Firestorm Over Twitter Board: Bloomberg West (10/7)

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Oct. 7 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Stanford's Vivek Wadhwa, Ford's Paul Mascarenas, WhiteOps co-founder Dan Kaminsky and HTC's Cher Wang. (Source: Bloomberg)

.. look into the early edition of bloomberg west.

-- welcome to the early edition of bloomberg west.

I am cory johnson.

Our focus is innovation, technology, and the future.

As the twitter ipo approaches, the company comes under fire for the lack of women on its board.

Twitter's ceo calls it the care talk -- the carrot top of academics.

We have the man whose mission it is to stop them.

And san francisco maybe the known for technology as much as its coffee.

First, the spot line -- the spotlight is shining on aisles -- on all aspects of twitter.

Over the weekend, a war of words erupted between twitter's ceo and a stanford law professor.

"this is the elite arrogance of silicon valley mafia, the twitter mafia -- the ceo fired back, tweeting -- he also made an attempt to defend twitter.

Twitter has not responded to our brief quest for comment.

-- to our requests for comment.

Joining us now to discuss this is senior west coast correspondent jon erlichman, who has some exclusive details on what is going on inside twitter's ordering.

John?

For what we can tell you, twitter has been actively searching for a female director.

This is according to two people with direct knowledge of twitter's thinking.

This is a process that -- a search process that began with in the last couple of months.

Some people might say it takes time in this process.

It is about finding the right person, the ideal candidate.

You hear the sometimes for technology companies or companies in general, it is not always easy to find the perfect board candidate were talking about men or women.

My understanding is this is a process where they are not exactly sure how long it will ultimately take to find that right candidate.

I think this tells you it is more about when as opposed to if.

This is a company that is actively looking to find a female director for its board of directors.

We are wall -- we are all watching this ahead of the ipo.

Really interesting that should come up, ahead of the ipo.

Tell us about the board that exists right now.

Well, it is a relatively small board but it is a board that is basically divided between people who are at -- who were l -- who were at twitter in the beginning and some relatively known operators.

Jack dorsey and ed williams, we learned about the early stakes in the company.

On the operating side, peter currie, david rosenblatt, and recently peter chernin was added to the board.

The thinking with a lot of these people as they can provide some expertise in a variety of areas as twitter built its business.

That may give you a little bit of a window on the kind of thinking of where goes next.

-- where twitter goes next.

It is the caliber they are looking for when they complain it is hard to find a woman executive, that is who they are comparing two.

Jon erlichman, thank you so much.

I want to bring in one of the people directly involved -- he joins us from stanford where he is a fellow at stanford law.

He is writing a book about fixing the gender gap in silicon valley.

When you look at this board, what you see?

I see the same problem you have in silicon valley, a small elite group of people, who i call "the mafia," who are stuck in the echo chamber.

They talk like each other, think like each other, and they basically are dominating the twitter board and that is fine as long as it is a private company.

When you become a public company you start asking things of the public, they try to raise $1 billion and they're going to settle billions of dollars in the stock, you become accountable to the public.

You cannot have your own echo chamber running the company, you have to be inclusive.

You have to do it because it is good for you.

I'm not saying burying -- saying bring in women or minorities because of a quota.

I'm saying it becomes a company more competitive and thoughtful.

Doing a disservice -- they are doing a disservice to themselves and the public by being so arrogant.

Costa low -- costolo's comments say -- what is your take?

The reason they have not been able to find a woman is because they are looking for a woman that is just like them.

Maybe it is a professor.

They're looking for somebody malleable that will go along with what they want.

They want a woman who can stand up to them, who can tell them they are screwed up.

If a woman was on the board, they would not have gone on -- they wouldn't have gone public so senselessly.

This is the senseless behavior you see in technology companies all too often.

That is what we are talking about right now.

I was really shocked that rather than addressing this issue, i wasn't the only voice in it.

He calls me carrot top.

I don't think i am a carrot top.

You are thinking more of a pauly shore or bob saget?

Or a ball he would star.

There are a number of really good looking guys in bali would.

I don't think it was meant as a compliment.

Here i am as a straight white guy, but why not.

I would suggest a company like twitter very much need someone that understands advertising in silicon valley.

Is it hard to find the right person?

Twitter is not a technology company, it is a media company.

They can probably find more women who are suitable to their needs in new york and madison avenue.

There are thousands of great women out there.

They can look at different parts of corporate america and find great business executives.

Look at this fiasco.

If there was a woman on the board, she would have told them to be sensitive to how this looks to the public.

Instead they were arrogant.

Rather than addressing the issue they started attacking.

This is the problem, they do not have the diversity or the balance.

You cannot be a boys club when you are a public company.

You can get away with it for being a -- you cannot knew it as a public company.

The rules are completely different.

Other companies that have diverse corporate boards that are not diverse companies or companies that allow minorities to rise to the top?

Take facebook as an example.

I have been critical in many ways.

In this respect they do the right thing.

They have two women on the board right now.

They have a second board member.

Even if they started likes -- with something like that they would not be criticized.

There are many companies that are inclusive.

A woman chief marketing officer, a woman controller, and they are doing very well.

Ibm has a woman ceo.

To this argument that you cannot be an engineering or technology company and not be mailed talk -- and not be male dominated is false.

There are great women out there.

Give them a chance.

To have had falling sales in two of the last three years.

More to the point, facebook is an example.

We have a woman playing devils advocate here.

Sheryl sandberg is powerful and smart as any woman in all of technology, maybe all of business.

I wonder if the lack of diversity in the board necessarily reflects lack of diversity in the company or more importantly the company's thinking.

That is true.

If you look at the company, you will find it is dominated by males.

All of the mansion it -- all of the managers in engineering are males.

There is a problem across the board with male domination.

This is why women do not enter computer science.

The number start to drop off because they say it is a male dominated industry.

We have a systematic problem over here.

It is not a matter of quotas or leveling the playing field for the sake of leveling the playing field.

The reason is because companies are losing out on innovation.

The economy is losing out.

A fellow at the stanford law school, we appreciate your time.

Thank you very much.

Still ahead, how are traditional, acre's pushing technology forward?

You can watch a streaming on your tablet phone and a bloomberg.com.

This is bloomberg west, streaming on your phone, tablet, and bloomberg.com.

New york state is going after attorney general eric schneiderman -- is going after -- eric schneiderman has issued a subpoena.

It restricts revenues unless they on them.

They have a deadline of today to turn over the information.

Airbnb responded by saying the vast majority of these hosts are everyday new yorkers who occasionally share their home in which they live.

We always want to work with governments to make the community stronger.

At this point the demand is unreasonably broad and we will fight it with everything we've got.

We will keep you updated on how the story plays out.

Today marks the 100th anniversary of henry ford's great invention, the moving in sub -- the moving assembly line.

It not only change the way things are built but transformed the way people worked and lived.

Matt miller is at the company's manufacturing plant in michigan.

How is it?

Michigan is fantastic.

I always love to be here unless it is in ann arbor.

Detroit is a great place to be.

I'm here with chief technical officer.

I want to ask first about the assembly line.

You walk around here and see all these robots, you have five different cars on one line, the technological advances are massive.

What is most important in the last 100 years?

It has been a wonderful year with 150 years, the anniversary of the birth of henry ford.

In hundred 10 years as a company and 100 years as a moving assembly line.

A great opportunity for us to reflect not only on the progress that has been made over the years but what the future might hold for us.

You mentioned some of the things in terms of manufacturing today.

The colors, the body styles -- henry ford said you can have the model in any color you'd like as long as it is black.

The customer choice.

We produce a full range coming down the same assembly line, everything from high-efficiency engines to the electric ones.

We are giving customers the choice in building that through the production process and so money cars on the road now are incredibly safe to drive.

We almost take that for granted.

His fuel efficiency the most important focus for technology?

Fuel efficiency, safety, teachers and equipment on the vehicle, customers expect everything.

They expect great fuel economy, environmentally friendly, safe d. -- safety.

It is a great terminus amount of technologies -- tremendous amount of technologies in those areas.

Clearly his little that his legacy his mobility.

I look at billboards and wonder what his legacy will be.

It is kind of the same legacy with a 100 year forward shift.

He wants to focus on making traffic systems better, the kinds of cars that he produces.

How close are we to coming close to making real the dream that he had, the cars talking to each other and avoiding traffic jams?

The dream is around the future of mobility.

Looking at some of the societal and economic trends, population growth and organization, tremendous increase in the number of vehicles.

A challenge around conjunction -- we are starting to look at different solutions.

Infrastructure related communications, technologies, just different ways we can apply technology to continue to offer mobility.

But to do it in a way that a safe and affordable in the true spirit of the company.

Ford has also been out front in terms of linking what the customer wants as far as social networking and media to the in car experience.

Why the missteps as far as technology is concerned?

I would say it is learning.

Technology being the first to bring to market very high-volume connectivity, allowing the customers in the vehicle to enjoy that experience seamlessly of making phone calls, listening to music, and doing it in very high-volume.

We continue to improve the products.

We continue to bring software up , to improve the quality of their experience in the vehicle, and just make things better for our customers.

Let me ask you question about behind the scenes.

We are in a 3-d printing lab here in michigan.

You can design and improve vehicles much more quickly than you have been able to in the past.

The concept of 3-d painting or ftp to allow an engineer to quickly realize it's a sign, but then allows them to evaluate ergonomics, whether it is a function or a weight optimization -- just an example of how we can use these technologies to help in the engineering process going forward.

They do so much.

A great overview of for technology.

I would say there is so much tech involved in cars, we should do more car stories.

I am all for it.

I want to see paul's mustang.

He will have to show you that.

He has a crazy one.

Matt miller.

Thank you so much.

Bloomberg west will be right back.

There is a new way of brewing in the world of technology.

Some of the biggest names are using their expertise and investment dollars to push artisan coffee.

Why are jack dorsey, and mark zuckerberg so into their coffee, emily chang explains.

There is something brewing in silicon valley, with some of the biggest names in tech bringing their obsession with fancy coffee right on campus.

Exhibit a, mark zuckerberg they wanted to create something very special for their employees.

They were very mindful of creating an environment that has a good culture.

These are brutal one at a time by hand.

It is big with the tech crowd.

He also sell strictly to google, twitter, and yahoo!. a lot of people in this cloudlike full things that happen to be delicious and luxurious.

Jack dorsey is also getting in on the -- on the action.

He has invested in a small roaster known for hip or restores, just steps from his company.

Then there is blue bottle, the small chain of high-end coffee bars known for its tech clientele and long lines.

Mark pincus wasn't so much that he brought a coffee bar to sing the.

Google ventures recently took part in a nearly $20 million funding round for the chain.

He has high praise for how bluebottle founder james freeman is changing the business.

James is one of the first people to discover that even a copy has traditionally been this thing where you grab a cup, you are on the go, you are on your way to work, he was the first one to kind of slow down.

The creates a better cup of coffee than anyone else.

A better cup of coffee, driving a new passion for the tech elite.

Emily chang bloomberg, san francisco.

Enough to wake you up.

I will take cafe roma arian now time for an on the markets look at what is moving the markets at the bottom and top of the hour every day.

Julie hyman joins us from new york area thank you.

Let's take a look at what is going on with stocks.

We are seeing declines here.

Not as steep as they were at the beginning of the session.

Continuing concerns about the effects of the government shutdown.

As for individual movers, let's take a look at intuitive surgical, shares that make the surgical robots.

They're getting a boost following a robotic surgery association.

An analyst who attended the meetings say surgeons are moving aggressively to learn techniques.

More on the markets in 30 minutes.

You think it is at a later time, 3 p.m. pacific and 6 p.m. eastern.

Now for your top headlines.

Argentina may be forced to pay more than $1.4 billion to its creditors after the supreme court refused to hear its appeal.

The decision was for palit court hearing.

It could lead to default.

The ruling remains in place while argentina pushes other legal action.

A record point thread for the upcoming jacksonville game.

The broncos will open the 20 point favorites against the pathetic jaguars.

Last night's game over the cowboys, the third highest scoring game in the history of the nfl.

It is the highest tv rating in any program.

President obama says he will not barter with congressional republicans until the debt ceiling is raised and the government is funded.

We are not going to negotiate under the threat of economic catastrophe that economists and ceos were increasingly warned would result if congress chose to default on americans obligations.

House speaker john boehner says the republican-controlled house will not pass a clean bill raising the debt limit without provisions to curb the health care law.

One week into the enrollment.

For that -- until the roman for that ford will care act and it isn't exactly smooth smelling -- smooth sailing.

What is ackley is going wrong with these exchanges right now?

It is a big bandwidth problem.

There are some good news.

They point to the fact that by the end of last week, 8.6 million people have visited their health care website to look at those insurance offerings.

The bad news, however, the federal health exchange repeated software troubles, a long way for consumers, a long way for last week.

Did ministration's chief technology officer said in an interview this weekend that fixes were on the way.

These bugs were function from volume, take away the volume and it works.

Any type of slowdown could really create a chokepoint that brings major problems to the whole system.

Three years after the enactment of obama's health care law i think what the administration officials and people outside were hoping for a smoother rollout to one of its key components.

It is like the apple problem.

Obviously they have to do something about this.

What are they doing to fix this problem?

We are seeing the administration has an anonymous amount invested in this, both on the money and political side.

It has been adding servers, reconfiguring systems while pledging significant improvements in the online consumer experience.

That is according to a spokeswoman from the health and human services department.

They have taken to their twitter account, apologizing for delays, asking for feedback for people who have used the site, and pledging to make the required fixes, even if that meant shutting off the website this past weekend.

How much time do they have to fix this?

That is the thing, they use the apple analogy a lot.

They have time.

Open enrollment is in october 1. they have until december 15 to be eligible on january 1. administration officials say these are glitches.

They are fixing them and they have plenty of time to do it.

They do a lot.

I'll turn to online marketing.

Ad dollars have been the target of hackers.

Armies of tc's controlled by hackers are being used to drive traffic across the internet.

People control these thoughts are directing website.

It looks like they have high volumes of traffic but it is the goal of leeward advertisers and ad dollars.

Billions of fake ad users have been generated, resulting in big cash -- they cash payouts.

-- big cash payouts.

Dan, this is clever stuff.

It actually is.

We always wondered why so many computers were being broken into.

Really, how interesting can it be?

It turns out if you hack one million graham knows, you make millions of dollars.

There are companies that actually specifically focus on older people, get them to download some software, and redirect ads.

It is clear they are getting those ads and they're going to real sites and users.

You're talking about fake buildings with fake lines around them.

It is a village problem.

It is the issue of just -- the advertising ecosystem is very open.

It is very built around if you can deliver, then the market is yours.

We will give you a way to get in.

Unfortunately when you are that open there are opportunities for bad guys to just defraud everybody.

Companies like google and yahoo!

Talking about the problems they have.

Is this problem exploding?

Crux one thing i want to be clear about is it is not just fake sites.

Very high profile sites have abilities to put your content on these open exchanges.

There is just an entire ecosystem, entire pipelines were lots of people can get in and if they are able to drive traffic they are able to make money.

The end result is real sites are getting themselves infested by these.

Summer in the pipeline someone can make money.

Why wouldn't they just send traffic to sites that seem to do something?

There was a case of media company -- when google suckled their algorithm they shuffle traffic away from demanding media.

There is always a way to move traffic.

At the end of the day these guys will have millions of clicks, none of them are real, they're are looking for who is willing to pay.

The hard part is that advertisers -- the entire ecosystem wants clicks.

Everybody from the publishers to the exchanges -- they do not care if it is leaking to sales, they get paid for the click read -- leading to sales.

Pickett paid for the click.

This is the problem for fraud -- they get paid for the click.

This is the problem for fraud.

The market expects you to have this number.

If you are an advertiser, and you are getting a no -- getting a client to click an ad.

If you find out those clicks are fake it is in your own interest to not let anyone know because you have to keep the numbers high.

You go back your customers and say, i am sorry that was fraught.

Do you drop the numbers and say, what is going on, do you no longer -- are you no longer a popular site?

Once you are in, you are hooked.

This has been going on for years.

We have a situation where even people who want to get rid of the fraud are kind of stuck with it.

That is what we are fixing.

This is huge.

Give me a sense.

Any number on the internet is huge.

The hope is that we were looking at equally distributed fraud.

There is a caught -- a cost of doing business.

What we found looking at the data is that some places are very clean, less than a percentage.

You have situations where there are very personal relationships between publishers and advertisers.

You actually end up seeing low fraud rates.

Like yahoo!

Focusing on brand advertising.

They may know the person who bought the ad for the homepage.

We have seen some very low fraud rates did in other situations we have seen high numbers, 70, 80, 90% fraud.

What kind of advertisers are paying for 70% of their fraudulent clicks?

You need one that you need one million clicks at the end of the month.

Search and optimization was tricking google into getting your advertisement very high so people clicked on it.

What it actually is is you pay a guy who goes to the russians or whoever, goes to who is running these armies of bots, and go ahead and click a bunch.

It is the kind of hacking we have seen out of eastern europe.

I can name half a continent.

We have seen eastern european hackers doing a lot of this kind of thing.

Is that worth -- is that where it is coming from?

The internet is not a place that cares about geography.

This is their best cash a point.

We started a lot of technologies trying to deal with tank fraud, people who were robbing banks.

Thing is that banks noticed.

When you train someone's payroll account, they cannot pay payroll anymore.

When you go ahead and defraud a bunch of advertisers they do not notice.

Dan kaminsky, wild stuff.

Thank you very much.

The white house made headlines when it overturned and import ban on apple devices but will it have the guts to do the same thing now that samsung is facing a ban?

The distilled, bloomberg west.

You can also catch us on our later time, 3:00 p.m. pacific, 6 p.m. on the east coast.

Will the white house step in to overturn an import ban on samsung devices like it did for apple?

A lot of tech observers are -- currently an import ban on older samsung phones is a set to go to affect midnight tomorrow.

The itc found that devices onto apple patents, the white house has stepped in to overturn an import ban.

Now the tables are turned.

The ban may help htc after the struggling smartphone maker posted its first quarterly loss last week.

The lost -- the loss comes as share of the global smartphone market drops from have to the second quarter.

While they have the best technology and products in the cupboard he over the next two months -- we sat down with chairwoman cheryl at the cooperation conference in bali indonesia and asked with the most important thing is for htc right now.

I think the most important thing is innovation.

When you bring the htc one, you feel it, you know the differences.

I think the market loves devices.

[indiscernible] reaching to our customers.

How much market share are you looking at now?

When you take a look at the global market share, it has dropped from six percent a year ago.

Aren't you concerned?

What are you doing about it?

We are improving on that.

We believe that we can for the upscale market in china.

We should be able to reach 20%. crux industry consolidation, does it make sense?

How do you view it?

I believe if you are passionate with your company and you are with technology, and you really believe that your mission is to bring the best product to this world and also you believe this technology is still in infancy stage, why do you want to consolidate.

We have a very good partnership with a lot of customers.

We are always in the partnership with people.

If there is further decline in your sales would you be pressured to consider a merger or a partnership?

At which stage which you consider that?

The challenge is for htc in the next 24 to 36 months.

I think the most challenging news this month.

It is between all those products coming out and we are improving for our innovation and our marketing.

I think the biggest challenge is two months.

Robert downey junior was co- opted to help market htc.

Has it worked?

Can start quality provide a catalyst for htc?

I think it will work because robert downey junior is the character.

People like him.

People see him as a change maker.

I believe it is here to change.

I believe opera downey junior -- it's a good thing for us.

Crux -- robert downey junior.

It's a good thing for us.

Crux are you spending a lot in marketing?

Compared to samsung you're spending 1/10 or less.

I think innovation is your life.

Innovation has to be in marketing.

I think the traditional way of marketing is good.

Innovation is also very important.

I believe htc is not only a company of innovation but also technology.

We have to integrate this innovation and have the innovation marketing also.

That was chairwoman cheryl.

We will be right back.

The next time you hear a tweet about breaking bad or shark nato, the nielsen rating will be watching those tweets.

Cori, people like to tweet when they are watching tv.

Nielsen share some numbers suggesting more than two hundred 60 million people in the united states were tweeting while watching live tv in the second quarter of this year.

This is about them staying relevant as this business changes.

We have an interview later on the late addition of bloomberg west getting the word out is good for growing its business on a whole host of different levels.

Thank you very much.

The request will be back in just a moment.

Reqs updating our top story for this morning, twitter has responded to bloomberg west about the issue of not having a woman on its board.

Twitter spokesperson says that twitter is actively supporting initiatives to teach and mentor more young woman with interest in science and technology.

We are ultimately a company of people.

Roughly 2000 employees worldwide, different experiences and backgrounds, all working toward our goal of giving everyone the power to create and share ideas and information instantly without barriers.

More coming up on our late edition of bloomberg west.

We are going to sit down with a salesperson, talking about his business and more.

It is time for on the markets.

Julie hyman has more.

Thank you.

Let's take a look at stocks read we are off the lows of the session.

We are seeing stocks decline and traders talking about this.

They're concerned about a potential government shutdown but they to think there'll be some sort of 11th hour solution.

Let's also take a look at currencies today.

The lingering concern is pushing down the dollar.

We are seeing the euro gained a little bit.

The dollar is falling versus the japanese yen.

When you look at the dollar level, it is at the lowest level in about eight months.

Washington speeds towards this budget cap without a resolution.

This is the most accurate currency forecast in the third quarter.

It says the currency may rebound.

Lucy is in jan -- lucy is in london and joins us.

Let's start with the actual level they are looking for when it comes to the dollars.

How optimistic are they?

They are very optimistic, conserving -- considering the levels we are at with the dollar.

They are completely in line with the currency forecast.

It is quite interesting when you think about the lows we are seeing in the yen currency.

They are looking for it to get

This text has been automatically generated. It may not be 100% accurate.

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