>> live from pier 3 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 the top headlines. oil prices tumble again today, hitting fresh five-year lows. the fall comes after the international energy agency cut its way 15 forecast again. -- tony 15 forecast again. decline may force the fed to change course. towhy would they start eliminate language over an

extensive. eriod of time when the u.s. is not deflating, not moving in its direction of its 2% target? i forget moves towards a stance relative to what the market expected a few days ago. >> with oil plunging, investors corporateing riskier bonds, causing yields to surge to the highest in more than a year. service to london's airports has removed -- resumed after a stoppage. problem grounded flights, stranding passengers and one of the world's busiest cities. happened at an air traffic control center, which had suffered previous computer glitches. google is transferring its engineering operations out of russia. google's engineers are leaving after russia adopted new rules requiring more data to be stored in the country.

planse this news, google to increase its business investment in russia next year. mababa group founder jack is now the richest man in asia. ipo has putccessful the former and good teacher past hong kong real estate tycoon. he has added $25 billion to his fortune this year. to our lead. is looking to expand in the world's most populous country, china. to help navigate the chinese market, they are partnering up with baidu. as baidu investment comes uber rides a wave of bad publicity. the latest in france, where a paris judge decided not to block

the uber service. joining us now is cory johnson, -- ss give enters general k ventures paul kedrosky. we start with you. inare also investors alibaba. here? uber or baidu? >> it's an interesting situation. with us.investing it's a typical story, the battle of the three condemns. we saw that three or four years ago with online video. versus one.eing two we are familiar with this kind of situation.

>> you have so many u.s. internet companies, facebook, twitter, they are blocked in the country. google has the lead. could uber be one of the were first -- one of the first big companies to succeed with this partnership with baidu? >> we hope somebody with the u.s. would do well in china. i think transportation is a highly regulate it sector. it requires local knowledge to do that. baidu could be a terrific partner for uber. but we have been on the ground doing this for for five years now. we have much more in tune with what needs to be done at a provincial level city by city to make this work. the city byaul, how mark has underestimated each city has its own peculiar problems. what do you make of this? whole problem with this wave of investment in chinese

car sharing companies is fundamentally, it's not a technology problem. it's a ground-level warfare. as you say, on a city by city basis, that really favors the deepest pocket and the incumbents. you have a regulatory hurdle as well as this kind of incredibly expensive city by city warfare. i think this is going to be the toughest market, the toughest partnership for uber worldwide, in terms of how they get access to this market place. but slower than it has been in any other major market. is in a handful of big cities in china, hans. theyis the likelihood could significantly expand beyond that given the cultural issues in the competition? you are not unbiased, let's say that. >> we have known them for three or four years. i was the second two ever meet them.

in over 300 cities in china now. it will take uber quite a bit of time, even with baidu's help, to expand. in china, whoever has the biggest market share and maintains a good level of customer service usually ends up winning the battle. >> that's the place in a marketplace business like this. is the technological herder -- portal making that impossible for them? >> that's a good question. in the case of online video, that is what happened. ,n the battle of three kingdoms it was a passing job working with the different parties, it ended up making a merger that didn't work. that's what it would take. it will be adjusting to see this involved. >> what does this mean for baidu, paul? we are talking about uber, and their success. is this a win for baidu, or they behind the ball?

>> i think it's the latter. this is catch up. it's capital-intensive catch up. i don't think this is in any meaningful sense a win at all. it's more of an inevitability that they had to do it. it felt like they didn't have a presence in this market place. there's this three kingdom warfare going on in china, and respected not just car sharing, but they had to be there. the trouble is, it's not technology intensive. it's highly capital intensive. it's very feed on the ground in terms of regulators. that means this is going to be a long slow war of attrition. it will end up in consolidation. having issuesis with regulators around the world and the united states. how are regulators responding to ridesharing apps in general? are they friendly, or they having the same challenges that uber is having in its own

country? >> that sector is regulated. a lot of laws haven't been able to catch up to what is going on. the fact is that china has huge transportation issues. everything has been going so fast. you go to beijing, the traffic problems there are horrible. >> by been there. >> yes, you have. this makes it more efficient. i think the government understands it has strategic benefits. they just have to get there in a way that makes it fair to the taxi companies and other constituents. the chinese government going to insist that whoever wins this ridesharing app battle be a chinese company or have a chinese investment? uber can operate in china right now, but does the baidu investment mean it is sanctioned by the government and away wasn't before? for the chinese government, my guess would be they will let the market forces determine who

the winner will be. >> in order for baidu to make an investment in a u.s. company like uber, today have to get permission? -- do they have to get permission? do they get a nod from the bodies in the states? >> i think the chinese government is encouraging companies to expand globally. they qualified to do this. it makes the situation more interesting. i can't wait to see how it will work out. >> hans tung, thanks for joining us. paul kedrosky, we will see later in the show. a practicedoxing, started by hackers is becoming more mainstream. we tell you how it works, and why companies like twitter and facebook should be taking steps to protect their users identities. that is much more, when "bloomberg west," returns. ♪

>> i'm emily chang. "bloomberg west." this is"bloomberg west." -- this is "bloomberg west." most people have never heard of doxing. it's when private information is shared on the web worried that information can be shared legally or illegally. a conservative blogger posted the full name and photos of the alleged victim on twitter. there was an outcry against him, tors tweeting at twitter remove the blogger from the service. so what should services like twitter and other social media outlets do to protect their users against doxing? who docs thisser -- doxed this user is still

tweeting today? what is the responsibility? >> i think any social media outlet, if it's being used to intimidate or harass an individual through doxing, they should immediately cease that user's account, whoever is using this doxing technique through their social media platform. >> twitter's response is that they do have certain policies in abusive users, they do block certain users. more extremee in saidtions, -- an executive he had a user wishing death upon his family. and twitter wouldn't remove that user from the service. >> someone who is making a threat, especially a violent threat, that's clearly going to violate most state laws. where youe of doxing, have a release of personal information, twitter is pretty clear. i'm sure -- i'm unsure as to why this guy haven't lost as sexy --

lost access to his account. releasing private individuals information without their consent is a violation of the terms of service. >> in certain kinds of information. information included unlisted addresses, social security numbers, nonpublic phone numbers and e-mail it dresses. so not a name or photograph. does it appear that this user actually broke the rules here? >> it seems like that's avoiding the issue. the reason that twitter is preventing or prohibiting someone from disclosing this information is because all the bad things that happen to people once this information gets out there. it's not the actual doxing itself, it's the derivative stuff. the pizza bombing the goes on. to make a distinction that would let you release someone's phone number and their address, but we are going to print you from doing it when it's not in the public domain, that avoids the

real issue of trying to avoid all of the future harm that occurs when this takes place. seems to happen on the spectrum. you had the case of officer darren wilson who shot michael brown in ferguson, missouri. the new york times published the street he lived on. and that has been used as an example of doxing. can you differentiate when it is fair, when it is not fair, when it's right or wrong? >> if there's a journalistic reason for doing it, if knowing the street but he lives on is germane to the facts, that is important. but just releasing it to say we know where he lives, and all of you know where he lives, i think that's reprehensible. >> we were talking about a case of a journalist who covered cyber security issues. he himself is been the target of situations, where some of the people he was investigating have discovered

his name and his address, and tried to make life very difficult for him. take a listen to some of the results of these doxing situations. >> they sent a heavily armed police force to my house by spoofing an emergency call for my home to say someone invaded our home. that was interesting. if it never happens again, it will be too soon. who ran a major saiga rhymes -- cyber crimes division took up a collection to send heroin to my home, and call for my neighbors saying we think he's a druggie, yesterday friends coming over. >> can doxing lead to other crimes? >> absolutely. the pizza bombing, where people uses this doxxed information to

send pizza boxes. that's on the lower end. when i was in the fbi, we investigated a number of issues were actual swat teams or quick reaction teams from the police department were sent to homes because they thought there was a hostage situation inside of it, and in reality, it was these individuals who uses this information who had been doxxed online, and they were making erroneous phone calls. were sayinglike you companies should be taking a harder line on situation like this. to look atlly need what they are trying to prevent. what is the harm they are trying to prevent. and the rules they are using with the terms of service they are using actually prevent that harm a rather than making an artificial distinction that says if we already know your address because we can google it and find it, we will allow our social media platform to be used as a megaphone where people can broadcast it and tied into your photos.

phenomenon that we will continue to follow. tim ryan, thank you for joining us. which newly now, public him but he will have more of an impact on the world -- we dig into that question, next. ♪

>> i'm emily chang. this is "bloomberg west." soared 56lendingclub percent yesterday, making the online lending startup one of the most valuable financial institutions in the country. lendingclub serves as a

marketplace connecting individual and institutional lenders with people who need money using data and web tools to provide the lender with an instant risk assessment. alibaba guest says that , it's actually lendingclub that is more important. we are back with paul kedrosky from san diego. cory johnson is with us as well. was morech i've yet important -- ali baba or lendingclub? >> obviously, obama was more important. -- ali baba was more porton. -- important. in terms of representing the bigger changes in how the world works, transforming economies and thinking of disruptive opportunities, it just is hands down no question, lendingclub. we were so preoccupied with ali baba, which will turn out to be a capital footnote to history,

where is lending club will represent this wrenching change for financial markets worldwide over the next five years. >> does that make it worth $9 billion? or $11 billion? >> like 100 x sales or something. separate evaluation of the company from the opportunity it's addressing and the changes it will precipitate. any sane person be a liar $24.75?ng club at no. let's say which one is more important in terms of where the biggest opportunities are going to be, what incumbents are going to get blown up among where probably the most wrong about the total addressable market. it's all lendingclub. capital-intensive, me too global player. but it's not the same sort of thing at all. lendingclub has growth in the

future, alibaba engineered its growth in the past. >> the market cap as it stands right now is all is $9 billion. paul, what do you think the big ipos of 2015 are going to be will we see anything on the scale of these two? >> i don't think we will see anything in terms of the market cap of an alibaba. you just aren't there in terms of technology. as anly to see and uber example. it's not the same kind of technology driven story. it's more about capital consumption and global scale up and radial tory arbitrage. see stuffal, we will going on. i look at companies that are changing the asset management industry. lendingclub is changing the lending market. these of the markets that i think are the places to watch, where the incumbents are fat, happy, and over profitable. they will get blown up. now the places where they are eating huge amounts of capital to address slow-moving markets.

i think people have their lenses completely wrong. >> lendingclub is the one to watch. we will be watching it. paul kedrosky, thank you is joining us on the show. have a wonderful weekend. the faa just gave the green light for more permits for commercial drone use. how big a step forward is this for the industry, next on bloomberg west. ♪ >> it's 26 minutes after the hour, which means bloomberg is on the markets. i'm julie hyman. let's take a look at where stocks are trading right now. we've had climbs across the board caps off the week. the s&p 500 coming off the lows of the session. now down .5%. material stocks have been leading the climb. will stocks are lower once again. let's take a look at individual movers. adobe system is one of them. though shares jumping to an all-time high, after earnings topped estimates. separately, adobe announced the acquisition of a photography company.

it's worth adrian million dollars. -- $800 million. the paint maker predicted 2015 earnings will come in below estimates. ♪

>> you are watching "bloomberg west," only focus on innovation, technology, and the future of business. i'm emily chang. facebook ceo mark zuckerberg got personal and alive streams q&a session with users. he took questions on everything from parenting to pizza. take a listen. >> i guess my view on this important issue -- [laughter] if you are going to be eating pizza, you might as well also have fried chicken on top of pizza. sarah frier joins us now via skype with more of the highlights.

this is the second public q&a that mark zuckerberg has done. we have seen him get much more comfortable handling some of these questions from the public. why is facebook doing these human days this way -- q&a's this way? that said in the last q&a he sometimes doesn't like the fact that a lot of his communication with users happens -- who journalists who likes journalists? he wanted to have an opportunity to collect -- connect with people directly like facebook does in their townhall meetings, where anyone could ask a question. it's as open as honest and as they could be. >> does he know these questions in advance? does facebook select these questions? >> you know some of them in advance, and some of them were certainly prepared. people flew and asked the questions from various states

and countries. parkwere there in menlo just to ask the questions. the rest of them, he asked openly on a thread on his facebook page. give whatever questions they wanted, and other people would of both of -- upvote them. the most popular ones were answered. >> i was intrigued about his -- youfulness around want to show your simply, you can't click the like button. he's not through the negative implications of a button like that might have. >> he doesn't want to create any coddle moreeople to negativity on the internet. he wants to have a positive experience for people on facebook. a dislike button doesn't make

sense. he thinks that people would use that to down vote other people and say this post is stupid. the empathy button, or maybe something for those situations where a family member dies, or -- post anose important story about something that is socially or culturally sad, he wants people to be able to react to that in a way beyond comments. they haven't quite figured out how yet. that might be still become. >> i want to share a couple more of his answers. he was asked specifically about parenting, and whether kids under 13 should be using facebook. take a listen to what he had to say. >> if you have a platform that is anonymous, it's easy for people to do harmful things to do to people rather than if you're using real names and are connected to other people who were also using their real identity.

to answer your question, i would follow our rules. we don't allow people under the age of 13 to use facebook. i would not allow my child under the age of 13 to use facebook. after that, i would probably talk to them about it. when hesn't asked himself is going to have children, which i know is that question a lot of people have. the other interesting question he got was about mistakes he made early on. was there anything he would have done differently. take a listen to his answer that. the mistakes we have made in running facebook and building it, there are many. i do know anything about building a company were a product. i have learned so much from the people around me. making mistakes is a lot of how i learn. i guess you have to keep on powering ahead and don't stress too much about it. >> he got a lot clearer there all of a sudden. >> he did. what do you make to his answers to some of these questions? does it seem genuine? >> yeah.

one of the questions i've always when did they ever have these moments of oh my gosh, i have created a monster? when they see the cyber bullying that happens on facebook -- and he did point to that. i thought that it was interesting to say follow the rules, no kids before 13. he has to say that. but when you think about children and technology, don't ban them. he says society is sometimes a little too overbearing with children in preventing them from to technology and literate today. he reflects on his own adolescence at how much analogy helped him get to where he is today. he felt like he was pretty proficient, and he understood it. he doesn't like that society has this idea that people should be banned. of course he can't say that children under 13 can be on facebook, because that's the rule. >> will now we all know the way to his heart, and that's pizza

with fried chicken on it. sara, thanks so much. at stealingding from the rich and giving to the poor? not exactly. we tell you how robin hood, a new zero commission trading up, is targeting millenial's. you can watch us streaming on your tablet, phone, bloomberg.com, apple tv, and amazon fire tv. ♪

i'm emily chang. this is "bloomberg west." trading stocks without paying a dime on commissions. is this the new future of finance for the mobile millenial generation? cory johnson is back with more. >> imagine a zero commission trading world, there are traders all over a phone on their faces right now.

there's an app, a company called robin hood. they are catering to a younger generation of first-time investors. but cofounder joins me now. how does your business work? >> is great to be here. robin hood is really a product of the first time investor. for people like myself and my cofounder, who are in their 20's and looking to get into the markets. >> typically, brokers get paid a commission for doing a good job. you guys are zero commission trade had is that work. ? >> people don't understand how it works. a trade is a purely electronic transaction. building from the ground up allows us to avoid the overhead from which typical incumbent brokerages charge commissions. >> but you have costs? >> of the costs are similar to the costs of typical technology company's, rather than a brick-and-mortar financial

institution. staff,stly employees, and we do make revenue. we make revenue from premium services like margin lending that active investors will use. different than typical consumer technology companies. we will have revenue. >> you are similar to other brokerages. you have exchange fees, you have to pay for the quotation systems and for the phils on some level? >> those costs are very small. and shrinking. there's a lot of efficiencies introduced in the industry over the past 10 years. the incumbents have them in passing those down to consumers. is anto $10 per trade order of magnitude more than the cost of actually processing the trade for the incumbents. online brokers struggling as well. >> definitely. i think the problem or the

difference between us and the incumbents is that their customers are in their late 50's early 60's. >> why is that a problem? that's when people have a keen bladed wealth and generate more money for the brokerage is not less. we view it is important for people to get started at an early age. that's when it really matters, when habits of bills. someone who begins investing when they're 18 will be much more savvy, much more knowledgeable, and will have built more wealth by the time they are 30 than if they start -- 29.ey are in a nine >> was this a demographic focus? a problem of young people not investing, and what can we do to create a product that would match that? or was it a new kind of way we could have trading work, who would be best suited for this? >> we had previous experience in the space. we started to financial comedies prior to this. we looked around and saw the people that are demographic or not interested in investing or openly distrustful.

the whole occupy wall street movement in the past two years, but ultimately, we view the market as being important. we wanted to make a product that for some investors actually want to use, and is friendly for first time investors. the incumbent should for doing that. >> as someone comes on to the year -- on to your platform and say they want to buy shares for soda stream or tesla, they get excited about a 3-d printing company. they buy the shares and then you start to enter this margin to them when? >> it depends. not all customers are suitable for margin. >> outside. 'll say. >> we view robin hood as a company that will be around for decades. we want to get these customers when they're young and have them stick with us over time. sometimes when i have been a customer for a while, these

features would make sense for them. it might make sense to upgrade to a margin account. we are under no pressure to make everyone a margin trader, extract a lot of revenue from each customer on day one. these young traders or want to be traders and investors, are the numbers of people investing less than it was a decade ago or 30 years ago? >> and adjusting thing is that millennial's, this generation, there are 90 million of them. a lot of them haven't selected their first brokerage account. but -- >> what is that say about previous generations? >> their demographic differences. 1980's,970's and charles schwab was very successful with baby boomers. a lot of those customers have been aged with a discount brokerages and are now in the 50's and 60's. we do think there are waves and patterns of when people start investing. certainly we hope that another one will start now. this is more of a

meta-question,. for -- newpriate investors or just order to put money aside. >> we think the main problem with young investors getting into the market is that of engagement. i think the problem is you are not going to get excited about investing in a new index fund or mutual fund. my age aree, people excited about companies that make products they use, services they love. it's just a way more compelling proposition for making your first investments than buying some mutual funds. >> having worked on the other side and knowing how much work goes and understanding a stock, i look at retail investors as in a really tough position. they are never going to be able match the resources a professional investor can really bring to bear. >> the patterns we are seeing with the user base is not a lot of people dumping in tens of thousands of dollars. our first-time investors tend to start with a very small about.

dollars, less than most brokerages have as account minimums. as they gain familiarity and comfort with the service, they put in more and more money over time. i think it's great that people are learning, they don't have to pay seven dollars to $10. they don't have to make a huge investment, in thousands of dollars to get started with understanding the markets. >>, then, the water is warm. thank you. >> thanks, corey. mark renton joins us now. what you have for us? >> our college mission tests becoming a thing of the past? table university in philadelphia is one of several schools often to take a different approach to gauge a prospective student's potential. what are the benefits and risks? the president of temple university will join me in studio in the next hour. that to you in san francisco. >> thanks.

do i wish i didn't have to take the sats. we will be right back with more of "bloomberg west," after this quick break. ♪

>> welcome back to "bloomberg west." i'm emily chang. the faa takes a step forward on drums, giving permits to four companies. they will be allowed to fly drones to perform surveying, construction site monitoring, and other tasks. is the faa moving too slowly, given that amazon has moved thrown operations abroad due to the slow approval process? our next guest is one of the four companies. brian, and cory johnson is still with us. i would love to know what

happened behind the scenes between you guys and the faa. what kind of conversations have you been having. a lot of you been having those conversations to get this to happen? >> thank you for having us on the show. the process has been a long one. but the faa has been true to their word. it's been about a years and we started it. but we finally have the exemption in the waivers. we are excited at this point and grateful to be able to move forward. >> did you have to do demonstrations? what were the questions they had? what was preventing them from doing this earlier? >> hurdles were procedural. not to get technical, but the faa's mandate is really to ensure safety in international airspace. the faa thatve to our desires, our goals, our missions were going to comply with existing rules, that we weren't going to impact the safety of international airspace.

with lots is filled of flight geeks who are excited about the idea of drones. sense of-- you get a what their notions of the commercial prospects of drones are through this approval process? what do they think will be done with drones? >> i think from the faa's perspective, that's not their focus. focus is safety. from our perspective, is allows us to take that safety and new technology, for in our case, the oil and gas industry, and move it forward. that's what we really want to do. i think from the federal perspective, their goal is to keep things safe. we have john of that. -- we have to honor that. mean foroes it companies like amazon and google are looking to drones to deliver packages and not the surveying of oilfields. >> is the first step. everyone has to realize with the

technology that advances so fast, it often gets ahead of the bureaucratic process. we have to take a deep breath and move within the bounds what we can do. the challenge for amazon and google is that they have so much technology and so much capability, i don't think there used to working within the standard rules of what is required to be in the national airspace. it's good for us all and that this is a step and we will get there. the government accountability office says it will be 2017 or later when the final rules are final rules. is that fast enough? >> is never fast enough, especially in the technology sector. we have to honor the processes that are in place. was antory of aviation organic evolution. but we are doing now is a revolution from a technological standpoint. we have to honor what is here now, and hopefully the faa will put the rules out soon so that we can review them in see them

enacted. it's been a process, and i think we will get there. we have to work with what we are able to do. your company flies drones that infect flare stacks over the ghosts of -- the gulf of mexico. what does this allow you to do better, to do more of? >> we are really excited. basically this is about safety initially. the first thing we will do is improve the use inspection processes by reducing the risk to humans. that's number one. the approval for us is not just from the gulf of mexico. it's everywhere outside of 12 not all miles. whether it's alaska, california, the east coast, the approval allows us to expand and do the work that has been done elsewhere in the world of to take the technology and of light in a way that people haven't been able to do in the past. in a way that people

haven't been able to do in the past. we will look for leaks and environmental issues, corrosion, things like that. it is really exciting because we have a big future ahead of us. >> brian, thanks for joining us. the bwest byteor . cojo, it better be a good one. >> four. four years ago tomorrow, we did our first reversal. >> that is a good one. get?uch can you >> that one. you look for you -- you look 10 years younger. you had no facial hair. [laughter] >> they called me a week before

they launch the show and said how quickly could you grow the beard back? >> we have both aged. the show has aged us. in my case, i've had plastic surgery since then. i'm a better man than i was. -- we've comee such a long way. we couldn't do it without our amazing team. >> so many other people have gone into greener pastures. we have a really great team working with us right now. we're glad to have that. >> we get to cover the best stuff. it's a great story. we are lucky. years.re four.'s not limited to >> do that as well work with us for four more years? ok. thank you. that was a great byte. thanks to everyone who helped the show get to where we are.

have a wonderful weekend. thanks for watching. ♪ . .

>> from bloomberg world headquarters in new york, i am mark crumpton. this is "a bottom line," the finance and of economics with the main street perspective. to our viewers in the united states and those joining us from around the world, welcome. we have full coverage of the stories making headlines this friday. the only one who knows what inside your medicine cabinet. phil mattingly reports on what some aal