Action on immigration. A coalition of 26 saves are given time to pursue a lawsuit. An expansion of the program for taking children from deportation due to take effect tomorrow. The real estate website zillow shares are rising after surprise earnings were reported on friday. The acquisition will be able to close as early as today now that the fcc has cleared the transaction. Revenue the Fourth Quarter is up 58 . 76 gains in the premier asian agent business. Intercontinental Hotels Groups up 10 thanks to strong growth in the u. S. Shares of holiday inn increased dividends. Here is the ceo speaking on the impact of the home sharing website like airbnb. They should be managed properly and subject to the same rules we are. Frankly, if that business grows place. Size in terms of revenues and noxious rooms for overseas significantly smaller from a revenue perspective, if it does grow and scott and consumers wanted, it is something we should look what look at running behind it. Right now, it is certainly at the margin. Cory intercontinental recently agreed to buy crossing the United States under the crown plaza intercontinental group. Now to the league, detroits biggest threat may no longer be maybe Tech Companies. Apple is the latest tech giant to signal in autos. Pursuing 100 people to work on the early stages of an electric car. Some of those workers work on what is being called project titan. Apple, google, tesla, and google are all involved there it who will win the race for the future of transportation and what role do the current automakers lay as they enroll innovation centers. M. I. T. Professor john leonard. Let me start with you. Is there a different discussion about what innovation is for cars away from the Auto Industry than in the Auto Industry . I think so. If you look at the exciting features that emerged this weekend, sensors alleged to be an applecart, you see technology with very precise localization and mapping. Some are whats involved in a google car. It is a different set of techniques and skills than the traditional detroit automaking industry. Cory i saw your byline and i thought yes, tim came to detroit and you come here to cover apple. What are similarities between the companies . Apple is a Global Company with a lot of cash. It is usually about a billion dollars to create a new car. Generally speaking. It is an expensive and timeconsuming process. On the one hand, apple has got a lot of money in the bank. 178 billion. They have got Global Operations and are used to doing some i Chain Management around the world and Industrial Design and dealing with the Retail Network all over the world. In some ways, they have a lot in place that the global automaker would have. That said designing and building the cars is very complicated. It is something that trips up even experienced automakers with safety and marketing and hitting what the consumer wants seven years down the road. It is a long time for developing a car. They spend boatloads of money in r d, which is on top of container ships full of money. The history of knowledge they have built up, that is the question. Is there an accumulated amount of knowledge or a bureaucracy that is about the way they will do things as a owes to a blank newspaper and start all over again. Engineers find frustration when they deal of automakers. They feel they do not move quick enough. Talk to guys in detroit and they say there is a reason we are so slow. Some of it has to do with safety and regulations and dealing with challenges of putting a product on the road were peoples lives will be in jeopardy if something goes wrong. More on that, it is it isnt about the way the cars are made . Wrestling with Union Contracts and existing factories and relationships with dealers . They have got to figure out what to put in their pipeline, as opposed to what to put on the road. Exactly. They have a lot of legacy issues. Tesla, you can say what you will about the Business Model that they have created an interest in the auto space new players who look at the challenges look at the new entrants, they are able to do what they can do in a short amount of time and what can other folks do . That is where the excitement comes from. When you look at the excitement, what is it technologically you feel like its right there ready to be improved upon the most . Is it the battery, the duration of the battery, the self driving aspects, the road awareness question mark i think it is safety. A number of traffic accidents over 30,000 per year in the u. S. Alone. It is a tragedy. With Artificial Intelligence coming online, we should have the capability to radically reduce accidents. That is the thing that is really exciting for what can happen now. A great thing to talk about but apple and google and other companies in Silicon Valley are looking at the idea of what the user is doing at that time while driving. They want to create a business where your digital life is at the center of their devices. Right now, when youre driving a car youre not able to fully engage in the digital lifestyle. If you are pushing a product that allows folks while in their car to the in Digital Space through autonomous jiving or other functions, that opens up a whole new marketplace for commerce. A horrible irony that the companies responsible for tech driving text driving accidents, they are now looking at cars. I off i also wonder if there is a different sort of pace in innovation, when youre safely aside from both. You have seen Engineering Centers here in Silicon Valley. Is there a different pace in Silicon Valley . I think so. It is a very rapid turnaround. Interestingly, google building its small prototype cars are partnering with companies in michigan. I think they said they want to work with the detroit ecosystem. There is an acknowledgment it could be winwin. Parts that are more traditional eastern u. S. Industries would be good at. It can all come together. It is an interesting time. Thank you very much. Drone delivery, new drum postals and what they could mean for Companies Like amazon and google, thinking about what goes up in the sky next. Cory i am cory johnson and this is lumbered west. World news headlines. Graces government request for extension of its Loan Agreement for six more months of warning to a person familiar with the matter. The step could ease the standoff over greek financing. The positive outflows from greek banks are accelerating. Talks to extend that bailout bogged down. The u. S. Subsidiary of swiss food giant nestle will stop putting artificial ingredients into the candy. The chain will be fully implemented by the end of the year. A set of artificial junk, nestle will use Natural Ingredients for its products, including butterfinger crunch bars and baby ruth. A major shift going on in chinas smartphone market. The countrys top smartphone vendor edging up samsung. The last quarter, news gets worse. The former number one has fallen behind apple. Skies will get a lot more crowded over the weekend. Incorporating commercial drones with civilian airspace. Peter cook joins us now. Peter, the rules are not as stringent as some people might have thought. That is a lighter touch is what the faa is trying to labor label these rules. You know how widely anticipated the rules have been for months. For years, people have been waiting for the faa to outline exactly how they would allow drones in commercial space. The proposed rules that came out at this point, some may suggest a lighter touch, but there are critics as well who say they are to drip owning and limiting to use drones. How that is like amazon and google, for example. I will walk you through main specs here, the drones in question must must weigh less than 55 pounds. They must fly in the daylight only. Below 500 feet and 100 miles an hour. Operators must these veneers are older but they will not 17 years or older. They must submit to the tsa for vetting as well. These are rules and guidelines for a lot of people that are not as tough as asked and did, but it is a long process from here still. Really interesting stuff. Around here, there are so Many Companies working on drones had they been waiting for these roles. Skies are open. Thank you very much. What do the new rules mean . All the startups are developing drones. Amazon and google. Joining us now is the executive director of the small uav coalition, a lobbying group working for the likes of amazon, google x, and also a senior policy advisor. What is in these rules that is good and what is that . The fact we have rules is in of itself great. It gives us a platform upon which to build. I would say there are problems to the extent that the rules will prohibit operations commercial operations of drones when there are personnel on the ground not associated with the project, which essentially will shift all commercial usage. It is a real problem. There are also some suggestions that there will not be an ability to operate outside the linux eight, which means it has to be a visual i hear the actual person has to be able to see so the very notion of the amazon drone that brin that brings a box and drops at your front door and hopefully does not clip your poodle, that is out with this proposal. Yes. Exactly. What most people believe and i think is true is that automation is going to be the future of the industry for delivery for precision agriculture for pipeline inspections, for disaster management, search and rescue, a whole host of purchases they can be used for. We have some work to do now. One thing i will say is that the faa was great in not touching the ability of recreational users to enjoy for Aerial Photography and digital photography. That is wonderful. Yes, but insights came out with a report today, 190 invested in drones last year. No one is doing that because they want another frisbee. The whole idea is, we can find a cheaper and safer way to inspect pipelines, which have to be inspected to check for leaks. So much more awesome because the cost would be so much lower. Is there a sense they do not want that happening . No, quite the contrary. The faa in the evaluation of the proposed rule said they would save lives, this is efficient, and that, they said uavs can be used for cell tower and pipeline inspection, things that are producing fatalities now which can be stopped with the utilization of technology. A lot of promise here. The only thing we have to keep in mind is this is a proposed rule so it will take a series of months. I am hopeful we can get it done as quickly as possible, but i do not think it will be this year. Other countries are already operating commercially. So we are still far behind other nations. In terms of privacy, what do we want from rules about drones . Amazon and google have notions of privacy different between them let alone between what other people might want. Privacy has a fair amount of portions and we all recognize that. The administration and the president put on executive order we thought was very thoughtful on the issue of privacy. It essentially says you cannot do something outside the expectation of the consumer. We are experiencing this across technology, which is aerial vehicles are not unique to the privacy issue. Mobile phones, cameras, helicopters, camera on a stick these things all have the potential to invade our privacy. The reality is the industry is ready to work with the government and work with the and cia on developing clear standards on privacy. Cory thank you very much. Google, not just drones, but how about balloons . The internet to billions of people that do not have the internet. That is next. Cory could you really check tumblr while going through new guinea . Google is trying to change it i launching balloons that could give Online Access the most to the remote corners of the earth. Inside look at googles project ballooned. The science of learning is one of the worlds oldest technologies. Imagine a fleet yvonne man looms, solar powered and equipped with special antennas so they can talk to each other and earth. All to deliver an affordable Internet Access to the remote corners of the world. 4 billion people on earth do not have access to the internet era we think we should be internet. We think we should be part of the solution. It is not a pieinthesky idea. It is happening now. Question many ways the balloon is just like a cell phone tower on the ground except it is 65 feet up. How many balloons do you have up in the air right now . About three dozen. The plan is to have hundreds of them soaring through the stratosphere, connecting earthlings down below. The first 60 balloons we launched, they all burst. The data rate was relatively low. Fastforward and some balloons have been lost for the and 170 days. There is something nothing obviously different about them from the rest, but they could be the key for stronger, faster internet. Our speed increased dramatically. 10 megabits per second of internet, not to stream videos down from a balloon that is 60,000 feet in the sky to the phone you have in your pocket. Balloons 565,000 feet, twice the size of an airplane controlled by the command center at bloomberg headquarters. What are we looking at . Realtime data showing what the winds are doing around the world. Googlers charted balloon pass, tracking wind, and communicating with air Traffic Controllers as they crisscross local airspace. How are the responses to countries for you flying to the airspace. Brazil, india, russia even who asked us to come and do pilot tests in the country. We are also talking to china. China is interested in bringing the internet to people in the rural area. Is the last mile being worked out still. Google is not the only tech giant exploring the sky. Google just invested in elon musks spacex and its fleet of broadband satellites. Drones and lasers and striking partnerships with local mobile carriers to show users a specific set of apps for free. Anyone trying to help with the goal is great. The skeptics, you would be like you can show them googles version of the internet. Know, we show them every version they can get. The question is why . Is it charity . It is not a charity. Getting Internet Access will be shared between google and telecom. He says the key is this internet will cost 1 10 what traditional wireless costs the average user, no matter where they are in the world. There are people so remote even this cannot reach them. Know, we should be able. Every country has spectrum. Our balloons can reach the tallest mountains in the craziest islands. We can reach all these places. Emily chang, bloomberg, mountain view, california. Google is not the only tech giant attempting to bring Internet Access to the remote corners of the earth. Mark zuckerberg is racing to wire the world with drones and lasers. An exclusive look at his latest project at google. Org. An amazing technical achievement led to one of the agencys most farreaching hacks a footing computers across the world. That story is next. You can also watch a streaming in your tablet and phone everywhere. Cory you are watching bloomberg west. Im cory johnson. And its a spyware may be hitting in hard drives around the world. Researchers discovered spying software in bedded into hard drives like toshiba Western Digital and ibm. This would give them the ability to eavesdrop on the majority of the worlds is computers. Im joined by the ceo of Cyber Security form firm silent. This is fairly amazing stuff. Even when he wiped the higher the hard drive, it stays there. That is exactly it. A matter what you do and what will you use to find it, even if you can find it you could try to wipe it but it will come back because it is in firmware. That is usually planted at the manufacturers. It is not the first time the industry has seen this tool this kind of virus or attack. It is simply the complication of this type of attack which gives its merits to talk about. Ok. It is also widely spread. The manufacturers at western dinner Western Digital or somewhere else. It is right across the industry. Every major manufacturer according to this report is affected by the software. We do not know the full scope yet, but the indications are that there are real opportunities with hard drive manufacturers to implant this kind of stuff into the firmware. Whether or not it was the production or postproduction is a little bit up in the air and i do not think we would know that yet. That needs to be fleshed out quite a bit and investigated areas what we do know is the ability to get onto the systems is really quite trivial. To stay there with assistance is quite trivial. It becomes easy for any adversary whether it be a simple bad eyesight tests criminal to do whatever they want to. What kinds of things can and as a pickup with a hacks such as this as opposed to the data hack from the past . Could be even israeli defense, as well. They have similar targets. In the middle east and asia that the nsa and other organizations are. In terms of attribution, it is difficult to really give smoking gun proof back to people on the keyboard. Certainly, highly possible improbable that they are part of this, but we do not know definitively yet. In terms of what they can do don near anything here it they could pretend to be the user of the computer. They could infect it in a way where they could capture screenshots. They can capture your passwords and become you on the internet take your persona. They could affect assets your bank account. You name it. It is up to the creativity of the adversary. The adversary, again i say the nsa because it was reported the report out of russia listed the countries most affected. It went on to list syria, china yemen algeria, and afghan out does seem to be particular targets of the u. S. Is there a notion about what kinds of things they maybe after because this is a hardware attack and they are not places where the keeping data stored in amazon web services. They definitely wanted to surveillance targets. It was not a destructive attack like the sony attack or they wanted to terrorize and destroy. They simply wanted to observe and surveillance understand what they are doing, creating an intelligence channel with the military operations and allow them to stay one or two steps ahead of what they perceive as adversaries, the victims in these cases. The countries, youre absolutely right. They have long been held target as well as israel and neighboring countries that are friendly. It could easily be those two for sure. We established how it works. Us talk about what this means for business. It is different than software or microsoft saying for customer in germany, host your data with us. The countries that sallys devices . A good question. I do not think we have seen this before. We have seen adversaries within these countries back during the bootable part of the computer to put their own stuff on here. But not from the manufacturers themselves. If that is truly what is happening, we have a big problem on our hands area there inside the organization as a bad guy, or in outsider, or they work with the manufacturers to allow the work to be done. Either way, it is a big story. I have got to think the best position to be in today is a salesman from a french struggling hard drive manufacturer who can walk into a manufacture of computers and say, i am not Western Digital or toshiba or ibm and i am not samsung. We talked to the ceo last friday of semantic and while he did not say the sales were slowing in europe, he said we have got to do a little bit more. Places to restore data that are not in the u. S. Are the manufacturers fundamentally hurt by this and does it go beyond this drive at all . Is it u. S. Text that Tech Companies selling in asia . The Tech Companies have been for many years ever since the snowden event. It created such suspicion inside a particular Europe Northern europe, london, things of that nature, that they are sketch called any u. S. Country especially u. S. Security country companies. They are requiring to view source code of your product and you have to prove to them there is nothing backdoor inside the very brains of the product. We will see that for a number of years until this snowden effect really dies down. Banks and companies are having to expose their software to the very on trusted Chinese Government but that is the state of the road right now. Thank you very much. Bloomberg west will be right back. Cory lands of dollars worth of cargo in limbo due to a huge dispute in west coast boards here. It is happening behind me and happening in los angeles and cattle. The labor secretary has flown out here to sell the dispute and get things moving again as Shelby Holliday reports from one of more than two dozen ports. Maybe the most important of the west coast ports. This is the breakwater here. Those are all ships. Ic 25 to 30 here. Being out on the water really gives you perspective on how much stuff is sitting on the ships that are going virtually nowhere. 140 foot shipping container, one of these behind me, can hold 130,000 pieces of clothing, 16,000 toys 3600 electronics or 15,000 auto parts. When you look at these, they have hundreds of containers loaded on them. It will get congested. It is congested now. Emily once an agreement is reached, it is not like all of these ships can rush into the ports and get unloaded. Experts tell me it will take months for the shipping traffic out here to return to normal. Shelby is in long beach still. There is a lot of stuff out there in the water. Who is feeling the effects of this . Basically anyone who trades with asia via cargo ship is doing the impact of this west coast port slowdown. To give you an idea of top courts out here on the water you have got apparel electronics, footwear, so were seeing ripple effects across the u. S. Economy. The Retail Industry says a west coast port shutdown would cost about 2 billion per day. Automakers such as honda announced their cutting u. S. Output because they cannot make the cars fast enough. The tech center is being affected because a lot of Consumer Electronics are shipped in the containers. Things like dvds and sometimes Television Game consoles. There are also electronic parts. Anyone Manufacturing Electronics is getting hit hard as well. If you look at the picture, 29 point ports it accounts for 12. 5 of gdp. If you look at the numbers, that gives you a sense of how much of an impact the ports shutdown is. It is a it is huge. I covered this second 2002 the last time they got shut out of the ports. It is fundamentally a technology story. Technology is coming and we will get rid of this throwing things on the ships, have fewer employees, but promise us we will have another generation or two of a shrinking workforce. The Technology Battle is still happening there. Yes, it is really at the heart of the dispute today. Behind me, some of these cranes can operate themselves. They are completely robotic. Because of the Union Contract we are playing paying one or two meant to operate the cranes at a time. They are still fighting technology in fighting for their own jobs. The introduction of containers and the automation of shipping is really advancing the industry. Cory a deep impact. Shelby holliday glad to have you on the ground covering it. Thank you. Some other world news headlines. Indonesia centralbank, the first time in three years. The nation deals with cooling inflation. Indonesian economy strengthened last quarter after its weakest year since the Global Financial crisis. Central banks around the world have used Monetary Policy since the start of 2015. The french president Francois Hollande is ramming through Economic Reforms and by emergency action. The bill, including proposals to ees regulation, but critics say it gives praise to businesses including job security. The italian maker of nutella chocolate says it is not for sale despite speculations swirling through the longtime owner their richest man, died last week. Giovanni says he strongly denies the rumors the company will be sold with nestle often mentioned as a suitor. Bottom line with Mark Crumpton speaking of things sweet, joining us now. Mark as you know legos are everywhere. As soon as you see them, you know what they are. Much more than a toy. A aid they aid in child lord childhood development. The Company Almost went bankrupt. The president of lego systems says the company lost its way. Why are lego so popular and how do they find their way back to profitability and how do they compete in the digital age . Mr. Laursen will join me in the next hour. Pimm cory thank you. We will be right back with bloomberg west. Cory i am cory johnson and this is bloomberg west. Siliga and the chart silicon the choice for everything from pc chips to cell phone channels. Super efficient replacement for that chemical, called gallium nitrate. The transistor is made out of gallium nitrate are said to be smaller and faster than silicon transistors. Can this actually change how the industry works . The ceo of power conversion joins me now. What do you call it . Talk to me about it and why it has not been used before. It has been able to grow on top of stoughton. We have followed the manufacturing that use the same facilities and get the same structure. It is not only much more efficient but lower cost to produce than siliga nowadays. Why . Asked the chips are smaller so you get more of them on a wafer. They can carry more juice in a smaller space. The electrons are more efficient. That is why. In terms of making this, what are raw components . You grow a thin layer of gallium nitrate and you do the layers like you do on any kind of a siliga and ship and bingo. You need to have a layer below . You use it away the electrical the electrical processes have been known for a while. They had been but only years ago did somebody figure out how to grow it on top and only a few years ago did we figure out how to make it work like a power transistor very well. What was the key of that . But some magic in the material science world. Making a device that could stay turned off until you wanted to turn it on was really the key. If a device is turned on all the time until you try to turn it off, think about the short circuit and the minute you turn on your switch, everything goes crazy. Figure out how to make it work in the opposite direction. That is something we did. Cory now that the processes are so small and thin, does it make more sense now that intel is making everything and nine nanometers . Smaller wafers in terms of thickness let alone in terms of size across the wafer. Does it make more sense . You start off with about 1000 times advantage with silicon. And we are backtracked thing backtracking. Theyre fundamentally different to incorporate this. We run our way sidebyside with a foundry in taiwan. Very standard. Moores love being a marketing dream, as opposed to an actual scientific process, is this the sort of story we hear every year of some new chemical discovery that allows for them to continue to get cheaper and faster . I actually think it is. I think moores law is a social pact more than anything else. You promised to keep delivering more and more. So since run out of gas there but gallium nitrate is just started. Cory how do we get started . Eight years ago, the fundamental thing was that we had no money, like a lot of stardust dress on a company in taiwan willing to not only invest to let gallium nitrate products. From there, we were able to get rolling with very little capital. One of the things we know is you really need a new fad with the new process quickly. Better than the Silicone Products that go through there. How big is the market . Today the direct market is about 12 billion. We are expanding into analog the unjust power. That is a 40 billion market. Beyond that, it is digital. There are technical hurdles to overcome. 350 billion. Eventually, it will take the whole piece, i think. What is the difference between going for power. There are very few barriers and were doing that right now. To digital it requires fundamental development of the semiconductor itself. I put a question on that. Thank you so much. Interesting. It is time for the bwest byte, a number that tells us a whole lot. Joining us with more out in the newsroom, what have you got . Number is 3700 turning out for the blowout, the hot arbiter other internet trinkets released every day. 28yearold ryan hoover, who over the past year has made himself into an unconventional powerbroker in Silicon Valley. Cool for nerds. This helps people figure out what . It is kind of a way to find out the latest products introduced. Some of them are clever and some are wacky. A lot of the companies that post products on there, some of them can get themselves invested. It is an example of the tech boom going on. Great stuff. Thank you very much can catch more bloomberg west right here tomorrow. From bloomberg World Headquarters in new york, i am Mark Crumpton, this is bottom line. To our viewers here in the United States and those of us joining around the world welcome, we have full coverage of the stocks and stories making headlines on this tuesday. Shelby holliday is in long beach , california, covering the dockworkers dispute in los angeles. Peter cook outlines the next move from the white house after a texas judge temporarily