A company has set its ipo share at above marketing range. Jd has not turned in an alley an annual profit, unlike alibaba. Twitter has elected all of its firstors, including the woman to join twitters board. The announcement came at twitters first shareholder meeting. Theyhit a they hit a high in december. And lenovo has a strong quarter. Their laptop and desktop shipments rose in the quarter despite in overall industry decline. They are making a dent in the smartphone business with its smart phone chip. 60 in the quarter. Welcome to bloomberg west. I want to welcome our special guest host for the hour. Also, longtime head of facebook wrote. Growth. Facebook great to have you here. Great to be here. We have started to figure out remind us though. What happened is i bought a company. We did a controlled transaction of one company and inherited ownership of tinder. Luationsluations va it easy, it it is addressing to look at doing different transactions. We are looking a buyout and controlled transaction. It has been an interesting year so far. , before we move on to that what is the valuation of tinder. In the rate of half 1 billion. It is a fair number. The original number was 5 billion and that was Wishful Thinking for everyone, including myself. We were quite happy with how everything turned out. Find about you . What areas are you looking at . What is interesting to me is thatthere are businesses right now are getting starved of capital because they are in this weird and awkward growth phase. Companies that are going by what hundred percent profits and the companies that are not growing or dying. People do not know what to do with them. Opportunity ton not just do a typical fiber 10 50 million transaction. Growing and take them back up. I went to get to our lead story of the day. I know you have been following ebay in asking users to change their passwords as a precaution after their systems were hacked. To hackers gained access customer information, including passwords, birthdays, and addresses. They also compromised a small number of employee login credentials and have gained access to eb central network. Ebay says that there is no evidence that unauthorized activity resulted from this breach. Our guest joins us on the phone. He studies techniques he used to compromise networks. Think this attack happened and how bad is it . Typically these things are going to be coming in through an employee a. Employee. It is easier to find someone who is willing to click on a bad link and open an attachment. Went to get inside the network, you can start rooting around looking for all of the important databases. Early indications are that was the model that was used here. It is a difficult one to defend. Doesnt speak to a failure of the ability of the check and balance of ebay to protect their users . Good point. That the good sign is databases that help credit card information seems to have been separated on the ones that held other personal information, which is a good thing. You do not want to get Payment Information stolen. Of other internal control, that remains to be seen. I certainly think the state of breaches we see enough of these now. Breach that the first were the bad guys get inside, that continues to happen. We definitely need to have better controls and making sure that the bad guys cannot get out with the crown jewels once they get in. They need to do a better job so that they cannot use the data that they eventually steal your steal. It seems that everyone is waking up to a cyber attack. Target. Neiman marcus. Should ebay be held to the same standard as target . Yes. Of that seriesd of events at target, was that the solution to the problem . John for a whopping he is the most exceptionally honorable an amazing person in silicon valley. Have known john for a while. He is the most exceptionally him amazing person in silicon valley. Our the figuring out what technologies they should be using so that there are one or two steps ahead of these hackers that have an increasingly extensive to try to hack them and frankly every other company. Do you view this as a massive failure on ebays part given that so Many Companies are facing this exact same issue . Or not . No. Massive think it is a failure. When a breach happens, something wrong happened. From what we have seen so far, this doesnt look like it was anything negligent on ebays part. We will learn more as time passes. The real important thing to remember is that the first layer of the breach where someone gets infected, it is really difficult to make sure that no one that works for you ever gets compromised. That is a really tough job. What i do think the industry can do better is not only when you find a breach, you let people know quickly, but we also need to be looking at other Security Technologies beyond just how to keep that first piece of malware out. What we do for the people that are infected with malware, how do we make sure that they do not become an entry point into the really important things inside network . That is something that i think is both a responsibility for the prize, as well as a security to help fill in that whole. , thank you for joining us. Coming up, the state of the industry. That is coming up. And you can watch a streaming on your phone, tablet, tv. Mberg. Com, and apple i am emily chang. This is bloomberg west. Guest host is here. Hamath palihapitiya asking youtart by about facebook and all of the acquisitions they have been making. Does it all make sense . It makenk most of sense. Having been there through a handful of them and announcing them from the sidelines, what has turned out to be the cheapest and smartest acquisition done by any Internet Company could beink whatsapp bigger than facebook . We have graded a growth team and social capital. We use that to help companies grow. We also help them figure out what is going. When we do our own internal projections, by 2015, whatsapp will have more users than facebook. Youre talking about a global phenomenon. When you look at facebook and you apply some reasonable discount to that, apple will be worth multiples more than the facebook paid. John chambers said this a few days ago. If you as a stalwart company for not figuring out every day how to get into the next phase, youre going to die. You do not want to be the company five years later with just a bunch of cash and no ability to innovate. If you do come in and up like microsoft and unfortunately, cisco and hp. There is a gaggle of these companies that do not know what to do. Zuckresult kudos to for having the courage to do that. And that to me is they had scratcher. It makes a lot of sense for that to me is a head scratcher. And makes a lot of sense. It could be the next platform. At least facebook has it. If it isnt, they can keep going. How likely is it that facebook will remain the dominant social network . I think because of w hatsapp, it is basically locked in. Dominants the medication behavior. You will see everything from transactions and payments, a lot of things you see in places like china and japan will get brought over to the rest of the world. There will be this massive pop from that enables it all. What about snapchat . Orientedlargely team in the u. S. Google is buying a lot of robot companies. They are competing and trying to connect the world in different ways. I think the proposition is very different. They said they would organize all of the rules. Information is getting generated in all of these other places. You are unlocking situational data around the home. Your unlocking all of the spatial information that is used to inform maps and get people from a to b safer. And glass . They realize the worlds information is no longer trapped on the internet. The information exist everywhere. Their job is to use all of the cash from search to go and basically get the information business anywhere else. What about apple . I think these guys have lost largely there mojo. If you see this acquisition, it is a head scratcher. Youre barring a hardware business with lowmargin comment doesnt make sense. Some people so when i tweeted that, they said they were buying the music service. You could buy spotify. It doesnt compute for me. What if they come out with a larger phone or a smart watch . I think it is all marketing. But we are seeing with the success of netflix and spotify, things are moving to the cloud. It is moving to place were it is available all the time everywhere. These devices are getting cheaper and they are becoming more extracted and becoming more available. Being in that business is a race to the bottom. You have to find a way to go up chain. Use the Balance Sheet to buy the winners in software. By spotify. By netflix. Those are the winning strategies. Much more with you coming up. Stay with us. Also, quick programming note tomorrow we have an exclusive interview with the intel ceo. We have he has high hopes for intel chips. He will tell us why tomorrow right here on bloomberg west. Ber andhead, huber, u pinterest all with high valuations. Do they deserve it . Welcome back to bloomberg west. I am emily chang. I figure funding rounds in the First Quarter or 2014 it possible that fundraising that fundraising is getting too easy . Theres a collaboration platform for enterprises that raised money. Still with us is chamath palihapitiya, founder of the social capital. Thanks for joining us. Guest is an investor in your company. How is it different starting a company today than it was with flickr a decade ago . Is started in 2002. There was the dock, crash and crash and 9 11. It is impossible to raise money. We were working on a game. Effort. As a last ditch in one sense, we were lucky there. It was entirely different. Is it too easy to raise money today . I think there are a lot of companies that are not raising any money at all and there are some in which i would say to take a step back. The enterprise per photo, we have probably done about 20 or ortfolio, weper p have probably done about 20 or 30 deals. We have a great practice. Of all of the companies we have seen, when he walked into the door, these growth is that it was applied to enterprise. Their company is promising to eliminate email. How . Intel inside the organization. Mail and said the organization. Inside the organization. Having everything visible to everyone rather than fragmented into different muscles. It is a huge advantage. On the surface take away the nuclear growth. Even more important, it just changes the organizational psychology of the people that use it. Theres less internal politics. There is less little email threads to train people. Everything is more transparent. It is all out there. Things are more logical. People operate in a more relaxed way. Impacts wayprofound beyond the revenue the growth in all that. Talk about something that might be eli joe. Illogical. Some are insane. They do not make any sense. Here is what i mean by that when are you and ask me about they say theyber, dont have a comment about that. Complete monopoly. It will get to one billion users. Doubling every year. 90 margins. You can buy it at four times. If i can buy that for a 15 billion market cap, i do not know if linkedin is completely mispriced or what. [laughter] im not smart enough to know. Ok. I want ask you. What do you think . It is so hard to tell from the outside. You do not have a really clear picture. For some, it is really tough to say. Was it worth it to facebook . Maybe. You can take into account the strategic value. Very complicated. Cofounder, thank you for joining us today. We will have chamath for the rest of the hour. Coming up, john chambers. I will speak to him about concerns during our exclusive interview next on bloomberg west. Time for Bloomberg Television on the markets. The markets ending the day higher after the release of aprils fed minutes. Policymakers continue stimulus to push unemployment lawyer. Lower. A check of the board shows the dow is up. S p up. For on the markets, im mark crumpton. This is bloomberg west, where our focus is on technology and the future of business. I am emily chang. John chambers is worried that an surveillance can have impact on his company. He wrote a letter to obama asking him to curb the nsa program. There is a new book that the nsa into equipment before it was shipped overseas customers. A cisco conference is happening right here in san francisco. We have an exclusive interview. Cory . Yeah, emily. This is an interesting gathering. John chambers joins us now. Be careful and age discrimination. I hoping no one will start that with me. Good to see you. Tell me about this event and the type of customer. Absolutely. It is 25,000 people here here it hundred thousand people online. It has everyone from the Network Engineers and the cios. Eventy takeaways from the is that innovation has been the strongest it has been in a decade. We have new highend switching. For the first time, the customers got it and so do the financial analyst. We will embrace concepts and now you can watch the financial mindless financial analyst minds go off. You are really hearing from customers. In many ways. It seems to be the hottest idea in the world of networking right now. Thinky i think of it is i of it as if im with my family and car and then my wife the navigator decides to take a turn and go over here. List offered in and change something so as they go through the network and off the highway and find a different route, the needs changes as i go and the software defines all of that. The concept is absolutely right. Think about the software is a virtual layer and you have your cisco layer. People are learning that they are costly. We have embraced fdm. And analyst god and the customers got it. We got several customers on stage yesterday. How of them talked about the structure brings, and policy. A huge competitive advantage. Then we talk about security. We take it to a whole new level with a desktop device that is probably about the size of a notebook and we combined the android capability with the ability to have worldclass touchscreen. That is just the device. It seems that the very notion sits on the argument of the storage. We will have a storage so specific that the direction will be decided before it leaves the network. Is that fair to say . Is it one or the other . I dont think so. You will see us put that in. Most people would not consider it comes pressure after the session of the last 48 hours. We have got the advantage using your words of of stability and having the advantage of when network do this. Theres a common policy not just in the data center, but all the way to the edge. People were talking about security. I want to read part of the letter. I thought it was really powerful. You are more specific than just about any ceo was saying that there might be a strong impact in the sales because of the nsa policy. Another said they simply cannot operate that way. The Customers Trust them to deliver the product and meet high standards of integrity and security. What are you hearing back from customers outside of the u. S. About the impact of the nsa activity . That would not have written that letter it was not buy a book. In theory, there has been no followup on that being used to practice on how you might intercept products. I want to take a step back if i may very i was the vice chair of the national superstructure Advisory Board after 9 11 for several years. And you spend a lot of time in the white house. The key take away is that if you told me we would go 1214 another attack on american soil, i would say that is impossible very the government has done a good job protecting us. Thatxpend too far, facebooks and the googles and , there is a state of proper conduct. It is a wild, wild west. Im not big reticle of the administration. We have to take a step back it with other governments around the world come here is how we move forward together. How do we position it so we do not affect the supply chain . The supply chain in terms of how you move products out and give it to the customers. I think the importance of protecting the security is most important. And the Business Impact . The Business Impact in china and certain other parts around the world are hesitating. In never needed to impact on it. The nsa is stalling . What i said is that people do not trust us. Then we have got an issue here we need rules of conduct going forward. It is the ability to look at how we have become the Global Internet and how every country has been inhibited has benefited from it. You need a consistency that you can count on, much Like Companies back in december. A transition we are moving to become the number one security company. The only way you can defend this is from the cloud to the data center. When they were getting pushed on you canrity, they said always solve it through the network. A year ago when we said we would become the number one security company, they said, maybe. I have done three acquisitions. Inare moving rapidly architecture that brings them together. We are going to move and view this at how can the network really provide a security in a way that no one else can question reich hopefully cisco will become the number one security company. Cann a way that no one else. Hopefully cisco will become the number one security company. We have known each other for a long time. What do you see coming down the pike . Interesting. You want to always listen to others. The ability to play out that game is to look at the endgame. You have seen the movie and the variations of it. The disadvantage is what a competitor said. They said, john, i want to congratulate you. I think the ceo should be in the job for five years. Not reinvent ourselves every four or five years. Your company and your culture and you as a leader have been able to do that in ways that others do not. I thought about it for a second. How many leaders did you have . The answer is only one. This is where i think there are companies or individual leaders. It used to be three or five years. Do evenco will tie to though people give us unbelievably good grades, we will increase that. We will see if we can reinvent ourselves one may time. One more reinvention for you . Will we be sitting here 19 years from now having this conversation . The next time your him he will be when i will be announcing my next the next time you hear from you is when i will be announcing my successor. We have got a strong team. A number of people can replace me and do a better job than me and my job is to make this like your family. I want my family to grow up and do even better. Chambers, thank you. The ceo of cisco. Thank you so much. Tomorrow we will be speaking exclusively with the intel ceo. Find out what he thinks intel can reboot its future by entering the maker market tomorrow on bloomberg west. Will come back to bloomberg west. I am emily chang. Stanford University Says its online