Microsoft. Meanwhile, ceo tim cook announced that apple is investing 850 million in a new solar farm, a partnership with first solar. President obama has called Vladimir Putin ahead of the ukrainian peace talks tomorrow and mr. Obama reaffirmed u. S. Support for ukrainian sovereignty and warned putin that the costs will rise if russia continues to send troops and weapons supporting rebels. President obama also spoke with the president of ukraine poroshenko. And twitter cfo anthony noto had his account hacked, and he was sending spam tweets. Hackers also hit the page of delta airlines, and they said they have removed the objectionable content and are investigating the source of the hack. The white house is creating a new agency Whose Mission is to stop Cyber Attacks and improve information sharing about those attacks. The Cyber Threat IntelligenceIntegration Center will collect that information from various Government Departments involved in Cyber Security including Homeland Security and the justice department. This follows the hacking of Sony Pictures and anthem among others. Will it work . Joining us via skype, micheal leider, former director of the u. S. National Counterterrorism Center and the crowdstrike chief Security Officer shawn henry formerly with the fbi. Do we need another Bureaucratic Agency looking at this . If you put another layer into this area, you are creating this creating some problems. If this was described as the coordination of intelligence i think there is some value. There are multiple centers where there is a lot of coordination happening. The facts are in the details. The real key is to see exactly how this is to be utilized. As the story was described, the president wanted to know what was happening at sony, and nobody could tell him. There was no Central Place to get this information. Is that a real problem . I think it is. People are right to be dubious. Theyre looking for solution to solve the broader problem. I disagree with my friend shawn in that often when you have the most organizations in government looking into the problem, you actually do need that coordinating agency. This should not be viewed as a panacea which will solve all of the problems but there is a need for a Common Organization to know what the nsa is seeing, what the fbi is seeing. Why not require companies to disclose when they have been hacked . If the Customer Data of the certain level has been taken isnt that shining some light on that force those companies to do a little bit more . Most of the cyber problem will not be solved by the government, it will be solved by the private sector. This will have to be able to be involved with information sharing within the private sector. This piece is much smaller. It is trying to make sure the u. S. Government is on the same page so it can intelligently interact with the private sector. I do think disclosure within the bounds of how industries are already seriously regulated is appropriate. Corporations need protection from the government so they dont face additional liability from those disclosures. I think the customers will hold them to that high standards. There is a compelling argument when the president says he didnt have the information that he had on this thanksgiving day. Is that the right place to do it and wouldnt that work . I dont think we disagree in this area. My concern is that there is another agency. There are lots that conduct operations. I absolutely concur. In terms of the white house not being able to get that information, i find that hard to believe. We worked at the nci jtf. We had the cia, dod, fbi. The entire u. S. Government involved in cyber all sitting and working on the same problem. Certainly the minds are there. It is trying to coordinate and bring this to a logical conclusion. I also wonder about the relationship with business and with the Companies Whose information is getting out there. Are there relationships like that right there with the cios of companies . Does the white house have the best relationship . That is really the ideal. Tactical intelligence, the u. S. Government is collecting a whole host of data that would be of incredible value of the private sector if it was able to get into the hands of the cios responsible for protecting these companies. When the president speaks on friday, that will be one of the things that they suggest. The companies are in a much stronger position to identify who the adversaries are and to detect them on the network. They have to have detection on the network so that they can better protect themselves. The president is coming to Silicon Valley. We will be there with bloomberg west. The companies in Silicon Valley have a very difficult relationship when it comes to privacy and data. What does he have to say in his messaging as to those companies here in Silicon Valley . You are right. There has been a very strange experience between those companies and the government after the snowden disclosures. I think that relationship has to be rebuilt, it has to be rebuilt for the companies for them to have success internationally. It has to be rebuilt in the u. S. Because the u. S. Government will continue to rely on the private sector for lots of people and technology that the u. S. Government also has to use. This is a possibility and an opening to rebuild that trust. We have to accept that there is no silver bullet. We put all of our information on networks. This will be the combined government with the u. S. Private sector and individuals. Shawn henry, thank you so much. The Company Behind grand theft auto is aiming for another big hit. The ceo will talk about his latest game evolve and how he hopes to get grand theft auto into china. This is bloomberg west, i am cory johnson. Here is a look at your world headlines. The russian president Vladimir Putin is cementing ties with the egyptian government. Putin presented egypts president with an ak47 assault rifle. Troops have broken through the prorussian rebel positions in a key eastern city. Facebooks internet. Org is getting a boost in india. The partnership will enable customers to access facebook and three dozen websites without incurring data charges. This comes in six indian languages. The japanese camera maker canon is making its largest acquisition ever as it looks for growth outside of the slowing camera business. They are buying a swedish Video Company called axis communications. They make Video Surveillance equipment used in casinos and shopping malls. Taketwo interactive has built its business on franchises like grand theft auto and nba 2k but now they are betting on a new game called evolve pitting humans against monsters. It goes on sale today. It has gotten rave reviews. We sat down with taketwo interactive Ceo Strauss Zelnick. It is pretty unique in that you will either play as a monster or as a team of four fighting a monster. As far as we know, that is novel. It won the best of show at e3. How do you make plans to launch such a thing and to try to figure out what the scale will be . I think it is true of any entertainment business. Certainly it is true of the movie business where you spend your money and until the picture opens you just dont know. You just dont know. We have a little bit more insight because we interact with retail and retail orders products from us and they tend to be experts. Usually they can signal through the analysis about how this is going to look. It is unusual that we would ship the product into the retailer and would be disappointed with how it sold. Occasionally it does happen. In this instance, the retailers are very enthusiastic. That said, it remains to be seen. We never like to claim victory before it comes. There is talk about sex and violence. I just dont care about sex and violence in video games. Is that morally bankrupt or is the market bigger . I think you said it right. You want to know what is there. It is up for us to deliver a rating, standby the rating, and market appropriately to the right audience. The rating they use is the most robust in the industry. It has the highest level of compliance as measured by third parties. When a parent goes to the store to buy a video for his or her child, they know to buy something that is rated e for a child. If an adult goes to buy an m rated game, they know that there is likely to be violent or sexual content. The same when you go to an rrated movie. The right to bring what a publisher wants to the public is terribly important right in america. Equally, we have a social responsibility to do what we think is right and only to market to appropriate audiences. I think both are important, the ability to do what we think is right, and our social responsibility is equally important. How do you see who your user is . Do you put them into groups . We typically look at it as concentric circles. The core being socalled hardcore gamers. People that love videogames and people for whom it is there primary entertainment activity. What about age, sex . It is across the board. The median age is 37, really adults. I think the reason is that one consumes the entertainment that you were passionate about in your late teens and that never changes. That is why it is growing so rapidly and aging. The video game business has been around for about 35 years. Every year that goes by, our median cohort will increase in age, which suits us just fine. They love them and they keep loving them. The second circle would be people who play video games sometimes but for whom it is not the most important activity. Then the third is the person who is interested but it is not their primary or even secondary activity. In the case of grand theft auto five, one has to believe that we addressed the entire market. You might only address the core market. Certainly the goal is to dress as broad a market as possible. We want to create a title that is cool to look at. When you build the business do you imagine going through those circles where you imagine a lifetime of that product . Would people find it first tomorrow and it would only be there 10 years from now . That is our goal. We are not always successful at it. A great videogame is easy to approach, difficult to master. We will have more next. We will talk about a proposition of sex, violence, and grand theft auto in china. What is the future of taketwos Digital Business . I asked Ceo Strauss Zelnick in the rest of our interview. We primarily sell to pc console. We are economical. We want to make our products available wherever the consumer wants to be. If that is digitally distributed, fine, if it is physical, fine. If it is pc. What matters is that we are creating an interactive experience. Grand theft auto five going to the pc on march 24. Is that something that will be a significant catalyst . We have high expectations. If history is any guide, we should be very pleased. In you have this partnership with tencent. Tell us how that works. They were our partner as they sought to develop and be a 2k online in china which is a free to play multiplayer game. We entered with tencent because they were the premier company there, because they had a point of view of how to go about doing it and they were prepared to mitigate a good deal of risk. It has been a great partnership. We have a lot of people on the ground. I think we have 24 million registered users to generate revenue every month. In terms of turning profits already, what is the growth like . That is a great question. Certainly, tencents growth is a nice backdrop, but it has to continue to grow, it continues to grow and we hope that it will continue to grow. Right now, it is month to month. The consoles, what does that mean for you guys . That is obviously a big market. It is a brandnew market. People love games in china. They are free to play. This is a brandnew business. So far, only be xbox has launched. The playstation 4 has not launched in china. We are seeking to get government approval to sell our basketball title. It is a massive market. 300 Million People in the middle class. The entire state of americas middle class could fit inside of chinas middle class. What do you expect in terms of timing . Might it just favor local developers and content . So far the content has been balanced with local and international. Ubisoft is on the ground, and this gives them an advantage. All of us in the government approval for what we do and that is a bit challenging. Maybe that gives you the advantage. Will we ever see a grand theft auto in china . Forever is a long time. I certainly hope so. We dont talk about this kind of plans, certainly not in regard to our titles. The Chinese Government has a strong point of view about content. Until that funnel is widened, it will be hard for us to bring a lot of action. Might that mean that firstperson shooter games like the one that you are introducing, that will have trouble getting into china . It remains to be seen. I think over time the Chinese Government will recognize that Entertainment Properties do not stand in contrast to the values of the Chinese Culture and that they can coexist. I think over time the Chinese Government needs to protect intellectual property with much greater vigor if they want International Companies to participate actively in the market. That was taketwo interactives Ceo Strauss Zelnick. You are watching bloomberg west where we focus on innovation, technology, and the future of business. Some of the biggest names in tech are gathered in San Francisco for two big conferences. Brad stone is on site of the goldman gig with some big interviews lined up. This is one of the biggest events on the Silicon Valley calendar and they have a lineup of ceo heavy hitters. We have got tim cook giving the keynote at lunch. Tomorrow, Marissa Mayer from yahoo , dick costolo from twitter. We have got a great line up here on bloomberg tv. We have got matt maloney, the ceo of grub hub. His big competition yelp just acquired one of his competitors. Stay tuned, we have a lot of good stuff coming from the conference. Those are some big names. Pandora finds itself in a big court case that could determine its future. They are facing off with bmi. They represent 650,000 songwriters and publishers. Bmi says that they are trying to present themselves as a terrestrial Radio Station. They are even buying a Radio Station in south dakota. They argue that pandoras reach is much larger than any terrestrial Radio Station, the 81 million listeners, who are not most of them in south dakota. This comes after pandora one against its rival organization. Joining us is the ceo of the future of music coalition. To me, this is existential for pandora. They cannot survive unless they can get lower rates of music. That might be the case but it is true that this is part of the process. The Southern District court of new york oversees the ratesetting process for pandora. The real policy or political fight here is more about what evidence is allowed to be considered in the rate determinations or whether there should be government oversight at all. To me and a lot of songwriters we feel that having a public process is important because it is more transparent. One of the challenges for songwriters in the digital era is understanding how much you are supposed to get paid, by whom, and when. The transparency issue is key. The ratesetting is going to be watched closely by folks on both sides of the marketplace but i think that everyone benefits from having webcasting continuing to be a vital part of the music sector. On its face, it is ridiculous for pandora to claim to be a terrestrial Radio Station. They serve a similar market to traditional radio. In the old days, the Music Industry functioned pretty basic. You heard a song on the radio, if you liked it, you might be motivated to go and buy a copy of that item and later a download. Nowadays there are all kinds of different ways to hear music but pandora is still a lean back experience. It can be customized to taste but for a lot of folks that is just radio. The interesting thing about streaming is that we have a twosided market. We have the leanback side which is pandora and other kinds of webcasters. Then you have an ondemand side which lets you make a playlist share that with other folks on the service. That is more of a spotify marketplace. From a market perspective, i dont know that it is entirely fair to expect the radiolike service to make up for revenue lost from a shrinking sales market and that complicates the debate quite a bit. Forget about the debate between the songwriters and performers. Is pandora paying a substantially different rate than i heart radio which is owned by Clear Channel, which is of course the largest owner of Radio Stations in the u. S. . The largest are able to lock in the rates. They do look different than pandoras rate and they are predicated on different evidence. That is the devil in the details for lawmakers. All of these services are becoming similarly situated. Why shouldnt pandora pay the exact same rates as i heart radio . That is an excellent question. The fact that Clear Channel operates a webcast type platform would indicate that those rates should be closer to equal or bro