Obama's Cybersecurity Plan: B-West (2/12)

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Feb. 12 (Bloomberg) –- Full episode of “Bloomberg West.” Guests include SIFMA’s Ken Bentsen, Wepay’s Osama Bedier, Intel’s Steve Brown, VMware’s Sanjay Poonen, Google’s Caesar Sengupta and Bloomberg’s Phil Mattingly, Sarah Frier and Peter Burrows. (Source: Bloomberg)

? live from pier three in san francisco, welcome to bloomberg west where we cover the technology and media companies that are reshaping our world.

Our focus is on innovation, technology and the future of business.

A few big stories today -- number one, alibaba is launching a u.s. e-commerce site.

They have been buying up stocks and now they are launching a fashion or jewelry e-commerce site and we don't know if it's going to look like amazon or at sea.

They certainly want to put a face board in front of u.s. investors and consumers.

News out of twitter -- twitter's redesign, kind of stumbled upon this yesterday.

We went online and discovered our twitter page looks a lot like facebook.

Twitter is experimenting with wings like this all the time, facebook is as well, but one of the things that makes it difficult for them to make changes is current users get upset when things look different.

That is the ultimate issue.

Twitter's appeal to people who don't use twitter -- twitter users of course are responsible for so many pages, but those numbers falling down, user growth falling down and they haven't addressed that.

We are following another big story out of washington -- the obama administration is releasing new cyber security headlines today.

Thanks, utilities and other essential services to improve defenses against hackers.

Basically they are going to outline some guidelines, but these are voluntary guidelines.

This is a rising issue.

In the context of what was going on with the nsa and the notion there are more and more security things happening around digital lifestyles and where people record their behavior.

One of the big criticisms of the plan is it doesn't offer incentives for cost murders -- for companies to make changes.

We are going to talk more about that with our white house correspondent, phil mattingly and ken benson from the security and exchange commission -- this is the result of a year-long effort.

Is this going to change the game?

Rex it depends on who you ask.

This is a nice start but it's not anything that's really going to change the game as it currently stands.

What they are putting out here's a group of best actresses and places where people can communicate and try to counter these cyber attacks, but you get the key point.

Missing from this document today are incentives to get big companies like the banks who are members of 10's organization to want to come in and participate.

They have to be careful about information sharing and legal liability.

Until that is addressed, it will be difficult for these companies to jump all in.

What kind of incentives are you looking for?

I would be a little more robust, not to contradict him, but we think this is a good step on the part of the administration and certainly there is more that needs to be done, including acts -- actions congress needs to take.

The financial services industry has spent a tremendous amount of money developing systems and protections.

We know there is more to be done because we are only as strong as our weakest link will stop this will begin to spur, not just looking at the financial sector but across all sectors where we think there's more work that has to be done.

We think it is a positive development.

The financial industry sees the least amount of successful hacking against it.

What does the financial business understand, whether its target or yahoo!, people who have had issues with hacking?

We do not represent the consumer financial area, we look at it from a markets perspective.

There are so many ways to come into the system and you are only as strong as your weakest link.

What has happened with target and neiman marcus indicates that there are risk and we think it needs to be a top priority for the administration, a top priority for congress, and a top ready for our members and organizations.

Is a really the responsibility of the federal government to give a company like target to make their network more secure?

Shouldn't they make that a priority?

You would think, if they have enough incentive, companies would look at what happened to target and neiman marcus, they've got plenty of incentives, but they might need guidance from the white house.

How are companies like target effort from utilities, different from financial services companies?

That's an interesting question.

In the grand scheme of things, the administration views it right now as very similar.

As long as there is a weak link, their major problems.

Especially with what happened over the last couple of weeks, it may be a leading indicator of not only have these attacks been bad for a long time, but perhaps they are getting worse and if members of congress, if they can't find some kind of legislative fix, a key component that's not fixed, these problems will just continue to snowball.

What you see with target, neiman marcus and the retailers here is that people are pointing at it and saying as long as these week links exists, we have major problems systemwide.

You have run experiments where you are testing out a nightmare scenario.

You call it quantum dawned to.

What's the nightmare scenario.

What did you learn?

We have done quantum gone one and two and will do another in a couple of years.

They are working with the treasury department and our department across the financial services industry.

We look at what the cyber attack on the equity markets would look like.

To the point you have to close down the markets.

It's about the need for better coordination between the industry and our regulators, the need for better information sharing between industry participants, market participants and participants in the government and markets as well.

Some of that is where congress can come help and provide liability protection.

If you are sharing information about a counterparty, that they don't trip other regulatory rules out there.

We look at it as let's make sure we are all talking and importantly, not just in the financial services industry but other sectors downstream and the utility sector.

We need to be seeing more engagement and activity.

With the lack of policy movement, is this a symbol of the toothless miss of the white house where it offers suggestions because is not offering legislation?

I think this is as much as they can do.

It is fairly robust.

They have a bunch of different agencies, the department of energy and department of congress and the white house are working on these guidelines and they worked with hundreds of companies to police standards together.

When you get a positive response , they're doing something right but in a divided congress, a white house that doesn't necessarily it along with any of the people in the house republican leadership right now, there's not a lot legislatively that you can do.

Until there is some dynamic shift, it's going to be like that for a while.

President of the security industry and financial markets association in new york, thank you so much.

Coming up, we will talk about that twitter redesign and how it's looking like facebook.

How will that impact user growth?

? i'm emily chang and this is "bloomberg west." online payment companies like square and paypal are facing higher levels of regulatory scrutiny and security concerns, especially overseas.

Could social media hold the key for making social payments more secure?

I want to bring in my guest who joined the board of we pay, which is basically an online platform for crowd funding sites.

You were at paypal for nine years.

You are at google wallet for four years, so you're kind of a guru.

Why join we pay?

I'm passionate about donation.

Innovation comes from the small guy.

Think square, paypal, even the early days of the web.

People forgot a company called signy oh who invented the gateway and invented this in 1996. innovation comes from small guys and it has pushed the limits.

They are focusing on the next chapter of e-commerce and they have an amazing risk asset management that helps them along the way.

And they use facebook to authorize payments, which sounds interesting.

I wonder if you have a hard time convincing them that facebook is the best way to verify whether someone is an fraudulent?

Rex it's not just focusing on facebook.

They're using a lot of different social media signals on top of conventional signals to stop payments have always been about risk and technology.

This is usually the secret sauce.

Even when you go back to when the set was starting, it was a technology company and they would say they are still a technology company will stop building great risk systems for today's problems has always been a recipe that works from the early days of the web and using social signals just make sense will stop you can locate your facebook profile and tell a lot about where did transaction happen.

We pay made a huge pitted and drop their consumer product.

How do we know they are on the right track?

The numbers are a good factor, but all you have to do is look at this new chapter.

For 15 years, e-commerce has been about products.

You can search online and get a product.

Price and selection was really good online.

As mobile put the internet in our pocket for everyday life, services of all kinds are being created much more efficiently.

You have huber and air b&b. it brings buyers and sellers together at the right time for services.

This is an incredibly challenging space.

You said just over a year ago that nobody today is delivering any solution that will get scale, including me.

What are the biggest challenges?

I was speaking specifically about off-line payments.

That's a long-term thing.

That's like chip and pin or fingerprints question mark how do you update today's swipe to something better?

In terms of marketplaces reinventing services, think about the babysitter or the way you get your library done or the way you get food prepared.

These are services coming about in a new environment where concert -- where consumers are creators of services will stop in the marketplace, fundraising is another big one.

The marketplace has a new set of payment problems and risk problems.

We are seeing companies like square run into big problem's internationally.

Stripe as well.

The rest of the world uses chip and pin and in the united states, we are still using swipe cards.

Is we pay going to hit those international problems when it tries to expand?

We are focused on online marketplaces, so for the moment, they're not going to swipe your card.

There's a lot of room to grow.

Think of how you pay for your huber ride or your air b&b room.

The payment is an afterthought.

They will provide the platform that allows that to happen while managing risks.

That's what these marketplaces are looking for.

Ebay-paypal spin off?

Good idea?

I probably know a little too much to say more about it.

Who is going to rise to the top in this world?

I think there'll be a lot of winners.

I don't think it will e1 player.

I don't think it is one winner take all.

The mobile platforms are a really good position and anyone who caters to developers will stop we are in the age of developers.

Anyone who caters to those, everything is a service, payments included.

Formerly of paypal and google wallet, thank you for joining us.

Coming up, we will talk a little bit about google driverless cars and what a driverless city might look like.

The results of a new intel study.

? welcome back to "bloomberg west." twitter is testing a new profile page redesign and it looks a lot like facebook.

Some people in our office actually have the redesign.

It looks a lot like facebook -- i thought no, don't change my twitter.

That's one of the big challenges when a company like twitter or facebook tries to make a redesign.

Our reporter that covers twitter and facebook joins us now to tell us about this test.

The company said on their earnings call that they were going to be trying to make twitter more approachable for users.

They're going to emphasize pictures and make it easier to understand.

This is a move in that direction.

People are very familiar with facebook.

Facebook has 1.2 billion users and twitter has 241 million.

To me, it's not about the size of the audience, it's about the success of growing the audience.

The numbers show them struggling for user growth.

Like they only added 9 million numbers in the quarter.

A million in the u.s. i use twitter because it's different from facebook and i can see more in a quick look that i can scanning my facebook page.

But yesterday, i walked around and talked to people about why they were or were not using twitter.

Out of a dozen people i asked, nobody was a twitter user except one guy.

That one guy had not tweeted in a year.

And this is in san francisco.

And a quarter were they announced their ipo, they got all kinds of universal threat -- universal press average.

You also saw the number of timeline views -- timeline views per user declined in the quarter.

Is that the best way to consider user encasement?

Lex twitter says you want to look at how many retweets and favorites happen per timeline.

Why don't they release that kind of data?

They have said some tweaks to their design have allowed more engagement and engagement has gone up.

Search engagement has gone up.

So it is possible to change the design in such a way that users engage more and that is what and the whole team is betting on this year, that they can do it with design.

It is just a test.

Sarah frier, thank you for bringing us data a. "robocop" is returning to theaters -- a remake of the film returns today.

Did you like that one?

I love that one.

It's frank miller.

It is great.

Jon erlichman is with us to tell us more.

We will get cory and some popcorn and share some anecdotes.

This is a weird story.

People who have seen the trailer for this film, you see robocop cruising around town on a bike, which is a ninja from how sake.

We called kawasaki and asked if that was their bike and they said yes, the producers reached out to us and they were interested in using the bikes.

We said cool idea but they couldn't work out a deal where they would provide the bikes because there was some beef over the branding.

But at the end of the day, the producers still used the bikes.

You see this a lot in hollywood.

A director that might be interested in using a particular brand.

The director of a lithium was interested in seeing the kawasaki rent tattooed on matt damon.

In "minority report, stephen spielberg wanted to go inside a futuristic lexus factory.

It's not a skeptical thing where hollywood wants to make money off the brand that the rents are interested and say ok.

So tell us about the lawsuit.

There is a potential 3-d printing angle here.

We have come a long way since 1987. you see teslas and iphones, they go for a more sleek look overall.

What you end up with is a firm called legacy effects which also works on the iron man movies designing this with 3-d ideas, doing 3-d modeling to take those treaty files and possibly saying let's use 3-d printing, though i will say there were reports that vision tech was involved.

Legacy tax said that's not the case.

I don't know if that bodes well.

They are using it in hollywood.

Like they're using it in the fashion industry as cory was telling us.

But not for emily chang, unfortunately.

Think you.

We will -- you should buy it for me.

Just 100 k. we will have more "bloomberg west" after this break.

Is 26 minutes past the hour, that means bloomberg is on the markets.

It seems to be another day of positive for big rally for four days straight, the biggest we've seen in a year, markets are taking a breather with the s&p up just two points on the dow jones down.

In terms of individual stocks, we're looking at dow chemical.

They are facing pressure from dan loeb, fighting back against the activist investor.

His plan to split the company and two would not include productivity or capital allocation.

We are also looking at dr.

Pepper and snapple.

Even though revenue came in shy of analysts marks, did beat estimates and expects to have some shares outstanding.

More bloomberg west is next.

? you are watching "bloomberg west" where we focus on technology and the future of business.

Hackers have hit at least one website owned by las vegas sands.

They posted statements resizing the chairman and staunch israel supporter, sheldon adelson over comments he made about iran.

They're working with law enforcement to figure out who's behind the attack.

Disney is launching a in start up accelerator program with people from techstars.

They will get $120,000 in investment capital as well as mentoring from bob iger himself and other media and entertainment executives.

Alibaba is going to launch a new e-commerce site in the united states.

The website will be called 11 made and is inc.

Developed by an alibaba subsidiary.

11 main is currently focused on building a compelling platform and will have more details soon.

Here in san francisco, the french president will be visiting -- the first time in 30 years a french president has visited san francisco.

Do you take a french resident to a french restaurant, apparently the answer is yes.

We have not figured out where they are going, but he will be apparently having lunch with sheryl sandberg of facebook, jack dorsey and others.

Part of the agenda is to say france is open for business.

Come invest in france.

It is a big market for them, but france has had issues with technology.

Most recently the alcatel-lucent mergers.

That one has been a very difficult one.

The difficulty there has been making the kinds of rapid changes in employment technology employers like to make.

You can't do that under french law.

I believe there are tax evasion probes against linkedin and google right now and france.

But part of the messages we are friendlier than we were before.

Good luck with that.

We will continue to follow franc½oise world -- francois hollande and figure out exactly what french restaurant they will be dining at.

I'm hungry.

Now to the future of american cities -- is it the jetsons?

According to a new install -- a new intel study, the driverless decade may be upon us.

44% of people desire to live in a driverless city.

So many avenues in new york are now pedestrian -- really reducing the number of cars just by taking the roadway.

A driverless city full of driverless cars or no cars at all?

I want to bring in the intel futurist from new york.

What do you mean by a driverless city?

We ask people what's the world you would like to see?

44% of americans are really interested in seeing a completely driverless the the.

What they are imagining is a city environment where they can just hop into a car and it takes them to a destination and there's no human behind the wheel.

This is an optimistic view.

I doubt it will happen in the next 10 years, but it's a compelling view of the future where life is more convenient, there is less congestion, and self driving cars tend to be safer.

There are dramatic numbers about the number of people in america, not young people getting drivers licenses.

Is that about this notion of sharing an economy or the fundamental ways people look at that or desire to drive a car lester mark people my age and older, we have all been sold the american dream of the car is a symbol of freedom.

If you are a millenial, you are much less likely to see it that way.

You see a car as something that will slow you down.

The idea of the economy of sharing this expensive resource -- most cars spend 23 hours out of every day doing nothing.

Millenials are much more predisposed to sharing cars and it plays and the idea of a driverless city.

The idea is you would not ever own one.

The car would just come and pick you up and take off.

Rex is this happening only in cities?

What are the trends in the suburbs?

We get so focused on where we live that i think we might forget that the rest of the country still needs her cars will stop if i look at the next 10 or 20 years, you see more and more cars coming to cities.

People want to decide what kind of car they want to drive.

Do they want a car they can drive themselves or a car that can drive them just to take away the pressure of driving?

There is more pressure in an urban environment.

If you're in a big city, you know how miserable it can be.

It's not the dream the car companies sell you of driving on an open road.

People will want it but they still want to drive themselves, and that's great.

There's a bifurcated notion of what a city is.

The preindustrial cities of san francisco, new york, they -- these post industrial cities like phoenix and often and atlanta, cities growing like crazy.

They have a different physical infrastructure that require automobiles in a very different way.

Rex outside the u.s., cities tend to grow up and in the u.s., cities grow out.

He cut his most of the cities developed after the era of the motor car, they'd are developed around the motorcar and public transport has not taken hold the way it has in europe and asia.

This is a way to have it in the form of a self driving car.

We have seen from the research we have done that people are interested in that model and are open to it not just as cars that drive themselves but cars that talk to each other and share information and gossip with each other.

Sharing information about what might be hazards up ahead to help reroute the car if there is an issue or two move cars out of the way so that ambulances and fire trucks can get through.

60% of americans say that's a really good idea.

They would like to have tractors in their car to help with those services to get through in a really busy environment.

We have talked about that as a means to prevent car accidents and crashes all stop you also talked to people in this survey about drones.

What is the public opinion about drones?

Is this something people want or are they scared of them?

We have all heard a lot of news about drones.

People are understandably anxious about that, but what was surprising is 60% of people are enthusiastic about drones for public service will stop drones that could help firefighters go into a building, inspect the building him a check the air for chemicals.

Understand where people are might need help.

Same thing with ambulance services.

If an ambulance cannot get across because of traffic on for a drone to take someone on the scene to quickly stabilize that patient.

This truth that the jetsons are the future.

Once a week, we do a story that i think the jetsons put in rosie the robot and astro and told us what the world would look like in the future.

Sees brown, futurist at intel.

Thank you for painting a picture of a possible jets and like future for us today.

We will have more after this break.

We will talk about how this could change the world of computing.

Lex welcome back.

I want to cover a story out of bloomberg news -- apple working on a set top box to be announced as early as april and they want to start selling it before the holidays.

We are hearing apple is talking with potential content layers like time warner cable and others, but what can you tell us about what they're working on?

It's mostly just that there is a new apple tv, this is an upgraded apple tv box.

It could be announced around april and be ready around time for christmas.

He are hearing talk of a new interface that easier to use for people.

The content is going to be king.

Would be vastly different from the apple tv set-top box we already know?

Lex we don't know.

They don't often them out with something radically different on itunes.

Content is what they have been missing.

It is still a hobby relative to the size of apple.

They refer to it as a hobby product, but you know, if they can get it so they've got all time warner cable content on their, suddenly it's a place where it could become a primary viewing vehicle for people rather than just for netflix or the different channels they have on there now.

We are hearing it will have a faster processor and be easier to use.

I wonder if it's going to be dramatically different?

The pressure has been on apple to come out with something new.

It doesn't sound like this is really it.

We have been hearing talk for years that they would come out with an actual tv.

That's not what this is.

They have a lot of big projects in the works.

They are clearly working on a watch.

We're hearing talk they are hiring sleep experts and things, so that is a major effort for them.

We will see whether it's an evolutionary improvement or a fairly minor product or whether this is when they start to crack the living room in a big way.

What are we hearing about a real television set?

That talk -- people like gene munster of piper jaffray have been saying this would come out any day now.

He has been saying that for three years now.

Clearly, apple has the wherewithal and talent to look at a lot of things.

I'm sure there are people working on a television somewhere inside apple, but there are lots of questions.

It seems like sometimes the street wants margins and sometimes the street wants growth.

Clearly, a tv would cause a margin problem for them.

What about consumers?

Consumers want new products.

This is true.

We will continue to follow this story -- apple coming out with a new set top box to be announced as soon as april and be on sale before the holidays.

We will be back with more "bloomberg west" after the break.

? welcome back to "bloomberg west." what vmware is partnering up with google, providing access to microsoft products on chrome books for the first time ever.

Will it equaled the modern corporate desktop?

I want to get to cory johnson for more on that.

Big announcement in the computing world, just made in the last hour or so by vmware and by google and by these guys right here.

How do you describe this?

This is awesome.

We are going to revolutionize to brands, bringing chrome to desktop.

People are trying to get them on computing devices and with the power of virtualization, we're are able to bring that powerful technology and blast that into google chrome books.

How much software is made for chrome books?

Fax there is a lot of stuff.

If you think about the whole web, it runs on chrome books.

Not just consumer applications but vmware blast and other stuff.

Everything is designed for chrome books.

As long as it works on the web, it will work on chrome books.

Google is running out there with a flag saying you could learn microsoft from books.

I'm a big xl deke.

We care about all of our users.

While there is a huge trend of people moving to the cloud and embracing chrome books as a platform choice, we know they have legacy applications they want to bring to this all stop they can sort of have the cloud and go seamlessly into this new world.

You have customers with windows xp -- before it expires in a couple of months -- the way in which you want to handle many of these old applications, you go to our larger customers and may have a lot of these -- they're not going to mobilize tomorrow.

We think there will be a number of these apps that will be the new generation of apps.

To provide a lifeline to these old apps, this is great.

It is the bridge to the future.

Because the desktop support will no longer be there for microsoft, rather than upgrade, you think they will run fewer versions and let users use it on the web with those apps?

This is a way by which, getting in that environment -- certain industries and verticals, this is becoming really big.

Just look at retail, for example.

Different stores all over, you have back offices and want to put in computers there.

Now you have to figure out how to manage those computers and take care of them.

You don't have an i.t. department sitting around you.

Like a combination of chrome books and you're set up on vmware is fantastic.

You can manage it from one place.

You don't have to worry about the security across these platforms.

You can just use them from the cloud and have them delivered to these devices.

Can you quantify what impact this will have on chrome book sales?

I don't know about specifically on the form of sales, but the impact this has on his this is is really quantified.

A study found it's not just the cost of hardware, that once companies move to chrome books in this kind of infrastructure, you could save up to $5,000 over the life of a single pc user.

And they tend to be so much cheaper than the notebook.

A number of different education places, countries across the world putting these devices in the hands of kids where you don't have all the desire to put all the applications into place.

This will be a big and a fit.

Last year, one in four laptop -- laptops sold was a chrome book.

Countries like malaysia were giving them to every school.

You can only do that when you have a platform that is studied to manage.

The tablet has also crept in as a computing device of choice.

I think it depends on the case.

If you think about a grade to doing math, but if you have a jogger fee assignment or write an essay, you want a keyboard.

In the case of a tablet, google has a great story.

We just is covered this and we want to stretch and cover desktops and mobile.

Always good to see you.

Thank you, cory.

I want to get back to the news about apple, said to be working on its new set top octave he announced as soon as april and be on sale by the holidays.

Jon erlichman is with us from l.a.. we know that apple is in talks with time warner cable and other partners about content.

What would the partnership look like?

That's a great question.

When you think about the people who use cable today and the box they use, you pay for that box.

If you are in a position to use apple tv but still have a cable deal, are you able to do away with those cost?

That's one of the immediate questions i have with this possible announcement.

But on the hardware, apple has to say competitive with row two.

Those have come to dominate this market of those kinds of devices.

The chrome cast product they put out got a lot of attention quickly and you have the same content offerings but that's part of the story.

Apple has to continue to come out with new devices.

The pressure has been on apple to come out with something new.

This doesn't sound like the big new tv that some have been talking about.

You to keep microsoft in mind.

The xbox has these capabilities.

I talked about what do you hear about apple and what they are doing and he heard they are trying to get involved with these negotiations with the cable operatives.

They were very reluctant to make a deal with apple because they saw what happened with itunes and the music industry and did not want to get themselves in that same position or there were giving up content to a competitor like apple.

The cable companies have been especially difficult to work with.

Hasn't that been the big stumbling block question mark the biggest fear they have is that your cable bill is looking too big and too high, you're just going to choose one of these alternatives.

Maybe it's a sign that they are aware that the alternatives are getting better.

The numbers for netflix, and how that's accessible on these different platforms.

On the xbox or apple tv, they want to kind of live within that world and make sure they are relevant and -- relevant to those people while making sure they are relevant to the people paying for cable.

It could be smart if it's executed in the right way, but they are scared about it because it's allowing people to shift away from the traditional way of getting your television.

It would be nice if you didn't have to pay for cable, and netflix, and get an apple set-top box.

That is a fantasy land, emily.

Nobody wants that to happen.

Thank you for watching this edition of the show, we will see you tomorrow.

?

This text has been automatically generated. It may not be 100% accurate.

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