no,t is 56 past the hour -- i'm sorry. it's 1:00 right now. we are live in new york headquarters. this is bloomberg west where we focus on technology, innovation, and the future of business. i am matt miller and i will read anything on the prompter. of u.s. policy toward cuba as the obama administration will reestablish diplomatic ties with the island nation. president obama says the moves will and an outdated approach.

>> we will raise those weferences directly, as continue to do on issues related to democracy and human rights in cuba, but i believe we can do more to support the cuban people and promote our values through engagement. after all, these 50 years have shown isolation has not worked. it's time for a new approach. >> the moves will ease travel and trade restrictions on cuba as u.s. citizen allen gross was forased after being held five years. rebounding after inventories were down last week. meanwhile the state of new york has banned at fracking, citing health issues and uncertain

economic benefits. also purely to saudi arabia for elderly. bill ackman spoke on bloomberg's speaking about" releasing an internal herbal life video that he says shows deceptive practices. >> hey, this is a ripoff. it is time to step away from it. it has an economic effect. it is not possible for herbalife to continue to recruit distributors in a world with transparency. >> meanwhile bill ackman has added meaningfully to his bet on fannie mae and freddie mac. sec planning to find sprint $100 million for billing customers for unwanted services horoscopes. it is a practice known as cramming. people familiar with the fcc commissioner

tom wheeler has imposed to penalty. the fcc has yet to vote. now to hackers. hackers threaten to movie theaters showing the interview," and theaters are taking precautions. carmike cinemas, the fourth show thehain, will not movie and the premier was canceled in new york city. the hacking group, known as guardians for peace, is trying to disrupt the movie, which tells the story of two journalists plotting to killed north korea for a leader. and ag us -- our guest member of a security firm based in palo alto. how serious should we take these threats? >> i do not think we should take the physical threats to seriously. i think they are definitely just trying to mess with us. >> who are these people by the

way? have they been linked officially to north korea? >> actually, quite the opposite. i think the north korea thing is more and more likely to be a ruse. >> the department of homeland security says there is no actionable intelligence to against moviet theaters. at least one movie theater operator taking this very seriously. seent, and you have reports of much smaller operators. the big question for sony will be whether the three chains that are larger than car mike --carmike also pulling movie. that would force sony to reconsider its release then. the movies on december 25 seems a little depressing to me, but a lot of people do it. how big a day is that for movie theaters? >> hey, i grew up doing it. it is a time of year studios

save major movies for. if you look at a movie like "the outit," it has come christmas three years in a row. backmoving "the interview" showed that they thought it had real financial potential. sony is a movie that a exec said was really bad, criticizing the acting, especially that of james franco. is that detrimental at all to ticket sales? >> idle think so. most viewers are not paying attention to what a particular -- i don't think so. most viewers are not paying attention to what a particular executive says. initially when they had started, we ran a story on how it could help it because of all of the added interest, the spike in youtube trailer searches, mentions on social media. now as it gets a little scarier, there may be people who say, i do not want to go in christmas day because i'm not sure what

that might be. drop fora welcome sony, because the movie scored poorly in new york screening spirit of little better with less educated people elsewhere. if you step back and look at the threats of terrorism, is that a big concern around the holidays? >> yes, any large gathering of people in a small space is a threat. the biggest threats the holiday season are typically around the purchasing cycles like cyber monday and black friday, that kind of thing. less actual risk on christmas day, because i think people are less likely to be gathered in big spots like cities and so quick that. >> interesting that a group called the guardians of peace come out with threats of violence, but i guess that is what terrorist groups do. do we have any idea who he's

are? can anyone figure it out? >> lots of very, very intelligent people have looked -- into this problem. they were specifically interested in finding out who they are. about thee concerned effect, but there are a lot of people who are turned into copycat stuff. the sooner we get to the bottom of it, the better. >> and, lucas, nobody wants to find out probably more than sony. how blunt have they been about these leaks? aaron sorkin actually wrote an editorial hoping that news organizations would censor the information they got. none seem to have done that. how much of this hurt sony? >> people there are a combination of scared and exhausted. talking to people who are currently there and you used to be there, they are blown away by the extent of the leak, and the

people who were there are trying dayimultaneously do their job, marketing movie, release a movie, work on projects coming out next year, and safeguard their security to the best of their ability, working with the people that sony provided. i have a question -- do you have a sense of how much this will cost sony, how much it will cost to them to protect thousands of people who work for them now and in the past? >> yeah, what is interesting part of the leaks that have come out our damage assessments they did in advance on breaches from before. so, it is tough to tell what is really at stake. i'mill be researching and sure what we will be seeing in the near future is the extent to the insurance they have for the damages it cost them and the damages it is causing third parties.

those issues will come out soon. but we know basically, based on their internal documents, talking -- there estimates were millions of dollars a day. ein there,ht, tal kl lucas shaw. amazing to me how talentless sony executives consider these highly paid actors like angelina jolie and james franco. maybe that will shine through in the next crop of movies. on facebook'ss failed attempt to buy snapchat. we have all the details, including how much facebook was willing to pay, coming up next. ♪

>> i matt miller in for emily chang. this is "bloomberg west." the sony hacking has hit the tech world with information

investmenthat, the .eaked in e-mails bloomberg news reporter sarah frier trends meet more from san francisco. hacking, the gift that keeps on giving for the media. really a headache that gets bigger and bigger for sony. right? >> absolutely. especially snapchat. snapchat is one of the most he gripped companies about everything they are doing. one of the most secretive companies about everything they're doing. they never talk about deals. we all knew facebook tried to buy snapchat for $3 billion last year. what these e-mails seem to suggest is the price was even higher than that. there were e-mails from the sony did they seriously turn

down this $3 billion? responded saying, use the real number --it seems to suggest it was higher. >> is this a facebook head ache as well? mark zuckerberg upset that details were leaking about his investigations? upset.he was pretty this isht -- you know, just not fair play, and actually snapchat's investors did apologize to zuckerberg for the leak, even if they did not want to admit blame for it. >> but some investors and snapchat were willing to do a deal anyway, right? >> it was a big debate whether they even should, whether the company had more room to go, and actually the fallout was interesting.

'elegal was in the middle of negotiating a deal, and he wanted it to have 40 million for himself and his cofounder, and that killed the deal. there were not ready to pay that much money, and when investors confronted evan about that, they said i just turned down one billion box. it looks like he may have made out pretty well in the deal with facebook and was looking to make up for some of it in this deal with tencent. >> wow. the web we weave. how many companies are involved in this? >> oh, the smaller startups, little pieces of technology, and we have learned they tried to get into the music business, but their terms were little bit too demanding for vevo. we're just saying a lot of does theseo how evan

deals. he seems to have very high standards. he is not going to negotiate down as we look through these e-mails. >> all right, sarah frier joining us for more on the sony leaks. film industry find a new home after losing an on the portrayal of unprotected sex on film. larry flynt is on next. ♪

>> i matt miller. this is "bloomberg west." upheld a appeals court

los angeles that requires adult film stars to wear condoms in movies shot in the city. adult movie industry claims that the law violates their free speech rights. it adds more than $1 billion to the local economy and according to nonprofit film l.a., there is already been a 90% decline in the number of x-ray productions through 2013.012 everyone leaving the city. what impact could this have on the shrinking industry and california? first amendment rights advocate himself, larry flynt. thank you for joining me. i wonder how you feel about this decision? leaved imagine you just and film your adult home somewhere else. happened, thisen

ninth circuit decision, obviously we are going to appeal .t to the supreme court i have been there five times before. i struck out three, but that is still a pretty good batting average. as far as the photo shoots themselves, i have spoken with all of the adult houses in the city, and they are either doing the desert, mexico, canada. there are a lot of venues where we can shoot. it is not even increasing the overall budget. instead of doing a two or three days shoot if they go to mexico, they go to or three weeks or so. the whole thing about this is the public is not getting the truth about this. this is not protecting actors from disease. what it is, it is an orchestrated effort to try to shut down the adult industry,

and this is the way they are doing it. with all of the testing we have in los angeles for this, for the in these films, you would be more likely to get an std from a one night stand than if you were to be a foreign star, you know? we have hadyears, maybe a half-dozen cases of hiv. you compare that to the national average. it is very minimal. >> there are still some companies playing ball, right? vivid already uses condoms and a lot of its films. >> we have done marketing all of with this, and the adult houses i know of, and whatever the reason is for this, whether it is a psychological barrier or what, people are just not buying films were the actors are using condoms. howet me ask you -- larry,

much are people buying anyway? i recently asked a millenial about porn viewing habits and he said, why would i ever buy anything when it all comes on these sites for free? >> or they downloaded up cable or get it up the internet, that's true. that is why publishing is doing very poorly and that is why the dvd business is doing very orally. but there is always going to be a market for -- that is why the dvd business is doing very poorly. but there is always going to be a market for porn. beenhing that has not addressed recently -- 20 or 25 years ago this was a man's ring. it is not anymore. women watch pornography.

we run. up in surveys the whole dynamics of the industry is changing. >> for sure. i recently wrote a story called porn," about a company that owns 90% of two sites and some people say is very liberal with its taste in terms of what it will put on those tube sites, maybe even stealing copyrighted material. what do you think of these supposedly napoli in the porn industry on the internet? copyrights are a big problem and the stuff that winds up on the internet, most of it is plagiarized. you don't get much help dealing with the government on those issues because of the business we are in.

it is starting to police itself, and i believe that is going to shake itself out pretty soon. recently got a few films stolen and what they have done is put out almost a kind of malware on the bit torrent sites to dissuade people from downloading their movies. youously a lot of movies make, you pay for, eufinance end up going out for free on the two the tube sites- sites. bitorrent about sonyle to do is about nothing. if it were a government computer being hacked, it would be a small story in "the new york

-- >> i appreciate your time. i will tweet this story about vampire porn. we are back in two minutes on bloomberg west. ♪

>> you are watching bloomberg west where we focus on innovation, technology, and the future of business. i am matt miller in for emily chang today. -- justry just reviewed debuted the blackberry classic, restoring features abandoned last year in looting a physical keyboard. the phone will be available to customers and i attended the launch event in new york city. i asked the ceo john chen if he was open to working with t-mobile again. was ater yesterday

bloomberg offices and he says he is open to reestablishing a relationship with blackberry for t-mobile. what you think about that? >> i would welcome that. they started the ball rolling. i responded if they want to get back together, i'm sure we could do good things together. >> i thought, man, if you could get this into customers hands, that is a sale, because the heft of it and the materials on the back -- how do you plan on getting this in as many customers' hands as possible? >> initially we have to wait for at&t and verizon. rogers and bell has it right now. i think we will concentrate very much before the christmas season in the toronto area. but then it will spread out. the u.s. carrier is going to be a little later, possibly january, february, but that is depending on their schedules. >> does it break your heart to miss the holiday season? >> it is our schedule that got

us to this point. i guess it is something we should have done better, but the software is taking a little longer time, as we always expected it to be. we have one schedule, but i virtually it takes it -- we are on schedule, but unfortunately point.s us to this people who have touched it, they love it. i've spoken to a lot of people. they say, it is great. i have been waiting for this. these things take time. how are you doing as far as moving on schedule? off,couple things -- first we will get to break even, cash flow, positive cash flow. then we will make money. then we will grow. in that order. i'm doing pretty good. i am right on time frame. . >> blackberry ceo john chen.

i spoke to him in death in manhattan just a couple hours ago. in to the latest trend venture capital, google venture, the search giant's venture capital arm has launched it annual year-end review. it details its top investments as well as the performance of portfolio companies including luber and nest -- uber and nest. thanks for joining us. i have to start asking about uber. use, a service i love to accompany him not sure i love. how do you deal with that? butle i know need uber, they think it is the most evil company in san francisco. >> this is a company that is probably the fastest growing company i have ever seen. 50,000 jobs a

month. we are really confident about the coming from future. it has the potential to be one of the most transformative companies we've ever seen. >> shore and an absolute home run for google ventures. how was 2014? how are you doing there? >> it was extremely busy. we had 17 exits from the portfolio this morning. we had quadrupled our investment in life sciences from 9% to 36% of our dollars invested, and we announced today it 100 25 million dollar fine for europe and israel. and on top of that i managed to get married as well. it was a busy year. congratulations on the wedding and the life sciences investment as well. health care -- i think that is a third of what you invest in now. is it as big a growth area you are looking at? >> it is.

for us personally, i think it is an opportunity to make a real impact on the world and life sciences is quickly becoming an information technology and i think there is a real chance to heaven impact on the world that goes beyond just trying to make people look at their phones more, that really helps people live longer, healthier, happier lives. obviously we all wish you luck there because everybody wins if that is the case. for you to win, you have to make a good exit. that was easier over the past decade than the past year. year for you in terms of ipo's? >> it was a good year. we had nest, and we had 16 other exits. we are pretty proud of the work we have done this year. >> and what are we looking at as far as on deck? deck up small businesses

get loans that might not otherwise be able to. using our phone algorithm to assess the risk for those companies, as opposed to something that is a little bit less relevant. >> what do you do when someone comes to you and says it is the you reactis, how do to that kind of pitch? >> we get those pictures all the time. we listen when some but he says they have an idea because the line between crazy ingenious is a pretty thin line. we see that a lot. that is our job. telling uso people about their hopes and dreams and we are happy to hear the bridges. >> -- happy to hear the pitches. >> last night, on techstars, he said most important are the people who are pitching and then the idea. is that basically true? >> i think that is exactly right. ideas are cheap. they are free. if i told you i had a file with

50,000 ideas in that, you probably would not pay a dollar for that. if i told you i had someone who could execute on that idea, that is worth a lot. that is what we're looking for. >> does it matter for you if someone helps out the google business or works on the android platform? it doesn't matter. if it is competitive and makes google stronger, that is probably more interesting to us. >> 2015, looking at the year ahead, are you going to be even more focused on health care and life sciences since that was your biggest bet this year? will be a huge focus off our time, energy, and dollars, even more so than 2014. there is huge opportunity there. >> you were instrumental in recruiting to google ask. what does that mean for google

ventures in a larger sense? a friend ofs been mine for 10 years. i was proud to see him join google. it is not just a trend. it is a really important direction the world is moving. think about health care as something at least as important as mobile and delivery internet service to the global population. health care is really important, and google ventures is investing in these areas. ventures is not looking at strategic investments. i am assuming you will work closely with google ex. how is ventures play with all of the other google properties? i have known andy for years. we work really closely with them, because i have a huge amount of respect or them and all of the people at google. so we work really closely to

understand the innovative areas. that is where the opportunity is . i talked to andy every day, to tell you the truth. >> thanks very much, bill. managing partner at google ventures. the shopping season, as it kicks off, don't you want to get out of your car to go to the store? if you don't, there is an app for that. it is backed by eric hit we will talk about it next, on "bloomberg west." ♪

>> i matt miller in for emily chang. this is "bloomberg west." the rise of same day delivery has rocked deliveries, but what about same-day curbside delivery?

curbsidee cofounder of . a very interesting idea. what me through it. i buy something from target and then i drive there and you have someone walk the stuff i bought out to me? >> that's right. we make it really easy for you to buy the stuff you need on your phone. we have it ready fast. as you pull up to the curb, we notify staff you are on april, we walk it out, we put it in your trunk and your on your way in about 20 seconds. >> my initial thought is, how do you get all these people at the stores i want to visit? >> we work with really great retailers to help them deliver our curbside fulfillment option and people have been loving it. it saves them time, especially during the holiday season. everyone is in a rush. it is a great way to get the

deputy fast. and buy i go to target a bunch about tells, it is not a curbside employee but someone from target who comes out and gives it to me? >> right now curbside employees are bringing it to the curb. what you will see in 2015, we will be handing these programs over to retail partners. >> right, because otherwise you would have to send people to stores all over the place and maybe just hang out there all day. maked that would probably is one of the largest employers in the u.s. and that is not our goal. >> how many delivery people do you have out there now? >> about 65. >> what stores are we talking about besides target? >> we are working with whitfield's and there's a mole in san jose where we are at about 20 stores. sears, coach. and we are giftwrapping for the

holidays, too. through the app you can say, hey, i want my stuff, i want gift wrapped. we will have it ready in about an hour. you just pull up to the mall. we will have the gifts loaded in. >> very -- helpful to you the mall concept. national, when you have people do curbside delivery at every target or westfield? them throughout 2015. we expect to be in a whole bunch more markets in the first half of 2015 and adding a whole bunch more national retailers as well. >> is a big box stores your mostly focused on? >> right now we are focused mostly on big box. i wish i can announce some of the names we have coming, but there are a bunch in the pipeline. >> you could just give us a hint. >> [laughter] big box consumer do they wear

blue shirts -- big-box consumer-electronics. do they wear blue shirts? >> [laughter] marill just talking to bill is what do they look for. -- we were just talking to bill maris. what do they look for for growth? there is anhat interesting will probably raise again before the end of 2015. buy's big bossst eric schmidt -- when we talk about exits, when do we think about an ipo, and do we think about this later on in your company life than you would have 5, 10 years ago? >> i don't have specific timing for an ipo, but it is our goal to build a very large independent company with

curbside. i sold my last company to apple and that was a really great experience, but with curbside, we see a huge opportunity. we think mobile commerce is e-commerce and there is an opening right now to help people shop on the go. this is something we do see as eventually going ipo and growing very large. >> we have seen other companies have similar acts. starbucks, you can order your copy before you get there. olivia sterns is looking at covering the last mile, how important it is to companies to goods the very last mile to the customer. is that the idea with curbside delivery? yeah, we think the technology we built to alert stores you are on approach really has a bot -- a broad range of applications.

there is an opportunity there. but we have solved the hard luring stores to the customer without draining the customer's battery. by name,the customer for example, is a really interesting and kind of war makes areas we have a lot of people reaching out to us about. >> maybe you could work with the department of motor vehicles? >> yeah, you never know. >> thanks very much. the curbside ceo from san francisco. looking for the best deals in air travel, but have no idea how airline pricing machines work? we get an inside look at the best travel tips for online booking next on "bloomberg west ." ♪

>> hi, i'm matt miller.

this is "bloomberg west." costsice of tickets constantly on face like expedia. how do you find the sweet spot we got a birds eye view into the travel trends expected in 2015. editor-at-large cory johnson spoke with the expedia senior vice president greg schultz and started by asking him about the biggest change he has observed. >> there are many changes we have observed and we just recently did a study with the airlines reporting corporation trends and does a price forecast into the next year. there are interesting findings from that. we see big demand from air passengers and that is being met by additional capacity from airlines. but the idea of a significant drop in fuel prices and our

customers, travelers, business travelers finding great deals. >> it is amazing in this era where we have technology chasing -- changing prices so dramatically, even on the same flight at the same moment when tita people have their screens opening looking at the same prices on the same flight -- let me ask you how it works. what is the cheapest day to book a flight? >> the commission is set for many years that tuesday is the cheapest day to book a flight. i been that goes back to the 1980's where you had an army of travel agents selling tickets are the -- through the weekend and then you had revenue managers come in and decide whether or not to launch a sale. as you said, airline pricing is much more dynamic these days. expedia's research did in fact find tuesday was the day in which our customers found the cheapest flights, but there are other factors that are more significant in signing the

savings. >> such as how far out you book the flight? that is what i have always found. >> that's right. that is in fact one of the best sources of money, trying to book far from your day of departure. in domestic trips, we found that actually 57 days from departure was that magic day where on average customers find the cheapest flight. i do not know if you have three months in advance to plan your travel, but if you do -- the trend is between 50 and 100 days. certainly after 21 days is going to be your cheapest option. for international flights, it is quite a bit longer. if you can plan up to ask months in advance, you were going to find the cheapest fares, and it 225 days in00o 225 days in00 to

advance. >> does it matter where you are going? new york and las vegas as opposed to other destinations? >> of course, for business destinations like new york and chicago, they will be more easily filled, so those will be hard to find last-minute deals. but certainly places like hawaii and mexico, our data showed significant savings in may be one to three weeks out from departure. you can find great deals to hawaii. >> i was surprised after was going through airline data yesterday and i discovered people talking about first-class tickets are actually cheaper than the main cabin tickets or the business class tickets. noticed the price difference between business class and coach minimus.inimus -- the >> that's right.

one of our findings was the gap between the premium and the economy class cabin has certainly shrunk over the last to the piers and we expect that to continue to shrink. we see some destinations, more leisure destinations where the gap between premium and economy 20%, 25e as low as percent. this is a great opportunity for to change to first class and we expect that trend to continue through 2014. ,> that was greg schultze senior vp of expedia. -- 57 days before he or she has to go somewhere that the trip even exists at all in the future? get the latestan headlines anytime on your phone, your tablet, on bloomberg.com, and on bloomberg radio. plus, we are on apple tv as well as amazon fire.

we will see you back here tomorrow, hopefully with emily chang. ♪ >> from bloomberg world i amuarters in new york, mark crumpton. this is a special edition of "bottom line." we are waiting for a statement from janet yellen. these statement will be released at 2:00 p.m. new york time. we will have live coverage of the fed decision and the news conference. let's hear from chief washington correspondent peter cook. the fed and will join us in a few minutes. also, constance hunter, a chief at kpmg.t we have lisa abramowicz who covers the debt market for bloomberg news and are on the saini. reporter mia

this is the last quarter of the year. can you sum up how 20 has been for the federal reserve? roughhas probably been a ride for them. they saw the fall, even though we have the taper. they have seen inflation suddenly really low here. they have seen the economy -- the economies having trouble exporting some of that to us. that has been a big problem for the fed. we are at an inflection point where a think you will really see volatility factors come into play. >> what are some of these factors? >> i think the real economy is playing up the way the fed hoped it would. retail, wages, all of that is playing out the way they thought. the question is, how much will be international market turbulence impact the decision

today and will it take a considerable time? a week ago, we thought it would. now it is 50/50. >> lisa abramowicz, what does the debt market need to hear from janet yellen today? >> they need to hear nothing exciting. [laughter] it needs to be completely benign. if the fed is more dovish or hawkish, you will see a pretty volatile afternoon. >> are they expecting volatility today? >> it has been volatile with oil and what is going on with russia. the bond market has really ratcheted their expectations for inflation. and the question is whether the fed will agree with their understanding of inflation and postpone. >> i think there is a difference the tween the way the long end of the market is reacting versus the front end. the long

>> we won't get more analysis from the three of you in a few minutes. let's go now to peter cook live in washington with that that decision and statement. -- fed decision and statement. >> the fed is changing its forward guidance language somewhat. they're insisting the fed be patient in deciding when to raise interest rates but they are saying that is consistent with their previous language. they can wait a considerable time before raising interest rates. there is a sum which on inflation and the economy. let me read directly from the statement. based on its current assessment, they are normalizing the stance monetary policy. consistent with its previous statement that it will likely be