emily chang san francisco. this is bloomberg technology. facebook goes to war to try to save democracy. we go inside of the social wherek's war room employees are running interference on domestic attempts to undermine the vote. plus, india is the next battleground in the fight for e-commerce demo on -- dominance.

the former microsoft ceo is bringing tech to basketball. clippers are using augmented reality to court more fans through the gates. first, to the top story. with the midterm elections three weeks away, facebook is on offense. 2016, we know russian efforts to disrupt the presidential election reached 150 million people on facebook and instagram. fake news ran wild. year, facebook does not want to repeat. in addition to the security team, we got one of the first looks inside of a new "war room" to combat the war on democracy. this is facebook's election war room. teams ofhere engineers, cyber policy, and the data specialists are patrolling for fake news, misinformation on meddling. what is happening here right now? >> experts from across the

company are looking at e-sports and seeing if there is any spike in content that could be related to voter suppression and prevent any of it from going viral. emily: this room did not exist in 2016. facebook executives seem to be in denial the social network could influence the u.s. presidential election at all. >> personally, i think the idea facebook, ofs on which it is a very small part of the content, influenced the election and in a way is a pretty crazy idea. emily: it has become clear that russia weaponize facebook to send u.s. elections into turmoil. facebook apologized for not hedging it and committed massive resources to combat it. what facebook calls coordinated inauthentic behavior has

continued from irish a -- from russia and iran. facebook says activity is ramping up in the majority is coming from inside the united states. order to manipulate public debate, you have to understate the culture you are targeting. there will also be more people inside of a country that understand it then outside. we are talking volume. the interference from overseas can be influences. point with someone step in? >> we want to move quickly and push as much of the decision-making to the team as possible. there is an escalation chain process and available so for you need to move something up, we can do it quickly. emily: the six spans across 2014's around the world including law enforcement and alsoity agencies that are

monitoring facebook messenger, instagram, and whatsapp. these mere mortals are not alone. >> our investments in machine learning have allowed us to block fake accounts usually at the moment of creation. emily: there is still an indefinite amount of new want when it comes to what kind of activity and content could breach policy. this week, the company would take on misinformation about how people could vote and whether the vote would count. other types of voter suppression, like whether polling places are closed or under threat by an active shooter, would be outsourced to a third-party and potentially flagged if false. lawmakers are watching. >> i think facebook and the other social media platforms were slow to react to this. they were will fully unprepared during the last election as the russians weaponize social media. they are slowly coming to aalize just how much of threat this is and an attack on

democratic process. i welcome the reforms. the final analysis will be up to the american people to recognize this threat and be aware of they have seen before that seem divisive or unrealistic. emily: expecting the users to make the call might be equally unrealistic. facebook keeps users in their own social silos that only further divide. >> we cannot fix 2016. my goal is that i believe the advertising business model creates the wrong incentives for facebook and that it forces them to use highly addictive peopleogy, and to push to increasingly extreme positions. polarization is good for their business. anger and fear are good for their business. emily: does it concern you at all facebook could be hurting

democracy more than it is helping? and think our goal responsibilities to ensure we are helping democracy more than we are hurting. we are ready. that does not mean there will not be challenges. when you have malicious actors, there are always going to be challenges. emily: the question remains, will 2018 be different? room is already being put to the test in brazil which is in the midst of a presidential election. you saw brazilian and american flags in the room. facebook is using the were delighted to describe how efficiently it is performing. to talk about brazil and how the battle against fake news is being fought, i want to bring in april so you journalist -- bring in a brazilian journalist. when brazilians went to the polls over the weekend, they debunked 12 rumors that combined

for 1.7 million facebook shares alone. also with me in the studio is sarah frier who covers facebook. sarah, there is a situation rapidly developing where you have the left wing candidates calling for an investigation into the right-wing candidate for deliberately running and deploying fake news, not just on facebook, but on whatsapp. hadad has dodd -- been attacked and he is asking federal authorities to see if that is coming from the opponents campaign. a lot of the venue for this attack is on whatsapp. that is something important to think about. as facebook deploys the war room where they are trying to see the fake news trends and find reports about not just voter suppression but hate speech and spam, whatsapp is a harder platform because they cannot see

what people are sending each other. emily: the initial election happened on october 7. we have heard about the violence and the misinformation. what was the election like from your perspective? had a very large scale of misinformation and fake news websites, but also images, videos, audio. any kind of media that was used in order to mislead electors from what is actual facts. during thethat first-roundr to the voting day, but we have seen that scaling up during the last five months. we have already debunked more than 100 pieces of misinformation since july.

most of them come from the right-wing candidate, but also, fans fromem come from the opposite side. it's not that this is a monopoly on the right-wing, but we see it being scaled up to an industrial level from the right-wing party and that campaign. emily: when he spoke to facebook executives, they were delighted with their work in brazil thus they were able to identify hateful content going viral towards the leftist candidate and take it down. leftistt just that candidates. after the polls closed, they saw a lot of hate speech. hate speech inciting violence

directed toward the northeast region of brazil. this region is one of the poor of brazil. roomsaw the way the war works, is they have representatives from the facebook teams that have to work , engineers, data science, policy, so in that case, the data scientists were able to see this is the content we are having. the policy person says this violates our rules, and the operations people were able to go out and find the content to take it down. facebook says one reason they are deleted is that what would normally take them a few days to accomplish, they are able to accomplish in two hours. is that enough? the volume of fake news around fact,s so heavy as our checking partners have said and this is something on the facebook platform. on whatsapp it is basically invisible.

you have spoken to a u.s. congressman that set up to a point it is up to users and they have to discern whether the posts are true or false. is it reasonable to expect facebook can really do this? on the flipside, is it reasonable users will discern what is true and not? tai? is it reasonable that users themselves should be able to decide or discern what is true or what is false. and, is it reasonable to expect facebook can really do all of this? tai: ideal yes. to empowerhave people to fact check for themselves what is on the web. we don'trealistic,

have a scale to do that. we have to be using technology in our favor. we see now partnering with -- is not ideal but theas somehow stopped spread of some misinformation on the platform. meanwhile, this kind of is on whatsapp which is much more difficult for people to fact check. whatsapp, twitter, and facebook are free so if you hire a plan on your phone, you receive free data to use thesapp, but not to access

fact checking websites. it is unequaled. you can receive this information for free, but you cannot back check them for free -- fact check them for free. when people have low levels of media literacy, it worsens. emily: we're going to continue to follow in the days leading to the runoff election happening on october 28 and the u.s. mcdermott election about a week after that -- midterm election about the week after that. thank you so much. the digital payment giant paypal repla reported revenue beating estimates. wasstrong performance boosted by venoco handling $17 billion in the quarter, growing 78%. announced aalso partnership with american express allowing customers to use amex reward points at paypal merchants.

still ahead, amazon and walmart are after global expansion. next on the battleground, india. this is bloomberg. ♪

emily: it has been five years since amazon launched in india. ownerspkeepers and store don't know who jeff bezos is an many people want be able to tell you. they are struggling to win over the country's people. walmart spent $16 billion to acquire the prime rival in india while alibaba has backed an online retailer. for more, we have brad stone who has traveled to india for this story. who is winning? >> i think probably both

companies are doing well. it is such an open frontier. you have hundreds of millions of people getting her first smartphones, coming online for the first time, and people in poverty moving into the middle class. there is opportunity. these companies are spending money on profitably to get market share. they are spending a lot of money on promotions try to get customers. emily: what are the doing different than the united states? brad: so much because of it being a different landscape. one thing that they are doing that surprised me is that they are empowering middlemen. you can go to stores in india something in the packages sent to the store. they are really rethinking everything from the ground up.

emily: how is this government handling it? india has so much bureaucracy and middlemen and red tape. -- tothe simplified simplify complicated situation, there are limits on investors coming in and being multi brand retailers. walmart have marketplaces but they also finance side companies to go and sell things on their own site. the new set of regulations might put more limits on that. both companies are lobbying heavily for a hands-off approach to do more business india. emily: which company do you think will have the upper hand over time? brad: walmart made a huge flipchart -- buy flipkart. amazon is more likely to be willing to lose money. this is continuing

to be an unprofitable market, amazon which has the stomach for it, probably. emily: does jeff bezos cap about it personally? brad: he went there a couple of years ago and wanted to hand over an oversized check to the head of the india division on an elephant. they could not find i an elephant. he is using his notoriety to build a business showing how much he cares. emily: if only more indians knew who he was. brett stone, thank you so much. check that out in this weeks edition of bloomberg businessweek. areman sachs and galaxy betting big on crypto by pouring $15 million into the cryptocurrency custodian, bitgo. that is next. this is bloomberg. ♪

emily: goldman sachs is getting deeper into bitcoin. goldman and one of their ventures are investing in cryptocurrency custodian bitgo. they put in the $15 million of fundraising. guards digital currencies for institutional investors. for more, let's bring in their ceo. what you get out of this investment from goldman and galaxy aside from money? >> it was not about the money. it is much more about the strategic nature of this. institutional custody is something is a big missing piece .

is working on changing the infrastructure for some time. goldman and galaxy are looking for that as well. they found us. happy to work with them. can you defined by institutional custody clients? mike: when you think about custody for your own assets, that is your choice with what you do for your own money. mattress,t it in your your bank, it is up to you. when it comes to institutions, they are holding other people's money. we have hold a much higher bar for what those custodians are doing. are notto know you lying, your audited, have the assets. custodians help. emily: how many clients do you have? mike: over 300. we are a global firm. um is more about hedge funds. emily: we have seen goldman slowly increase its commitment

to bitcoin after initial uncertainty. what does goldman get out of this? mike: goldman is a very different company. they have been a financial services powerhouse for decades. their ability to move into the space requires more than smaller companies. it will take a while because they are a bank under more regulatory scrutiny than bitgo is. emily: how much of your business is compromised by the amount of shady practices and misinformation in the industry in general? mike: part of the challenge for the entire industry is to figure out how to get the word out it is not just about that. we can create safe money, we have the best form of money ever created with digital currencies, and we can take that forward. we are a regulated company. of the same rules and terms of customer identification, etc. that any other custodian would be subject

to. we are doing the same thing for digital currencies. emily: will the market turnaround? mike: it is definitely low right now. no doubt it will turn around. the question is when. emily: wendy you think? mike: i do not like -- when do you think? mike: i do not like to guess because we are in it for the long-term. bitcoin has opened our eyes to the idea that you can move money around the globe with no counter party risk. we're never had that before. emily: what is your objective? would you sell the company to goldman? mike: we are trying to make an impact on the world. it is not about sales. i do not want to sell it to goldman. the idea here is we are new products that will enable new things. we can change the way the financial system things. marrying silicon valley with wall street will allow us to learn from what they have been doing over the last decade and bring in innovation that comes

with silicon valley tech companies. , thank you solshe much for stopping by. the l.a. clippers are reinventing basketball. how augmented reality could change the way fans interact with the game and bet on it. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪

emily: this is "bloomberg technology." steve ballmer is known for his enthusiastic speeches and now he's bringing his passion for tech to the basketball court. as the owner of the l.a. clippers, he's unfailing and augmented reality platform that puts fans in charge of their viewing experience. it uses a mix of ai and let youd reality to estimate probability. fans can toggle between modes for different diagrams and camera angles.

i sat down with him to discuss. take a listen. >> day in and day out, the technology industry, like every other industry, has a key role in society. some of it is all positive in goodness and innovation, and some of those things come with a downside. as the downsides get revealed, whether with security issues in software number of years ago, privacy, election manipulation, i don't think the spirit of excellent innovation will be anything other than lauded, and yet the tech industry has to also take these bumps and bruises and serious request from society to do better. call it a once-in-a-lifetime, but there will be excitement about tech and there will be issues over which tech needs to show responsibility. emily: i know you are super pumped about this. you are pitching this is a

revolutionary way to what clippers games and this puts the viewing experience in the hands of the viewer. how does it work? steve: what we've done essentially with our partners with a very cool technology company here in l.a. is apply our official intelligence to watch, study began, and then draw in real time automatically what is going on. so if you want to watch as a player would watch and see the probability that your teammates will be successful for a shot, if you want to see real-time diagramming of plays, we provide you that. if you want various camera angles, you can get that. if you want live commentating, you can. computer-generated highlights are available in near real-time. the ability right from within the website or within the application to tweak things out, we provide all of that. .hat is in beta the thing that is broadly

available today which is exciting for people in the los angeles market is a set of augmented streams to do much of the things that i talked about, which are available now on the fox sports at and people can watch the game that way tonight. emily: so it's about recording the viewers of tomorrow and the nba skews younger. who are you trying to attract with this? steve: we are trying to take first the fans who are already excited about the game and give them away to get into the game even deeper. business i think one of the first things you have to do is feed your enthusiasts. since nba fans tend to skew younger, we think we will see great uptake by today's fan base and where building out interesting things to draw in people who know less about the game. is essentially a software service and we will continue to feed new products and ideas into

this thing with great regularity. emily: given that you're collecting all this additional data, is this something that could also help the team win games? steve: this is actually built off a set of technology became at first in an analytics product. there are six cameras in the ceiling of every nba arena. the software we are talking about starts by looking at the floor, seeing every player, knowing where the ball is moving, the speed, and there is a layer of so-called sheen learning software that can tell you exactly, that was this kind of pick and roll. the likelihood to lead to a , it is being defended in this way. all the core technology that feeds a set of tools that the teams do use to improve the way they game plan, product named eagle, the clippers were one of the first users of that product from this company second

spectrum here in the late -- here in l.a. emily: how could legalize sports betting be integrated into this platform? steve: we have a platform where you can show additional data real-time in the game and with which you can interact. that makes it a great platform to support legalized sports betting and sports gaming. you may want to see fantasy points, probabilities, there's a lot of things that might be legalized on which people can gamble. we can show those to you live on the screen and with interactivity there's a possibility for online gaming partners to work with us to augment the experience in that way. emily: he will be an interesting season. you have lebron going to the lakers. integratehe clippers that? steve: i love our team, i will

be honest. it's a very different team than last year. we have guys back that were injured for much of the season. we have new players and rookies. i love our team. very close knit. it's consistent with what i want out of our team. whoh-minded, greedy folks are going to die then and get things done. about otherent guys, but no one is going to want to play us night in an night out. emily: current l.a. clippers owner steve ballmer. the wall street journal has reported a company considering an ipo. the company has reportedly been valued at $41 billion, double its previous valuation. journal the the company could go public as soon as the second half of 2019. making, but imagine a job finding humans the robot bff.

and succession at square. jack dorsey's top number two is gone. what's next after losing their cfo? this is bloomberg. ♪

emily: matchmaking between two friends is hard enough to imagine trying to pare someone with a robot companion. that's exactly what a research firm here in san francisco is trying to do. ♪ quick meet betty. she lives by herself, but for the last few, she hasn't been a long.

>> tell me a joke. >> did you hear about the claustrophobic after not? -- astronaut? apparently, he just needed a little space. >> those technology isn't made for 93-year-olds, but this woman is making sure that this particular robot is. >> who are you? >> she is researching the way we interact with machines, and if she has her way, robots will soon be a trusted companion for all of us. >> how can i help you? >> i am a human robot interaction researcher. >> daniel works for an israeli startup called intuition robotics.

her office is here in downtown san francisco. >> come on in. >> the company is funded by couple of big names like samsung and toyota. full disclosure, bloomberg venture capital arm is an investor. >> can i take her out for a spin? tell me what you can do. >> i am a social robot designed for older adults. your family and friends and even play music. >> it might remind you of the amazon echo, but you would be missing the point if you compare her to a smart speaker. she is not meant to just be useful. she is meant to be a companion. >> why don't you take a break and have a drink? that's my she has ahead that can nod and make other subtle from as you would expect

pet. >> the our research with older adults, refining that almost on a daily races, we see that someone tells her that they love her or that they like her. also tell her, i'm depressed, or i am lonely. they will open up to her in a way they might not necessarily open up to a human. >> it is an on sale yet. but a prototype is already in the homes of about a dozen early testers who live in the bay area. >> tell me what the weather is today. >> danielle's job is to figure out what's working and what is not. >> sorry, please rephrase your request. >> she does that by visiting each of her testers twice a month. >> how important are these visits to your job? >> their critical. we are building a product for

people who we are not. i'm not a senior. how could you know how to design for somebody if you don't do research? because otherwise, you would just be designing in the dark. next daniel's research has ,elped shape every little facet from the way she moves to the way she talks. >> is a very special job and it can be really hard and it can be really frustrating. but at the end of the day, it's incredibly rewarding. i think the most rewarding part about it is when i see the joy on the user's faces. feedback saw their turned into something real. >> today, we've driven east of san francisco to go see one of her research participants. >> tell me something interesting.

but did you know that ronald reagan was a lifeguard in high school and saved 77 people's lives? conversationere is, i should say no, i did not know that. i expect her to be able to continue a conversation for at least a couple of comments. >> why is that? >> because that is companionship. >> by 2050, almost a half when people will be 80 or older, and if current trends continue, more and more are going to be like betty, living alone. >> daniel knows that no robot could ever offer the same companionship that a real human could come and the key to her work is to embrace that very

limitation of scenes. robots should help humans do with a love, help humans interact with more humans, help humans in general, not pull humans away from humans, not take human jobs and leave humans without purpose. >> whether it is in our workplaces are in our homes, robots are soon going to be everywhere, and it's up to danielle to make sure this robot filled future leaves us just a little better off. >> of don't be afraid, and if , come in.raid i promise it's a friendly place. coming up, square, the company makes is old-school with the new. how it aims to be your business's one-stop payment and

inventory shop, next. this is bloomberg. ♪

emily: where is looking to take on old-school credit car machines with a new device called the square terminal. it lets you processing new type of payment and print receipts from one device you can pick up and take to any part of your store. it has software that lets merchant access inventory and set invoices. sat down with jesse to get the scoop on the new machine and how the company will move forward following the recent departure of cfo sarah frier, who went on to become ceo of the company called next-door. >> sera is a really good friend and we are happy for her. she's doing something she has always wanted to do. we have a lot of powerhouses around the table on the executive team and we feel confident in who we have around the table. we talked about the

strong bench on the show at many times. investors are asking who is going to fill her shoes. we will start the search for a cfo and we expect there will be a lot of interest in it. the former cfo goldman sachs will lead the search and we have a lot of confidence will -- we will be able to fill it. we feel great about our purpose and our momentum and the people we have around the table. i don't think we will miss a beat. emily: your announcing the new square terminal. what is game changing about this and how is it different from the previous hardware register? jesse: it's a great new terminal. that is fresh and you and has all the technology people need. there are millions of terminals in use and they're made of andware that are lackluster

not very forward-looking. this will fix all of that. square forworked at seven years and apple for eight years before that. what did you bring up your apple sensibilities to square? ,esse: i learned a lot at apple i learned from the best. you learn what excellence means. you learn to value and scrutinize execution. if you cannot execute, none of it matters. to i learned you have identify the technology that will affect the customer experience and the things you want to control. that's our payment infrastructure, the way we move money, the embedded software that runs are system. smartphones, there's a lot of competition. as you mentioned, there are so many different kinds of registers, they are very different, but how does this standout from what is already on the market? jesse: we really benefit from

integration. the payment service is provided by the same people that make the connections to mastercard, visa, and ask, discover. we have a great relationship with apple and google. we can make something that is integrated and will provide a seamless customer experience, not stitching together a variety of suppliers. emily: how will this expand the customers that use square? jesse: big businesses that have a specific point-of-sale, like a dentist or optometrist. square will not make a point-of-sale for them. all those businesses are entrenched in that system, but these have a way to accept payments right next to it. what were the biggest challenges building this hardware? jesse: integrating hardware and , hasare in a small package a built-in battery, works on

wi-fi and has a built-in thermal printer. at something that doesn't want to be small and sleek and easy to pick up. it's a great consumer electronics design. it's not the calculator from 1985 that they've been forced to use. emily: there are questions about jack dorsey's role. we seen him testify before u.s. congress on behalf of twitter. we have the elections coming up which is also big-time for twitter. how present is he? jesse: he is always there. i met with him today. he has put together a strong bench of people. quarter put a perfect in a row of revenue expansion. i feel good about our momentum, especially with your product launches. emily: apple is expected to unveil new ipad and matt are's an event in new york on october 30.

bloomberg reported earlier that apple is planning the largest revamp to the ipad pro since it went on sale in 2015. there will be a lower cost laptop and a new many desktop. what do we know about this event on the back of the smartphone event? that new products in time for the holidays. it's a crucial selling season for apple, as we all know. don't often announce stuff outside of cupertino or california at -- or san francisco. they had one event in chicago earlier this year. they are branching out somewhat but it is still not a regular occurrence. ipad, they will bring some of the features of the iphone and -- iphone x and bring more excitement to that. seller out ofat

the gate, but it has been cannibalized by more recent products like the iphone. emily: in that event in chicago where they unveiled education software, that will power sales ipad. wherechools are an area apple dominated but now schools are getting into chrome book because they are cheap. my kid uses one at her elementary school. it is definitely an alternative to apple in the classroom, so they needed that. arear as the new macs concerned, you will see a new macbook pro and yet the professional. emily: we just saw an announcement on coverage of

apple, putting up $1.5 trillion target on apple and saying it's not the devices that will power this, it is the service business. tom: they are buying the apple story about the big cushion to tens of, making it billions of dollars in revenue. you have seen apple go after that aggressively with it push deeper and deeper into music, video, entertainment, they want to be a services company as well as a hardware company. emily: and the devices make it possible for them to push the services to consumers. tom: and they are all interconnected. they get us addicted. they all work together. emily: tom giles,

much. that's all for this edition of "bloomberg technology." . tune in tomorrow. we will break down the proposed internet bill of rights. i'm emily chang from san francisco. this is bloomberg. ♪ this is bloomberg. ♪

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haidi: welcome to "bloomberg daybreak: australia." tory: we are counting down asia's major market open. ♪ haidi: these are the top stories we are covering in the next hour. u.s. stocks fell on continuing unease on trading growth, oil falling to its lowest in a month with tensions and saudi arabia. president trump says it looks as if jamal khashoggi was