Response to ebola. He is a former chief of staff of joe biden and al gore. The first nurse infected with ebola has been moved to the National Institutes of health in maryland. We fully intend to have this patient walk out of this hospital, and we will do everything we possibly can to make that happen. The other nurse who contracted ebola is at emory hospital in atlanta. President obama has signed an executive order to improve security for Government Credit and debit cards. They will be equipped with socalled emv technology, with a security chip instead of the strip. We are launching an initiative called buy dsesecur you should be able to buy the things you need without risking your identity, credit score, or savings. The president urged the private sector to follow suit. Former google lawyer michelle runhas been nominated to the u. S. Patent and trademark office. She has been serving as Deputy Director of the agency. Her nomination is subject to senate confirmation. The Patents Office has been without a permanent director for nearly two years. Is google still a major Growth Company . The thirdquarter Earnings Report shows growth is starting to slow down at the search giant. Were down from the prior quarter. Google is dealing with cheaper ad prices and more consumers accessing the site via mobile. And while growth slows, google is spending 50 more on research and development as it pursues self driving like cars and delivery drones. Does google need to change its Business Model . Editor at large cory johnson is with ourhe studio guests. Are these results from google alarming . There are two ways to look at it. One way, mobile is real. Google used to be the first stop for everything. The second thing has to do with, look at facebook before it went public. Everyone said mobile would doom it, and now it is making it even more powerful. It goes both ways. We dont know how the split goes with google, right . We dont. We think 60 is desktop. The balance would be mobile. It has been increasing materially over the last few years, and we think they are much further along in monetizing mobile. There was a huge gap two or three years ago. Ak thiss margins were we quarter. What do you make of that . This company is spending more than it should. Gross margins, they had a onetime charge, a legal charge, Gross Margins are relatively similar to the last couple quarters. We see a big increase in r d spending. That is where a company like google should be spending. But balloons and drones . You are right, balloons and drones, maybe not. Wearable devices, absolutely. Ime two major moonshots interested in. Wearable devices and google in the car. The next two or three years, youtube, google for the enterprise, google play. If you have huge margins, take profits and put them into threeyear plays anbd five to 10 year moonshots. The former head of google x said the capital they are spending is a drop in the bucket. They can spend a little money and potentially get all this runway out of it. But is it all really a drop in the bucket . 2. 5 billion in capex every quarter, no. Yes, but one heck of a buckety. ,. [laughter] i want to know from the mobile perspective how the prospect is given for advertisers. Do you more out of mobile ads on facebook versus google . One part is where the audience is. When users go to google on the desktop, advertisers have to go to google. But when they dont go to google on the phone, google does not have that ability to monetize. But when they go to google, they are still valuable. They type in what they are looking for, and it is all. Relative to facebook, it is a question. Click declined only 2 . It was the smallest decline we have seen in some time. Whats going on in the ad business, where you see price compression slowing down . The trend is reversing. Mobile clicks, for our clients mobile clicks have traditionally been hard to monetize. Advertisers dont know how to turn that into real money. It doesnt seem like a longterm business to me. You and i have different opinions about the way the mobile ecosystem works. I would say advertisers struggled for a long time to monetize mobile traffic, but they are learning how to do that. As they learn how to do that, the value of the clicks is going up. The trend is reversing, to knowing what they are doing and the traffic comes more and more valuable. You will see a reversal over the next couple years. Eric schmidt, executive chairman of google, says he thinks amazon is googles biggest rival in search. When you agree . Absolutely. The most profitable part of Google Search is retail, and if you are not searching on google for products youre probably going to amazon. That said, 80 of retail sales globally occur away from amazon, so there is plenty of fragmentation. You dont need to worry, google. Thank you both, as always. Coming up, airbnbs socalled joining us. L be you can watch us streaming on your tablet, phone, bloomberg tv, and amazon fire. This ismily chang, and bloomberg west. Over 140,000 people descended on es annual conference. Many travel here to San Francisco just to hear Ceo Marc Benioff give the keynote among other speakers like hillary clinton, mark andreessen, and al gore. For adown with benioff special edition of studio 1. 0. I spoke about his early career, and his vision for the future of salesforce. Ytoou started a company when you were 15, then worked under steve jobs. What was the most important thing you learn from him . Passion. Steve jobs was one of the most passionate people i ever met, and i still remember, in 1984i was programming assembly language, the language at the core of the microprocessor at apple headquarters. We were writing the First Software that did assembly on the macintosh. Steve jobs came storming down the halls, motivating the developers. His energy was infectious, and everyone went to work as hard as they could, because he was there, and he was working so hard. I learned you have to be allin. Thats something i try to bring to salesforce. How confident are you in the future of apple under tim cook . I think tim is doing a great job. We saw some great new project products with the new iphones. I have one in my pocket right now. Apple is a great company, the greatest story in american business. Look, steve was the greatest of the greatest, we all know that. Being the followon will be tough new matter what. Makes steve at success. How were Larry Ellison and steve jobs different as bosses . Both were phenomenal visionaries, able to have a feeling for where the industry is going and work hard with their teams to create that reality. Where they are different, larry was maybe eight more of a suit and tie kind of person. Steve was in his jeans and black turtleneck. Remarkably there same. That is why they got along. In what way . It gets back to that passion. They were very passionate, dedicated, focused people. The number one issue for both of them, the business. Nothing was more important to steve than apple. Nothing is more important to larry than oracle. There is a message in that. If you want to put everything above everything else, you will achieve that. Whatever you focus on, you are going to get. And for both of them, the number one thing in their lives was their work. You tweeted, there has been and always will be one ceo at oracle. What do you mean about that . How optimistic are you about the coceos . Im sure they will continue to do a good job, just as they have the last two years. But we all know that Larry Ellison is a force of nature, and what Larry Ellison wants, Larry Ellison is going to get. So whoever is the ceo will have to bend to his desires. Larry gave you money to start salesforce. He did. He was our first investor. And salesforce has become a competitor of oracle that might be true. What did salesforce do write that oracle has done wrong . We got focused on a vision of the cloud. Google or yahoo do. But instead of delivering books or search results or something the cat, we deliver business functionality. We stay focused and dedicated to that idea for 15 years, and because of that singular focus we have be able to achieve great success. There is a message in that, which is you have to be dedicated. Is there another message that oracle missed the cloud . Oracle has a different business. The chairman, who just retired, took me into his office and said, good thing you are leaving oracle. I said, why is that . He said, it will be hard for us to do a brandnew Technology Model and a brandnew Business Model, because everything from the way you deliver the software to the way you recognize the revenue is completely different in cloud computing. U. N. Larry ellison had a rivalry over the years, and more recently a partnership. What is your relationship really like behind the scenes . Larry and i have a great relationship. We are always hugging and kissing. [laughter] frenemies . We have been friends for 30 years. That has been exciting. Look, i had some great mentors in my life, people i have been thrilled to have. My parents, grandparents, but also like you mentioned, steve jobs, colin powell. I dont think anyone influenced me more than Larry Ellison. I would not be the ceo i am today. Salesforce would not be the company it is, not just because of his money, but because of everything he continues to teach me. So vague bih Tech Companies are splitting up. Why is that happening, and are we going to see more of it . There is a lot of Different Reasons why thats happening. One thing, these Companies Might be too big. Theyve become unmanageable, and you want them to be smaller, easier to manage. In an organization like hp, t hey will have one for each, and that will be a great strategy with two ceos. The same thing as a great strategy for you. Is horrible of those Companies Oracle one of those companies . It is hard to do. The most important thing, portal has to innovate at a higher rate. Thats all we have not seen in the last decade. How he continue to buy companies without losing focus . Acquisitions are hard. After doing 25 acquisitions over the last five years, acquisitions are hard. But you can transform your company through acquisitions. The other thing acquisitions do, they bring all these incredible people into your company. If you can nurture those people, you end up with phenomenal results. What you do to overcome the hard part, the challenges when you buy a company . As ceo, you have to choose which one you will be in. It will dramatically increase the success of it. Sonly have so much time, where i spend my time is super important. I divide my time into four quadrants. Drant, thein qua transformation quadrant, is where i spend most of my time. The things that i know, if i dont do them they will not get done. There are other things a run operating the business, nurturing things for two to five years from now, things around efficiency, that i dont have to be as involved in. I still have to be involved in some level, but the transformational things, i have to pick and choose carefully, then i can really deliver. Marc benioff, ceo and chairman of salesforce. Eastern on00 p. M. Bloomberg television. The Chinese Government may be helping hackers steal u. S. Trade secrets. Find out what the fbi knows, next. Welcome back to bloomberg west. Im emily chang. U. S. Tech companies, beware. The fbi is warning about hackers sponsored by the Chinese Government. The agents say they have use customize malicious code that Security Experts could not attacked. The u. S. Government accused china of widespread economic espionage, indicting five Chinese Military officials in may. Our security reporter is with me in the studio, with more. The fbi says they have even more capabilities than the hackers of a year ago that we were concerned about. Thats right. Just as the u. S. Gets better at hacking other countries, one thing about foreign adversaries, they are Getting Better all the time. The threats you saw, thats one of the things that makes the Security Industry such a dynamic space, it is evolving. Any specific reason this is happening, or is it a continual escalation . A lot of it is Standard Industrial espionage that happens between the u. S. And china. But also, we have ramped up pressure on china in the u. S. Ashave called them out intellectual property theft perpetrators, so there is added incentive. There are very few consequences for this in china, if you are caught hacking u. S. Companies, so there are very few reasons not to improve your capabilities. The fbi is asking Companies Like apple and google to be more cooperative and give them a front door to information on our smartphones. Of course, apple and google recently ratcheted up security, making that supposedly more difficult. Why would apple and google want to help the fbi . Its an interesting mission. Fbi and Law Enforcement are saying, if you make it harder for us to pull data off of devices, our criminal investigations will be stymied. The thing left out of this organization, all that data can still be accessed through standard, legitimate warrants. Apple and google says, if you own our device and it gets stolen or gets into the hands of lawenforcement, the device will be harder to crack, but every other investigative tool available to the fbi and nsa, this does not change that. Its a contentious issue. Apple and google are saying they are protecting their users. General keith alexander, former head of the nsa, i asked him if this lack of trust between Tech Companies and the government can ever be repaired. He said, Tech Companies will do whatever the government asked them to do, because they have to. We learned only recently what the consequences are two companies that resist the nsas commands for data. Yahoo was facing fines of 250,000 that would multiply every week they resisted. They are not backbreaking, but still potentially huge financial penalties for resisting government requests for information. What apple and google are proposing, they say we dont even have access to the information, so we cannot give it up. It is good for users. Someone said, logistically it reduces a lot of burdens on the companies from responding to Law Enforcement requests. Are Cyber Security reporter, thanks so much. We will continue to follow all this. As marc benioff told me yesterday, there is no finish line when it comes to security. Own ing secret of its is whisper sharing information with the federal government . That is next. Bloomberg television is on the markets. I am mia saini. As you can see, we have green across the board after a couple roller coaster sessions earlier this week. A couple individual movers. Morgan stanley shares rising by the most in northern three months more than three months. Trading revenue rose at the fastest pace on wall street. Carnival shares falling after an ebola scare. We will be on the markets again in 30 minutes. This is bloomberg west, where we focus on innovation, technology, and the future of business. Billionaire investor mark cuban is hot on netflix. With the massive fall this week, perhaps in relation to disappointing subscriber numbers, shares of netflix are falling again after driving 19 yesterday, the more than the more in less than two years. Q been tweeted, i am buying netflix at a small percentage of major media companies. Take a listen in the future, it is either if you want to watch something you just google it and go straight to it or youtube and go straight to it, or netflix, if you are going to buy netflix stock, i would not recommend it, but on a day it is down 25 i might recommend it. Netflix could have one billion subscribers by the early 2020s. Seems they are at the same page. At anonymous social media whisper faces claims it has been tracking the location of users who share their most intimate secrets on the platform. The guardian detail the Data Collection they witnessed while visiting the companys l. A. Headquarters. They claim to be the safest pace place on earth and are allegedly sharing information. Cory johnson and paul kedrosky. What do you make of the story . It is pretty bad for them. I tried to go through this. I am sensitive to problems of making privacy and anonymity work online, because it is very difficult. Based on what we saw in the guardian story that came out, there are actual screenshots of this thing. They seem to show the incredible level of detail with respect to tracking peoples physical presence. That makes it tricky whenever you say, give the example of some quotes from somebody who seemed to be located somewhere in the white house proximity and said something about how people if people only knew what was going on. It is remarkable stuff. I was also amazed when it was said there are 2. 4 million messages every day on whisper. There is clearly a demand for this service. But to put things up anonymously , is this over for whisper . I think it is deal over in a broad sense for a lot of people claiming true anonymity. We saw a little of this with snapchat. The whole notion of being able to protect peoples data is up in the air. When it comes down to it, if you read comments from the company, the cto was responding to complaints people were making. It boiled down to, we have the data, we just dont use the data. So now rather than protecting information by not collecting it, now we say trust us, we have it but we will not use it. I dontt a lot of think that is what a lot of people sign up for. If things are going to change, they have to change dramatically. I spoke to the ceo of whisper at sxsw, and he championed the anonymity. Take a listen. Anonymity is a very powerful tool. There is a spiderman quote with great power comes great responsibility. I know that one. We view anonymity in the same way. Paul, would you say they are not practic