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tv   Bloomberg Technology  Bloomberg  November 7, 2019 11:00pm-12:00am EST

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taylor: i'm taylor riggs in san francisco, in for emily chang, and this is "bloomberg technology." coming up in the next hour, bottom line versus data breaches. facebook's intentions questioned after leaked court documents emerge. we have details. plus, trouble woes. shares of online travel company expedia falls thursday after they posted disappointing earnings. we hear from the ceo in an exclusive interview. and disney magic. the global media giant beats
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fourth quarter bottom-line estimates. we will break down the results ahead of disney's highly anticipated streaming platform debut. but first, to our top stories. facebook continues to struggle to regain trust over how it handles user data. but that has become more complicated. there has now been a leak of internal documents suggesting business considerations outweighed those privacy concerns. it is something that facebook publicly touted when it decided five years ago to cut off tens of thousands of developers from its platform. to discuss, i'm joined by bloomberg technology's sarah frier, as well as ben brody in washington. sarah, let me start with you. you covered this story. what do we know from these leaked documents so far? reporter: the documents give us this interesting internal picture in a way we really haven't seen before of how these decisions are made and the difference between how they are discussed internally and how the company explains them externally. internally, they are saying we need to cut off any apps that
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could potentially be competitive from our services, advertising, from our developer tools. externally, they are saying we really need to increase the privacy of our platform, so we don't want these third parties to have access to this data. so, it's really interesting looking at these discussions. one thing that really stands out in these documents is how competitive they thought messaging apps were. they cut off we chat, line, and three asian messaging apps from using facebook for advertising. this is just a year before they ended up acquiring whatsapp for $19 billion. it ended up being $22 billion. that is something regulars will be extremely interested in when they develop the antitrust probe. taylor: and to get that regulator perspective, ben, walk me through how this further complicates facebook's relationship with washington, d.c. ben: i think sarah is exactly
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right. those sorts of considerations, how did you view messaging apps? how are you evaluating them? those are the things the ftc is going to be looking at. we should have a caveat here. you are not obligated to deal with your competitors. if federal and state and antitrust enforcers are not finding that this company was dominant and was abusing that dominance to perpetuate a monopoly, then there's no case here. but i think that they are going to be looking at these things. i always say, antitrust regulators are just like us, but with subpoena power. when they read a news story like this and they see these kinds of documents, and some of these documents have in fact leaked out previously before, they ask the same questions we are asking right now. they are going to want to take a look at those. they want to maybe take depositions. that is that much more the lawyers will have to say hold on a minute, we can produce some of this, we can't produce other things. we saw in california yesterday,
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they are actually going to court over document protection. does that create the situation here possibly? taylor: ben, remind us again about that burden of proof. you could say, to play devil's advocate, you could say you have a right to protect your own business interests, a right to not deal with competitors, that we are a for-profit company and we should protect our own interests. what is that burden of proof? ben: right, exactly. spinning is not against the law. the federal antitrust regulators , the federal trade commission, is going to be doing a rigorous economic analysis. what happens when facebook makes a particular business decision? where do consumers go? what do competitors do? how much of the market share do they actually have? they are looking at all these things before they even get into a theory of harm, a case about a particular violation. it will take a long time for them to build those things up. they are going to interview third parties, they are going to look at economic models, they and look at complainers
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experts from both sides. it will take a long time for that to build up. we don't know necessarily where it's going to go, but i think what this represents is a really tantalizing question for them to look into now. taylor: sarah, this is further complicated by the fact that an anti-competitive, antitrust issue, but they are publicly touting data privacy. this is an antitrust issue, not data privacy, correct? sarah: it's a little bit of both. as you know, when facebook cut off developers' access to data from users' friends, they did it only for certain developers. they white listed other developers. that's one of the problems from -- problems at the heart of this lawsuit that got leaked. when we see instances like cambridge analytica, a direct result of these relationships so freely handing out that developer data, how they handled it, when, why is a huge issue with regards to the privacy
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front. so they don't do that anymore. but as facebook gets hammered on privacy issues, they are going to become more anti-competitive as a result. they are going to be in charge of their data and keeping it as close to the chest as possible and not letting other people get a slice of that dominance. taylor: tying it all together, it is bloomberg technology's sarah frier and then brody. -- and ben brody. thank you. expedia shares plummeting thursday after they close about 27%. they saw a decline in revenue growth in the third quarter. verbo is the fastest-growing category of the travel company and competing with airbnb and in an exclusive interview with the ceo, he discusses his outlook and strategy with bloomberg's guy johnson and vonnie quinn. take a listen. >> we did have a difficult quarter. that said, there's a lot of great things happening around expedia group.
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we had a lot of highlights. volume from room nights are up 11%. we continue to see great strength on our expedia partner solutions business. we continue to make great efforts on our customer centricity efforts. we did see direct channels up more than the overall business. and we've got a long way ahead of us. guy: let's talk about what's happening with the short-term rental business. there seems to be a concern that you are struggling to make your message heard on google. how do you reduce reliance on google search? guest: i think overall, whether it's our alternative accommodations in business or vrbo or other core brands, a lot of it is the strategies we have in place, which is making sure we have great products for customers, that we build a loyal customer relationships, we've got incredible loyalty programs., for example, just
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hit their 50 million loyalty member. expedia has a good rewards loyalty program. it's about good rewards and services for customers and that's what we are aimed at doing. vrbo itself, the alternative accommodations brand, has relaunched its new brand. they are looking at launching that in other regions around the world. ultimately, we have seen good strength there. the vrbo brand itself has been up nicely double-digit. we will continue to move along with our multichannel strategy that really isn't a strategy that is solely dependent on google. vonnie: how much more are you going to spend on marketing with vrbo? it is taking time to have this rebranding accepted and known by the public, particularly now with this new challenge of google putting hotel finder above the likes of vrbo in search. that makes it much more difficult for you. i think investors want to know when that will happen, how much it will cost for that to happen?
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guest: we will do it in a balanced way. we have that and digital television. we are seeing good results. as we roll out internationally, it in acontinue to do balanced way. our alternative accommodation strategy isn't just about vrbo. we brought our partner facing teams closer together. we are now just 650 alternative accommodations offerings from on our corele brands. international expansion for us will be a real combined effort. taylor: that was expedia ceo mark okerstrom. game makers activision, blizzard, and take-two reporting earnings thursday. activision reported third quarter earnings. the world of warcraft classic and call of duty coming off a dismal year, in part due to a
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controversial decision to temporarily ban a player for making pro hong kong statements. take-two also saw a revenue bump in its most recent quarter. that increase was fueled by recent releases of borderlands three from gearbox software and publisher 2k, launched in september, and nba 2k20, the best-selling game in september. the maker of grand theft auto also raised its outlook for 2020. and coming up, the future of genealogy and its role in the wider health care system. that is our conversation with the ancestry president and ceo, next. this is bloomberg. ♪
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taylor: providing genetic data will empower consumers and improve their health care. that is according to the
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ancestry president and ceo. the company has faced criticism about the value of the dna data they provide, but the ceo says it will advance health care and give providers more information about their patients. she spoke to bloomberg's max chafkin at the bloomberg year ahead event in new york. take a listen. guest: what's really going to advance the industry is not a focus on technology or lab reports, but how do we get consumers to better health outcomes? for us, if we can understand actual genetic risks that can help us get on the path to prevention in meaningful ways with collaboration to health -- collaboration with health care providers so the we can we can live healthier lives, that is where we are adding value and solving problems, so that's where we think the future needs to be focused in this industry. max: so what is the business here? historically, these have been one-off tests, but my
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understanding is you are moving towards sort of a subscription model. why don't you talk a little bit about that decision. guest: we didn't want to be another lab report provider. if we were going to go on this, it needed to live to the standard we hold ourselves, a personal discovery to enrich lives. we needed to get people from insights to action. we focused on what consumers want most. actionable insights, access to genetic counseling services, this is new, i have questions, i want support. i want a seamless connection. as i moved to that action, i want to know that doctor can understand that and take action. lastly, i want a comprehensive screening. for us, that's affordable access to next-generation sequencing technology, which provides a much more comprehensive understanding of genetic risks. max: so what does that mean? the whole genome? put that into lehman --
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-- into layman -- guest: the original technology that was used for the first company that entered was a technology also used for ancestral research. but as we go into the field of health, being able to look at the whole of genome, not just snips of it, but the whole gene really transforms our ability to include more people and understand many more risks. for us, that's why we chose a subscription model. it really aligns our interest with consumers. ancestry health plus integrates a comprehensive health history understanding with a comprehensive understanding of your genetic risks, looking at genes from next-generation sequencing, and there are more applicable insights to deliver to consumers. there are many more to come to help us put consumers on an empowered path to preventative health. taylor: that was ancestry president and ceo margo georgiadis.
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now joining us is bloomberg's max chafkin. he also had an interesting story about the u.s. cto and controversial comments he made in lisbon. what did we learn today from what that cto said? max: he became cto in august. this is his first speech outside the u.s. it was in portugal at the web summit. the audience here was sort of interesting. a couple of things. number one, he basically reamed china and huawei. he urged europeans to basically stay as far away from chinese infrastructure partners as possible, which is something the u.s. has been saying for a long time. but it's interesting he also met with someone earlier in the day and delivered the same message in person. you are seeing the trump administration reiterating the statement even as they are
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coming to some sort of trade deal with the chinese government. the thing that was a little more interesting to me is that he also kind of picked up on something mark zuckerberg brought up a couple weeks ago. he said, europe, you need to be careful. if you regulate these big technology companies, meaning big american technology companies, too much, that will create an opening for chinese companies. that is going to create an opening for companies that maybe you are not going to like. you don't like facebook, but how would you like it if you had to deal with another company? he delivered this message to vestiger. delivered a summit the next day and was supercritical of facebook. there is definitely a divide. taylor: i like that you brought up facebook because we heard a similar thing from sheryl sandberg, the coo at the year ahead event. she said not only are we dealing
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with chinese data privacy, how we are able to censor free speech, but we are also planed -- playing by their rules and they can turn over data to their government at any notice. how much of that as well is a bigger issue? max: i think this is a big deal both in terms of facebook's business, because tictoc, that is the most significant competitor facebook has. it is not twitter. despite the fact that the most theificant competitor in conversation might be jack dorsey. the real business competitor here for facebook is tiktok. sheryl sandberg is right. some of these critics are right haveat tiktok that there been reports -- there have been some reports of censorship, of basically a different point of view towards free speech. i think there is something to this critique of, you know, you manageske how facebook
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content, but you are really not going to like how a company closely aligned with the chinese government manages conte nt. something else tangential to this is the political at issue. -- is the political issue. facebook said we are ok with basically misinformation in political ads. a lot of people, including some facebook employees, have pushed back strongly. you might see some adjustments. they are probably not going to change the policy overall, but there has been a willingness to negotiate on targeting. this book is not going to fact check political ads, but we will change the rule on who you can target that adds to or something along those lines. taylor: two great interviews and stories today. that was bloomberg's max chafkin. thank you for joining us. coming up, a saudi spy plot. it turns out former twitter employees may have been using the service to spy on users for the country. that's next. and "bloomberg technology" is livestreaming on twitter. check us out @technology.
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and be sure to follow our global breaking news network @tictoc on twitter. this is bloomberg. ♪ taylor: the u.s. government has
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charged two former twitter employees with helping the dissidents inon riyadh. two of them are not arrested in the u.s. they wired hundreds of thousands of dollars. bloomberg technology's bloomberg -- bloomberg technology skirt wagner joins us with the details. give us the backstory on this. kurt: the claim here is that
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these employees were basically using their position inside the company to look up information on account holders. as you know want twitter, you can be anonymous. you can pretty much say anything you want and people won't necessarily know it's you. if you're in the building and you have access to the emails or the phone numbers and personal information linked to those accounts, you might be able to place an identity to an account that in this case could have been critical of the saudi royal family. taylor: how much of this is two twitter employees going rogue versus twitter not doing enough and being implicated in all of this and eventually may be the ones held liable? kurt: sure. this was a few years ago and we are just learning about it now. it is a safe, question to ask our a -- to ask or a fair question to ask. what did twitter know at the time? what should we have learned from them a couple years back? at the same time, it's a little unfair or maybe unrealistic to expect these companies that have thousands of employees globally to know what each and every one of them might be doing in the ir personal life in terms of
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the relationships they have. certainly it is an expectation that twitter should be able to say we know who has access to what information. it is a little bit tougher to know that they are necessarily going to take that information and treat it in the way they should be treating it inside the company and also when they go home at the end of the day. taylor: why aren't we doing a better job? why aren't these tech companies doing a better job of verifying what employees have access to that key special data, and why isn't it only a select few? kurt: that's a great question and one we have been asking over the last couple years. facebook in particular has dealt with a lot of data privacy issues. part of the thing is when the companies first started, they were growing at such a rate that the idea of protecting and locking down that information was a secondary concern to building the products and adding more users. the idea that these places were open, open workforces, people can go in and have access to build the necessary features was
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just part of working there. only recently did we realize it might be a problem. taylor: almost coincidentally, evercore analysts came out and cut the stock in part because they have underinvested in r&d. this highlights that fact, and now we are seeing a play out. -- seeing it play out. is that part of the story as well? kurt: i think you can always criticize companies for not doing enough on security. i think that's probably a fair criticism, especially for twitter. it seems a little bit coincidental perhaps that the news of these rogue employees comes out at the same time. it is a little tough to say twitter, if only you invested an extra $1 million, you would have stopped these spies from doing what they are doing. i am not sure if they are totally related, but i do think a lot of companies, and facebook again, they are putting a ton of money into security of users and i think the rest of the tech industry will probably have to follow suit. taylor: playing catch-up. that was kurt wagoner for "bloomberg technology."
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thank you for joining us. coming up, disney shares soaring after reporting fourth-quarter earnings. the earnings call currently underway. let's listen into what bob iger had to say about disney plus. this is bloomberg. >> we are still relatively small in terms of the scope of things, a number of subscribers, but i think the best way for me to characterize it would be to say that we were enthusiastic about what we saw the consumer reaction to be. we certainly feel good about the product that's going to the marketplace next week. we will know a lot more in just a few days. ♪
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taylor: this is "bloomberg technology global news," where we join bloomberg "daybreak australia" to bring you global news. let's take a look at those top global tech stories we are watching. sophie? sophie: the board of google parent alphabet is investigating how the company handled claims of sexual harassment and misconduct against some of its executives. according to cnbc, the probe includes the behavior of chief legal officer david drummond. plus, it has previously been reported that google reportedly paid android founder andy rubin $19 million in severance.
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he left the company over a relationship with another employee. netflix is vowing to spend more on programming in the face of increased competition. the biggest streaming service already expects to spend $15 billion this year, more than any of its rivals. ceo reed hastings said netflix is just getting started. he said the company has been strong in series and now was getting strong in movies. those are the top global tech stories of the day. kathleen? kathleen: thank you so much. disney shares are up in late trading after reporting earnings. key insight of the report says losses of their direct to consumer unit widens. of the in part for calls
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disney streaming service. let's bring in our mediatech analyst, etc., watcher of these big media companies for so many years. porter, they have good numbers at disney, for sure. guest: very good numbers, but it was the dominance at the box office that props those numbers up. kathleen: what does that mean moving ahead? guest: the theatrical movie industry is not going to last more than five or 10 years, but where disney has positioned itself, it will be the dominant content producer, distributor over the top, and streaming. and the market has finally caught up to bob iger and realized disney owns the space. taylor: porter, we could talk earnings call and
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numbers. what numbers do need to see to feel confident they can take on netflix? guest: they are going to lose money for at least four years, maybe a little longer. they are talking about reaching by 2024 -- bob iger has said we will have 50 million paid subscribers. the very smart thing he did right away was price it at an irresistible level. if you are a parent and do not subscribe to disney plus, i think your kids will probably leave home. it has got so much recognizable and irresistible content. no one can touch the huge amount of library material bob iger is making available. kathleen: a bargain. guest: it's a real bargain, and he's thrown in espn and hulu. taylor: how can you go wrong? kathleen: what kind of revenue, what kind of profit and
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positioning can this earn for disney? guest: it will become the biggest profit spinner four or five years from now, but right now, it's going to lose money. it lost almost $1 billion last year just in the start up and each year until it breaks even, it will lose several billion dollars. but that is development cost, and that is actually money well spent. taylor: porter, we are hearing on the earnings call from ceo bob iger, who is coming out and saying there is no floor insight -- in sight for cable subscriptions. how much of a headwind from cable subscriptions can be from a risenkly, in streaming? guest: it is not the cable subscribers that are the concern. it is the retransmission fees that are worth billions of dollars to disney and other content providers. just on abc alone, he's going to start to lose literally billions of dollars from retransmission because of the serious cable
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cord cutting that has been ongoing and is only going to accelerate. kathleen: so you are still very positive on the stock? is this a stock you own? is this a stock you would buy? you are positive on online betting. guest: we have been in and out of disney, and i think what has happened is disney has gone from a day trader's stock and market influence, rumor-driven stock to being a value stock, and that is where the market is going to find a huge appreciation in investing in disney over the long haul. kathleen: as you said, it never hurts to have your brand, your logo, mickey mouse, it is known by so many children around the world. guest: here is a little number you ought to keep in mind -- disney has a p/e today of 17 times. the only other media company of any other comparable size and content quality is comcast. they are also 17 times. netflix has a 92 p/e.
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that suggests that since they have announced they are going to spend $15 billion this year and more next year, they are not going to make a profit, and that at 92 times, somebody is going to pick them up. taylor: porter bibb of mediatech capital, thank you for joining us. much more ahead. this is bloomberg. ♪
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taylor: with just under one euro -- one year to go to the 2020 u.s. election, facebook's coo told bloomberg news think this -- things this time around will not be the same. >> we think the 2020 election is a massive test for us, and it should be. elections have changed. we have changed as a company. if you look back to 2016, of
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course we were prepared for state actors. what they did was hack in and take more information. this new, more insidious stuff, we were totally unprepared. we never thought of it. we missed it. everyone missed it. that's different now. taylor: speaking of being prepared for 2020, think of the following scenario -- deepfake videos, self driving buses killing voters, chaos in the polls. that's what went down on tuesday, but not in the actual u.s. elections. rather, it was a simulation to it u.s. officials against each other to see who would win when it comes to safeguarding an election. the event, dubbed operation blackout, was run by a cyber security firm. joining us now, cyber reason's chief strategy officer, and in studio, bloomberg technology's cybersecurity reporter.
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roy, let me start with you. what was the scenario behind this simulation? guest: hi, taylor. thanks for having me on. the background for this, as you stated, was the vulnerability of elections, not just through hacking of the elections system itself, and not just through social media, which are the obvious things we like to think about, but looking at a broader scope of how critical infrastructure actually can influence the mobility of voters, how mayhem can influence the viability and credibility of the elections. we have created a simulation, which is a fully immersive exercise of a red team that are hackers trying to disrupt the elections, and a blue team of defenders that are trying to respond and put together a strategy while innovating in real time as the simulation goes on. taylor: as we look at how important these simulations are, it really highlights our vulnerabilities. all week long in our election series, we have been talking
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about vulnerability. where are we most vulnerable? reporter: as we have talked about, the u.s. election system is actually about 8000 different counties at the local level trying to protect the integrity and security of the american election apparatus. so, the closer you get to the ground, to rural communities in swing states where i.t. support is perhaps minimal and you have county clerks who spend most of their year issuing marriage licenses and zoning permits, to then ask them to protect the integrity of an election is quite a lot, so that is probably where the greatest amount of attention and energy is necessary. it is unclear if that is actually happening. taylor: we have team red and team blue. team red is the hackers. how did they perform? guest: the hackers team put together a scenario of first of all attacking critical infrastructure, acknowledging
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every single critical infrastructure is actually the election infrastructure, attacking both autonomous vehicles as well as traffic lights, public transportation and other means of critical infrastructure -- power, gas, and others, to either demobilize specific segments of the cities that were identified as swaying into one side of the vote, and by that actually impacting the election. the blue side, which consisted of cyberreason, fbi, secret service, arlington police department, and other organizations, put together a defense strategy trying to think as broad as possible and then reacting in real time to the simulation. what this immersive exercise made them do is start thinking beyond their traditional thought process, and then allowed them later on to sort of absorb what happened in the exercise and have some lessons learned so that they can prepare in peace
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time towards election day itself. taylor: how realistic do some of these scenarios sound? some of them sound a little outlandish, but are they useful exercises? -- in getting us to think about the different types of ways a disaster could occur? reporter: i think absolutely. any exercise is a useful exercise at this point because we don't know what sort of attack is waiting at some point in 2020, right? we know what occurred in 2016, that russian hackers used sequence attacks to attack illinois and used phishing expeditions to get into florida, but we do not know what is waiting on the other side in 2020. so playing out as many scenarios as possible to prepare for attacks in 2020 is a good idea. taylor: how do we switch from going to the defensive and protecting ourselves versus going on the offensive and getting out in front of this? guest: in a way, both things are
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tied together. we need to put together a strategy that puts ourselves first of all in the shoes of the attackers, understanding what are all the possibilities at hand to be able to attack the critical infrastructure that needs to be defended, and then, taking some proactive action in order to go hunt for these threats before they get to critical infrastructure. dot cyberreason is trying to in collaboration with those organizations is in them and teach them what hunting is all about and how to come together and collaborate so the defense strategy is cohesive. taylor: finally, what are our best tools? is it improving auditors, electronic and paper voting together, using blockchain, which we talked about yesterday? what are our tools? reporter: i think the paper trails being developed across the country would be the best tools. the trouble is that different election administrators and cybersecurity experts disagree
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on the best way to create that paper trail. in some places, ballot marking devices are being embraced where there is some semblance of a paper trail, but it's credibility -- but its credibility could be called into question. other regions are depending on hand marked paper ballots you feed into a scanner to create an auditable trail so that if there is a hack, if there is an exploit, there is a way to tell if the intent of the voter is being reflected in the final result. taylor: roi carmel of cyberreason, thank you both for joining us. still ahead, peter thiel's vc firm is being sued for 16 million dollars by its former general counsel. we will hear from the plaintiff next. this is bloomberg. ♪
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taylor: the venture capital firm
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founded by billionaire peter thiel is being sued by its former top lawyer. it is crystal mckellar who was the general counsel and alleges the company wrongfully terminated her and retaliated against her for calling out alleged wrongdoing at the company. she joins us now. crystal, thank you for joining. outline your claims for us. guest: sure, thank you so much for having me. i'm here because the founder has been abusing the trust and money of investors. i and it shall he tried to -- i initially tried to fix things from within, including urging peter thiel to use his power to shut down fraud. that did not work. i went to the fcc, and they retaliated against me by smearing my name in the press and also by filing two separate lawsuits against me in delaware and in texas, states where i have never worked, in an effort to intimidate me. as you can tell, it has not worked.
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the question of what he has done that needed to be reported? he raised a second fund two years ago and locked in massive annual management fees from its investors on the false pretense he would use those management fundto fund a team to great tech companies to invest the capital. instead, he virtually eliminated the investment team, pocketed the management fees and lied to investors about it. taylor: to be fair, i want to bring up the response we have from the spokesperson, and i want to read it out loud. this is the allegation -- "the allegations in the complaint are false. documents reveal she personally approved these fee disclosures and repeatedly stated that aj had the highest integrity. they are confident that will be proven in court." do you have a response to that
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statement? guest: to be fair, the document discloses full management fees. let's be clear about what the light is about management fees. the light is that he was telling investors he had waived 100% of the management fees charged to fund investors in 2017. i witnessed ajay tell this lie to peter thiel at his home in january of this year after peter had accused him of having broken mithril through his greed. i heard from another investor he was telling the same lie. he reached out to her, and he told her he wanted to remind her he had waived all 2017 management fees so funds for investors did not pay management fees for that entire year. that is false. taylor: some of the issues that are broadly going on in the vc world right now are high valuations. the suit alleges that the higher
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valuations were maybe too high. the problem is all you wish and is what any investor says it is no public market for price insurance. so how do you go about proving that in court? guest: i 100% agree that reasonable minds can absolutely differ on what a reasonable valuation is for a private tech company. it reasonable minds can absolutely defer on that. but when ajay, peter, and paul legate, who served on the board and was very in touch with the day to day, when all three of them agreed that the company is worth zero, it's probably worth zero. taylor: why did you name peter thiel in the suit? guest: it's a great question. peter is not a partner or officer at mithril. but a large investor and for a long time he and other investors were being lied to. he eventually did learn the truth and did nothing.
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i'm not accusing peter of any actual wrongdoing. i would never suggest peter lend -- i wouldself to never suggest peter lent himself to ajay's fraud. but i disagree with the final action he did take, which was to choose to do nothing. when i brought these concerns to him, when he learned of the fraud that was ongoing, he chose not to act. he chose not to exercise his power that could have shut down the fraud, and he was the only person who had the power to shut down the fraud. that's why i went to the government. taylor: you were a general counsel, a lawyer by trade, so you know how these things work. what is your ideal outcome? is it a settlement? is it money? what do you want the outcome to be? guest: the most immediate outcome i'm looking for is for the government investigation to continue without further interference by mithril. beyond that, we will see. taylor: that was crystal mckellar. thank you so much for joining us. finally this hour, we get
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another look at disney, which is reporting earnings on thursday. the media giant beat on both the top and bottom line. this comes amid a lot of anticipation for disney streaming platform, which ceo bob iger address on the call. mr. iger: we are pleased to announce additional distribution partnerships with amazon fire, samsung, and lg. disney+ will also be available in a bundle with espn plus and ad-supported hulu for $12.99 a month. taylor: with more details on the call is bloomberg's chris palmeri in los angeles. your key take away from that earnings call? chris: disney is always able to pull a rabbit out of the hat or, i guess, a mouse in this case. earnings overall were down, but they beat wall street expectations. some of the drivers in the past, espn profits were down. tv overall was down profit-wise, but once again, it's film -- it is the film division just
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soaring. theme parks, consumer products saving the day. people are going to look at these numbers and cheer. taylor: i want to talk about the details of the earnings, but frankly here in san francisco, you know we just want to know about the streaming numbers. what new information have we heard about disney's streaming? chris: lots of things. they announced a lot of new partnerships. it is key, especially with amazon. i think it is the second most popular streaming device, so they are just making it very broadly appealing to a lot of people. verizon customers are something like 19 million of them potentially that could get this new product free, which launches on tuesday. they are out of their way to get -- to make it accessible to every possible consumer. taylor: it was interesting that when we look at disney's strategy, they are looking at spending $1 billion on new shows and films. they have some of the old classics, but now they have to
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work on building up that new original content. does disney have the balance sheet and the capital to really do that? chris: they do, but one of the realities is that disney's profits are going to be challenged. all these new businesses do not start to show profit until 2020 3, 2024, five years from now. they just said on the call the direct to consumer business lost $740 million in the current quarter and will lose $800 million in the next quarter. ongoing billions of dollars of losses as they pivot to this new media. taylor: finally, i do want to end on some of the other news outside of streaming. that was parks and studios. we are getting some headlines here about attendance at the parks and studios. your key thoughts on that? chris: this was a challenge. we reported earlier that star wars land attendance fell. now they're saying things are not so bad.
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we raised our prices, people are coming. we are making money on the parks overall, so that was good news. they still have some headwinds. hong kong theme park profits way down with the protests there. taylor: bloomberg's chris palmeri jumping over to save us after getting off of that earnings call. thank you for joining us. that does it for this edition of "bloomberg technology." we are livestreaming on twitter. check us out @technology. be sure to follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪
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