tv Bloomberg West Bloomberg April 21, 2015 1:00pm-2:01pm EDT
. . >> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover innovation, technology, and the future of business. i'm emily chang. here is a check of your bloomberg top headlines. it is a potential deal that could create a generic drug powerhouse. an unsolicited $40.1 billion offer for mylan pharmaceutical. the deal would create a drugmaker with more than $27 billion in annual revenue. greek officials believe the confiscation of $1.6 billion in
local governments will be enough to keep the country afloat until the end of may. access to the cache is critical with bailout talks at a standstill. here is former ecb president. >> we have to be totally realistic. it all depends on the maturity of the position of the great government -- understanding that in any case, if it wants to deliver growth and jobs, which is the main goal of the government -- it has to produce recovery. emily: people say resistance to greek assistance is growing at the ecb. russia plus takeover of crimea across the country cost the country $27 billion, and costs are expected to rise. that's what the russian prime minister told lawmakers today. he also blamed western sections and falling oil prices for russia's economic woes. the russian economy contracted
last quarter the first gdp decline since 2009. german software giant sap for sorted -- reportedly 20% -- 26% drop. here is their ceo. >> the currency effect is very helpful. it took a 12% growth business to 24%. in every region, we had double-digit growth. emily: i think he is making progress in its transition to the cloud as support more than doubled. microsoft and yahoo! have updated the terms of their search alliance, making it easier for either company to exit the partnership. yahoo! reports first-quarter earnings today, the spotlight will be on the ceo to see if her efforts to revive growth are paying off. the former ge ceo wrote about her in his new book, and her decision to end the company's work from home policy.
he was on bloomberg "surveillance," today. >> she has people working from home, and she says we're going to take this fight to the competition, we need to be all hands on deck. emily: we will have complete coverage on yahoo! news earnings on the late edition of "bloomberg west." it's being called a mobile-geddon. bloomberg is altering their search algorithm, and when you search on your phone or tablet mobile friendly websites will be ranked higher. it is a reflection of the importance google is placing on mobile. there are concerns that businesses with unfriendly mobile websites could see their business plummet. joining me is the founding editor of search engine land. this is your world, you have
been covering this every day for years. is this really a -geddon? >> it's warranted in the way we've seen it used, when los angeles has a big freeway update and they called it car-maged it could be a disaster if it's notdon. -- if you are not prepared for it. people thought we need to get our mobile stuff together. whether it turns out to be a disaster for the prepared, we are waiting to see right now. emily: we are told could take days or weeks to see how this affects different websites. any websites in particular that you know of that will suffer because of this? >> we've seen a few websites in the media, but the wasted -- the way to think of this is small businesses that are aware that they are putting out the update. google announced this at the end of last year.
you expect companies to have aligned them with this fact. for them, it's really about getting the user experience up to speed. emily: what this in the context for us. google ads does tweak its algorithm every so often. how dramatically has that affected certain listings? i know ebay has suffered when google changed its algorithm. danny: the big change that people are familiar with is panda that started in 2011. google did that to go after content that wasn't quite spam but wasn't quite good quality especially sites that seemed like they would answer questions that didn't do a good job. when they did that at one point, they had an update that changed about 11% of their search results, which was dramatic. it's a shift to do that. you envision at least one of those links of not more on the page are going to go. to did have these impacts you talked about, where you had companies losing stock value,
having to report the day off track, it was having a financial impact on the company. they said this mobile-geddon could have an impact as high as panda is going to have. it really is something that is potentially going to be significant, that potentially can hit the bottom lines of some of these companies of they haven't prepared. there is an big companies will that haven't done it. i do agree that it is more likely to be something that will impact a lot of the smaller businesses. emily: any companies you would single out that are not mobile friendly? danny: rsa group, which is a large insurer in the u.k. didn't seem to be mobile friendly when i looked at it. we haven't spent a lot of time checking those things, we are waiting for visibility reports that will give us an idea of who is impacted. one last thing about that -- if you were a big enough company and someone is searching for you
by name, you are probably going to be fine. there are other signals google should use to whether or not they should return something. they do want to return the right answer. it's going to be a case if there is something that's better and it is mobile friendly and you are not, that is where your problem will be. emily: google says it is striving to give us the best and most relevant search results. google get something out of this. it has a big impact on the mobile ad dollars. tell us about that. praveen: apart from the search quality, one of the reasons this is important is that google and search engines means that people are using more apps. they are using amazon app, so on and so forth. it's important for them to stay relevant and essentially -- especially on the smallscreen device means giving you the information you need. people attentions span is really small. is have a domino effect in terms of the better search results they can deliver, the better at
pricing it is. that helps with getting better mobile app marketshare versus some of their rivals like social media. emily: danny, there is a lot going on with google right now. they are fighting a big antitrust investigation in the eu. they open an investigation and android. i was listening to critics that say google can do whatever he wants with this search algorithm. why does it have to cater to other websites that are out there? what do you think about these investigations. ? are they fair? danny: most of the stuff i've seen with the eu is. i compare it to "the new york times," putting up the "los angeles times," sports page up so someone should regulate that. i think users expect search results to be presented to them.
having said that, google's market share is so high, they may be under the special obligations. that's really up to the authorities to decide whether or not they think -- you have a 90% market share in europe. while this may seem weird, we are going to feel like you should be forced to carry some of these result in a better way and some of your competitors. i think the twist in this is when you get the allegations especially in local search or travel search, where google has been taking content from some of the competitors to build its own competing search engines to them, it really muddies the water and can produce a lot of sympathy to think maybe something should be adjusted here. emily: what about the investigation and android? does that seem more warranted or less ridiculous to you? it's a situation where google is making contracts with different phone makers like about what apps to place on their devices. danny: it deserves much more
attention. google has that android is an open platform. anybody can do anything they want on it. the reality is if you wanted to be an android trademark device, you have to go through google. part of going through google seems to be that you are going to be caring things like google search and google apps in prominent ways. because they have such a march -- a large market share in search anyways, it seems to say if you're going to have any android device, it will have to have a ballot box approach which could be the case with microsoft on the desktop in choosing a browser. the usual have to decide -- the user will have to decide if they want google search or something else. danny sullivan, and provine -- praveen thank you. we continue to follow this. we have breaking news on the futures trader arrested for his alleged role in the 2010 market
crash. julie hyman is in new york. what have you got? julie: he has been arrested in london by scotland yard. this according to the commodities futures trading commission -- the doj on the criminal side of things. the doj is alleging that this trader had contributed in some way to the flash crash of may, 2010. they are holding a call and detailing exactly how he may have contributed to it. some of the things they are talking about is that he has been charged with wire fraud, commodities fraud, and spoofing. the scheme detailed in documents filed by the doj he is been using software tools and manual trading to manipulate the price of the s&p e mini's contract.
all of this from a complaint that has been filed by the department of justice. this is the first arrest of any kind that has happened in relation to this flash crash which as you recall in may of 2010, did cause that unusual plunge in the s&p 500. again here, we are still getting the details and we will update you as we do get more headlines. i'm going to hop back on that call and i will fill you in as soon as i get some more details. emily: julie hyman, we will come back to you. thank you so much for that update. coming up, we had to the rsa the biggest security conference in san francisco. we will be right back. ♪
it has been a will to years since the first revelations about nsa surveillance from former contractor edward snowden. in that time, cyber attacks have become an ever greater threat to the u.s. government and the private sector. how is the nsa's cyber security strategy evolved? cory johnson has more from the moscow the center. what is at top of mind for people at the conference this year? cory: that's the big question -- what is top of mind? how is the threat and response changed? we see so much drama in the world of cyber attacks, from the target attack last year to the sony attack -- which brought a new way of doing things for the hackers, which means there's a new way of doing things for the government and the private sector. to talk about that, chris english joins me now, former nsa deputy director. you are also working on the private sector side is a partner with paladin capital as well as
other things on the private side. the intersection of public and private, this trying to build a wall against cyber threats and hacking -- what are the struggles that companies and the government are having with that right now? chris: one of the problems is that we see these as separate networks. we call of the internet, but there is one network. it's a rising tide raising all boats. there are threats that affect us. it's the same boat. cory: for conversation say, when target is hacked, what has that got to do with national security? chris: the same verbal abilities -- vulnerabilities target has are the networks that other people use. national security converges on can we guarantee the nation can stand on a platform called
cyberspace the internet, and have confidence that it's going to be available to them. that diplomacy can be taken care of in that space, the government can use that space. its national security, private security, all wrapped up in one. cory: the white house says the company sharing this information will be protected from lawsuits of certain types. on the industry side, some industry complainers are saying or some industry people are saying look the sharing the government wants is one way. we share with them, they don't share with us. the nsa has been taking information at a private companies without their knowing that was the case. what is the right kind of dialogue to have the provides whatever security the nation needs, but also lets companies understand what the threat is? chris: their instincts in the private sector are right. if the government has
information that can benefit the whole, the government should apply that for the benefit of the whole. but we need to distinguish between the snowden allegations and what is in fact, true. the vast majority of what the united states discovers, whether is it a static proposition of just looking at these systems to see whether they have vulnerabilities and frailties, we're looking at the composition of systems. you put these things together, how they operate the vast majority of that is pushed to private sector. it's not pushed in a way that it looks like it came from nsa overtly, but through the department of homeland security given to private companies and we see something they need to know through the fbi. that is ongoing. i don't get fasting -- happening fast enough. the president has taken it as far as he can in terms of saying through his executive power, he is going to encourage sharing and try to reduce the liability that might accrue from them. i think it by statute, we could go further. and the culture at the end of the day is the thing that going to make the difference. emily: -- cory: you had all
these different pieces of information about threats that were being gathered by government sources that wasn't shared. it sounds like what you're describing is not dissimilar. you have common actors, bad guys and one-sided side and the same bad guys occasionally going after the government or private industry, and that sharing may be create a pre-9/11 kind of vulnerability? chris: it does. there is an analogy to be drawn there. we thought about connecting the dots, it's less about that as it is about achieving some degree of coordination. it could be i have a hunch and you have a shard of information and someone else has a shred. if we put up together at the bowels of the problem, we might just crack the net. emily: -- cory: chris inglis thank you for your time. emily: cory johnson we will be back with you later. do not miss the exclusive interview with general keith alexander, former nsa director
emily: this is "bloomberg west," i'm emily chang. back to breaking news, a futures trader has been arrested for his alleged role in the may 2010 flash crash that cause the dow to plunge 1000 points in just minutes. i want to get back to julie hyman, senior markets corresponded in new york with the very latest on this arrest. julie, what can you tell us. julie: this investigation has been going on for quite some time. i was listening in on the call with the cftc the regulator there, the head of enforcement action of the cftc saying is that been going on for a while. he is not being precise as to
when the investigation began. we are talking about something that happened nearly five years ago now that the department of justice is been looking into. here is exactly what has happened. the main as a trader based in the united kingdom, and he has been arrested today, it's not clear when that tradition or if extradition is going to happen to the united states. he is being charged in the civil action by the commodity futures trading commission and the criminal action by the department of justice. what is he being accused of? the cftc enforcement officer saying that singularly being responsible for the flash crash but being a significant contributor. he manipulated the price of the s&p e mini contract. he used a dynamic layering scheme, he had multiple simultaneous large volumes sell orders at different price points, that's what they are
calling layering here. he created the appearance of substantial supply in the market and cancels his orders at the last moments. that created this market imbalance that seems to have been created the cascade that led to the flash crash. not only that, the cftc is saying that his actions within the s&p e mini's market continued to release this year. this behavior was still going on. what you are looking up behind me is may 6, 2010, when this happened. a very dramatic day in the markets if you recall. that is the plunge that we looked at. that's in the s&p 500. it led to a lot of questions about market regulation, about market structure, and so now we are getting some answers. but more questions -- how one single person could have contributed to such a degree to such a dramatic action in the market that's when to be something that is going to be a lot of discussion about in the
, and the future of business. a futures trader has been arrested in his role in the may 2010 flash crash. he was arrested in the u k, facing u.s. charges of wire fraud commodities fraud commodities manipulation, and spoofing. the u.s. is seeking his extradition. the flash crash occurred may 6 2010, when the dow jones industrial average plunged 1000 points in just minutes before later recovering some of its losses. democratic senators outflank and
-- al franken, elizabeth moran, and more are asking federal rate disorders -- federal regulators to block the comcast time warner merger. they say the merger would lead to higher prices and fewer choices for consumers. antitrust regulators are meeting with executives from both companies tomorrow. the chipmaker arm holdings says first-quarter sales rose 22%. they said revenues were up just 3%, as they dealt with in order backlog. here is the ceo. >> we are forecasting licensing growth in the main term, it was 5% to 10%. some quarters away higher, some quarters that will be lower. it is a lumpy business when it comes to licensing technology in the way that we do. i'm not at all worried by the year on year. we are coming off such a high base. emily: upgrades for faster 4g phones are helping to arm boost
rule to growth. the company's biggest gain in almost six years. this after the world's biggest ways -- wireless carrier said it added 53 million users to its wireless network in the first quarter. blackberry is making an acquisition, reaching a deal to buy the filesharing security startup watch stop great the company helps keep tabs on who has access to internal documents to guard against leaks. this is a key part of the turnaround plan. let's head back to the rsa cyber security summit underway right here in san francisco. enter large cory johnson is standing by with a man who knows -- editor-at-large cory johnson the standing by with a man who knows a thing or two about leading through crisis. and a thing or two about links.
-- cory: anything or two about leaks. the guy in charge said alan joins me now. that kind of crisis containment leak, i don't one search the metaphor too far, but there might be similar practices when dealing with a leak. admiral allen: there are. in scale and scope. when a event gets complex, it stretches your existing policy. if you think about what you're doing, but it's to take all the spare parts and focus on the problem. cory: are we talking about oil or data. admiral allen: data leaks and oil leaks are both messy. cory: and unexpected.
and maybe there common themes for causes. it seems i do struggle for many companies. they circle the wagons, shut down networks, shut down all kinds of networks, a stop sharing with other entities. what is the right kind of response? admiral allen: you have to start before the event occurs. you have to be thinking about the severity of a breach, should it occur. you need an incident response plan, you need to involve your senior leadership, you need a point of accountability of the single person when it happens. cory: companies are busy. i can imagine every company of every shape and striped deciding to devote lots of resources to planning for an event that hasn't happened to them yet. admiral allen: the problem is, people will tend to say a breach or cyber event is in the purview of this security officer. cory: chief information officer,
or head i.t. guy. admiral allen: their legal applications regulatory implications, all that needs to be managed at a higher level across the firm. cory: the head of target is gone, the head of sony pictures is gone, after these hack attacks that they didn't bring on. admiral allen: you become self indemnified if you don't do the work up front. you put the board at risk. think about it in advance, if they are not doing the job, you can fire them. cory: is this the role of the chief information officer? understanding how the systems work and how they have impact can only be done with the person who runs i.t. admiral allen: it's larger than i.t. event, and it consequences can be larger. that's the reason there has to be more holistic approaches to try and spread this across the
firm. you need someone who is more senior who has responsibility and accountability. cory: what is the key message for the cio to bring up the scale and say -- i imagine they are in the situation of saying i'm not big enough for this problem, get ready. admiral allen: we talk about connecting the server room to the board room. a lot of folks think this is a technical issue, when in fact it's like any other complex crisis. you have to be prepared to deal with it at the board level and understand what your role is going to be in how you want to play that. that can only happen if senior leadership is really listening to the technical issues involved and actually understands the risks they are assuming if they don't get involved. cory: interesting stuff. former u.s. coast guard admiral thad w. allen thank you. emily: cory johnson at rsa. up next, we take a look at a cancer risk test that costs 1/10 of what its competitors charge.
emily: -- julie: i'm julie hyman at the breaking news desk. one individual has been charged with relation to the may 2010 so-called flash crash, the plunge we saw in the u.s. averages. he has been arrested in london by the metropolitan police, he's been charged with unlawfully manipulating and attempting to manipulate and spoofing. what exactly does that mean, how exactly did he do this, and single-handedly it looks like or at least significantly contribute to a large market imbalance. it looks like what he did was essentially put in large sell
orders that were significantly far from the current asking price of the s&p e-mini's contract. they were on the order book invisible to other buyers and sellers, it created a lot of confusion. this behavior continued until quite recently. he has profited to the tune of $40 million, according to the justice department complaint. we will bring you more as we have it on this developing story. emily: i'm emily chang. this is "bloomberg west,"." color genomics has developed a saliva test that screens in 19 cancer risk genes for harmful mutations associated with those causing cancer. it was a mutation one of those very genes that led to angelina
jolie to have her breasts ovaries and bavarian tubes removed. here is the founder and ceo of mentor.com, also an investor the project. great to have you back. great to have you on the show for the first time. my first question is why has it taken so long to develop a test like this that is affordable? >> we've been working on the test for two years now. it is a consultative thing. we had to marry the very best diagnostic lab software and bring it together to create this product. it's a very cognitive thing to build. you also want to focus on quality and so you need to ensure that when you're dealing with information that important, you do it in the right way. it's something that's quite get it to bill. emily: you and a number of high-profile women in the
community have invested in this company. why? >> first, i knew elad, i've seen himself problems to grow companies. i have the utmost confidence in his capabilities to grow. there's an incredible human impact from this test. it's possible to save millions of people's lives. the test is available, people know about the change, it's a mystery about how to get the test, cost is a barrier. i thought it would be an incredible social impact. emily: you have a phd in biology from m.i.t., you worked at google and twitter before doing this. should every woman get this test? should i get this test? elad: the decision to get tested is up to the woman to decide. it's a personal choice to work with her doctor and come to a decision on.
our focus is more on making this accessible to everybody and affordable so that if a woman chooses to do this she is able to and cost is no longer a barrier. emily: wiser test cheaper than the competition -- why is your test cheaper than the competition? elad: we automated everything. they drive down costs. we use software to automate things, and lastly, the business model is fundamentally different. we don't take insurance, people pay for this out-of-pocket. we don't have to deal with insurance, that can be extensive. we are not holding out -- building out a sales force, and we are willing to take less margin. we are effectively passing back a lot of the savings to the person who is purchasing the test. emily: they're interesting things happening in breast cancer testing, i know personally they are not doing the stack to me is until women are 40 years old. -- mastectomies until women are
40 years old. i don't know if you can speak to this in terms of fighting the disease. mariam: i'm not obviously a medical practitioner. i do think it is interesting that many of people have heard about this gene, and i myself talk to my doctor about it and was dissuaded from taking the test because of the cost. it is hard for doctors to decide to ask insurance to pay for this test right now, they have to make these calls that are purely based on cost. i think the test could substantially change the access to better care. emily: what are doctors telling you about your test in particular. their competitors that make a more extensive test that insurance is to help cover. are they more inclined to recommend your test because you do still have to have a physician recommended. because it's cheaper. elad:
all tests include access to genetic counseling. we've gotten full feedback market -- we haven't gotten full feedback from the market. in general, the primary focus is ensuring that every thing we do is done in a responsible and lawful way and then ultimately we ensure that women get this information in a manner that they can then go and work with their physician on a personalized plan around screening and prevention. emily: in terms of the science behind it, is your test different from the other ones on the market? elad: we using standard clinical diagnostic technology. for these genes. we use illumina as the sequencing platform, we use other things that are standardized technologies that have been battle tested for many years and that are proven to work well for this type of testing. emily: this is a test online and
available today? elad: correct. people can purchase it through our website. there is a physician ordering component to it. we are trying to streamline the process so that if a woman chooses she is able to get access to this important information. emily: obviously you do investing on the side, how does this fit into your portfolio of other things that you are interested in? a high-powered women running her own company the same time. mariam: you want to work with people you enjoy working with. that's a big part of it. the other is thinking about how to have impact. i focus on my company, but i would like to be able to have impact in other ways. here's a way to help a lot of women in a known way. with a big market potential. it's a great business idea, a great business potential. also a great way to have social impact. for me it's a different part of the portfolio of my investment portfolio. it addresses a social need as
david, thank you for joining us. let's talk about big picture, where we still talking about gordon moore, and how big of an impact has he had in the world technology? david: great questions. gordon moore is a physical chemist, cofounder of two of the most important companies -- fairchild semiconductor and a spinoff off from that, the intel corporation. a company he cofounded. and for which he was today the longest serving ceo. certainly, it's chief technological strategists. we are still talking about gordon moore not only for intel, but for the importance of the silica and microchip in our whole digital world.
it's the material foundation for the digital world. and it is responsible for an incredible profusion of electronics. they have made electronics incredibly cheap. from the development of the first silica and microchips to the present, the cost of microchips, the cost of electronics and therefore the cost of computing has dropped 1,000,000,004. with that, the entire society has been suffused with electronics and computing. emily: gordon moore was a local guy, i understand he now lives in hawaii. i'm sure he lives quite comfortably. tell us a little bit about his background. david: he was born in san francisco but his family live in pescadero. it's in san mateo county, just over the mountains from palo alto in mountain view. and with the exception of probably the number of years you could count on the fingers of
both hands, his wife was within 60 miles of pescadero. here's the real story of a person who changed the world largely by staying at home. emily: i know he is quite active in philanthropy. does he worry that moore's law could be undermined or disproven someday? david: he does have a concern that he sees some fundamental limits coming up to our ability to shrink transistors ever smaller and put more of them onto chips. at the same time, reducing the cost of electronics. he sees a couple fundamentals the size of an atom, the speed of light, these are physics barriers in its way. he's concerned that within this decade, it may end. although he does say he hopes he is wrong. and he is quick to point out that many times in the past, he and his colleagues in the
semiconductor industry have only been able to see perhaps 10 years into the future. but there seems to be growing uncertainty. emily: you can't get beyond the size of an adamant. i'm not a scientist, but that does seem to be a limit. interesting stuff, david brock wrote the biography of gordon moore. thank you for sharing that with us. it's time for the bwest byte one number that tells us a whole lot. cory johnson, what if you got? cory: 783. last year, there were 783 companies that suffer data hacks and the united states alone, up from 600 the year before. it's a record number. i think it underscores the point that every company that has data which is probably every company, has got to be concerned about this risk of data hacks. that's why this rsa conference in san francisco is such an important deal for all companies out there with data, which is
pretty much everyone. emily: what is the biggest concern at the rsa conference? cory: i think it's twofold. it's the patients that hackers are showing, cyber criminals aren't out there bashing in the door for sneaking in some way and getting something. the type of attack is changed greatly. the bad guys are getting into a system and staying there. and waiting around, figuring out how the system works, figuring out when the system's most vulnerable, when the least competent people are manning the controls, for example. expanding that kind of attack. that's what you saw at target and sony. that's why it's a big deal, the notion that the threat could be so much larger and more costly is a big concern indeed. emily: we will be delving into all those issues in more depth tomorrow with general keith alexander, former head of the nsa. cory johnson, thank you so much. and thank you for watching this
mark: from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." the intersection of business and economics with a main street perspective. to our viewers in united states and those joining us from around the world, welcome. bloomberg west editor at large cory johnson is live in san francisco for the rsa conference on cyber security. peter