from pier three in san francisco, this is "bloomberg west," where we bring you >> to our top story. thatbi has now confirmed north korea was behind the devastating cyber attack that

forced sony to cancel its christmas relief of "interview." tells the story of journalist hired to kill north korean leader. this movieation of could cost of the more than $200 million. they talked about the impact on sony hollywood with vice and captain arnolds. arnol >>ds. it hits us in freedom of speech. that is what we are made of. how is it going to affect movies going forward? how was it going to affect books, magazines, and tv shows westmark everybody is really disturbed because we do not know what work and.

>> q, does it surprise you that the north koreans have the ?apabilities >> thank you for having me. capability on a defensive side and on cyber offensive capability. they are training people and getting tools. we see that on full display in the sony attack. mexichem can we expect films getting canceled whenever they want to? you show what you have, and there is a lot of uncertainty still in the sony hack. who was it really that long

aunched the attack. there are still a lot of pieces we will be finding out in the coming weeks in march. >> catherine, let me get you to weigh in on this. the implication is obviously a slippery slope. >> i think most of the people in hollywood which they would continue on with the release of the film, whether it be dvd or release and the theaters. sony will really have to work with their cyber security units and find a way to and work on how we can get the movies out which as you said could come from any country. they are not logical people. they are people who are cultural fanatics and trying to censor .he united states as i said, freedom of expression is one of our most important tenants. >> how come we did not see other

studios rally around the sony? why did we not see the hollywood get behind this community and say if you can shut them down, you can check down to. >> that is a good question. we are definitely in unknown territory. they did not want to make the first move because it does set such a dangerous precedents. i think the other studios are trying to rally around the creative and they want to support the creative freedom of expression. at the same time, i don't think anybody wanted to make the first move. god for bid anything happened and they were part of liability as well. are in uncharted territories and everybody is watching very closely what will happen would you do at the studio came to you and said look, we had a threat of violence, but we will go ahead and put the film out anyway because that is so we do in this country. how do you prepare for that kind of thing? >> i know. it is challenging. we have already seen on display

at capability that the group has. level ofn achieve some security and recovery. i think you go back in and do a full forensic investigation. how did they get in and the kind of tools to the use question mare? to say that those industries are potentially at risk or it i think there is a lot that we could learn from this attack and certainly there is a lot of great cyber capabilities in the marketplace. it is on call for those companies to bring those capabilities. >> how often do you see those cyber security that cross over from the virtual world into real physical violence question mark -- into real physical violence?

>> if you think about what is happening online outside of the sony case, the good love the internet. we are connecting all of these kinetic devices. they have moving parts, they can do things. it is becoming a very serious issue of how do we get those things, devices, companies, secure online? i think we are making a lot of progress in the space. this attack and several others over the last year, to be quite frank, it shows we have a lot of work to do. uber is on the defensive again. -- one was adly have raped one of their customers.

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>> this is the best of bloomberg west. i am emily chang. an uber isorks as accused of taking a passenger and raping her. a spokesperson tells bloomberg west that this is a despicable crime and their thoughts are with her and her recovery. they are continuing to do everything they can to assist with the investigation. they will do more background checks with the drivers. uber is doing enough to protect drivers -- writers. riders.

>> they will catch fraud with names and identities, and they do believe that they should do that. it is good to see that they are finally acknowledging they uber has that for >> announced even before today's case came to light, that they will do more background checks or at least deeper background checks. also, a lie detector test. that they will go through on their own to do this is crazy. the government can do it for you and they will get more information than they could ever get on their own. the government needs to do it. they are trying to have a special exemption so they can do it themselves it only cost about $80 to $75. $50 to $75. it is sad to see all the people being affected.

>> to be clear, even a yellow cab driver can commit and has committed horrible crimes. people from all walks of life, regardless of any background check, sometimes to commit horrible crimes. it is not just an uber driver. there was a right showing attack this weekend that may have been a different company. >> consumers need to know that there is a greater risk with ube r that are not as accurate. for instance, the u.s. attorney general did a study years ago looking at florida employees and license applicants. over 10% of them named check versus biometrics were people who are prior convictions. you will never catch everybody. , orou can catch somebody serious crimes, dwi, murder, they should not be behind the wheel. i think that is the moral of the story. which, wen tackling have control over destiny.

we have alternatives. all the legal license apps that do government background checks, we have the option. be rest assured that not only this method and cyber security issues with sony and all the stuff that is going on, senator frank is really questioning the and the alleged spying and tracking and use of data. i do not know what is really going on there and i will hopefully know in the future what the deal is. the bottom line is when i put the gps in the new york city cap yellow ca weity said by law we had to haveb, provisions of any data. to seeve the ability where you are going, but we have

lost that says it is illegal for under two run the system of taxicabs to use that data of where you are going. we should do the same thing for r >> maybe he will call you up and ask for your advice on this. i want to read a statement very ub they say theyr began a global reviewer. and that they will build new safety programs and intensify others. >> if they call me, i will talk to them. cityrmer chairman of the -- new york city taxi and limo commission. matt alson uber, spoke with partner of google ventures. they are a partner of uber investors. he asked about their pr challenges. >> i think anytime you have a company going as quickly as uber

is, and it is a really fast company. adding more than 50,000 jobs a month. you will face scrutiny, but we are optimistic about the future of the company. it will be one of the most transformative companies we have ever seen three >> for sure. a home run for google ventures. how was 2014, how are you doing there? >> it was extremely busy. we had 17 exits from the portfolio. we had a company go public this morning. we quadrupled our investment from 9% to 36% invested. on top of all of that, i managed to get married. it is a busy year. >> i think it is one third of what you invest in now. it is the biggest growth area you are looking at?

>> it is. it is a good opportunity to make a profound impact on the world. life sciences is becoming a technology and i think there is a real chance to have an impact on the world goes beyond just trying to make people look at their phone more. but really help people live longer, happier, and healthier lives. you luck, we all wish because everybody wins and that is the case. for you to win, you have got to be able to make a good exit. that was more difficult over the past decade than it was this year. -- was it the best year for you as far as ipos westmark >> it was a great year for us. it was the third largest exit over the last 10 years. , includingther exit the when i mentioned this money. we are pretty proud of the work we are doing. >> on deck this morning?

>> yes, that is correct. >> what is that quest -- company for? >> they can use their own algorithm to assess the risk of those companies. correct what do you think of somebody comes to you and says they have a company and they are that. of thiser or how do you react to that? >> there is a line between crazy and genius. it is a pretty thin line. we see that a lot and that is our job. to listen to people who are telling us about their hopes and dreams. we are happy to hear the pitches. >> he was saying that most importantly the people who are pitching by the people, the pitching, and then the idea. is that true? >> that is absolutely right.

ideas are free. you probably should not pay a dollar for that. what if i told you i knew somebody who could execute on that idea and build the company, that is worth a lot. that is what we are looking for. people who can execute. >> does it matter if somebody's idea. the google business or works on sebi android platform? >> no. it does not matter. we are not looking for inks strategic. anything that can help make google stronger is more interesting to us. >> 2015, let's look 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? >> yes. that will be a huge focus of our time, energy, and dollars even more so than 2014. there is a huge opportunity there. >> you were instrumental in implementation and google x.

what does that mean for google ventures and google in a larger sense? >> and he has been a friend of mine for 10 years, so i was proud of him joining google. i am proud of all the work he is doing which have the potential to be there he transported. i think it is not just a trend but an important direction that the world is moving in. importantat least as as the delivery of internet service for the global population. health care is very important and it is important that they are investing in these areas. let's google ventures is not looking to make strategic .howstments does google ventures play with all of the other google properties? >> sure. i have known andy for years. we work really closely with them because i have a huge amount of

respect for them and their intellect. a lot of the people or all the people i googled, we work really closely to understand the innovative areas that they are working out and work reception might come from. and to see where opportunity is for >> managing partner of google ventures. up next, can you make money started by twitter cofounder? we learn about obvious ventures, next.

>> the firm will focus on what it calls world positive investing. it will pour money focused on sustainability and health.

his cori johnson our editor at large spoke with james walking. >> we are really excited about it. we think that the simple idea of combining profit and purpose is a really great one. and, it is bounded on our offices that really big companies are going to be built by solving grand challenges in the world. challenges like climate change. like quantities. there is an enormous amount of work to do and profits to be made. --t is the kind of focus companies we are focused on. i think twitter has given hundreds of millions of people a voice worldwide and be can point to a lot of social change, big and small to -- that has happened to that. but it is interesting to me in the case of twitter that they are all media focus. you are talking about things that go far beyond media, giving people voices to technology. >> yet. we have three scenes in obvious

ventures. one is sustainable systems. that is about for-profit solutions to climate change. it is about new kinds of sustainable resources. i will give you an example. we invested in the company called beyond meat. they are taking plant protein and creating delicious protein products that are alternatives to eating animals. that is really really good for the climate. we also think it is a very good business. >> it is an expensive part of every meal and it is hard for people to get enough of. >> , be called pizza power. empowerstwitter it individuals. we have got almost 30 million small businesses in the u.s.. it is where job creation happens. they have been underserved by technology. we are seeing with the smartphone new businesses like

-- that give small businesses. of services they can run. startupancisco-based for software for plumbers, carpenters, electricians. people who run businesses out of the truck. they can do everything from scheduling, invoicing, assessing payments by on their smartphone. >> at how big a huge opportunity. >> we think so. it piggyback on this fundamental changes of technology in the last five years of global cloud. digitalcall that a democratization. the fact that everybody has a supercomputer that is connected to the internet in their pocket is fundamentally game changing. >> does this mean that someone pitchng to walk in with a and add one more page and say we are a do-gooder or fundamental way of thinking about it? >> one we have written about is ventures for us is the opposite of corporate philanthropy. not about running a traditional business and doing some good on

the side. not that we are against it. we are looking at businesses where it is integrated. >> every company should do what salesforce is doing, a certain percent of revenue to profit -- to charity. >> we love for companies to do it and we want to go one step forward. we look at companies were each dollar of revenue has social benefits. >> does it change the way companies -- let me ask. when you look at at your career when we met a long time ago, you were doing something, did you think about in terms of what it meant socially? that was not the purpose. >> it was the beginning of my world positive journey. i would get e-mails from customers saying thank you so much and i never met my

granddaughter and i just opened a photo envelope and saw pictures. a woman in guatemala sent me that note. >> it was a photo sharing service. >> one of the first. >> it was taken over by kodak. and run into the ground. [laughter] >> you had that happen to you. it did it change the way you did your work? if the companies have a different sense and proceed to do it in a different way? >> i think so. it did for me. i taught much more about what is the meaning of the business i am building? how do i combine money and building? that's another of our dualities. we are seeing a wave of millenials that want to work on something that matters. >> james joaquin, cofounder of obvious ventures. making money on your smart phone by playing games could be the

next frontier for gaming companies. we speak with ea founder, trip hawkins, about the potential, next. ♪ . .

>> welcome back to the best of "bloomberg west," where we focus on technology and the future of business. i'm emily chang. >> practically everyone plays games if they have the time. what if you could win some money while killing time? that's the goal of a company called skillz. they allow cash tournaments on a bunch of mobile games. they just got a boost by hiring trip hawkins. we spoke with him. >> we operate a platform inside each game.

it's the games you know and love and now you can compete inside them for virtual currency or cash. it's legal. >> if you are breaking the law, live television is not the way to announce it. >> it's like the pga tour. we only operate skill-based games. this is in jurisdictions where it's legal. the new york marathon is an example. the pga tour, there are a number of growing companies that are virtually organized. >> what you see in the history of games where this fits and why it might be attractive? >> i think after defining and building ea sports, i think there are two big trends.

i does want to comment. the first is running a little company. there is a chance for us to do something for kids with game technology and a lot of ea sports fans have kids. we just launch this on the iphone a few days ago. it's an emotional iq game. you can search for in the app store. the other trend we are talking about is i am helping young entrepreneurs like andrew build new companies. he is a great example of this next generation of entrepreneurs that are going to carry the game industry forward. the idea of hard-core gamers that want to battle for prize money, it's a very big idea. it makes sense that sports are finally going to segue into the virtual world. this has the potential to be an enormous market. i got involved because they have a great platform. they can bring this in a scaled and fundamental way to mobile devices. >> we have reached this point where we have been talking about

forever, would this be competitive? would people compete in public? we see arenas of people playing games for money. is mobile the right platform for that? >> we care about what our culture values. i get into sports by watching sports on television. today's kids are more likely to be playing video games. they would much rather watch attornment of their favorite video games being played by professional gamers and if they want to compete -- it's like the rock 'n roll revolution. everybody wanted to be in a band. video games are a big industry. >> i was more of a rapper. our kids important to this? >> what tripp said when i first met him before he became our advisor is we are at a point in time or video games have been around for about order years. you need a game or set of games before they can transition into

national sports. when you look get videogames in the 1970's, the first cash competition was held by atari for space invaders for $20,000. games like that are iconic and they have lasted for that timeframe. now games are part of the same opportunity that professionals or cyclic or a basketball. >> i remember betting on the side, that was probably illegal. when you are counseling these people coming into the gaming is this, is her a common mistake that they tend to make in terms of building a popularity around certain games? >> one of my jobs is to tell guys like andrew not to fall into the same traps and holes.

there are so many things. building the culture of the organization and your hiring decisions and how you motivate and reward people. those are the basics. one of the things i like about andrew is he's already gotten off to such a great start. he is going in a fundamentally sound direction. you need to have a big idea. this is a very big idea. >> has he given you any good ideas? >> there been a number of moments like that. it's interesting for me because growing up playing games from electronic arts, it was so exciting to work with a legend like trip. he pioneered a lot of my favorite games. the idea of him pioneering sports and bring that to mobile in a new way was compelling.

that was table stakes. as we started to work together, trip has been so insightful on things like human resources and how to build a great team and to inspire and lead them. that has been an amazing experience for us. >> trip hawkins and and your paradise. coming up, john chen talks to me about the company's earnings. is blackberry really on the comeback trail? that is next. ♪

>> welcome back to the best of "bloomberg west." i am emily chang. blackberry is it hit right keys with investors. they had disappointing revenue as cash turned positive earlier than expected.

i spoke with ceo john chen. >> we are going to turn out positive cash flow before we get to revenue growth. we are going to launch a lot of products. it will come sometime next year. >> new phones are showing progress. you have the passport. tell us about who is buying these devices. how many of these are new blackberry customers? how many are upgrading from old blackberries? >> i think you see a lot of people using two devices. i have a new product year, around june. it will make -- i want to convince people to go to one device. in the case of the cloud space, more uptick from the in-store basin people who have used the

9900 product. the older blackberry product. i think those people will be resonating with that. the passport is mixed. there are new users. they come from other devices. there is some win back. there are people who came back. there are a lot of loyalists. the classic is good for current users. >> software sales are up. >> i am hoping both go up. the one reason that people need to understand and they need to go into it, i understand the impatience of the revenue thing.

it was the quarter that was important for us to clear out our old inventory. year over year, 93% of our inventory was cleared out. i am very pleased with where we are positioned. we have very little inventory. i can't produce the old phones anymore. that is clearing the way to get to the new phones. i'm not concerned about it. the investors have a different view at this point. >> apple and ibm just showed off their apps geared toward the ipad. what do you think? how much of a threat are they? >> that is always something we have to take seriously. we are aiming in the same as space. it is not very deep.

the one thing about their collaborations, they are very much on a proprietary system, the iphone and the ipad. that is nothing to ignore. our solution, we have business solutions, are more open oriented. they can be run on any device. we can manage all of those devices. the partnership we strike is broader. i think we're going to continue to stay open. >> what are the chances we see another acquisition in the next six months or so? what area of the company do you think could be bolstered by another acquisition? >> that is certainly something of interest to us. another we have the ability to generate cash from operations, we have $3.1 billion in cash.

i shouldn't comment on acquisitions myself. if there is one to be done in the future, i'm interested in the iot world, the internet of things. we have a lot of partnerships in handheld and the medical world. you will see us more interested in progressive world. >> i know we have talked to you about the internet of things. you are going to unveil the internet of things strategy. what are the chances that we see a connected hub for the home device? >> not a connected hub for the home device, but something we are strongly interested in and working on. we have strong connected cars.

you see one of those models, i think it's going to be the maserati. >> you gave yourself a better than 80% chance of turning the company around. what would you give yourself today? what are the chances? >> i hope we are going to be here to stay. i don't want the headline to be 100%. anytime you say that, you might jinx it. i will give it 99%. how is that? >> hampton creek, the start up behind eggless mayonnaise just raised $90 million. we asked the ceo what he plans to do with all the cash. coming up next. ♪

>> welcome back to the best of "bloomberg west." i am emily chang. hampton creek is hoping to change the future of food. the company behind egg free mayonnaise just raised $90 million from some big-name investors, including marc benioff and eduardo saverin. cory johnson sat down with the ceo josh tetrick to talk about the company's plans. >> it starts the basic premise that 99% of what we eat isn't any good at all. it's not good for our bodies or the planet. >> that leaves a pretty big market. >> we want to bring out products that we have the ability to make better. in the case of mail, how do we

make something that is more affordable and has better health. we like to pick products that connect with people emotionally. cook you know, there is a natural authenticity to it. we like markets that are large. we are going to come out with austin next. that should be toward the end of next year. >> i am so conflicted about your business. it sounds like frankenfood. the way you talk about it, it is the opposite. there are natural ingredients instead of processed food. tell me about the conflict. >> let's talk about what it actually is. there are 400,000 plant species. only about 4% of them are researched. but we do is search to the plant. we picked the best of them and then we use the best of them to make food better. take this cook you know, it is certified by the non-gmo

product. there is no chemical engineering. we are using plants from the open and we make food better. >> why not do genetic engineering and use the best the chemistry has to offer? >> its perception. that is part of the reason. it's important to us we connect deeply to everyone. we don't want to get political about this. we don't need to. we can just use plants. without engineering them, they are good enough. that allows us to what we need to do. >> it's a marketing decision? >> it's both. it's a big perception and also can we do it without doing that, i think it's good to do that as well. >> the most intriguing thing about your business is the product itself. using notions of how to develop product from the technology and math world, that's a different universe.

how do you codify that choice how you run your business? >> to your point, let's use data sites. what we do is we screen plants. we get all the data and we put them in a database. we have computational biologists and food scientist that take it and bring it together to make better food. the reason we take that approach is i tried a different approach when we first got funded. i thought we would run out of money. the approach was let's order lots of commercially available ingredients like kellogg's or nestle or general mills. let's see if it works. let's see if we can make cookie dough with it. i got nowhere. i burned at hundred $30,000. this was my dream to start this

company. we did not get anywhere. what if we bring in biochem and data science? with each discipline we brought in, we got better. if you think differently about it, it's almost as if we didn't know any better. that's when progress happened. >> the you have a roadmap to get stuff on the shelves? >> not yet. we have been fortunate with the retailers that we work with. that is not a part of a we do. we are the number one selling mail at whole foods. that was the first company to introduce the mail. our most important partnership is not in retail. it's with the food service company. >> 4 billion meals this year. the scale is massive. it's not just about creating template taste better, we went a cost structure that enables us

to sell these things at a more affordable price. >> josh tetrick with cory johnson. leaving los angeles, will the adult film industry funded and home after losing an appeal over portrayal of unprotected sex on film. larry flynt is next. ♪

>> welcome back to the best of "bloomberg west." i am emily chang. a federal appeals court has upheld the los angeles longer wires adult film stars to wear condoms in movies that are shot in the city. the industry claims it violates free-speech rights. it seems to be having an impact. according to film l.a., there

has been a 90% decline in the number of x-rated productions in the city. matt miller spoke with larry flynt. >> we're going to appeal it to the supreme court. i've been there five times before, it's still a good batting average. as far as the photo shoots themselves, as token with all of the adult houses in the city. they are either doing it in mexico or canada. there are other venues were you can go shoot. it's not really increasing their overall budget during if they go to mexico, they do two to three weeks instead of two or three days.

the whole thing about this is the public is not getting the truth about this. this is not protecting actors from disease. it's an orchestrated effort to try to shut down the adult industry and this is the way that they are doing it. when all the testing that we have in los angeles for the actors that star in these films, you would be more likely to get an std from a one night stand the new wood from being a porn star. we have had half a dozen cases of hiv. compare that to the national average. >> some companies are playing ball. vivid uses condoms and a lot of its films. >> we have done marketing testing with this. so have all the houses i know of.

whatever the reason is, whether it's a psychological thing, people do not buy films or the actors are using condoms. >> larry, how much are people buying anyway? i recently asked a millenial about foreign viewing habits. she said it should i ever buy anything? >> or you can download it on cable or get it off the internet. that's true. that's why publishing is doing poorly and the dvd businesses doing orlie. there will always be a market for born. it's just a matter of delivering a quality product to people. >> larry flynt, first amendment advocate.

that does it for this week. you can catch us monday through friday. see you next week. ♪

>> it clearly changed the way people begin to think about economic policy. >> if we did nothing else, we changed the world. >> boy, this is the first time in years. >> stand by, take three. >> knowing for sure whether it was going to work, no. but what a grand experiment.