Transcripts For BLOOMBERG Bloomberg Technology 20171122

His actions during the war of the 1990s. He was ejected from the when he said everything they say is a lie. He was sentenced to prison. It you are watching bloomberg technology. This is bloomberg. Im Alisa Parenti. Emily this is bloomberg technology. Our continued coverage of uber, the company concealing a massive data breach. After delete the information and keep quiet. How this can impact efforts around the world. Russian election meddling on social media. It have seen the as an face book wants to tell you which you follow. Earliestcebooks investors sell off all of his remaining shares. Why he is selling now. Racing from one disaster to the next leading to boycotts, lawsuits, criminal the ceo executive was supposed to market the beginning of a new chapter. He continues funding more horrors at every turn. News that we broken uber concealed a massive cyber attack that exposed personal data on 57 million customers and drivers globally. Blumberg is this week businessweeks matt, and we have agencies around the world launching investigations into this . Three in europe, and Eric Snyderman is on this. We will continue to see more states get in on this. It seems to be regulated at the state level. And they say they shouldve disclosed this breach. It seems pretty clear they did something wrong. The interesting thing is that they paid the hackers to cover it up and seems to imply we could take hackers at their word. Max it is pretty insane when you look at it. Im not really sure what else you would call it. Can take theseou hackers, clearly not necessarily trustworthy people, and try to get them to sign something or get them to promise or swear that they will not give away the data. Enough, not thats to tell your customers, thats really troubling. Howaises questions about hard it is for uber to clean up. When we step back and look at the data breaches we have had over the past year, it is just very concerning just from a consumer perspective. Emily its not like these are young kids and this was their first rodeo. The chief Security Officer that was fired was chief Security Officer at facebook for five years. When i talked to Security Experts yesterday, they expressed the same thing. It seems like that after this speech was discovered, uber tried to package the 100,000 payment on a more above Bounty Program. Above Bounty Program is when the company pays outsiders to find flaws in their system. And rewards them. Max it usually happens ellen it usually happens in that order in sit of the other way around were they say, pay us or we will do bad things with the information. Softbank is poised to invest 10 billion in uber. You wonder if they can lower the price of the share that softbank is willing to pay. Max what is going on now, there is the one billiondollar. Nvestment and there is a negotiation with 9 billion worth of shares. Are looking for a discount on that valuation. This is yet another brand problem. Another instance in which the Company Looks less than trustworthy. Data breaches, especially when talking about a company like uber that knows where you live, where you are going, who youre as well as typical stuff like contact information. That is a lot of information. With other rivals outside the toxic stew part of a theyve had to confront. Julie in this particular hack, they say they did not get credit cards or trip history data. But at this point, its difficult to take uber at its word. Are there other skeletons in the closet . Ellen that is probably the question they are asking themselves. What else is there to find now that ive taken over leadership of this company . You have the ghost of Travis Kalanick and the culture he built have repercussions. Julie hes still on the board. Ellen he continues to be a big presence at the company. Something that investors and people watching the company have concerns about. Its not just another data point in that column. Julie theyve had their license revoked . And multiple u. K. Agencies looking into this . Max as we learn, one uber mistake in a jurisdiction will reverberate around the world. It makes it that much harder to negotiate for the municipalities. Each market is its own thing. Politicians are obviously looking to protect customers, looking to attract attention. I think this makes the london negotiation harder. It makes negotiations in places like brazil that much harder. Julie hes apologized and said i cant make any it is for this, we are changing the way we do business. At what point do these kinds of echo s stop happening the statement is made multiple times since stop happening . Ellen the statement is made multiple times since he has taken over. It ways uber has function for the first heaven years, continuing to complicate his attempt to change the image and the messaging. And the way it runs its business. And in the meantime, uber has investigations in the federal government. Theyve also been very questionable. Max there are so many, its hard to keep count. The defense of the new management, if you take over a company that is full of problems and has all of these ongoing investigations, what you want to do is get it out there. Get it out there quickly. If uber is to close this off and we go six or 12 months without hearing another shoe drop, it would be like the 15th shoe to drop. Is this is it. Maybe thats good. Putjob at this point is to the ghost of exercise the ghost of Travis Kalanick. Is that they found this and they are dealing with it. It is maybe a year too late, but at least theyve told us now. Julie thank you both. We will continue to emily thank you both. We will continue to follow the developing stories. The security and exchange involved usedely criminals. Intruders may have had access, for months, to a database never meant for public release. The corporate data could have led to illegal trades. Hit the like you button on any russian sponsored content . Did you . Facebook is getting ready to show you if you did. Bloomberg tech is Live Streaming on twitter. 5 p. M. In new york, 2 p. M. In san francisco. Emily more optimism around bitcoin. Tobling the price target 11,500 by the middle of 2018. A 40 gain from current levels. A strategist says a pullback set the stage for the surge. The Hedge Fund Manager projected bitcoin will end at 10,000. Few weeks ago, the world got to see the infamous russian length Facebook Accounts on russian meddling in the 2016 u. S. Election. Now facebook has announced a new tool that will show which propaganda pages or accounts they followed and liked on the social network. The tool will appear by the end of the year and is estimated at 150 million were reached by these posts from Internet Research agency, the name of the firm from russia believed to be behind it. Max, tell us exactly how this tool will work and how far it goes. Max we dont know that much. A kind of a curious announcement the day before think giving, one of the slowest news days of the year. Facebook pops up and says we are working on a thing that let you know how you interacted with the russian propaganda. They some is very brief blog post, it will tell you, basically, did you like a russian Internet Research agency built add . Or did you follow one of these fake pages, these fake activist accounts. One of the things it doesnt do ifmaybe equally interesting not more interesting is to see the ads in their feed. Unless you interacted with these ads which most people did not, this is not really going to apply to you. It does give people a window, a bigger window than they had before into just what this propaganda looks like. Open kimono that some might expect or prefer. The internets research agency, the supposedly russian length organization that generated this content . Max people call it a troll factory. The bestknown known of these kind of propaganda shops. Theres been a lot of Media Coverage located in st. Petersburg. It has a new name now and is basically a call center full of people that are highly trained in sort of american language and who are logging on to facebook everyday, trolling people. It may not be the only russian wentcted propaganda that on in the election, but its the best known one. The one facebook has chosen to make disclosures about. Emily facebook is dealing with a lot of other problems. Fake news that is not russian related. Facebooksry about advertising discrimination. The ability to not show ads to african americans, jewish people, single mothers. Are very endemic to the way facebook has been doing business for a very long time. How do they deal with it . Is the propublic a story pretty interesting because they reported on the fact that it was using facebooks selfservice ad platform to create ads that look like they violate federal housing law. You cant have discriminatory ads, ads that dont advertise to certain groups. Facebook said we are fixing this problem. Provide look a said they havent fixed it, not completely. It raises questions about how much control the company has over its platform. Thats important to the russia conversation because lawmakers, most americans would like facebook to come up with a solution to this. To make it easier for them to , basically, bad stuff off their platform. Emily hang on a sec. Peter thiel has sold off most of over 160,000elling shares for a total of 129 million. Joining us now, tom metcalf covers billionaire workings. It is important to know that peter thiel sold the vast majority of his shares right after the ipo in 2012. Almost 1 billion worth of stock. Hes sold almost all of that. What do you make of this . It is reminder of a couple of missteps. Wishes hed held on to his shares a little bit longer from the ipo. At current share price, its closer to 4. And just in terms of how it looks, he is really whittling down to the bare minimum. Context of a 3 billion personal fortune, its interesting. A surprise to be investors. Its part of his trading plan. It reminds us of prominent facebook investors at this point. Emily to top it off, peter thiels role on the facebook board has been questioned. If he should be there at all. A guy that funded a lawsuit against gawker. Mark zuckerberg has come out and said we want diversity of opinions. You think peter deals peter thiels time on the board could be coming to an end . Max it has that look. Last week, it was reported that he stepped up from the wellknown Silicon Valley incubator and invest in fund. It looks like maybe hes backing away from Silicon Valley to d. C. In washington, peter thiel is a huge asset to facebook. Is conveying to everybody that facebook is a neutral party. , one of trump supporter the most prominent endorsers of donald trump, it makes facebook a little bit controversial. It gives facebook a lot of credibility with people on the right that worry about it. That there was a news scandal where facebook was seen to have been pushing down conservative news and opinion. Board, it leave the would hurt facebook. It wouldnt be great. Emily there are other big sellers including the cofounder of whatsapp. Selling 3 billion worth of shares . Tom and the year before, he sold 4 billion. When he came aboard facebook, he had a lot of facebook stock. Is 80 assets of facebook. In siliconstion valley, what is he doing with 8 billion of cash or liquid assets . I certainly want to know the answer to that question. Thank you both so much for joining us. Coming up, the man behind beloved animated movies is the latest to face allegations of harassment. What it means for disney pixar next. This is bloomberg. Now to the latest allegations of a hollywood power player accused of misconduct. John lasseter, the chief creative officer of disneys Pixar Animation Studios says hes taking a sixmonth leave of absence amid allegations he made unwanted advancements and contact with numerous women over the years. The allegations were first reported by a Hollywood Reporter. He acknowledged missteps and painful conversations. This comes as pixar releases its latest movie, coco. Already the highest grossing movie in the history of mexico. Lassiterat did actually do here . These reports of unwanted hogs . Many of them . A hugger. Was known as the report yesterday and the Hollywood Reporter about unwanted advances with a woman. Touching people, excessive. Said wased to what he unwanted hogs and gestures. Today, trips to strip clubs and lab dances with lasseter. And pixar employees, additional references to women that felt uncomfortable in his presence. Things hes allegedly said to them. Seemsitial statement maybe not to cover everything. Make of thedo you six month leave of absence as opposed to being fired as we have seen happen with many other hollywood players that have been accused of such things . Chris disney definitely seems to be treating john with kid gloves here. Saying they support his decision, very dramatic for Media Companies to just terminate relationships with people. It speaks to the influence hes had on the company the last 15 years. An amazing track record. The Consumer Products as well. Man at the company. What does this mean for the business . Chris pixar has a pretty deep than just talent. They were famous for having this group of directors they called the brain trust. Many of them have been in place for a while. It is likely if lassiter dustup down, they can pull someone from their. It might be that they look outside and try to change the culture that allowed this to happen. Mieri chris paul joining us. Why the stakes are so high for retailers this holiday weekend. This is bloomberg. Alisa im a Alisa Parenti and you are watching bloomberg technology. A former doctor for the u. S. Gymnastics team has pleaded guilty to seven counts of criminal sexual conduct. Larry nassar was accused of molesting the seven girls singing it was medical treatment. Since then, more than 100 women including gold medal winning gymnasts have come forward with their own stories of abuse. Nasser has faced 25 years in prison. Roy Moores Campaign has taken another hit. The washingtonian is reporting Communications Director john rogers has left judge moores team amid ongoing Sexual Harassment accusations. The special election between roy moore and democratic candidate doug jones is set for december 12. Congressman joe barton has apologized after a lewd photo of himself surfaced on the internet. Released aold Statement Today expressing remorse for not using better judgment and letting his constituents down. A spokeswoman says he has no plans to resign. French president Emmanuel Macron has announced the auctioning of migrants. Recently seen video footage that was broadcast last week on cnn showed migrant men being bid on and sold. There requested the Un Security Council to change human trafficking. Hes hoping it will produce concrete action and resolution. Global news powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. We are joined by bloombergs sophie with a look at the markets. Folks are raring to go for thanksgiving so stocks are closing little changed. It could see a mixed start to the session if you look at futures. Australia is looking flat. Japanese markets are offline. At a high against the dollar. That fell to an october low. The aussie dollar holding above 76. , the oilholding gains has regained a twoyear high reaching 58 for the First Time Since the summer of mid2015. Kong, next up, more bloomberg technology. This is bloomberg technology. Im emily chang. Black writing has always been a boon to retail stores. ,iven the rise of ecommerce this Holiday Season could be make or break for some. Bloombergs emma chandra has more. Emma black friday the traditional start to Holiday Seasons here in the u. S. Pointing to strong Economic Growth and low unemployment with skyrocketing Consumer Confidence providing good conditions for the american shopper. 3 to 4 tation is sales growth, 680 billion in sales. Analysts pointing to a string of positive Earnings Results over the past few weeks, saying a number of retailers are better positioned this year for what consumers would want in terms of integrating both online and instore retail. Said they been promoting early to make sure the customers know exactly what they are offering. There is a doubleedged sword when you look at this highly promotional environment. What we see here is a number of retailers chasing sales and it could impact margins further down. The other struggle is the many traditional retailers providing services instore and online in order to compete with the big online or ecommerce retailers like amazon. Online shopping continues to grow here in the u. S. I 20pected to go up percent this Holiday Season, accounting for 100 billion in sales. Amazon is likely to be the big winner from that. Last year, they took 38 of all ecommerce sales during the Holiday Season. That is expected to grow this year. Emily emma chandra there. Retailers are slashing prices, and that could impact their margins. Big winner is ecommerce. Online sales are expected to increase by 20 this season. What is the state of retailers as they try to compete with amazon . Now, ceo of boomerang commerce. Always great to have you on the show. Especially today of all days. We going to see this black friday and cyber monday . As we are watching the trend, its very clear that enough sales in the Holiday Season, it will be either online or it will be influenced by online. Storee brickandmortar if you look at the walmart,nt, amazon and that will be the big battle. Watchere are others to like target, best buy, and toys are us. To ecommerce, the primary weapon will be pricing. And we saw walmart making an acid a massive acquisition. It lost the dynamic pricing technology. How did they deploy that and become competitive . It is yet to be seen. Do you expect to see these retailers behaving visa a vis amazon . Withazon has a leg up competitive pricing and a dynamic selection. As we look at walmart, they are starting to have that technology as well. Isunderdog in this potentially target. And we have been looking at target for the last few years. Boomerang reports that we saw target to be not so competitive in 2015 or 2016, but in 2017, and the can a quick amazon in terms of rising. Emily what about in terms of pricing. Emily what about convenience . Do you have the right product in do you have the right price . Are you getting customers to your store . If you look at target, the price , they have a chance to be the dark force in this market. Emily who do you think the winners are going to be . It is too early to tell, but i would that bet on amazon and target. Emily and the losers . Those that dont have dynamic pricing. Emily what about some of the other brick retailers like j. Crew, the gap . Companies that have deep discounts throughout the year . Tobrick and mortar continues struggle in this market. Especially if you go brickandmortar first. Very few retailers are taking advantage of technologies to be competitive. Struggle tosly figure out the battle between ecommerce and stores. And had you compare cyber monday to black friday . Cyber monday will be pretty big this time. What we saw over the last two , black friday is starting to become more as opposed to black friday. Emily my strategy is that the best discounts are black friday. On black friday, should they wait till cyber monday . High market at this point. How concerned are you about cybersecurity . Whether it is target, neiman marcus, or recent years. Some of these older School Retailers now have their Cybersecurity Strategy under control . Cybersecurity will be front the i. T. Standpoint that has happened in cybersecurity. It you have seen in the retail market, it is a typical of other segments. Emily you think they are still vulnerable. From boomerang, you are sticking with me. Mark you been at President Trump and asked if he knew how big an impact alibaba has had on the u. S. Talk market. Theercent and 7. 5 times Monthly Trade deficit has gone to one chinese company. Alibaba says the shares have tripled since the 2014 ipo. The biggest in u. S. History. Trump has long targeted china but recently softened his stance citing that u. S. Policy. Trump did not respond to cuban. The battle for voiceactivated home assistance heats up. If you like bloomberg news, check us out on the radio. This is bloomberg. Emily amazons use of brickandmortar stores to sell its own hardware could edge up the competition. They are helping sell amazon echo devices. It puts the device in front of shoppers every day and it is hoping will help lead tech rivals like apple and google in the dust. The apple home pod will be delayed, missing the crucial Holiday Season this year. The former amazon executive still with us. What do you think of the strategy to try to sell the echo at whole foods . On one hand, why not . On the other hand, its not something you would normally buy while grocery shopping. Having to think about and nail down the story about on the channel, amazon is thinking about on the presence. Entering the ecommerce and the brickandmortar landscape. But now, when i think about the presence of amazon in your homes , all the way from entering my home, i see the amazon boxes laying on the floor. Thelly, if you go to kitchen and start cooking, you use amazon dash. They start thinking about capturing the share of the customer at every point in time. Omnipresent in the customers mind. Emily what about the lead the echo has on the home potty . Homepod. . Amazon has a big lead. It is going beyond the amazon fly deal. View has a ly the amazon echo is starting to drive more traffic and add more traffic to the amazon ecosystem. It is starting to really help the amazon echo perform much better and sort of be able to start to drive purchases through it. How much traffic is echo really driving . , maybes to play music add a couple of things to the shopping cart. Is it there yet in terms of really driving transactions . It is a start. If you think about information, you think about google. Is doing here, if you think about products, they want you to come to amazon. Its a small step for the big vision and amazon is really known for driving iterative models and getting it to the market quickly, starting to drive success. Emily do you think that big vision will be realized . It is too early to tell, but it has a huge amount of function ahead and leapfrog against competitors. Google home and other competitors, they still have to make a leap in terms of not just the natural language processing and the amount of information that can be provided back to the customer, amazon has figure that out to a large extent. It also has a big shopping element attached to that. Knowing that ecommerce is not a foundational feature of this device. It is about improving the audio. This thing, looking at alexa, where itthe product does audio and does shopping, it does answer other questions as well. That device may not be as compelling to the customer. Emily who wins when it comes to the Smart Speaker . Amazon search is through mobile, the web, amazon alexa. And that is also feeding into the amazon alexa sales. Good, reinforcing environment amazon is creating. Bets onill have my amazon alexa. Emily just a few hours to go and we are there at the holidays. Ceo of boomerang, former amazon executive. Good to have you here on the show. Coming up, Holiday Travel is in full swing and one company is looking to get you on board with smart luggage. We will check in with the founders of the away bag, next. This is bloomberg. 2yearold smart Luggage Company away credits success to a meaningful consumer experience, which is why they made the unique expansion for online to brickandmortar stores all over the country. Emma chandra set down with the founders to just drop discussed their disruption of the global luggage industry. Take a listen. You dont think about retail as just where luggage is, building ind we are the travel stories we are trying to tell. If you walk into one of our and it is just supposed to be a really inspiring place to get you thinking about your next trip. Its about providing that offline contact to the biggest retail store, which is awaytravel. Com. Emma the new york store is only 30 devoted to product . Its about creating an experience for the customer when they come into the store. What do you want them to be doing . Flights, were booking the travel guidebooks, we created this space for people to think about travel. Different products or channels, network would be away it could be a podcast, magazine, a blog. How much is it about enhancing the experience and how much is driving revenue for you . We created those channels in order to give us more ways to tell our stories. Here, our editorial magazine is all about just peoples experiences and stories. And really giving a piece of travel media we did not think existed out there. Same thing with the podcast. It we have an Amazing Community and network of travelers. Every single thing that we do is just providing context around our product, what they enable you to do, and inspire people to travel better. The media platform had two goals around it. In how they plan to think about how they will explore the world and the Media Properties themselves are all revenue generating. Are Good Business women. It they have to be a way of driving sales. Or do they create revenue themselves . The Media Properties create revenue themselves. Be fundd you can raising is this something you have brought support into as well or are they more interested in just the product . Investorhad the same since we have started the business and from day one, they understood the bigger vision, creating a travel lifestyle brand. From the star, we said we are launching with this carryon and that is our first source of revenue, but we will expand the physical product line and expand the product line beyond physical products. To become a true 360 travel business. They knew we would move to the media. Are you looking to be acquired by someone, do you want to take a Company Public . Is there a fiveyear goal . Our longer term plan is you want to become the number one travel brand everywhere in the world. If anyone is going on a trip and they need anything, whether it is an item more information, we are the first brand they think of. In terms of what that means for the company, we are keeping all doors open for where we are in five years, 50 years, 100 years. Emma there is a 100 year strategy . There is. In five years, we want to be the number one travel brand in the world. Emma is there a way to book travel through you . There are so many problems with the travel industry so if we can fix it, we will be looking into it. A Company Looking to disrupt, looking to be a rather traditional and unsexy sector. . Hat did you learn from them it can change the way they see an entire industry. Way, away, people did not care about buying luggage. Thingting more be one was the consumer experience. The product is critical, but its about everything with your barehand your brand, your business. Brands,t wave of retail these ones that will be successful are thinking about all of that. Emily emma chandra there with the founders of away. That is a for bloomberg technology. We are Live Streaming on twitter at 5 p. M. In new york, 2 p. M. In san francisco. Happy thanksgiving. Have a wonderful holiday weekend. That is all for now. This is bloomberg. 7 00 a. M. In hong kong. We are live from bloombergs asia headquarters. This is daybreak asia. Stocks fell, the dollars saw its biggest decline in eight months as the fed indicates reduced dovish in us. Miness. Ovish it is just after 6 00 p. M. In new york. Jamie dimon cant wait to return to china and will pay more taxes if necessary