>> from bloomberg world headquarters, welcome to bloomberg west. where we cover innovation, technology, and the future of this mess. i am pimm fox in for energy -- emily chang. the federal reserve says it will be patient when it comes to raising interest rates. is the fed chair. link, which does not represent a change in policy, is fully consistent with our previous guidelines, which stated that it will likely be

appropriate to maintain the current target for the funds rate for a considerable time after the purchase program. reserve comments sent us stocks soaring. the s&p 500 rows for the most since october of last year. decision toama's restore diplomatic relations with cuba after 50-plus years of tension. here's the president on the attentional benefits. >> i believe american businesses should not be put at a disadvantage, and the increase in commons -- commerce is good for americans. we will facilitate transactions between the united states and cuba. officials will be able to allow -- open accounts at cuban financial institutions. itshe u.s. will also ease

cuban ban and open an embassy in havana. oracle is making progress in its shift to cloud computing. torall revenue was up 4% $9.5 billion. oracle posted a slightly smaller profit. the second quarter saw major transitions, with the cheek executive leaving to become chairman. twitter chief executive now own zero shares of twitter stock. the trust sold off their final holdings, earning $22 million in a series of sale over the past month. shares are down 45%. the company says sales were designed to diversify in debt -- investments. 500-9000has more than restricted stock units.

to the lead. sony says it will not move forward with the planned release of the movie "the interview". this comes after the nation's largest movie chains decided not to show the film. movie theaters said no hackers threatened violence against any and the movie invoked the september 11 attacks in its threats. ae movie tells the story of plot to kill north korea's leader. in los angeles is phil lieberman, security expert. also with us on the phone is entertainment law your -- lawyer devon mccrea. >> the first consideration is a

business consideration, to recoup the investment. i believe there has been talk about releasing the movie video on demand, and trying to find a way to recruit the investment -- recoup the investment. sony will look to people like mr. lieberman to help them ascertain the identity of the hackers. they want to figure out who is responsible, including whether there are potential former insiders that may have been involved. on the legal side, they are facing a couple lawsuits with respect to disclosure of information. we will have to consider those claims. >> lieberman, let's say you get a call from the head of sony right after this program. what do you tell them to do about the systems? >> that is a great question. we are talking to sony it at this point. the issue really has to do with

the nature of how well they are handling passwords and accounts within their environment. this was a major breach. it went across everything they own. correct -- file the follow the correct protocols when it comes to unveiling and releasing information relating to the hack attack? >> there is no protocol for this. it is an unprecedented type of attack. the escalation yesterday, with regard to threatening exhibitors of the movie, that is without precedent. some of the attacks involved money and extortion. no one has ever threatened physical violence as an outcome. this is different. it does not follow any pattern we have seen before. >> devon mccrea, is it possible the $44y could cover million they spent to create the

film? >> there is insurance coverage for production. on the language of the policy they have. >> phil lieberman, what would you suggest to the actors and professionals involved in making the film about the future of their online life? >> we have seen the attacks on celebrities with regards to their cell phones. i believe there was some disclosure with regard to sony having some cyber security insurance already. it should cover part of that. in addition, auditors will face some liability in this. discovery with recent lawsuits, the amount of disclosure that auditors provided as to the job they were to security and how compliant they were with industry standards. >> devon, is there any way the individuals affected can do

something when it comes to personal liability? >> the individuals that have been harmed by this may be looking to -- for the results of the audits with respect to sony's handling of the information. some may be looking to sony for not exercising reasonable standards of care in protecting information. the theater exhibitors amc and regal have decided not to show the movie. are they giving in to online terrorism? i had an interesting discussion with lots of different entities. what we have in the u.s. legal system is, if there is a public threat to life and property, and one of the exhibitors puts on the film, assuming that happens even if it was not terrorism,

they could face serious liabilities. they probably figure it is too hot of a potato to hold onto. there are better things to do. >> what does this mean for other movie studios when they decide to make pictures that might annoy the subjects? >> that is a major concern, with -- whether we will now have studios deciding that they will not make movies because they are concerned somebody will be upset by it. >> lieberman, last point to you. sony executives, will they have not only their profile online, but how they deal with individuals as a result of everybody learning their personal enough comments? >> there is a lesson to be learned that has to do with security on the internet. nobody is really all that secure, your e-mails and your documents and pictures,

everything is in play if you want to be protecting yourself online. will need to change their profiles. there's a bigger question about ceos and the nature of their role in i.t. security. the aunt the financials, there is a bigger question that needs to be asked about whose job it is to provide security. another question with regard to other corporations, what hopefully the ceo in general has to do with security. >> phil lieberman, and devon mccrea. coming up, more on sony. ♪

♪ bloomberg west. the massive hacking in the sony entertainment has hit the tech world is the inner working of snapchat are exposed.

the details on snapchat's deal with facebook, and more, were revealed in the e-mails leaked from sony's ceo. frier joins me in san francisco. thathacking, the gift keeps on giving for the media. it keeps on getting bigger and bigger for sony. >> absolutely. especially snapchat. snapchat is one of the most secretive companies about everything they are doing. they hate talking about deals. we have some rare insight. what is interesting is, we all knew that facebook tried to buy snapchat for $3 billion. the e-mails suggest the price was even higher than that. e-mail from the , is he seriously turning down $3 billion?

he knew the real number, was the response. the e-mails suggest a price was higher. >> is it a headache for facebook as well? zuckerberg was none too pleased with the fact that rings were leaking about his negotiations. >> he was pretty upset. he thought this was a technique by snapchat to try and drum up nextest for the nest back investment round. he thought this was not fair play. advised toinvestors apologize to zuckerberg. willinginvestors were to do a deal anyway, right? >> right. it was a big debate about whether they should, whether the company had more room to go on. the fallout was interesting. the middlel was in

of negotiating a deal, and he wanted to have $40 million for himself and his co-founder. that killed the deal. they were not willing to pay that kind of money. evan,nvestors confronted he said i just turned down billions from zuckerberg. he could have made out very well in the deal from facebook. he is looking to make up for some of that. >> the web we weave. coming companies are involved? >> we see some of the acquisitions snapchat has made from smaller startups for little pieces of technology. we learned they tried to get into the music business, but their terms were a bit too .emanding for vevo we are seeing a lot of insight into how evan does these deals.

he has high standards -- he will not negotiate down. >> thanks, sarah. sarah frier joining us. leaving los angeles, will be adult film industry find a new home after losing an appeal of the pro-trail of unproved track did sex -- unprotected sex on film? >> larry flynt is on next. ♪

♪ >> i am matt miller, this is bloomberg west. upheldals coal -- court

a law requiring adult film stars to wear condoms in movies that are shot in the city. the industry claims the law violates their free speech. the industryes say employs 10,000 people in california and adds billions of dollars to the local economy. there has already been a net -- a 90% decline in adult movies since 2012. everyone is leaving the city. what impact could this have on the shrinking industry in california? joining me is the owner of larry flynt publications, larry flynt. larry, thanks for joining us. i wonder how you feel about this decision? thought you just leave and film the films somewhere else. >> we are doing that. before it even happened, the ninth circuit decision,

obviously we are going to appeal it to the supreme court. times been there five before, and struck out three. but that is still a good batting average. as far as the photo shoots themselves, i have spoken with all the adult houses in the city. can go to mexico, the caribbean, canada. there are a lot of places to shoot in. it doesn't affect the overall budget. aey could go to mexico, do 2-3 week shoot. the whole thing about this is, the public is not getting the truth about this. this is not protecting actors from disease. it is an orchestrated effort to try and shut down the adult industry, and this is a way that they are doing it.

with all the testing we have in los angeles for the actors that sign to these films, you will he from akely to get an std one-night stand then you would from being a poor and star. in the last 20 years, we have had maybe a half dozen cases of hiv. when you compare that to the national average, it is minimal. >> there are still some companies that are playing ball, right? vivid already uses condoms and a lot of films. >> we have done marketing testing with this, and so have all the houses i know of. is, whether reason it is a psychological barrier, people do not buy films where the actors are using condoms.

>> larry, how much are people buying, anyways? i recently asked millenial about porno viewing habits, why buy anything when it is free online? >> our audience can download it on cable or get it on the internet, that is true. that is why publishing is doing poorly, and the dvd business is doing poorly. there will always be a market for poor and. it is about delivering a quality product. , 20 orng we have going 25 years ago, this was a man's thing. it is not anymore. watch pornography with their husbands and boyfriends. this is a fact.

it shows up in surveys we run. the whole dynamic of the industry is changing. >> for sure. i recently read a story called about a company that owns 98% of tube sites. with what itberal will put on those sites, maybe even stealing copyrighted material. what you think about this supposedly not lee on the internet? internet?y on the >> the copyright is a big problem. all the free stuff that is winding up on the internet, most of it is plagiarized. you don't get much help dealing with the government on those issues. that's because of the business we are in. it has started to police itself.

i believe it will shake itself out pretty soon. >> sony recently got a few films stolen. lwarehave put out a ma on bit torrent sites to dissuade people from downloading their movies. a lot of the movies that you finance and up going out for free on these sites. what do you do to be that? the whole thing with sony has a lot to do with nothing. if this is some government computer being hacked, it would be a small story. i think, because a lot of celebrities were involved, they are making a big deal out of it. i do not see it as a big deal. >> of course. it is interesting that sony executives consider their talent

. they are losing money on products they have invested in. you are as well. how'd you stop the internet from giving away the money you have invested in 3-5-minute clips? way you canno really stop it. that is the ongoing problem with the internet now. you have much more control over this in broadcast television, which we are very big in worldwide. i agree, the internet is a problem. no one has been able to solve it. i do not think these people more putting out this material for are -- isee that they can't see they are making much money at all. larry, i appreciate your

time. i will tweet this story about dgeek, which is putting out pornography for free on the end. we will be back in a few minutes. ♪

♪ you are watching bloomberg west, where we focus on innovation, technology, and the future of business.. itskberry is going back to latest phone model, restoring features they abandoned on old devices, including a physical keyboard. to phone will be available verizon and at&t customers. i attended the launch in downtown new york. , ifked the ceo, john chen he was open to working with t-mobile. jon leger was at bloomberg offices, saying he wants to reestablish a relationship with

blackberry for t-mobile. what do you think? >> i would welcome that. responded, and if they wanted to get back together, i am sure we could think of some good things to do together. >> i was holding the device, and --hought, the half of it at the heft of it in the materials in the back. how do you want to get this into his many customers's hands as they do haveo >> it in canada. before the christmas season in the toronto area, then it will spread out. the u.s. carrier will be a bit later, probably january or february. that depends on their schedule. >> does it break your heart to miss the holiday season? guess this is something we

should have done better. but the software is taking a bit longer. we expected this. we are on schedule. unfortunately, it takes time. it will be a good device. people who test it, love it. people say, this is good. they have been waiting for this. arabin comments about, john has only been here for a year. how are you as far as moving on schedule? positive cash flow, we will make money and good -- grow. i am doing pretty good. i am on time, maybe a little ahead. chen inberry's ceo john

manhattan. comeback toaking a venture capital, google venture has released its year in review. this gives details on the firm's top investments. joining me now is google venture's president. bill, thanks for joining us. love to use,vice i but as a company, i'm not sure how i love it. need uber,ple i know but they think it is an evil company. >> anytime you have a company that is going as quickly as uber, this is probably the fastest growing company i have seen.

anytime you see that, you will face scrutiny. i am optimistic about their future. most one of the transformative companies we have seen. >> a home run for google venture. how was 2014? how are you doing? >> extremely busy. we had 17 exits from the portfolio this morning, and a company that went public this morning. we quadrupled our investment from 9% to 36% of our dollars invested, and we announced a $125 million fund for europe and israel. it has been a busy year. >> congratulations. is one third of what you guys invest in. is that the biggest growth area? >> it is.

personally, i think it is an opportunity to make a profound impact upon the world. ane sciences has become information technology company. there's a chance to have an impact on the world that goes beyond trying to make you look at their phones more, but really to help people live healthier, happier lives. there.ish you luck everyone wins if that is the case. for you to win, you have to be able to make a good exit. that was more difficult over the past decade than it was this year. >> this was a great year for us. nest to our portfolio. we had 16 other exits. i am proud of the work we have done. on for one we looking helps>> that company

small business get loans via algorithms. >> when someone comes to you and says, i have a new company and it is the uber of this, or the airbnb of that. that pitch?act to >> we listen to people when they say, i have an idea. the line between crazy and genius is eighth in line. we see that a lot. that is our job, listening to people talk about their hopes and dreams. most importantly, the people me are theching to most important, then the ideas. is that the case for you? >> that is right. ideas are cheap. if i told you i had a file with

50,000 ideas and that, you should not pay a dollar for that. but if i told you i had someone who could execute on the idea and build a company, that is worth a lot. >> does it matter if someone's idea helps out google or works on an android platform? >> we are not looking for things that are strategic. it does not matter. if it helps make google stronger, that just makes it more interesting. >> let's look at the year ahead. will you focus on health care and life sciences? >> that will continue to be a huge focus of our time, energy, and dollars, more so than it was this year. >> you were instrumental in recruiting the next expert. googlees that mean for ventures and google in a larger sense? >> he has been a friend of mine

for 10 years. i am proud to see him join hegle, and proud of the work has done. he will be transformative. it is not just a trend, it is an important direction the world is moving in. asnking about health care something that is at least as important as mobile and delivery of internet service to the global population. health care is important, and it makes sense that the company invests in these areas. >> google venture is not looking to make strategic investments. i am assuming that you will work closely with andy. how does google ventures play with the other google properties? >> i have known andy for years. we work closely with them. i have a huge amount of respect for them. all people at google, we work closely to understand the , whereive areas

disruption might come from, where opportunity is. i talk to andy every day. >> thanks, bill. bill maris from google ventures. shopping this holiday season will kick off, if it hasn't already. don't you want to get out of your car at the store? if you do not, there is an app for that. we will talk about it next. ♪

♪ >> this is bloomberg west. the rise of same-day delivery has rocked e-commerce industry. what about same-day curbside pickup? that is the idea behind a bay area startup that allows people to pick up purchased goods without getting out of the car. curbside with me is

waldman.arren stuff from target, and you have someone walk the stuff i bought out to my car yeah >> we make it easy to buy the stuff you need on your phone. curb, well up to the notify staff on your approach. we walk it out and you are on your way in 20 seconds. >> my initial thought is, how do you get people at the stores that i want to visit? >> we work with great retailers to help them deliver a curbside option. people love it. especially during the holidays when everyone is in a rush.

by bathgo to target and towels, ituy bath is someone from target to comes out and gives it to me? >> right now, curbside employees are bringing it to the curb. we will hand the programs over in 2015.rs >> otherwise, you would have to send people to stores all around the place. and sometimes they would hang out all day. >> that would make us one of the largest employers in the u.s.. we are a software company offering a curbside option. delivery people do you have out there right now? >> 65. >> what stores are we talking about besides target? >> there is a mall in san jose where we are enabling 20 stores -- sears, coach. can say, i app, you

want it to gift wrapped. you pull up to a curbside location of the mall, and we will have your gifts ready. it is great for last-minute shopping. >> the mall concept is helpful to you, because you can cover many stores. when you go national? when will you have delivery at every target? >> we will see at rollout in 2015. we hope to be in a bunch of different markets and in a bunch of national retailers of the next year. >> which retailers are you looking at? >> right now, we are focused on big-box retailers. there are more in the pipeline. >> can you give us a hint on who they are? big-box consumer-electronics? do they wear blue shirts?

>> maybe. with googlealking venture's president. what do you look for in terms of funding and timing for growth of curbside? we are well-financed right now. probably raisel by 2015. >> you are backed by eric schmidt and gary yang. we were talking with bill about exit. when you start thinking about an ipo? you think about that later in your company life than you would have five or 10 years ago? >> i don't have specific timing on an ipo. largeour goal to build a

independent company. i sold my last company to apple, and that was great. with curbside, we see a huge opportunity. we think mobile commerce is different than e-commerce. there is an opening to help people shop on the go. this is something we see as eventually going ipo and being very large. >> we have seen other companies have similar apps -- you can now order your starbucks before you get there, walk in and pick it up. olivia sterns is looking at , gettingthe last mile those goods the very last mile to the company -- customer. you see it growing beyond curbside delivery? >> we think the technology we built to alert stores that you are approaching has a broad range of applications. problem ofhard

alerting stores, restaurants, approachingnsumer without draining the customer's battery. there are all sorts of possibilities. greeting customers by name is an interesting experience that we have had a lot of people reach out to us about. >> maybe you could work with the dmv? >> you never know. waldman, thanks for joining us. looking for the best deals in air travel, but have no idea how airline pricing works? we will get a look at travel tips, next. ♪

>> i am matt miller. the price of a flight seems to

change constantly online on expedia. how do you find the sweet spot and snag good deals? expedia combines stats collected by airline's recording data. gregjohnson spokes with schultz about the study and started by asking about the biggest change he observed. >> there are many changes we have observed. we did a study with the airlines reporting corporation that looks at ticketing trends, and does a price forecast into next year. we are seeing increased demand from aircraft users, and that is being met i additional capacity from airlines. a significant drop in fuel prices contributes to travelers

finding great deals. that, in thisng era where technology changing prices so dramatically, even on the same flight at the same moment. how does it work? what is the cheapest day to book a flight? says thational wisdom tuesday is the cheapest day. act to thet dates 1980's, when you had an army of travel agents set -- selling tickets to the weekend. you had revenue managers coming in on monday deciding about sales. airline pricing is much more dynamic these days. expedia's research found that tuesday was the day in which customers found cheapest flights . other factors are more significant. >> such as the number of days for you book the flight?

that is what i have always wondered. how far in advance should i book a trip? that is one of the best ways to save money, trying to book far from your day of departure. in domestic trips, we found that 57 days from departure was the magic day where, on average, customers would find the cheapest flights. if you have three months and events to plan, that is the best day. between 50 and 100 days, after your cheapestl be option. for international flights, it is longer. up to six months in advance will allow you to find the cheapest services. about 225 days in advance. you wheree data tell you are going, if you are going

to biggest versus new york? york?as versus new businessrse, destinations like new york and chicago will be more easily sold by airlines at the last minute. those will be harder to find as last-minute deals. places like hawaii and mexico show a significant savings 123 weeks out. >> i was going through airline does a yesterday, and i discovered people talking about first-class tickets, how they are cheaper than the main cabin tickets. is -- i noticed the price difference between business and coach class was diminished. >> one of the great findings from the study was the gap

between the premium cabin and economy class has shrunk over the past few years. we expect that to continue to shrink. we see some destinations, leisure destinations, where the gap between premium and economy as 25%.- as low this is a great opportunity to snag first-class. we expect the trend to continue in 2015. >> that was greg schultz, expedia the p. -- vp. days before you have to go do we know the trip even exists in the future? you can get the headlines on your phone, tablet, or on bloomberg.com. we will see you back your tomorrow, hopefully with emily chang.

♪