Live from pier 3 in san francisco, welcome to "bloomberg west," where we cover the global technology and media companies that are reshaping our world.
I'm emily chang.
Our focus is on innovation, technology, and the future of business.
Let's get straight to the rundown.
Have hackers attacked computers belonging to the american military?
Numeral reports of an escalated cyber war between the two countries.
A showdown in washington or the government shutdown is coming as soon as monday.
If d.c. grinds to a halt, how without heart -- how will that hurt the tech industry?
Google is celebrating its 15th birthday today.
Here what it was like in the early days.
Hacked by iran.
They have reportedly broken into unclassified commuters -- computers used by the u.s. navy.
The tax happened in recent weeks and were carried out by hackers working directly for iran government or those acting with the approval of the iran leaders.
Officials do not believe the hackers stole information of significant value.
The report indicates they may be stepping up activity.
Previous attacks when relations between iran and the u.s. have been sawn.
It is the first time the president of the u.s. and iran have spoken since 1979. joining me now, my guest who covers cyber security issues.
It is interesting.
What they have described is an attack on operations of the navy.
They may not seem that serious.
You can learn a lot from those networks.
You can learn who is who, who is important, and who to target.
While this report is to be believed, we can assume the iranians have not stolen navy destroyer plans.
What are they looking for?
Probably the same thing we are looking for.
We are attacking the a cyber -- via ciber.
They're looking for weaponry.
Trying to learn how the military operates.
These attacks are almost always multistage.
He will start with a low level network.
Hasn't the u.s. hacked iran?
And gain critical access to their nuclear programs?
The most famous attack was launched by the u.s. and israel on and in rainy and -- on in a rainy and power plant -- iranian powerplant.
The only reason we know is some of the code leaked out and affected other computers.
Some of these attacks are random and how we detect them.
Whether there is an error, or some eagle eyed technicians spot something suspicious and investigate.
We learn about these things in a random way.
How else is iran flexing its muscles?
The attempt we know but have been attempts on banking websites.
There were a lot of attacks on very large u.s. banks.
The site went down for several hours.
The point was to demonstrate both that the iranians have hacking skills, and that they can inflict damage on u.s. economy.
Those attacks conserve another purpose, as cover for more sophisticated theft of money attacks.
How worried should we be?
It sounds serious.
It is the state of play we are in.
The u.s. is good at hacking.
We do a lot of hacking overseas.
Stepping up their game.
This breach doesn't sound that serious.
It shows that despite these the store talks, between the countries leaders, underneath we have this hacking escalating.
That is going to continue for as long as anyone is around.
Likes -- thank you.
This afternoon, the senate voted to pass legislation to keep the government funded for the next six weeks.
It goes back to the house and that leaves open the possibility of a government shutdown as soon as monday.
Will there be a deal before the government runs out of cash?
That is the million dollar question.
All eyes are republican -- all eyes are on republican leaders.
They are trying to defund obamacare.
The question is, will they bring some provision to weaken obamacare back?
We are not expected to hear from john boehner until tomorrow after he meets with members.
The president had a message for him.
Over the next three days, house republicans will have to decide whether to join the senate and keep the government open, or shut it down because they cannot get their way on an issue that has nothing to do with the deficit.
If there is no deal, the government runs out of cash on monday.
Obviously, there are some any things we could discuss that could be affected here.
The fcc -- the sec has said it will stay up and running.
How could this in fact -- impact the tech sector?
The big picture we're talking about, 800,000 workers on furlough.
All of that will impact tech.
Fights between google and apple will be put on hold.
It is not great timing for an ipo.
The shutdown could happen october 1. the question will be will that impact which are pricing into the market?
If you take a look at the standup we saw, it could.
2011, the debt ceiling fight went down to the wire.
Then the budget battle which led to sequestration.
Then the credit downgrade rate stocks took a big hit -- downgrade.
Stocks took a big hit.
The number of ipos vomited -- plummeted.
I reached out to twitter to see if there is concern.
I haven't heard anything back.
From a power -- power out so grosz to one of the most valuable countries -- companies in the world, we hear from google's earliest employees on the 15th birthday.
It is the search engine that has become a big part of everyday life.
Google is celebrating its 15th birthday.
15 qualifies for senior citizen status.
How does google keep its edge?
Jon erlichman has more on that.
On one level, google is still young.
Larry page describes them as a teenager.
You think of the companies we talk about, and google starts to look older.
Whether it is twitter or instagram.
The list goes on.
Part of the story inside google that i think is interesting is that even with close to 45,000 employees, a business that is inspected to generate $55 billion in revenue, there is still with some of feeling that it has a startup mentality.
There is an argument that there are some people that don't feel like there is a start feeling.
There are people who get started on relatively interesting projects really quickly and we see what the acquisitions they make.
Obviously they have thousands of employees.
Larry page has said he wants to feel like a startup.
He wants to keep working on these moonshot ideas.
How do they hold onto that start up feel now that they have gotten so big?
If you think about the stuff that they are doing, the most recent initiative that google announced was on health.
The fact that no one likes getting old.
How can we tackle that?
How can we tackle that using technology.
It is not something we would have thought of with google.
They like that.
They like taking on the hard stop -- hard stuff.
Giving the resources they've got, they are in a position to roll out billion-dollar businesses others may not be thinking of.
Sometimes people argue that is when -- it is when they are chasing something someone has already done, that is were you see less innovation and risk- taking.
Jon erlichman, thank you.
I want to bring in some folks who know google from the very early days.
George herrick was one of the first 10 employees.
He served as former director of a startup incubator within google.
He is now an adviser to google ventures.
With us is cried walker, who sold his company -- craig walker , who sold his company that became google voice.
His most recent venture is called goober conference -- uber conference.
I was at graphics, doing data analysis.
I thought instead of selling software, maybe we could target advertisement to search engines and do that billions of times a day.
Did larry come after you personally?
I pitched it to my company.
I figured i would go spearfishing.
I would go vacation in the middle east and my part -- my parents would pay with it.
I got a call from a friend who said a friend of mine in starting a company.
You want to join them?
That is possibly the worst pitch i've ever heard.
I had read an an article about it.
There were a couple of articles about them in the press.
Larry reached out to me.
He said do you want an interview with us?
I decided i would try to interview so i could pitch the company and the go spearfishing.
For with a year you soldier company?
2007. to yahoo -- you sold companies to yahoo.
How did they core you?
It was an entirely different courtship.
It was a big -- yahoo was a big and middle management.
You never saw the ceo.
The negotiation process was very adversarial.
When we left to start grand central, google wanted to talk.
It was entirely different.
It was collaborative.
He wanted me to be successful.
It feels like a startup.
Once you got in, 2007, it had been around for a while.
It fell like a startup.
Didn't they come and meet with you?
That was the thing.
When we did product reviews, we would do them.
They would be there.
You would present to some middle management who would present to some higher-level metal management.
I'm sure it has changed since marissa is in charge.
We were speaking with someone about the hiring of marissa mayer.
People have come out of google though gone on to amazing things.
You were there.
I was one of the people who was interviewing her.
She was trying to decide between companies.
I try to give her a version of the sugar water speech.
You want to come here and change the world?
That was one of the things that influenced her to come to google.
We were going to change the world.
What did you see in her?
She seemed smart.
She was a software engineer.
We were interested in gaining a balance of women in engineering.
That was important.
We wanted to recruit her.
To be on this, try to recruit everybody that way.
This was the opportunity of a lifetime for everyone that i talked to.
I spoke with hunter walk.
He had no idea the company was so secretive.
You didn't find out until you got inside.
Speaking of google as it is gotten bigger, to larry and sergey meet with you?
Do you still have these meetings with people below them?
Likes they are still very involved in the product side.
It was -- let's be clear.
I did not come call on us.
We wanted to do these products features.
It was then we were pitching to.
You are still in touch with them.
How does google avoid being a legacy company?
There is a ways attention between being focused and being innovative.
You have to balance and a right way.
When you are too focused to end up improving your current businesses.
When you're too innovative you in that distributing your work.
Google has been accused of that.
I think larry has been doing an excellent job of focusing areas of innovation that can make a difference in the world.
Focusing on self driving cars.
Working in google glass.
And the california life company.
Are these things going anywhere?
I think so.
They're going to make a big difference.
You have to look at how many people this can impact.
Think of the time you spend driving.
That is why it is a big impact.
What i think they have also done by focusing on these projects and not spreading their current list of projects thinly, he is improving many things about the company.
They put a lot of effort in.
I'm a huge admirer of his.
I am very excited to hear when he was the ceo of the company again.
Thank you for joining us.
And getting that nostalgia about the early days.
Thank you so much.
Coming up, how hackers can infiltrate your computer and 47 seconds.
That is next.
? welcome back.
I'm emily chang.
You can catch our early edition at 1 p.m. eastern.
A task force suggested that new york -- to talk at hacking.
It is in the headlines.
Just how vulnerable is your computer?
Megan hughes got a few lessons from former nsa leaders about how it is done.
Bob can hack into a network, access your webcam, photograph you, load your password, and live in your system for years.
I am on.
This is a demonstration military leaders needed to see.
I wanted to know how fast can you get good.
How fast can you learn about the skills we learn about.
Let's he turned astacio -- they developed cyber wargames for the pentagon.
If you are a company, someone can negate millions of dollars in research.
They walk us through the demo, using the toolkit backtrack.
The first step, reconnaissance.
That will search facebook, try to gather as much information about a target.
They scan for vulnerabilities.
We are looking for is which ones are open.
Knocking on a door and looking for windows that are open to see how we could get in.
He finds a weak spot named after a microsoft patch.
It is still vulnerable.
They obliterate the code and bring up a load that connects them to the target.
You sneak in behind the car in front of you.
It lets me do things as if i were setting in front of it.
He unleashes a bag of tools.
You are going to log onto your bank account.
I will have recorded that.
You can eavesdrop or see with the target is working on any given moment.
Other tools help hackers get into new targets.
There is persistence.
Every time you start your computer, the hacks are up and running.
Megan hughes, bloomberg washington.
As apple tries to make inroads in china, could gaming be away to gain an edge?
How chinese gamers are reacting to apple's newest devices next.
? this is "bloomberg west," where our focus is on innovation, technology, and the future of business.
I am emily chang with your top headlines.
Thorsten heins says he is disappointed in the companies second quarter results.
They reported a drop in revenue and a $1 billion loss.
Much was due to a huge write- down on old sold -- unsold phones.
A panel says passengers should be allowed to use tablets and other wireless devices during takeoff and landing.
Mobile phone calls and text messaging would be prohibited.
That is good to be sent to the faa next week.
They will determine the next step once it gets that report.
Facebook is making a big push to increase mobile ad revenue by expanding targeted advertising, looking at everything from how promotions show up to testing marketing messages.
E marketer says 40% of revenue in the second quarter.
What if it -- what does it take to capture a chinese gamer's attention?
According to a beijing-based game studio, publisher, they're trying to help companies change their games to make them more accessible for chinese audiences.
Which operating system should american gaming companies choose to win big in china?
The general manager of operations, first of all, explain to me what coco china does?
Thank you for having me.
We are very interested.
Likes we are known as -- it is a mobile entertainment platform.
We own the developer community which grew with the apple economy in china.
Also, an open source game engine used by tech developers worldwide.
Unit -- you guys have investment from sequoia.
It is the market.
Where the -- we are the market leader.
According to our research, it will reach 1.5 billion u.s. door does -- dollars.
How does it stack up to the xanga, the asian companies?
I think mobile platforms give smaller competitors a unique advantage.
In terms of creativity, the most efficient way to reach out to consumers, the comparing to sing it, we have our local know-how.
I have never seen one in person.
We have been covering this.
Talk about the differences about developing for different platforms in china.
Apple versus android.
When you talk about the android versus apple, it is not apple versus google.
It is apple versus the domestic app stores.
The keys to have a very broad distribution across channels.
These are the google play equivalent.
Gaming experiences bets on the iphone.
The platform is unified.
There is only one device.
For android, there is the fragmented devices.
It is the focus.
You help companies break into china.
How is gaming different?
Plenty of u.s. companies have had huge challenges in china.
Is gaming different?
There is no political sensitiveness.
In terms of taste, it is different.
One example is a popular theme in chinese game.
The local monetization, including integrating with payment platforms, and what to charge to local players.
What advice do you give to u.s. gaming companies?
He have to work with a local partner.
The biggest message is there is a revenue potential in the market.
What about content?
Some content does work well for chinese gamers.
For the hard-core games, you need to be fine-tuned for the local market.
Thank you for joining us today.
Music streaming service a-- we will speak the ceo of both companies.
This is "bloomberg west," where our focus is on innovation, technology, and the future of business.
I'm emily chang.
Evernote -- i spoke with evernote ceo and asked him why this deal made sense.
Salesforce is a company that we really aspire to be able to work with.
They have paved the way for our business.
Any customer has gone through the most important decision that makes them be able to put important things in the cloud.
They are the ideal company to be dealing with.
It is a big honor to be able to do something with them.
Evernote announced an updated version of its business product.
To the digital remix, where tech is changing the music business.
There is a new reality and radio buried apple, pandora, and spotify are forcing traditional players to step up their game.
Cumulus media teamed up with the service reo.
Back with that deal.
This gets -- they will promote their service on their stations.
Thanks to both of you.
Whenever we see partnerships, people are interested in who made the first phone call?
Had a this is started?
Jury when i had a meeting -- drew and i had a meeting.
One of those introductory meetings.
We were incredibly impressed with their technology and vision.
We were looking for a digital audio component to go with our broad cast distribution.
It really made sense.
We are improved with -- impressed with drew and is seen.
-- we were impressed with drew and his team.
I think of pandora, it seems that you are able to jump past the process.
You hit on the head.
We want to have a product.
This allows us to jump into it by accessing this amazing company that moves -- that they have built.
In addition, the other big strategic element to this deal is the awareness.
There are millions of listeners on the channels.
That is a great opportunity to bring the word out to people who will love the service.
If i think about the empire that cumulus is becoming through the deals, lots of talk and news, lots of sports.
It feels like you have taken a different path.
When people think of pandora, a lot of rap and alternative rock.
It seems that a different path.
That is true.
We have organized our company around those content verticals.
Countries where we are rolling out our first multiplatform.
-- country is where we are rolling out our first multiplatform.
We are organized around those content verticals.
One of the misnomers is in terms of radio listening, not only is the reach of 93% of the country, but the time spent listening is in norman sprayed it is two thirds of all audio consumption.
That is going to shift over time.
Things move slowly.
One of the things we are talking about is digital audio has four principal components.
The custom playlists, the feature of creating mix tapes of yesterday.
It is a feature.
It is not radio.
The third would be the national channels.
Sirius does that.
We're going to take the great content from the west would dow acquisition -- westwood dial acquisition.
The last would be streaming of local broadcast signals.
It is a very interesting app.
It will combine four of the elements that make up digital audio.
They were something like that out there today.
Before we wrap things up, is there a possibility that the music and video world could come together?
We are figuring it with these platforms are going to be.
Even with what you are exploring those avenues.
Could you see more of the subscription business is coming together?
Why -- absolutely.
We have a video service market currently.
Our goal is to bundle the products together.
We think that could be compelling.
Lots to watch for.
Thank you to both of you.
I will send it back to you.
Move over [indiscernible] we will take you board the multimillion dollar ocean towing -- ocean toy.
I'm emily chang.
The biggest event for luxury boats, the monaco yacht show has begun.
As demand for luxury yachts increases, so does that for extravagant toys.
We met with eric haselman, and the dutch company that makes the submersibles.
? my name is eric.
We are a company that builds some earnings for people -- we build submarines for people.
A submarine starts at 1.6 million dollars.
You would get a two seed submarine that would dive for a few hundred meters.
You need a certain size to be able to fit comfortably.
The first summary was built by a dutchman in the 17th century.
Now we have come out with these small, good looking submarines.
We have a water to medication system.
You can stay underwater for four days in the submarine.
There are so many things you can do.
It is the ultimate toy.
Now they want to go and see what is below the surface.
There is so much more to explore.
? the global gaming expo is the from your casino entertainment event.
It gives execs to see what is new in the industry.
One company that is historically a big presence is igt.
Cory johnson got a chance to catch up and see how the conference has become a tech affair.
A lot of technological innovation is introduced.
There has been an amazing collision between hollywood and the gaming industry.
A lot of big brands.
They are bracing the technological advances you see everywhere, from tech -- touch technology to audio advances.
I have seen companies that would do things like real-time sports betting on mobile devices . or chip counting technology.
Do you see a lot of that kind of thing?
That is absolutely certain.
I think you see a lot of the chip in the chip example.
You are stunning to see the technology proven in other industries that will be more conservative given its regulatory elements.
Those technologies that have been proven in other industries are making their way to the casino floor.
There is no question about it.
You combine it with the move to new platforms online and in mobile.
Our industry is becoming more reliant on technological advances.
You guys are going to the internet.
You acquired double down, a social media poker thing.
How is that going?
We could not be happier with the performance of double down.
Our theory going in was the social infrastructure combined with the game library that have been proven over the years, it would be a sure hit.
We are finding that is exactly what is happening.
Our content is the differential reader -- 15 g-8 that businesses at a rate of $200 million in revenue a year.
We expect to continue to grow in the future.
What is it about gaming companies going online?
I think journalists focused on zynga.
I wonder what expertise it is you think will let you reach a more general consumer?
It is a couple of things.
We reach a general interest consumer in casinos every day.
That is not new for us.
It is taking the experience to new devices.
First and foremost, it is about content and the experience.
The audio, the graphics, a combined package basis that consumers look for.
Different than seeing it, we are focused on social casino experiences.
Bringing the vegas experience to the mobile device on the desktop.
We are finding that differentiation does matter to those who choose to consume gaming in this way.
I have asked about yahoo.
There was a conundrum about your resume.
That you had a degree in marketing and economics.
What happened there?
I think it is activism a growing activity.
I stand behind my credentials.
I'm scrutinized by every regulator around the globe.
I stand behind my credentials and my representation.
It is about cycles.
Yahoo is in a cycle that is positive for them.
They are -- their investors are getting what they deserve.
I have been very pleased with the last year.
I never understood how that happened.
I have never seemed to understand how that happened that your resume got changed completely.
There is a lot of discussion about what happens in the internet world today and how information flows.
As i indicated, i stand behind the credentials in the way i represented them.
I think that is what matters.
That was patty heart with our editor at large.
It is time for the bwest byte.
One number that tells a whole lot.
It is fry way -- friday.
It brings me pleasure to bring you a friday bite -- byte.
It is how much money that was raised by the star breaking bad, i a platform based they allows -- he is going to watch the finale with a fan.
That is cool.
The end of an era.
We will be talking about it i am sure.
Have a wonderful weekend.
This text has been automatically generated. It may not be 100% accurate.