>> welcome to the best of bloomberg west where we cover invasion, technology and the future of business. every weekend we'll bring you the best of west, the top interviews with the power players that are reshaping our world. microsoft hopes the third time is the charm in the tablet market. the company unveiled the surface pro 3 aten event in new york city. >> ladies and gentlemen, this is the tablet that can replace your laptop, surface pro 3. >> now we all thought there

would be a smaller surface mini announced to take on the ipad mini, but instead the surface grew. it has a bigger, 12 inch screen and is thinner and lighter than previous surface pro models. and microsoft faces an uphill battle with this tablet. it had 1.3% market share in the latest numbers, with apple leading more than 32%. our editor at large was at the event and spoke with microsoft's corporate vice president of devices and studios marketing. corey started by asking him what's changed with the new surface pro. >> this is definitely a brand-new device. uilt from the ground up. this surface pro 3 is the first device that is a full p.c., intel powered, all the power to push microsoft office. a third of an inch thin. super light, incredible screen,

and it's a tablet. >> the marketing message is very different for this device. tell me about that. >> well, basically what we've been trying to do as a company is find out how do we bring unique point of view to really differentiate and address the issues our customers have. 96% of people who have an ipad also have a laptop. part of what we're trying to do is do something that no one has ever done before. create a device with the beautiful use and productivity to get things done. >> tell me first about the productivity. i was talking to an analyst, he thought that was a much stronger message for microsoft because it ties in with what? >> well, it ties in to is as a company, our vision as a company, seeing it focused on helping people do more to be more. it's around that productivity that we say, let's take the power of the microsoft offering,

cloud, software, and devices to create an experience that helps people be more productive. >> i don't want to take away, i think the style thing is particularly intriguing. >> let's take the productivity scenario. so, you're a student or a business professional and you want to write some notes, take some notes. today, 70%, people with pen and paper, they just grab it and write. in tech, as you know, lock screen, find the app, boot up. now here's what we can do. tablet, one click, just like that i'll get one note pops up and i can immediately sort of take my note. one more click and going to save it to the cloud and available in ll my devices, even if it's in iphone or android. if you come in and take a look, you get this rich display of all these graphics, these beautiful pictures. all of that with this productivity so you can just write and edit. >> and the screen is pretty

impressive. >> one of the best screens we've create. we've done one of the famous bondings that will give you anti-glare. so that is pretty fantastic. if you pull it over to the laptop form factor, you've got a couple of things. first you have windows, so you have all of microsoft office. we talked about adobe photo shop, bringing creativity to the device. because the vision we have is just don't read books, be able to write books. don't just look at art, be able to create art. a device that can do both those things is pretty incredible. >> where has the surface had its most success? we probably know the numbers, we know the revenue numbers, we know the losses of the write-off. but in what arenas have we seen the most? >> the biggest success is along productivity, students of any kind, they have homework to do, an ipad doesn't cut it. they want to be able to edit and

write notes. business professionals taking account they need to be on the move, art -- architects, whether drawing, this is where we hit the sweet spot today. >> what's the number one channel for surface and how might that shift or change? >> we do pretty well across the channel, if you're talking about distribution, best buy, we do pretty well there. as we broaden out, you'll see it ship in many more places. >> talk to me also, is there any sort of nokia magic in here, or is that too early in the relationship? >> probably too early for this particular release, but they bring a lot of strength for us and design creativity, manufacturing creativity, operations capability. so we've already had a lot of discussions with the new folks who come over. in the new mobility team about surface and how we get better, how we work across surface and phones. so it's kind of an exciting time now. >> you come from x-box, which is

the most successful hardware thing microsoft has ever done. what do you bring from x-box to this? what sort of experiences have worked out well? >> well, one of the best we've had that i think applies to our overall position in the company was that it wasn't until we built that we understood the magic of hardware and software to do breakthrough gaming that delights gamers everywhere. that sort understanding about the complete experience, that's what brings us here. >> the corporate vice president of devices and studio marketing for microsoft with corey johnson. well, c.e.o. john chambers says surveillance is hurting american companies. we're asking chambers about these concerns in our exclusive interview on the best of bloomberg west.

>> cisco c.e.o. john chambers is

worried n.s.a. surveillance could have a major impact on his company. he sent a letter to president obama asking him to curb the surveillance program after there was alleged that the n.s.a. hacks -- we sat down with an exclusive interview with john chambers. corey started by asking about some of the exciting announcements the company has made at cisco live. >> what i enjoy most is the time with the customers. i've done seven sessions in 48 hours -- >> so really hearing in don't rs in ways you really depth to. >> having technology to a business outcome, if you will, looking in from the customer's perspective. >> it seems to be the hottest idea in the world of networking right now. correct me when i try to explain

what the technology is, i think -- as if i'm with my family in a car and then my wife the navigator says let's take a turn, go over here. let's stop for dinner and change something so my needs as i go through the network, off the highway, finding a different route, change is a go and the software is defining that. the concept right? >> it is absolutely right. as a virtual layer then you have a physical layer. we embraced it and we had six customers onstage. now we're referencing for cisco. i've of them talked about it brings common policy and your applications from the cloud, to the data center, to the wide area of the court. huge advantage. we talked about security, a year ago about our gleam in the eye, now we get a good shot at it. our new announcement was

rerouted collaboration. taking it to a whole new level with a desktop device that probably will be the cost of a notebook and will combine android capability with voice, with the ability to have world class telepresence, touchscreen, and that's just the device. collaboration is what's missing in terms of productivity and business. >> it seems like the very notion sort of sits on the opposite end, our argument is the storage, which sort of says we're going to have storage so specific this the direction will already be decided before the packet leads the network and you don't need the software to find network. is that fair to say? it's one or the other? >> no, i don't think so. i think they're here to stay, and you're going to see us put that in to our own architecture, and most people would consider, especially after the last 48 hours, the number one player. but we've got the advantages using your words, programmability and flexibility

with the advantage of having one network doing this and having a common policy throughout, not just in the data center but all the way to the edge. >> talking about security, emily mentioned in the introduction about the letter you sent to the white house. i want to read part of that letter, because i thought it was very powerful. quarter before last, you were more specific than just about any big c.e.o. sort of thing, there may be a big impact in your sales to china because of some of the n.s.a. policy. but i want to read the part where you say we simply cannot operate this way, our customers trust us to be able to deliver the doorsteps, products that meet the highest standards of integrity and security. what are you hearing back from customers outside the u.s. about the impact of the n.s.a.'s activities? >> well, first of all i would not have written that letter if it wasn't for a book. in theory, allegedly, there's been no follow-up on that, of being used to practice on how you might intercept products. first, i want to take a step back, if i may.

the vice chair to the president after 9/11, president bush for several years. >> you spent a lot of time in the white house, i know. >> the key takeaway, at that time, if you were to tell me we were to go 12 to 14 years without another attack on american soil, i would say impossible. yet the american government has done a good job of protecting us. however, if you expand too far, the companies announced back in december, the facebooks, the googleles, the apples that we've got to have, using my words, a state of proper conduct, or rules of the road as we move forward. because there are none, it's a wild, wild west. i'm not being critical of the administration, even the n.s.a. i'm saying we have to take a step back and here's how we move forward together, and how do we position it so we don't affect the supply chain which may be in a given country, like india or china. the supply chain in terms of how you move products out, get into

the customers, your design. i think the importance of customers know you protect your security is most important. >> is the business impact limited to china right now? >> well, the business impact was an impact in china, and an impact in certain parts of the world hesitating. you never know the true impact on it. >> you think the n.s.a. is stalling sales? >> no, no, what i said is people don't trust us, then we've got an issue here. that's where we need rules of conduct that we're going to use going forward. so the ability to really look at how we have become the global internet, and how every country has now benefited from it and every country placed somewhere on the supply chain, you've got to have a consistency that you can count on, much like the companies said back in december, the software companies in terms of citizens. here's the transition, we are moving to become the number one security company, because the only way you can defend this is from the cloud to the data center, while they're in network, to the edge to any device. several of my fears when they were getting pushed a little bit on security, they said this is

john's issue to solve, because you can always solve it through the network. so a year ago when we said we were to become the number one security company, people said yeah, maybe. we've done three acquisitions in the last year. we are moving rapidly to all areas of security, not with individual pieces, but with architecture that brings it together. we did an acquisition today. so we're going to move and view this as how can the network really design a security in a way that no one else can and cisco hopefully become the number one security company. >> you referenced how long we've known each other, and you've been at your job for 19 years. what are the advantages of being in one job for so long. like what do you see come around the pike, or what meeting are you sitting in and saying i've seen this before, here's what we need to do? >> well, it's interesting, you want to always listen to others, but as you said, the ability to play out the game, get data points, go to the end game, state one of the options, you've

seen the movies, just variations. the disadvantage is what one of my peers said to me about three years ago. it was a competitor. and he said john, i want to congratulate you on reinventing cisco one more time. i said that's why i believe a c.e.o. should be in a job longer than four or five years. he said most of us, including himself, we don't reinvent ourselves every four to five years. your company and your culture and you as a leader have been able to do that in ways that others do not. and, i thought about it for a second. he said how many of the leaders that you have have you kept longer than five years? and the answer is only one. this is a company -- it used to be three to five years, now every three years. what cisco will try to do, we're going to increase that by two. see if we can do it one more time. >> you think one more

reinvention for you? or you think you and i will be sitting here 19 years? >> we've given a time frame, the next time is when we announce my successor, my goal is to make that as smooth as can be. we've changed five c.f.o.'s in the company. five head of sales, the second one was me. we've got a very, very strong team. a number of people that can replace me. and my job is to make this just like my family. i want my family to grow up and do even better as i retire. >> corey johnson with cisco c.e.o. john chambers. well, intel is betting big on the maker movement. so, what is the maker movement? intel c.e.o. explains during our exclusive interview. ♪

>> welcome back. intel is one of the godfathers

of modern silicone valley but as the company tried to establish itself in the post p.c. world it's getting back to its tech roots, making tools for hackers and hobbyists. we tracked down intel c.e.o. at a bay area maker fair to learn about intel's plan to get inside he hearts and minds of makers. >> i was born and raised in silicone valley and i remember my backyard was a plum orchard, and that's absolutely true. that's old silicone valley. think this is the future. so this is the galleo board. with a cork in the center there. yeah, it's designed for just his kind of environment.

it's made for the maker and we're starting to use it. > interesting. do you see the makers gravitate towards this? >> we are sold out. hat thing has taken off, you know, we gave 50,000 of them away to universities. we are building them right now, demand was six times what we forecasted. >> really? >> yeah. >> now why is that? know -- viously, you >> i think it's probably because f the fact we all -- [inaudible] >> usually if you were to ask intel 10 years ago where the

direction was going to be, p.c., p.c., p.c., maybe some mobile p.c. not robots, lights, stuff like this. how do you make sure intel's an int cal part of this movement? i think it's by me spending days like today. by hiring guys like joey you just saw. building products for them. these are the people who will be the next steve jobs and the next google and everything. these are the people who are being raised up with technology, and invasion. and that's really what we saw over the last couple of years, was hey, if they're not aware of intel technology, and what we're capable of doing, and if we're not aware of what their needs are, then we're not going to line up together. >> intel has been part energy with community organizations to get kids, especially young

girls, involved with technology. in part two of corey's interview with the intel c.e.o., he met some of the kids who have done some cool things using intel echnology. >> [inaudible] >> that's very cool. and it switches it off when i close it in? >> yeah. >> we've discovered we start with girls in sixth reason. part of the reason we start them in third grade is so we can keep them all the way through college.

>> we have this next project p.c. and we've got a contest going on, called make it wearable. have got a cog on called make it wearable, and the whole idea is to see who can make them. we do not know what is going to happen. we are going to have a lot of things that just kind of, so so, not too many. but one of these times it is going to take off. it is everybody, though, whether you participate or are coming to watch. a lot of people have gotten into this moment, and they become big events. >> what do you think is so attractive to people who are not in tech? well, most of these people are in tech.

in rome, to the fair andit was just as exciting people who are in and out of tech, i think it is something about the innovation, seeing just what somebody can make. -- thisnot all about event especially -- it is not all about high-tech post-up not everybody is building everything with galileo boards. the cardboard elephants. >> cardboard elephant, the wind generator using home depot buckets, these devices, it is about creativity and figuring out just what you could build. >> and so businesswise, are you trying to sort of see the market or be there for whatever market takes off? what is your business plan. down with someat spreadsheets and thought what are we going to do, where are we going to be? not satlly, we have down with spreadsheets as much as we said look, this is a

community that you see things like kick starter and indiegogo. these are places where the next new products -- they are going to come out of either this place or these people. and what we found was we were absent from this, and they did not know intel, and we did not know them. by engaging with them, they now know intel, then our products, they know what we can do, and they will come to us, and then what we found is as you saw with making our, they are products better. they're giving us input. hey, do this, at this, we like this feature, and so we think that working with them, they will know us, we will know them, and we think that will be good for the long-term. this is one of those where it is an investment for the long-haul post-up we do not know where this will end up. we are ok with that. >> cory johnson with intel ceo brian krzanich at a bay area fair.

outspokenof the most of comcast's proposed purchase of time warner cable. we will hear from senator al franken about why he is so upset . ♪

>> you are watching the best of "bloomberg west." i'm emily chang. senator al franken has been one of the most outspoken critics of comcast's proposed purchase of time warner cable. he recently sent them a letter asking about their commitment to net neutrality. cory johnson i spoke with the senator. i asked if he had gotten a response from his letter. >> well, not yet.

they just got it. they have been going on tv about how they are buying time warner cable and that will extend net neutrality to a greater number of consumers. that is because they are required to by the conditions of their acquisition of nbc universal back in 2010. that runs out in 2018. they refuse to say what they will do past 2018. >> i want to play a portion of that ad. here is seven seconds of that ad from comcast talking about their commitment. >> how do you make life online better for more people? you start by extending net neutrality protections. >> ok. they start by buying the second-largest cable provider

and they are the first largest cable provider. you start by buying the third largest internet broadband provider. you are the first largest internet broadband provider. live up to the conditions that were imposed on you by the fcc. but the moment those conditions stop applying to you, you do anything you want. it is kind of not entirely an honest ad. >> you who called the deal a disaster. you're not happy with at&t and directv either. how disastrous do you think this could be? >> at&t and directv is further consolidation of media. i had not looked at that as thoroughly as i have the comcast and time warner deal.

they are competitors. they are both cable and broadband providers. to me, that was immediately -- i opposed that from the get-go when i heard that. i want to study at&t and directv a little bit more. let me say this. at the hearing, comcast said that this will start more competition if we combine and there will be a dogfight and innovation. it this is the first thing that has happened is another huge company is wanting to buy another huge company. what has really happened is just more concentration and telecommunications and media.

that is very, very concerning. the result i believe will be less innovation, less choice for consumers, higher costs for consumers, and less service. >> senator, which is a bigger concern to you, the concentration of broadcasting with these two companies or the impact they can have in the future on the world of broadband? >> they are both very concerning. there is a relationship between net neutrality and this comcast buying time warner cable. they will have 40% of all internet broadband. netflix has paid for it. >> they paid for the fast lane. >> yeah, they paid for a fast lane.

that speaks directly to net neutrality. for your viewers who may be, net neutrality is at term not everybody understands, it is been the basis of an open internet where all content travels at the same speed. a perfect example is there was this thing called google media or google tv. or google something -- i'm sorry. anyway, there was this format. youtube was starting at the time to compete with it. it was google video. over a pizza shop in san mateo, california, they developed youtube. because youtube could travel the same speed as google video, people liked youtube better. youtube became youtube.

if there was a fast lane for big corporate entities, big content netflix or any corporate entity which is what wheeler the chair of the fcc is talking about, then you would not have had that kind of innovation. >> senator al franken with cory johnson. what impact will this have on the companies creating the content? we will hear what the disney cfo has to say on the best of "bloomberg west." ♪

>> welcome back. i am emily chang. there but a wave of new deals in the tv industry. think comcast and time warner cable. how will all these deals affect the companies that provide the

content like disney? our senior west coast correspondent jon erlichman spoke with jay rasulo at the cfo conference. take a listen. >> whether it is that merger that may happen or the comcast and time warner cable merger, it is no surprise that there is consolidation in that space. we have strong relationships with all of those companies that are involved in those mergers. like everyone else, we are in the process of analyzing and trying to understand how that will affect the ecosystem down the road. we don't have anything that we want to say. we want to look at the implications to us. it is very early days for those announcements. >> what about the acquisitions you guys make?

you explained the marvel acquisition, and beyond doing the deal, there is integration and part of your job involves bringing these companies together. you said in the case of marvel, it is a different process and doing it versus how you do it. maybe lucasfilm which brought you the star wars brand. what is the process? >> we have done enough acquisitions and successfully integrated them to have a real point of view. i would say first and foremost there is the user interface. the user is the customer or the employee of that acquired company. we like to leave the user interface in place as much as we can. we like to keep pixar as pixar and marvel as marvel. we like to keep them that way and not let what has been so successful for the walt disney company or so successful for espn wash over them like a tidal wave.

we buy companies that are already well-run that we think we can access and use further through our data ecosystem. in terms of the user interface, we like to leave that in place. that has worked extraordinarily well for us. even pixar, which is an eight-year-old acquisition, it is still very much the way it was from a look and feel and way of working that was when we bought it. we don't want to break that area i could say the same thing about marvel and lucasfilm. >> that was disney cfo jay rasulo with jon erlichman. we have got the timeline of the social network's public life coming up next. ♪

>> welcome back to "the best of

bloomberg west." i am emily chang. facebook just celebrated the second anniversary of its ipo. that first day of trading was just the beginning of several ups and downs for the social network. we took a look back at facebook's timeline in the public eye. >> may 18, 2012. facebook makes its debut public on the market. it is a rocky first day. shares closed at $38. it has a $104 billion valuation. less than four months later, the share plummets and hits an all-time low of $17 a share. in october, the social network hits 1 billion users. it shifts its focus to mobile and introduces poke. he tries to buy the app.

one year into public life, facebook introduces home. home gets mixed reviews but facebook doesn't a home run in mobile ads with revenue soaring to $1.3 billion by 2014. then there is the acquisition spree. $15 billion on brands. $2 billion on oculus virtual reality. it adds up to a rebound. shares reach an all-time high of $72 on march 10, just in time for mark zuckerberg's 30th birthday and the end of the second year in the public eye. >> as founder and managing

director of the social capital partnership, he is investing in companies with a social mission. i spoke with him about the latest acquisitions from whatsapp to oculus. >> i think most of it makes sense. having been there from the sidelines, -- >> you think whatsapp to be bigger than facebook. >> i poached a bunch of people and we created a growth scheme. we use that with the companies that we invest in. they figure out what is growing. when we do our own internal projections, it tells us that by 2016 whatsapp will have more users than facebook. we are talking about a global phenomenon. when you look at facebook, which is worth $150 billion and you apply a reasonable discount to that, whatsapp will be worth multiples more.

paid. >> does it matter that facebook is buying rather than building? >> absolutely not. if you as a stalwart happening are not figured out everyday day how to disrupt yourself, you are going to die. you do want to be the company five years later with just a bunch of cash and no ability to innovate. if you do, then you end up like microsoft and cisco and hewlett-packard. there is a gaggle of these companies that don't know what to do. your lunch is getting eaten. kudos to zuckerberg for having the courage to do that. that's to me as a little bit of a head scratcher. i think it makes a lot of sense for gamers. is it worth $2 billion? i have no idea. the real question is does it matter when we are talking about a nominal amount of the lucia.

it is a reasonable negligible right off. >> how likely is it that facebook will continue to be the dominant social network? >> we will see facebook be the dominant consumption behavior and whatsapp the dominant user behavior. a lot of things that you see in places like china and japan will get brought over to the rest of the world. there will be this massive platform that enables all. that'll keep facebook relevant for another decade. snapchat is a teen oriented product. >> google is buying a lot of robotic companies. they are competing and trying to connect the world different ways. >> google has a different proposition. they're going to organize all the world's information. information is getting generated in all these different places. they are unlocking it.

you are buying situational data around the hub. when you do self-driving cars, you are unlocking all of this spatial information that people get from a to b more safely. they realize now that the world's information is no longer trapped on a webpages on the internet. information exists everywhere. their job is to use all of the cash from search to get them into the information business everywhere else. it is an amazing business. >> what about apple? >> i think they have lost their mojo. when you see this transaction happen, it is a head scratcher. they are buying the beats music service, you could get spotify and by that company.

why not buy the number 143 times as much than buying an also ran for $3 billion? that does not compute for me. >> that was chamath palihapitiya. anonymous social media apps like secret and whisper have start up controversy in silicon valley. it is unwarranted? we will ask the founder of secret next. ♪

>> welcome back to "the best of bloomberg west." i'm emily chang. there is no secret that anonymous apps are generating plenty of buzz in silicon valley. while secret may be popular, it has also been called scandalous. it allows people to post thoughts anonymously.

i spoke with david byttow and chrys bader and asked them about their vision for secret. >> we have worked on social networks for several years. we noticed that something was missing. we have all these thoughts and feelings that we have everyday. we don't have a place for them. they don't belong anywhere. like some of those things that you just mentioned or i want to get engaged or i want to quit my job or i fall in love. all of these thoughts that we have everyday that don't have a place. we created secret to be a place to share those with your friends. these start as secrets and they are private and personal to you. there's nowhere to put them. >> you worked at google. i know you worked on google plus. there is a lot more guilt with

secret than with most social apps. >> i think provocative and intriguing is good interesting. >> do you have any idea how me people are using it? >> what kind of growth are you seeing? >> it is a secret for now. >> you ask for my email and address when i sign up. do you have any idea how people are using it?

can your employees see that? >> security is the most important thing. when you join the product, you want to build your social network. you can start sharing with friends and friends of friends. >> anonymity breeds negativity. how concerned are you about the negativity? >> this is the top priority for us. we want secret to be a safe place. we don't want it to be a place where people can hurt each other. we have invested a lot in our moderation team. we have internal guidelines for this type of stuff. when things are flagged on our platform, we review it and it is taken down. >> we are having to grow up very quickly. we are having to button up. >> in terms of having to take down posts, what does that involve?

how actively are you curating and watching? some of the posts single out specific people by name. maybe they are true or maybe they are false. >> we want to make a safe place for private individuals. we should be able to talk about news worthy individuals like the president or other public figures. we are not in the business of deciding between true and false. when we see the people are flagging content, that is what we look at and make a judgment call based on internal guidelines. >> cannot open you up to legal issues? >> we have really good lawyers. we are prepared for this and have thought it through. in the case that somebody does something illegal or we are subpoenaed, we have the ability to turn that information over. >> secret is not a place for illegal activities. >> there was a twitter burst that these experiments and with broken hearts and ruined lives and everybody regrets participating in them. how do you respond? >> he has some experience with products. we need to solve this problem and make a productive route that uses anonymity. >> this is the secret of silicon valley. people are using this around the world now. this is more like a dinnertable conversation. you have had a couple of glasses

of wine and you are being vulnerable. that is what we see on secret. here in the valley, people like to predict the future. it is hard with social products to predict where they are going to go. >> when you look at the products, it is a reflection of you and your friends. a lot of the things that you see are being said in public or private and around dinner tables. >> evan williams jack dorsey are two of your mentors. how have they been helpful to you? >> we spoke to them about this very early on. jack is a very deep thinker. he was the one who made me realize that this could be a powerful force for self-awareness in the world. >> my interview with secret cofounders david byttow and chrys bader. that does it for "the best of bloomberg west."

we will see you again next week. ♪

>> hello, and welcome to "inside fendi." we are in rome, and over the next 30 minutes, bloomberg will take you behind the scenes of one of the most iconic italian fashion houses, fendi, with the ceo pietro beccari. in 1925 two italians opened a fur and leather shop in rome. their names, edoardo and adele fendi. the mantle passed to their five daughters, and is there where the story begins. they had some help from