswalk. isit has truly become and it

partly their own fault. they become a lightning rod for many peoples to satisfaction. almost any issue that might not be as widely publicized becomes this giant worldwide story when it involves uber. there must be something wrong but we do not talk about the ongoing problem of sexual assault involving yellow cabs. upo not see stories popping about the two dozen assaults occur. it is a kind of species of double standard but uber brings it on itself with respect to its brass knuckle tactics. >> it is a story we will continue to follow. for joining us in a very important topic.

maynard webb has served as a top executive at many silicon valley startups. what advice does he have? we have office hours with maynard next.

>> before the break we were strugglesout uber's breaking into the indian market and the accusation that a driver rape a passenger. the indian government is saying is not only unwelcome but it will be blacklisted. how should they and their executives be handling the

issue? our guest is currently on the board at salesforce. what would you say right now if you had him in a room to yourself? >> i would say a feel for you and wish you well. tell him --uld problems like this are opportunities for you to make your company far better. and while it is horrible that a woman got raped and we should do everything in our power to make sure that gets prosecuted well, to build find a way friends into government and figure out how to make sure we can still conduct business in appropriaten an way. >> there are people who love travis, who believe in him and it did not hurt their last funding round.

there are people who say he is arrogant and brash and has some work to do. >> i cannot speak to travis because i have not personally met him. >> if someone on the outside. >> here is what i would say. i do know bill gurley extraordinary -- extraordinarily well. i will guarantee you that he ,ould be giving travis great sage, brilliant advice and be totally dedicated to try to make him better. >> when you were at ebay, you had your own challenges entering india. one of your employees was arrested. >> a person in charge of our india office was arrested. is it was not on the plan for aesthetically feeling with our head of india in jail. somebody had put an illegal tape

of two teenagers making love on the site. it was quickly taken down. the police heard about it and i asked him to come down to the playstation plaintiff friendly way to give them updates on how he would deal with this in the future. and they locked him up. he said pocket for weeks and him with condoleezza rice at the create a and to pay for by the policies to have happening and they are you are in a new value of learning and that there are things that happen. newould you go into a market before you are prepared for all this challenges? i asked earlier how to the balance moving fast versus moving smart? india is a few -- a huge market and everyone wants in.

>> i think you have to do both. you have to do -- be in the country and iterate in change and adopt and you have to have enough of a stander stand what would -- what the issues are. as matters that situation is, that same thing could happen with the driver in the u.s. here. they have to take a look at what are we doing to make sure that passengers are safe. wherever they are. most safest and trusted way to get transportation. >> as we were speaking about this, real people getting into real cars in the real world. when you are using facebook you are behind your computer screen and you might not ever interact with the people you're talking to. i am getting into a stranger's car. >> you're getting into a taxi, i -- uberust over drivers

drivers as much as taxi drivers. the company that provides that service makes -- needs to make sure it is safe. you need to have the feeling that somebody is flying the plane, that they have been certified and they are safe to take you to where you're going to go and that will be something. if i were there i would be working on that in a big way. >> maynard webb, always great to have your sage advice. great to see you. coming up, amazon threatens to take its drone development program overseas if the government does not change its policy. we have those details next. ♪

>> i am emily chang and this is "bloomberg west."

the company's attackers just released so-called publicity bibles including brad pitt's phone number and aliases for actors like daniel craig and natalie portman. the hackers demanded sony not ."ow "the interview the film is set for release on december 25. what kind of impact could this have on sony pictures? i know you have been watching the story with bated breath. how big a deal is this for sony and its place in hollywood, how upset are these actors going to be, why bring a project to sony in the future if it cannot be protected? this has been huge for sony. it has been devastating to some affect. they have been paralyzed for weeks and all the personal

information is everywhere. it is not just business related. individuals working there my they had social security numbers out on the internet for people to find if they wanted to. it gives us a great insight into what has been going on there to some degree and there is more information coming out every day , a vast amount of it. it is a lot to go through. the surface ing terms of what we know. there is a huge for idf information out there for the publication. on whats a breakdown the actors got paid and what the film is costing sony and that is a film that people might think is at the heart of this whole attack. >> we also now know why sony abandoned the steve jobs movie. that, theproblem is personal information of all

these people being put out there is an incredibly difficult issue and we know how devastating the impact of this could be. what about some of these other company secrets, how bad is that for sony? yesterday we saw an effect on the stock price and that was on playstation was down. it was really only that data. prices fall in the share down 4%. i get the impression that it has spooked a lot of people. this could happen to any company and this company has been targeted. that is somewhat up for debate. -- they said that no industry software could have protected a company. it is a question of could this have happened to any studio?

i do not know if it would stop anyone working with sony. --y stop by conference controversial films. and insighttion into their workings will come out. we'll have to see. one of the things that people are talking about is what that might have in terms of green lighting projects that might have political repercussions. that is one other question that is being sorted around. >> thanks so much. we will be watching every twist and turn here to see if any more information comes out. the early days of apple. what wozniak remembers steve jobs was like way back then. >> it is time for bloomberg television to go on the markets. i am matt miller. we want to get you caught up on

where stocks traded today. you may have expected a huge selloff and you have the s&p closing off unchanged and the .5 of closing with a gain 1%.

>> for its 85th anniversary, bloomberg businessweek is chronicling the most disruptive ideas of the past 85 years. in 19 76 the apple computer went and $.66.r $666 wozniak remembers the early days. >> we have the very first computer we built even before we started a company. i had wired the bottom and soldered it together. that was the first apple 1

computer ever. those were the most in cable times. i,mer that i built the apple was aware that a revolution was supposed to start. i had given away my designs for free. steve jobs came into town. he would pop in to town and see what i was doing and he would somehow turn that into some money for both of us. seen me demonstrating our computer. showed a demo and he said no. -- retail price was $666.00.s

and we wouldigns drive the finished projects to the garage and then to the store. we outgrew that garage very quickly. disruptor special eastern read p.m. we look at seven innovators whose ideas of change the world. do not miss an interview with ron wayne. at 1interview tomorrow p.m. eastern. >> amazon is threatening to move morbid drone research side -- outside the united states.

amazon proposes to fly the drones on private are pretty in a rural area supervised i trained pilots according to the letter which was a response to questions from the faa. joining us by skype, our guest. he is in new mexico with other drone experts for conference on unmanned aerial systems. what is your response to amazon's letter here? >> amazon is not alone. where sympathy to the concerns. the small uas role has been around for years. while the u.s. has delayed its rulemaking process, other countries have captured a piece of this growing industry. the u.s. is certainly in danger of falling behind and there is quite a bit stake. >> what exactly do you want the u.s. government to do because on the one hand, there are safety issues here. what should the government be doing at this point?

>> what they are doing is there will likely be in a commensal passes to make sure of the safety of the space. -- shouldnalized finalize the rule is set as possible. rule should be published this year. the press article. they are talking about possibly moving operations abroad to the u.k. the faa is being unfair to amazon? they have granted permission to be used in movies. >> i do not think unfair is an appropriate adjective. there are over 150 submissions that have been made and under

section 333 exemptions. are continuing to have problems. an issue of much concern to amazon, to the faa and the unmanned vehicle systems association where mario was joining us from. a story we will continue to follow. more after a quick break. how one for-profit company with the nonprofit mission is winning over bill gates and richard branson. we will speak with the ceo and founder next area do can watch us streaming on your phone or tablet, apple tv, and amazon fire tv.

>> will come back. imm leachate. welcome back. i am emily chang.

company has raised when he $5 million in series b funding investors. spoke with founder and ceo of change.org about this news and theted i ask him about unique investment strategy and why they decided to raise money from a lot of people. take a listen. ofwe wanted a large group people with an amazing experience across different domains. to those people over time for advice and support it is why we wanted to support of what we take to the group of people. you are talking to somebody different people at once. it is an out-of-pocket for your talking about a lot of different people. >> the invested the same amount as a line if they were any

normal company. a number of them significantly more. number of investors that were involved. it was about how you spend time instant of trying to sprint to raise money as soon as possible. we wanted to race it as smart as possible. >> this is also mission driven and it is unique in the world of silicon valley tech startups that we know. >> we believe the business can be used in service of social impact. it was announced yesterday he was an investor and we think we may be unique today but in the next couple of years there will be an increasing number of companies that take this approach. >> what kind of return can investors expect? toit is part of our model provide return over the long term and the only way we can run

straight it is possible to use technologies to validate the model and unlock capital. it is like showing financially successful as well. building a long-term business. >> what is an exit look like to you, i you going to go public? >> the plan is to have private sector offerings. kickstarter has been talking ofut, and increasing number companies want to do. >> does that mean you will never go public, what can the expected return? >> an important part of our think incredibly long term. part of that is how we would provide the financial return to demonstrate the building a company for social impact is impactful and financially successful. that is part of our plan.

>> investors can expect a return without an ipo. >> we will stop showing up but there are increasing numbers who -- private. quiet >> to your investors by that? conversation.g the biggest sticking point has been you decided that you want to think long-term. we talked about the plan through private secretary markets. that is one of the big opportunities for enabling companies to think long-term. >> how much money do you expect to make this year? >> it is similar to what you might have on facebook. to sponsor campaigns in the same way you might have sponsored coasts. you have the obama campaign previously and large clients building movements on change.org. more than half of our costs are

covered by revenue. >> when you're taking money from some of the organizations that have an interest in the petition , does that create a lack of 'sarity to change.org position? >> one of the things is a and open platform where anyone, anywhere can start an open position. enable the 20,000 people to start petitions and there is a few hundred sponsor campaigns and get launched by the biggest organizations that we do not endorse but enable them to pay to promote. >> it is perceived as a more liberal organization. organizationative start a petition? >> this is around empowerment. we cannot think there is a left to right divide. we think it is a divide around a small number of people that have a disproportionate amount of

power regardless of political affiliation. we are about a disruption so we need a democratized democracy regardless of affiliation. >> what are some of the more popular petitions, where you made an impact? >> one of the most popular was the trayvon martin case. his parents started a position because there were so little awareness of his case. mostly the petitions for their most viral end up being some of the most successful. >> you said you want this to go s.yond petition it is always going to be a core part of our model but it is a mechanism by which we can leverage that as a channel. there is a huge opportunity to transform the way in which elections occur. the user experience has not for hundreds of years.

that is a tremendous need an opportunity for us. the founder of change.org. advertisers thought they were getting customers but instead, they were getting scammed. a look at the dark side of digital ads next on "bloomberg west." ♪

>> i am emily chang and this is "bloomberg west." market tos will robots. four video ad clicks are fake. cory johnson back with more. >> this is amazing stuff. this is the largest public study on bots ever. companies are being ripped off to the tune of aryans of dollars. -- billions of dollars. to me, we have this endless discussion about is this a bubble, isn't that a bubble, are the numbers real or fake? why are numbers suggest is that

there are dozens of companies that we see is change cash -- changing media whose results are bogus. >> there are actually real people on the internet. it is not all fraud area that none of it -- not none of it is either. we have this extraordinary opportunity to work with 36 of the largest rands in the world to find out what is real and what is not. looked at a lot of campaigns and looked at a lot of domains and what you found is the number of impressions, when advertisers thought they were getting ads, they were computers that were long gone and computers that were taken over. there was an enormous amount of fraud being covered. >> absolutely. a quarter of the video ads, one quarter are fraudulent. more than 10% of overall display. it is not like it is evenly

distributed. it is not background noise. tuberculosis is not evenly distributed either. there are hotspots where 89% of the traffic was completely bogus. ,> the numbers you came up with how much money was being wasted by advertisers who bought ads and were thinking they were getting clicks but they were being deceived. the globallion of spend is going to fraudsters. the lights are on, when someone clicks on the ad but no one is home. >> i am taking of companies like whether it is demand media or face the gore google or it is media companies -- not that buzz feed is fake.

we found out that clicks were fake. for everybody.em >> one of the key findings is over a quarter of the fraud was not on those tiny obscure sites but was in these top premium sites that a lot of people use. what happens is sometimes people sell a million clicks. a million people view this but only a half can be expected to show up. what makes up the difference? someone pays a guy who pays a guy who pays a guy who gets millions of infected machines to click and add fraudulently. the biggest surprise of the study was when we find -- found out that the actual crime is not from the cloud. ,hey do not rent the machine they break into people's homes and have those home computers click all day.

this is the basis for why so many people's computers are getting broken into. house at 5 a.m. and i some my wife's computer was still on and i felt why hasn't this thing gone to sleep? i thought she was clicking on ads while she was asleep. there is an advantage. i can imagine the case where someone is listing the career by going through -- to a third party site and getting these fake clicks and saying i got these numbers up by 50% and i want a bonus and do an ipo and move on to a company with a because i put in some short time bogus results. >> when you rob a bank eventually someone notices the bank balance hits zero. a whole bunch of numbers get numbers going up. it is a perverse incentive. exactly like you describe. >> thank you very much. you should be getting about

all the videos and tweets we're getting. this may it -- emerge as one of the biggest fakes. >> time for the bloomberg west fight. we had a range of 275 models. teslaweeks later, increase the estimate. realpa is out with the numbers. themodel s is 250, says epa. tesla is taking 70% of the wasrs whose buyers said it 280. they may have to pull over for

haver charge area did >> -- charge. >> when the numbers are less, it ,s part of the tesla narrative be careful of what you are buying into. the dual motor machine which is interesting has a lesser .istance >> to other carmakers have the same differences of opinion when it comes to apa standards versus how many miles per gallon? >> companies do not come out with information before the car is out. the distance you can go per charge is a big deal for tesla in this era where you have to either go home more find someplace that has a charger. it is one more reason why we see sales concentrated in areas like northern california. >> thank you and thank you for watching this edition of the

show. all the headlights all the time -- headlines all the time. see you later. ♪ .