One key question for many u. S. Investors is how does alibaba work . We will look at is. Model. It is the end of the road for mac worlds print edition. It will stop publishing a print edition and layup most of its staff. It debuted in 1984, the same year the first macintosh computer was unveiled. 13 years after the september 11 attacks, the United States is back on the offensive, confronting terror groups like the Islamic State. Just last night, president obama announced a broadbased coalition to confront the group. I have made it there and we will hunt down terrorists who threaten our country where ever they are. That means i will not hesitate to take action against isl in syria as well as iraq. This is a core principle of my presidency. If you threaten america, you will find no safe haven. The fight against terror continues, technology is changing everything from the way we gather intelligence to the way terror groups broadcast their messages embracing social media. Joining me is Michael Chertoff, the executive chairman of the Chertoff Group and the former secretary of the u. S. Department of Homeland Security. He is with us from washington. Thank u so much for joining us. What was your reaction to the president s speech yesterday . At leastk it laid out the general grammar cover strategy which has to include not only air attacks in iraq and also directed at isis but helping to put Ground Forces in with our allies. I think we will need to have some capability on the ground in terms of gathering intelligence and helping direct some of these operations. A key part is also going to be dealing with terrorist financing and travel. All of those elements are good. I would be careful in promising that there will not be any boots on the ground. Its a little hard to see how this will develop and we may need to put special forces or special operations personnel into the actual theater of combat. What role as technology playing in this fight . How has our technological capability improved since we started fighting al qaeda 13 years ago . Has been almost a revolution and war fighting. Its because of the use of technology. Our ability to use precision weapons, to target people who are dangerous, our ability to coordinate intelligence collection and realtime operations like we saw in the operation that a laminated Osama Bin Laden. Those of them giant steps forward. Back several years ago when we were actively engaged in combat in iraq, we were remarkable and the precision and speed of our targeting against critical terrorist leaders because of the ability to marry the technology of intelligence and the technology of our operations. The bad news is the bad guys have also developed technology and got better and bomb making and better use of social media and have gotten better at communicating. There was a news story that they have schooled themselves on what Edward Snowden released to better defend themselves against us which would be another negative consequence of what Edward Snowden did. Theres no question the trap the technology has transformed the battle. Its amazing what has gone on in terms of social media. Withnk of terrorism 1. 0 Osama Bin Laden handing off a videotape to al jazeera and that so they got the message out. Has thistand that isis program they use that people sign up for to spread the twitter message. They broadcast so much information about themselves in social media. Is there a suggestion that there is an offensive capability as well . Absolutely, this is a war of ideas, not just a war that occurs in the physical realm. And terroristsis try to do is to enlist others in their cause and frighten those they oppose. They have been quite effective in using social media as a recruiting tool. We can do some of the same things to push back. Some years back, there was a zawahiri where he talk to muslims around the region and around the discussion, there was real pushback and people criticized him for the fact that innocent muslims are being killed. If we are smart about it and we work with our allies in the region, there are ways to use social media effectively but it cannot be just the United States imposing its view on everybody else. It has to be working with those who are part of a Big Community in the region to come up with an alternative vision of what the future may be. Is using technology risky for them . Does it leave behind digital evidence that would make it easier for us to track them down . Of course, when they leave digital fingerprints, that creates the possibility of following the anger pranced. I dont want to get into specifics but there is a certain risk to them. There is also the risk that what they put out will actually offend people. There have been some religious leaders in the region who have now spoken out against what isis does pointing to the fact that they are killing other muslims. That really undercuts a lot of their appeal. As with most technology, its a swoprd, it can be dangerous in the wrong hands. I was struck early this week when isis after twitter shut down a bunch of sites, isis threatened twitter executives. Is that a real threat . Im sure the intent was to make it a real threat. Whether they have the capability of carrying that out is a different question. It shows their mentality. They only have one mode and that is to threaten and kill. I dont think its particularly effective in this case. It underscores the importance they place on social media. This is what keeps them going. A lot of what they are trying to do is to construct an image that they have momentum on their side and they have gotten their side. Both of those are false but in order to project that false image, they need to be able to use the media. Also or recruiting. They are using social media for recruiting to literally direct new personnel to the battlefield. Thats absolutely right. Thats not a new story. Akiaw that when anwar al was alive use the media to recruit people. Its also available through to them for purposes of training and encourages people to carry out operations. In many ways, its the essence of terrorism, the public face of what they do is a critical element of their strategy. There are those who believe that because of our Technological Capabilities and because we have gotten so much better at intelligence gathering, we should focus on that and forcing terrorist attacks before they happen rather than military force. What do you think . No defense is perfect. Youve got to have layers of defense. As we said 10 years ago, we are much that are off fighting the fight over there than over here. While we have done a lot in order to be able to detect terrorist fighters coming into the United States, its not perfect. In fact, to be honest, some of our intelligence capabilities actually have been degraded by some of the controversy we have seen around nsa and by the fact that the release of information that was classified has helped the enemy come up with countermeasures. Even with perfect intelligence, we still need to keep the enemy on the back foot. If they are worried about themselves, they are not planning to attack us. Thats what we saw in afghanistan. I think that is got to be part of the strategy here. We cannot allow them to have safe havens as the president said last night. What you think of a company where customers they have includes the fbi in the military. Theyis a company that sickly synthesizes and analyzes data to try to prevent things like the next 911. They believe they may be able to stop the next 9 11 if they have not already. Without getting into specific companies, there is no doubt that one of the things we see coming out of the Tech Community out west is the increased ability to use analytics to master and analyze huge amounts of data. Whats clear about the world we live and now is we are collecting some of it to death so much data about travel and transportation and communication and the flow of money. We have surveillance that collects enormous amounts of video. Its useless if you cannot assemble its and integrate it and make sense out of it. Thats why Big Data Analytics companies are very hot right now. People see there will be a continuing need to digest the data we are collecting at an x potential rate. Do you think big data could somehow make military force obsolete . You always need to do something with the data in the end. If it is not operational, its just information without any consequence. It will allow us to be more precise with their military targeting and be able to be more focused in terms of the kinds of assets we deployed. I dont think its ever going to do away with the fact that if you want to take out your enemy, you got to literally take them out. Years ago today, we had a lot of the data about the 9 11 attackers but did not put together. As we pause to remember that day and i remember it vividly because i was on duty on that day, you are exactly right. End, if information is sitting in a repository on the its useless. The key is to see its significance and connect the dots and then take action before the threat actually materializes. That will be the imperative we face over the next 13 years. Homeland security secretary Michael Chertoff, thank you so much. Up next, alibaba is on track for a recordbreaking ipo but how does the company work . We will show you coming up next. This is bloomberg west. The alibaba roadshow has role to the west coast, in adelaide today, day four of the roadshow. The ecommerce china has been pitching potential investors with videos. Later, it will go to San Francisco before going back to asia and europe next week. It is aiming to raise more than 21 billion in the ipo which would be a u. S. Record. For more on ally bama, sam grobart took a look at just what it is really all about. He walked us through the experience first hand as he ordered his signature salmon colored pants from alibaba. Com. Been talkinghas about alibaba from Silicon Valley to wall street. Alibaba is pretty huge. For starters, its the Worlds Largest ecommerce company. Last year, there were more than 248 billion in transactions on alibabas site which is more than amazon and ebay combined. More than 80 of all ecommerce in china happens on alibaba site and its ipo might be the biggest in world history. Those are just numbers. What makes alibaba more interesting is that this Chinese Company can connect you with millions of manufacturers around the globe, people making just about anything. I wanted to put them through their paces. I wanted to use the site to help me find a manufacturer who could make me something pats seemed like a good idea. To reach those manufacturers, i had to create a buying request, form that describes what i want to be made. Within a day of posting my request, i have replies from manufacturers in china, india, pakistan, and the czech republic. I firstle that down, ditched any replies from companies that were not alibaba gold suppliers. Gold is a tier manufacturers can pay for and it means they have submitted to some background checks to ensure they are not running a scam. Among the remaining companies, i judged their responses on basics like price and delivery times but also in how well written their responses were and other things like whether they included a picture of the pants. Its like online dating. Ultimately, i decided to work with a manufacturer in pakistan. I know what youre thinking how can i be sure the suppliers were not a bunch of sweatshops . I checked with the u. S. Department of Labors InternationalLabor Affairs bureau which tracks labor abuses around the globe and they give this project a clean bill of health. To get started, my guy in pakistan needs to get some money. This can happen in a couple of different ways. Alibaba has an Escrow Service called ali pay which holds your money and real is and releases it to the manufacturer when youre happy with what you order. You can also pay a manufacturer directly using Western Union or wire transfers. How much money are we talking about . Lets start by considering what im asking for. Im looking for pairs of pants in four different colors in multiple size combinations and i want more than one of each. That right there gets me to 280 pairs of pants and a nine dollars per pair, my total cost is 2520. My costs did not end there. Getting the pants airships to me would cost another 1983. That would get my pants on from pakistan to new york in about two days. How did it all go . Remarkably simple, it was like combining a craigslist ad with the giant 3d printer. 25 days and 4500 dollars after i started this process, i got exactly what i was looking for, a big mess of pants. And they came out fine but what do i do now . On the one hand, i have enough pants to last me for the rest of my life or i could share them with 279 of my closest friends. I guarantee there is not a pair on the street like them. Bloomberg businessweeks sam grobart. He is sam, i am still waiting for my pair of purple pants. Youomberg west will give will bring you the alibaba story, a halfhour special. At 9 p. M. Ring tonight eastern time and pacific right here on Bloomberg Television. Seventime grammy winner Pharrell Williams has plenty of things to be happy about. He will tell us about his latest project in tech, media, and music next. Welcome back to bloomberg west. Pharrell williams is having a massive month. He is having a massive career. He kicked off the nfl season with a performance of happy, launched a new fragrance and partnered with twitter. We sat down with him to learn how he is building his empire and using technology to do it. We have more from new york. What is he like . Hes really cool. He is an a credibly tech savvy celebrity. Called 24 hours of happy and helped launch his song to the top of the charts and he performed at the itunes Music Festival is promoting twitter to provence to promote his new album and fragrance. I asked him what technology will blow up in 2015 . Its not about the technology, its about the user. Thats what you will see. Of technology has some sort obsolescence built into it. It does not need a main thing. Its not about what people will be using is why they will be using it. Thats the essential question. Will people be using tech to buy things . The announcement of apple pay and the twitter buy button could help celebrities like Pharrell Williams to make a fortune and thats what we will be looking for in the next couple of months. As if hes not making a fortune already. Isnt he the latest judge on oh quote the voice . Yes, im trying to figure how much he makes and is rumored to be about 8 million for a boat the voice. For the voice. Him what he thinks will happen and where tek will take things in the season. He had an interesting answer. Animalnology is aferal running wild and its hard to predict what it will do. As all things in the animal kingdom, it is born with instinct and can only go so far. Then if you are Pharrell Williams and smart you will adapt and change and go with the flow. You keep on making money. Apparently he was born with instincts. Thank you for that interview. Apples big announcement of apple pay it the mobile Payment World by storm. Paypaly paul does testis paypal see this as a threat or a friend . It is 26 minutes past the hour at which means Bloomberg Television is on the markets. Equity benchmark indexes are still in the red, picking up on the sell off. We are still within one percent of its alltime record high. A couple of individual names were watching mens wearhouse, the retail chain reported secondquarter earnings that topped analyst estimates but revenue fell short. The shares are down by more than six percent in the company is blaming expenses related to its acquisition of joseph a bank. Itss wearhouse completed 1. 8 billion takeover back in june. You are watching bloomberg west. I am emily chang. Pandora has just signed a major licensing deal with bmg. The deal brings songs from the bmg catalog to pandora including songs from the onsite, from beyonce and bruno mars. Music industry can find common ground. Apple pay is ready to launch in just a few weeks. Paypal will be supporting the service however, paypal is not on apples initial list of official apple pay partners. Does this spell problems for the future of paypal . Ere with us in the studio is the owner of braintree. Why isnt paypal or brain tree on the official list . If you look at the list of targets, there are a lot of players that are not there. Most notably the vast majority of major retailers are not there. Walmart and best buy have said they are not doing it. It is interesting as a product. It has beenatnfc, around a decade and is not really gotten traction. Are major Unanswered Questions about the security and who will be responsible for fraud. Until those questions get answered, a lot of the merchant population will be sitting this out. We have always been an open platform and we support a variety of payment messages methods. We set for merchants who want to use us, we will support those transactions. We are one of the only players that is across the ecosystem from the consumer to merchants. We said we will support these transactions. Until many of these questions around security and who holds the responsibility for fraud, you will see a lot of these players in the ecosystem waiting for those to be answered. Does the security inherent in it change the reluctance of some retailers who might be willing to accept this because they know its lesser . I think thats a question that a still left to be answered. You can answer it now. Speak to these as to how well the biometrics will work. There has been some of this before of the fingerprint scanners which are utter but are not foolproof. Many questions are still there. It is still open as to who will be responsible for any problem. Its also about what happens when an account gets hijacked. These things happens and when that happens, even though this rides on top of tokenization,