Billion for infrastructure. The fund will have a mandate and by a variety of assets including airports, toll roads, and Wider Networks here it they plan to complete the fundraising by the end of the quarter. A lot of tech earnings out this afternoon, including ebay. They expect the spinoff of people to be complete in the third quarter. There he meant grew 18 in the third quarter. Overall sales grew 4 and shares are rising in afterhours trading. Qualcomm is not welling investors with its orderly checkup. They posted it 36 drop in secondquarter profit and says Many Chinese Companies are still not complying with licensing agreements. Now to our lead. Facebooks firstquarter earnings reports. For the First Time Since 2012 facebook did not hit a home run. Revenue was up 42 to three and a half billion dollars. Profits drop 20 . Still, facebook continues to post huge user numbers. Monthly active users are 1. 14 billion. Mobile users are 1. 25. Shares though, are falling, almost down to percent. Joining me is cory johnson. The revenue not looking as great, but engagement looking pretty good. Guest get on facebook for the long haul. There is not the same excitement , not the big beats, but if you look at the engagement numbers, all of those numbers are progressing year after year. If you take the long haul approach to this, that backs do have an impact setbacks do have an impact, but theres nothing that concerns a. Emily i sat down with Mark Zuckerberg in december and talked about the writer though broader strategy. Take a look at what he said. Mark our strategy is to build things that people really want to use. Facebook is the most used app. Whatsapp and instagram are the next used. Emily 800 million users for whatsapp. Instagram, facebook messenger, 600 million users. At what point does facebook not become the core experience . Cory i love the interview. Point number one, i think the dumbbell approaches what we will see. He talked about this at the conference, he said you are going to have motherships book. And the news feed and experience on the mobile device, that is going to be mother facebook. That may be the principal source of revenues. The experience of facebook and data will come from varied sources like messenger, Whatsapp Instagram oculus wednesday. Facebook will know a lot about people. Even the principal Revenue Source will be big mother facebook. You can see part of these results point number two, i would say is the results they put up today are spectacular. Maybe analysts had higher numbers, maybe there is a schematic wall street where they put bigger numbers. But this is just a fantastic quarter. Revenues went from two and a half billion dollars a year ago to 3. 5 billion. 49 growth profitable growth, Free Cash Flow. This is just a blowout fantastic quarter from a company that does all of the things that i company should do. When sales are slowing you have to be sure but it is still big. 49 if currency was flat yearoveryear. Emily zuckerberg certainly doesnt lack ambition. He is taking on even bigger problems in life to connect every person on the planet he has run into a few hurdles. This week in particular in india. Some potential partners are not supporting the internet. I want you to take a little listen to a little bit more at the interview ended in december where he talks about what he wants to do. Take a listen. Mark we just turned 10. We decided in the next 10 years we want to take on really big challenges in the world like helping everyone get online. Emily how cord you think internet. Org is to Facebook User and how concerned are you about some of the problems they have run into recently . Guest i think it is good pr. I think the core of what Mark Zuckerberg one is really that he wants to change the world. Facebook obviously fits. But if i were to drink it, it is probably on the list of things that are important it if i were to rank it is probably 5th on the list of what is going on. Not the whole story. Emily what about mobile . Sheryl sandberg says facebook and instagram control one out of every five minutes the user spends on mobile. Guest it is staggering how investors can spend those progress comments. It probably will go higher. That talks about some of the things cory said about that mothership and how profound the platform is. They really just our milking a brand that isnt that exciting. They are doing great just with facebook. That is the real takeaway, they have a continued interest in what is going on facebook, yet they have more relevant ads that have higher pricing driving results. The whole exciting part is imagine what happens when some of his other stuff actually starts to kick in. Cory and what happens when the rmb kicks in r and d case in . 30 of their revenues are devoted to rmb r d. They are spending more, 200,000 a day, on this research effort. It is a huge one. Emily thank you both. Her nsa had general keep alexander general keep alexander. Emily welcome back to bloomberg west. , im emily. An indepth discussion on cyber stretch cyber threats. I sit down with a retired fourstar general. First of attentive headlines. Greek banks have received access to more emergency funding. The governing council raised the cap on emergency liquidity of this by 1. 6 billion dollars. In the meantime, euro area finance ministers will feet meet to persuade greece to commit to economic reform. Donald ceo and new mcdonalds ceo is relaunching a mobile app and remaking its marketing strategy. My vision is for mcdonalds to be seen like a modern progressive company, for the contemporary customer experience. It is about doing what it takes to be doing what our customers expect tomorrow. Emily a reported a 33 drop in firstquarter profits and an 11 drop in firstquarter sales. Sales of drop six straight quarters in the u. S. Boeing says different production costs are rising for it dreamliner. Costs rose 3 in the First Quarter. They also posted negative Free Cash Flow and a 92 plunge in operating cash flow. Profit in the First Quarter actually rose 38 . Sales were up about 8 . Here in san francisco, nearly 30,000 Security Experts are in town when he security conference. One of the largest security events in the world. Among them, one of the most authorities on Cyber Security general keith alexander, a retired fourstar general who resigned as nsa commander. He is now the founder and ceo of ironnet, a Cyber Security and consulting firm. You are famous for being in charge when Edward Snowden dropped his bombshell. Im curious, since he stepped down, what has changed in the Security Landscape . What has surprised you most . Guest what has surprised me is where we are and the rate at which the cyberattacks and lights are increasing. We have seen over the last year, exports exploit against target, home depot, j. P. Morgan the attack against sony. When you look at the changing landscape, threats to companies is growing significantly. Part of that is attributed to the rapid change in technology. Part of that is the Global Landscape when you look at what is going on with russia, iran north korea. Terrorism. All of those combined to make this a very tough area. And one where i think the good parts about these conferences, we need Tech Companies to come together and grab a better way of addressing these problems. We have not done that yet. Everybodys being attacked the solutions that cyber teams are putting together is insufficient. One of the good things about being here is looking at addressing new ideas wrestling with those that other Tech Companies have seen and how you can partner together to provide a more comprehensive solution. Emily the president of rsa gave a very controversial keynote. He says the Security Industry has failed. Do you agree . Guest i agree mostly with that. The practical reality is we have let security languish on two fronts. Technology and the demand for better security. In the past, it has been one we can write over. One did not have to draw from the big boards. I think what happened to target and home depot, everybody said we now look at this as the ceo and board level. It is need that type of change into something that we now need to look at from a tech perspective, let us put the solutions on the table to get a more comprehensive approach to Cyber Security that does not put it on the back of the i. T. Professionals. If they are getting hacked it is because they dont have tools and training. It is not because they dont want to protect networks. Emily what is it that you want from Tech Companies . They say there will never be a backdoor. Edward snowden says there has been a backdoor for a long time. Guest what Companies Need to do is how do you bring integrated approaches . It has nothing to do it back doors. You dont need backdoors or any of that. You need is a way of understanding one malware enters your network how do you do that . In the past it was antivirus solutions. Save me see Antivirus Companies like symantec, antivirus alone is insufficient you need more comprehensive solutions. That brings in a Team Approach like Companies Like symantec, mcafee and others. Also firewall companies. Look at how you can integrate them. I think that is what he was referring to in his speech and what i think we actually need to do. We collect team and cyber on the civilian side, it could present a much better set of products that would help these companies. Emily if the Iran Nuclear Talks well, what can we expect . Guest im very concerned that those fail. We had iran and russia. And at times, their way of firing back on sanctions is to use ciber. Cyber. That im concerned it does fail there will be cyber repercussions. There were over 350 distributed denial of service attacks in 2012 and 2013. There are also attacks on saudi arabia in 2012 that destroyed data over 30,000 systems. If those come together against any of our sectors we have a big problem. Even against the government. Part one, lets fix the difference. We can do a much better job. Take this off the table. I think we need cyber legislation second. We absolutely need government and industry to share so the government knows when industry is being attacked. Going back to backdoors government cannot see into networks and does not want to see into networks, and does not know when a company like sony is in contact attacked. Cory emily the ecb documentary on hbo . The takeaways that the government sees literally everything. Guest one of the things you and others can do is get the facts on the table. It is very interesting that we sat down for the president ial review group. We had a board member of the aclu look at what the nsa does. That was geoffrey stone. We would like to hear his views because what he found his that not only is what nsa was doing was what they were asking asked to do, but they were following the law and had great integrity. But that doesnt normally come out. What comes out is somebody sensationalize is it and claims they are in all of your networks. How Many Networks are out there and how many businesses . Santa claus can see every child in the world. That is a nice thought but it is not correct. In the same vein, and other Government Agencies. The real question is, how do we let government know when a companies under pressure . We have to do that. If it is the governments responsibility to defend company like sony, who is going to tell them . What we do todays forensics. It is after the fact. That company, our nation, has lost a lot of money. We can and should do better. Emily stay with us. We will continue the conversation after the break. The state of Cyber Security. We will be right back. Emily welcome back to bloomberg west, im emily chang. We are back with the general keith alexander, her head of the nsa. Former head of the nsa. You feel the public vastly misunderstands how much information the government has an tracks. What candidacy in terms of my emails, my communications . What does the government know about me . Guest about you other than being on bloomberg integrate personality and a great personality . If you are talking to terrorists, the government will require more a warrant to track your communications. Think of a public case the guide was going to blow up the new york city subway. What nsa had to do under the 702 program with get a court order to allow them to get information on the Communications Going from an al qaeda known terrorist with him. That is what nsa and that program is geared towards. Nsa is the foreign side of this not the domestic. This perception that we are listening to phone calls or reading email is completely false. Unless you are talking to a terrorist who is overseas. Domestic it would be the same thing with the fbi. They have to have a warrant or some reason, probable cause to go after you. Emily what about the dragnet . Guest this is the to 15 program. The metadata program. Emily information you collect right . Guest this is actually Business Information that the government compels Internet Services to provide. It has no content. It has the date and duration of the call. Only those things. Your name is not in there. No content. I will repeat, no names, no content. Just numbers. What that is used for is lets say, there was actually a number in that communication in that public case. The sba fbi told nsa, that is his number and we know he is talking to al qaeda. Under the rules at the time, nsa had to have proof to look in the database that that number was associated with al qaeda. One of 35 people could look into the database and go out to see who he was talking to. They waiver to see one of the people in new york had connections to other terrorists. All they saw was the numbers. The numbers resulted in somebody overseas known to be a terrorist. And if they would give that number to fbi an essay would give that number to fbi. The fbi could look that up. Nsas job was to connect guys from 9 11. Not to interrupt your communications. Emily we will continue the conversation after a quick break. Thank you for the explainer. You will get more indepth coming up. Emily im emily chang. This is bloomberg west, and we are back with retired general keith alexander. Founder of iron Cyber Security. He says the nsa is just connecting the dots. The problem that i think the American Public has is the nsa collecting the dots. Guest actually nsa is authorized to get this this is records to play in the database. But they can look at it unless they have reasonable suspicion. And then, every time they look into it and everything they touch is audited, and can be overseen by the courts the administration, and a number of places and administration and is reviewed by the president ial review group. They all found that nobody was misusing the data. The real issue, how do we do it better . If there was a better way to protect the country, im all for it. I think that is where the tech immunity and government needs work together. Emily at tech communities have insisted they are not going to sacrifice privacy or work with the government. You have larry page and tim cook and Mark Zuckerberg taking this personally. Guest i would step back and say, what is needed or the country . We need a way to stop terrorist and protect civil liberties. The court found that this is the best approach we could come up with. I put that to the tech community, is there a better solution . Can we come up with a better solution . More poorly not only for our country by europe and other countries. Emily what is your solution . Guest i have not come up with a better one. That is the problem. We have wrestled with this for several years here how do you connect the dots . We could not 9 11. The Intel Community took a hit for not being able to connect what the nfl i and if they thought overseas with the fbi souaw here. If there is a better solution we should put it on the table. If you were able to put the best of big data, the company you mentioned, will end apple google and apple, why dont they join in and say let us come up with a solution. Emily so are you saying that apple, lugo, facebook can stop the next 9 11 . Guest im saying that they can protect civil privacy better than what we are doing today. If they do they would require government and industry to work together. We have a great tech immunity. We have to bring them in. We have to out how do we cross the divide that was created . There is a lot of misinformation out there and we need to fix it. We need people like you to help. Emily you said last year, im really concerned something bad is going to happen. I do think evil need to know we are at greater risk and there is a lot more coming. What else could happen . What is something th bad . Guest im concerned that isis and other terrorists want to hurt our country in europe. It is in their best interest to have a big attack because it helps them recruit more people. We are doing everything we can. By telling the back at how we stopped them only helps them. Think of what happened with enigma and the early parts of the war when the germans went from the third or fourth right we started to lose the war in the atlantic. Im concerned that the amount of information revealed post Edward Snowden gives them more information. Now is the time for companies to help people protect our privacy. The government cannot do this alone. Emily how concerned are you about another 9 11 . Guest i am really concerned. Most of my time spent while director was spent on counterterrorism. 99 of my time. I did not have time for anything else. When you think about it, the tools they have, the approach we are taking, and when you see crowdsourcing and the, is there a way