Global news powered by 2600 journalists and analysts in 120 countries. This is bloomberg. Bloomberg technology is next. Im caroline hyde. This is Bloomberg Technology. President obama vows to retaliate on the election hack and urges donald trump to take the kremlins actions seriously. We will have more on obamas yearend News Conference. And apples 14 million in back taxes forcing changes to International Tax laws. We speak to alex webb. And german Hotel Bookings all debut. Climbing in its will be companys edge be enough to woo u. S. Investors . To our lead. President obama vows the u. S. Will take action against any Foreign Government that metals with the election. In his final News Conference he reiterated russia was responsible for hacking the Democratic Party in the runup to november 8. Intelligenceniform assessments, the russians were responsible for hacking the dnc consequence, it is important for us to review all elements of that and make sure that we are preventing that kind of interference through Cyber Attacks in the future. Donald trumpever has repeatedly dismissed experts reports about russias role in the dnc hack claiming democrats are seeking to delegitimize his win. What are the risks of ignoring reports of russians cyber tactics . Policy us now, cyber expert, welcome to the show. This shows how vulnerable the u. S. Can be. Mock mocker see in question here. How vulnerable is u. S. Security . It is very vulnerable. Nationstates are getting additional capabilities. Other nationstates, north korea and iran have conducted efforts against private companies, offensive attacks, we know about sony corporation. Caroline plenty of hacks throughout the week. You were at the heart of helping build the backbone of what is now Cyber Security policy. What is missing . What more needs to be done to help protect companies and the government . The industry and the government need to come together and work effectively. We dont have a National Policy on how we deal with a major nations they attack. We have to find a way to bring them together and defend the nation in cyberspace. The nation,ending does that mean retaliation . Clearly the nationstate comes after the United States, we need to respond, swiftly and with clarity. You dont have to respond in cyberspace. But you do have to respond. It is critical the United States respond swiftly. Caroline its interesting, rex tillerson, he obviously had relationships with russia in the business community. What does it mean for relationships from a diplomatic standpoint . Tillerson is the ceo of a major company. They had dealings and russia and oil dealings. He built relationships for that. As secretary of state he will have a different role. He is going to take the u. S. Government line, not the exxon mobil line. I am sure he will do it effectively if he is confirmed. Caroline what will that line be . It seems to be a warmer embrace to russia. What does that mean in terms of Cyber Security . Will the walls get higher . Themselvesprotecting . No doubt we have to protect ourselves effectively on Cyber Security. It is not just russia and china. Have unclear if there will a warmer relationship with russia. People have taken that view. Mr. Tillersons relationship with russia. Russia is doing a lot of bad stuff. They are involved in syria in an interesting way that sometimes may look supportive of the u. S. , but problematic of the Syrian Rebels we are supporting. Rush is not a good actor. Dramatically will alter relations, im not sure how it is going to go. Caroline talk to us about the key risk at the moment when it comes to u. S. Security, u. S. Organizations. Is rush of number one threat . Or is there more . I think internationally we have a lot of security issues. We have ice is growing in power. We have russia increasingly aggressive. We have china increasingly aggressive. China and russia are the leading actors. For a company we need to look at the chinese situation with International Property theft. It is a huge problem. It looks like china is going to walk some of that back. It still continues. The core of the economy is intellectual property. That is a disaster for our economy. Caroline it has been wonderful speaking to you. Thank you. Another story we are watching, the u. S. Is demanding the return of an unmanned underwater drone seized by china in international waters. The pentagon says a Chinese Naval ship sees the drone northwest of the philippines. It was deployed by a survey vessel with a civilian crew. China has boosted its naval patrol of the south china sea. They indicate the nation has kind willeally he claimed has to put on reclaimed reefs. More next. All episodes of Bloomberg Technology are on twitter. Weekdays at 5 00 in new york. This is bloomberg. Caroline after 874 Research Gene munster is leaving for venture capital. Look at the big picture. Return to growth and should stay in growth mode for about the next seven quarters, as long as you can see in a tech company. Caroline in his final Research Note he predicted apple will become a Services Company and then develop a kind of augmented reality wearable devices that would replace the iphone. We will see whether that lives up to expectation. The company has ordered to pay 14 billion in back taxes by the European Union following an investigation that found ireland provided apple illegal aid. The team that rattled the Irish Government and spurred changes in tax law has been dubbed the max of force. Max force. Mondays a slightly more task force on tax planning practices. It gives more clout and makes it sounds like it is there to exercise maximum power. The head of that was a guy called max. , toas given the task investigate companies of that tax practice in europe. The investigation went around the world. America was involved. What was the scope of it . The way it kicked off and gained pace was when the u. S. Senate subcommittee started looking at where u. S. Companies were paying tax. That theyoach was should be paying tax in the u. S. And not elsewhere. That drew the attention of european authorities. Apple isnt paying taxes and as far as we can tell theyre not paying a lot of tax in europe. They the argument is that they have money and ireland which is not taxed there. The money repatriated to the u. S. , it will be taxed. They will be liable for taxes at some stage. Course, ireland, irish politicians going to cupertino. People in brussels digging into documents, trying hard to understand this complex issue, which the commissioner admitted they were not they did not have great knowledge of going into it. They learned on the job. Broad encompassing investigation. This is yet to play out to a certain extent. When will we actually hear who wins out . What surprised you the most . What is going to happen in the next few weeks, before the end of the year even, the four full decision will be released. Apple will file an appeal but still have to pay the backlog of money. It may be that it is reduced or scratched entirely. The thing that was surprising that i found, just the size of the team in brussels looking into it. The ultimate expectation is with union, theyeuropean have vast numbers of bureaucrats digging into these things. A team of just for people to begin with. In my mind i thought their may be hundreds of experts with vast amounts of experience taking into tax appeal. They were starting from the ground up. That was surprising to me. A lean, mean max force machine. That was alex webb. Union pilots who fly for amazon concerns to online shoppers. They running ads suggesting the retailer may struggle to deliver gifts on time after a judge ordered striking pilots back to work. This is amazons first Holiday Season since it unveiled amazon prime air. Coming up, bitcoin is mounting a serious come back. Behind dive into what is the stellar surge, next. Expedias site for of all go has made its debut trivago has made its debut as a private company. They asked about how he feels about going public. He sounded relieved. Not super it is important where the stock is trading, where the price range is now. We see the development over the years. It was never about the big show. It was about Continuous Development and learning. That is important for us. That is important. We talk about Continuous Development, looking at your financials, it goes back into advertising and not necessarily r d. Where are you looking to continue to expand . Does that change over time . Growing, 70, 80 year over year. We are heavily investing. , our mainocus spending is advertising. That doesnt mean advertising without a lot of r d. Marketing are doing is very analytical. We are trying to learn and improve over time. At the travelok booking space it is very crowded. Only you have your experience. Differentiate from the rest of the competitors . Just a judge. We would never go into booking. We want to be a tool for consumers to use have a great overview of the market. We would never sell them something. Most of the players trying to get into that space, they think they have to do the booking themselves. When you look at the new folks coming in, airbnb, expanding into experiences. It seems to be infringing on your territory. How do you feel about where airbnb is . Understand, for us it is opening a huge inventory. They opened that out. They make them bookable. People can find them in the future. That was not possible before. There we are welcome to them. Ivago chiefhe tr executive there. They are now worth 2. 8 billion. Bitcoin is rising above the rest, its surge reaching its highest level since 2014. The Digital Currency has outperformed gold, major currencies and the s p 500. Cory johnson joins us from new york. Why the rally . Cory it is interesting. The performance is jawdropping. Who would have liked to have that in any investment . Game entally, bitcoin has gained acceptance as a safe store of value. It did not have that a year ago very year ago. It does seem to have achieved acceptance. You have seen rallies on the price of bitcoin, not just during the course of the year, but when geopolitical events would cause a concern about the value of other currencies. It is like gold but you can use it. That is the way bitcoin started to be seen. Unc a movement of this. Election of donald trump. That is the way it is behaving, like a reserve currency or like gold. 770 eight dollars is the highest since 2014. Were real14 there worries. We saw millions disappearing certain exchanges. How concerned or nonconcerned should we be that this could happen again . Figurear be it for me to that out. There is a lot more infrastructure almost daily around the world of bitcoin. More and more companies are allowing it as a form of payment. That are able to meant bitcoin. A little more difficult to create than the next. Have more and more challenges. It is more and more expensive to make bitcoins. There are fewer coming on the market. That restriction of supply adding to demand has resulted in this price rise that we have seen. Caroline you have been a hedge of old. Of old funder cory did you call me old . All back. I take it you used to be a hedge funder. Is this going to last . Cory who knows . It is harder to predict how anybody is going to trade something. , long ord my work short, it was trying to understand the underlying value of something. Currencies dont have a value. They are a trading vehicle. The usefulness of bitcoin has changed. The fact that you see these crises of currency in india for example, as i mentioned, briggs it, you saw an interest there briggs it am you saw an interest there, turning to bitcoin. For those reasons, you are saying the underlying thing that you are buying has a different value, a higher value than it used to. Verybitcoin is today is different than what it was at the end of 2015. Speaking, isbally this a truly global traded piece of asset at the moment . The answer is yes you uc a lot of traded bitcoin in the u. S. Yes. You see a lot of traded bitcoin in the u. S. The know your customer rules are so important. So legislated into existence. Somethingo way to use as anonymous with bitcoin with the financial markets. There are limitations. But you certainly see excitement across the world in this currency in a way that people are using it to store money. Caroline bloomberg editor at large cory johnson, the youthful cory johnson. Now coming up, donald trump is meeting with tech leaders. The biggest packed ever. And facebook fighting back on fake news. We discussed the biggest stories as we approach the final week of the year. Elisa for antiand you are watching Bloomberg Technology. President Obama Holding his here and News Conference today at the white house with russia and summer security squarely on the agenda. In early september, when i saw president putin in china i felt that the most effective way to ensure that that didnt happen was to talk to him directly and tell him to cut it out and there would be serious consequences if he didnt. Mr. Obama said moscow retreated after that discussion, but after that emails belonging to the Democratic National committee were already in the hands of wikileaks. Says the russian government and its syrian allies are responsible for the masses death toll in syria. Four years, we have worked for years, we have worked to alleviate human suffering in the war in syria. Horror asis united in the savage assault of the Syrian Regime and its russian allies on the city of aleppo. To savemats are trying the evacuation of eastern aleppo. In aleppo, the evacuation has been suspended. Syrian000 people and the rebel stronghold left on buses. State media said rebels were trying to smuggle weapons out of aleppo. Congressional republicans have closed a yearlong investigation into flint, michigans water crisis. The House Oversight committee cites both state officials and the federal epa saying they did problem soon problem soon enouh or take proper action. The top democrat in the senate Donald Trumps choice for the u. S. Ambassador a majorl may represent shift in u. S. Policy. David friedman opposes the two state solution and he told a supportr that trump may israel facing some parts of the west bank. Dayal news 24 hours a powered by over 2600 journalists and analysts in over 120 countries. This is a bloomberg. Caroline this is Bloomberg Technology. President obama laid out the rising risks of cyber warfare. We are a digitalized culture and there is hacking going on every single day. There is not a company, a major organization, or a Financial Institution where somebody is not going to be fishing for something or trying to penetrate with a virus or malware. Caroline a clear example of disclosing ao major hack last week. Experts talking about this issue. Welcome to the show. Lets begin we were all geared up for donald trump versus the tech titans. It was not as adversarial as we thought it would be. The two things that surprised me was, firstly, i was overwhelmed by the amount of detail that carol fisher was able to get. And also the photos that were published ahead of time, it looks like the tech leaders we saw were going through three of the five stages of grief. Every major issue was touched upon but i dont know what the response they heard from trump. If they really will dig in and try to fix some of these issues. Caroline you mentioned carol fisher saying it was weird but not as awkward as expected. Were you surprised by all the names showing up . There was a lot of reasons going into this meeting to expect it would be a lot less collegial than it was. Ump has done and said about a lot of these Tech Companies like amazon and apple have been confrontational. You expected that same time he took with Media Companies and the same things he is said about Lockheed Martin and what he is done with boeing. Who knew what was going to come out of it . As of these people were invited, there was an initial question of how publicly im going to talk , yes, im going and this is what my agenda is. There was a lot of questioning within these companies internally about who should go and who should we send. Outdefinitely saw them come and once you knew there was going to be a few more ceos there, you couldnt send someone lower down the ranks. Caroline through acquisition you hold some of facebook, you feel these big Tech Companies should be representing their shelters their shareholders . A lot of people had been nonpartisan in their views about the president elect. I think washington and Silicon Valley have to work together. Involved from apple manufacturing in the u. S. Instead of china and Everything Else in this ecosystem. We have to engage like it or not. Caroline interesting that one of the big tech titans who was not there was marissa mayer. It could end up, as we reported, this could derail the deal. Verizon wants to do a couple of things. They want yahoo to assume more not theiabilities and assets of they acquire. Failing that, can they renegotiate price . What is more likely is this is negotiating through the press. I do think there is going to be some kind of a reevaluation of how much verizon should pay. At the end of the day, yahoo is still a vital asset to verizon. We have every reason to believe they still want it. Yes, there was more hacking than initially thought. We broke the news this week that there were a lot of sensitive government email related content in what was hacked because people use their yahoo as a backup. Not everyone