>> live from pier three in san francisco, welcome to bloomberg west, where recover innovation, technology, and the future of business. here's a check of the top headlines. in a deal to battle superbugs, merck is buying cuba's pharmaceutical for $4.8 billion. combat bacterial infections and other types of treatment. jeff mccracken points out the clack -- points out to -- >> there are bacteria that builds up resistance to penicillin. he you need new drugs to combat

these viruses. that is what merck is trying to .o with this cubist acquisition >> cubist hopes to have four new antibacterial drugs by 2020? u.s.ald's saw its worse sale decline in a decade last month. they are struggling to compete. an expired meat scandal in asia has hurt sales. lending club has boosted the sales price of shares in its ipo. the committee plans to all the shares at $14 each, originally offering them for $12 apiece. lending club is expected to start trading thursday on the new york stock exchange. and nintendo may have something to celebrate this christmas. after losing nearly $200 million last year, became maker is making a comeback. they expect to sell 3.6 million wii u consuls this year.

to our lead, new details behind sony's massive cyber attack. news has learned the breach began at saint regis hotel soon after midnight on the morning of december 2. hackers use to the high-speed network to leak the details of 47 thousand sony employees. security experts still don't know who hacked sony and why, but new information points to dark seoul. the north korean government has denied any involvement but called it a righteous deed. what do we know about who launched this attack? jason glasper joining us from skype from seattle. cory johnson is with us as well. jason, what do you make about

these new details that's it started in a saint regis hotel and this group may be behind that he echoed -- behind it? >> it shows the nature of this attack and whoever did it was clearly sophisticated and clearly looking to target sony and embarrass them. quite frankly a more thorough pancit of a company, i don't think we'd ever seen before. this is uncharted ground. >> what do you make about the fact that the north korean government has denied responsibility for the government. they called it a righteous deed. the state is behind -- does it look like to you the state is behind this? from the north korean perspective, the more attention it gets them the better. let people think they did it. even if they didn't they are still getting credit for an act to they may or may not have done.

they clearly have a political agenda and are happy to see this -- go down.wn to >> listening, what are those fingerprints? similar toit look previous attacks by the group? to find theable code executed within sony's network and that was specifically put together and compiled to attack sony. it had the name a specific ip addresses. to anode is very similar attack that happened in saudi arabia, as well as another attack that happened south korea. to be credited similarity in the code itself, .his code used to wipe drives

>> why hasn't sony been able to contain the data? will be see more of it? >> that is really the problem. collected -- has collected your secrets you are relatively powerless to prevent them from releasing it. it is interesting the theatrical way these attempters -- these attackers have gone. they have taken terabytes of data, and yet they only released 40 gigabytes of stuff. trying to drawe this out and embarrass sony as much as possible. >> i want to bring in jordan robinson of bloomberg news, who break to these additional details of where exactly this hack attack originated from, out of a hotel. how do you track that down and

why were they using this network? interesting that because of these hackers, they have made information public, they do leave little clues behind as to where they are operating from. it was this ip address, located at the saint regis. folks that believe that hackers may happen working out of that hotel physically. there is a possibility that hackers are also working remotely. it is very rare you get kind of a juicy -- the hackers at the very least were operating through this hotel and their high-speed network. many unanswered questions about that detail. are makingse hackers information public, they do

leave breadcrumbs for investigators to follow. >> what is new about this? as a new era, and dangerous new era in cyber security, what is this to suggest this is not just a one-off but a new era? ,> this is the kind of breach kind of a rolling breach. it gets worse and worse. when the attackers came out, a lot of people looked at that and said that is a lot of data. they may not have all they are claiming to have. whole lot of information, much more than people initially thought. they compromised sony very thoroughly. everybody is waiting with bated breath to see what drops next. the idea that we are going to the into your network and

race everything, we are going to physically destroy it. that is new, that is really damaging. of we are going to lay bare all of your corporate secrets on the history, medical social numbers, leaked copies of movies, that is not acting out of profit motive, that is acting out of malice and provocation. giving a company a black-eyed. we really haven't seen lots of hacks like this. this is a new attack and damaging to sony. >> it seems they wanted to embarrass sony more than anything else, which is different from the target or home depot breach, where the presume, trying to profit on this information they are putting out there into the cyber world. i would say is if anything it seems the interview, this movie that the hack attack

is potentially in retaliation for, a comedy about kim xiong own only gotten more publicity. -- a comedy that kim shot on -- , only gotteng-un ow more publicity. makes this attack so unique is this was in fact an absolute targeted attack. these guys were looking to get sony. they did everything they could to get sony. they even coded a specific attack against sony. many other breaches we have seen, those were kind of like targets of opportunity. they presented an ability for attackers to go in and took advantage of that opportunity. in this case these folks were targeting sony. >> a line that grabbed me, you mentioned something called the korean computer center hacking

effort with offices in many countries. why the uae of all places are they allowed to operate? >> it is an interesting question. here's is the challenge with hacking from north korea. has an advanced cyber warfare capability, most of which they got from russia or iran or other partners. north korea only has one outbound connection to the internet, and that is through a chinese internet provider. if an attack were ever to be traced back to that internet connection, attribution is instant. usually these satellite operations are under front companies. they access the internet and access talents in some of these countries. germany, russia, china, others. this is a necessity for north korea to implement their cyber

warfare attacks, because it is simply too risky in many cases to launch them from north korea itself because of its control over the internet. it is very easy to identify when it would be then. they kind of do the attacks on their behalf. .> a fascinating read thank you so much for that additional detail. we will continue to follow this story. evan williams has just launched his next project. we have the details next.

>> a new venture capital firm to work on world positive investing. obvious invention -- obvious ventures is looking to invest in

young companies. bryan womack joins us with more. how is this different from everybody else's? >> he has a little bit of clout here in the valleys. he is going after this space. he sees opportunity here. he is not the only one in this firm. it is not just a charity thing. world positive investment, how much does he care about it? >> he has done some of this before. he had an incubator when he stepped away from twitter. as ais something he sees moneymaking thing. record andack finding good stuff. working on medium.

that has been what his full-time job is. >> he is leading fat, and other successful company. i want to do some stuff to help make the world a better place. from an entrepreneur's perspective, how much does it matter to get evan williams of all people on board? names as big. few it says something when you go to other investors. >> thank you so much for bringing us that update. still ahead, u.s. family spent $243 billion per year on babysitters. ceo of onek to the come in a helping to provide care cap to companies like linkedin and facebook. ♪

>> care.com is hoping to help companies that benefit supporting -- benefit working parents. joining us in the studio is the founding -- founder and ceo of care.com. corey is still with us. corey and i both parents ourselves. you are actually working with companies in silicon valley, like facebook. they are providing your services and they are paying to provide your services to employees. them impact productivity is actually care. copies like facebook, linkedin, ebay, google, these heads of

companies realize the important of attracting great talent. the public sector needs to support care in this country. only 12% of women get paid time off. companies realize they need to provide these benefits to their employees. >> if you are not using a service like care.com, it really is word-of-mouth. pretty much at whatever daycare you want to send your child to, it is difficult. withpent time talking people as high up as president obama about these issues. does he understand how difficult the situation actually is?

>> they invited companies. we lifted the importance of care and investing in infrastructure. why not invest in a care infrastructure? obviously the challenges prevent the public sector from investing. it was 1971 when nixon really got rid of a bill to support federally funded day care. the reality is the private sector has sept in -- has stepped in to provide options for families, especially a work balance they are looking for. >> you have seen some dramatic growth. when you try to get into this business, you made a big acquisition recently. how do you grow in a business? the opportunity is there.

you make a business out of that? targeting 42we are million households just in this country alone. we are only 2% penetrated. the demographic trends are heading in that direction. we know there is not enough for a top-tier infrastructure. we know seniors are just increasing. that is just across the globe and countries around the world, not just the united states. -- the private sector is providing care. it is really a solution for families. >> do you do more acquisitions? you only have about 14 million shares. there is possible equity offering. is the stock price what you want to do here? >> we said we would raise money and continue to be focused the 42m&a and go after

million households, we are going to continue to do that. our team is focused on delivery, took us on making sure we provide shareholder value, and just continuing to serve families and caregivers. >> what do you think about that? does it help this situation? is to provide women and a lot of choices so they can make the right decisions in their lives to plan for families. and different women have different priorities. one of the things i am pleased is the fact that different cansyncratic needs, you look for child care, pet care, housekeeper.

whatever your need may be. the largest number of jobs posted, 60% of the jobs are actually part time afterschool jobs. >> it is fairly amazing. >> you are looking for a new cfo. i wonder if he would change the way you a dress it with these companies. i imagine when you are looking through the long term, may make changes and adjustments. do you stay with the plan as it is right now? >> we pretty much are confident in the cash we raised in regards to going public. we will do that with the cash we race.

weare consistent in the way have been communicating with our expectations. we continue to be excited. >> crate to have you back here on the show. we will be watching as you guys try to solve this very important problem. an employee exodus at the new at the newuld -- republic. could the cofounder peter blame. -- beta blame? -- be to blame? >> bloomberg tv is on the markets. let's take a look at where stocks are trading. oil trading at a five year low. in terms of individual movers, look at shares of mcdonald's. they posted them worst monthly

sale decline in more than a decade. sales fell 4.6% in the u.s.. analysts projected a drop of 1.9%. more bloomberg west is next.

>> can tech moguls also run media empires? from jeff bezos 2-d they founder, several tech

entrepreneurs have tried to make their market in an industry at the cross of change. recently at the new republic, the centuries old foundation bought -- there have been a mass exit us by employees citing a cultural disconnect. joining me now is cory johnson. editorial staff have resigned. there have been complaints. in with thiscame tech startup mentality and it just didn't work. in the history of magazine publishing, there is no magazine that has been beloved by a strip -- by subscribers than the new republic. they bought it with an

incredible opportunity because subscribers love it. it is enormously influential in washington dc. but the notion that users are consuming information digitally and creating print isn't working for them. these attempts to make a new digital media company really upset a lot of the staffers that are there. of which because of the messaging around it and the way it was communicated. it sounded like it was no different from a buzz feed or gawker or these awards that are so loved i did it all media in right now. >> let's talk about that. we have seen new media upstarts. jason gilbert spoofing all of the movement between these publications.

he says -- it goes on from there. people moving around, a lot of brand name journalists moving around, and nobody knows what the future is. >> what i love is it sounded like the kind of thing you would read in the new yorker. and yet it was on medium because the publications are going away. how can the kinds of new journalism that happen in the , is itker and magazines of 200 pages long, where is the place for that journalism, if anywhere?

>> i wonder. business is fundamentally different from a media company. >> certainly they operate in profits. may be looking for something like a common -- like a common denominator. that is a problem that year is trying to address with some of the other startups. the intercepts do some great journalism, not least of which taking over. >> the new republic seems to be

up and running just fine. >> i think it is going to hurt a lot. the great writers this magazine has -- readers are following a lot of these people who make a name for themselves, going back to andrew sullivan. people follow that magazine for the writer they've come to identify. >> we will keep watching. martino companies better than one? tech companies go to be human sizes and offer out a way to free up resources. back speaking with a venture capitalist who specializes in these deals.

>> im emily chang and this is bloomberg west. hp, and symantec have announced major spinoffs this year. some of the biggest tech companies in silicon valley see the advantages of splitting up. are the splits part of a new industry trend? cory johnson back with more on that. this is an interesting story about where great opportunities are. there are some great opportunities from companies that exists in other parts of giant companies. the capital is this new partnership based on an old partnership. rob, talk to me about the big picture idea about where you

find opportunities to invest in. >> the opportunity lies in large companies. orse companies have nuggets business divisions that are no longer strategic. and we work with them to carve out, or, spin them establish a joint adventure. in this case we put them on a growth path. >> a lot of you guys are restarting things right now. there is a company called blade and it was a spin out of nortel. this dominant equipment company that fell on hard times, they did a lot of acquisitions and had a lot of things under their roof. technology existed inside nortel networks. it was not a priority of nortel, however they got great product, great technology, and a well-established customer base.

, let me back up, what was the technology? the technology was given by gigabit switching. >> nortel was trying to put the fires out. >> they didn't invest thoroughly in it. what happened is we restructured to business and enhanced it 10 gigabytes and eventually a 100 gigabytes switch. and ibmany grew acquired them for 40 or $50 million. >> this is a lot more than what you paid for. you typically do this with a stub. is it an equity stake, an option, or what? >> they keep an equity stake the load 10% -- stake below 10%. i take him on these torturous

locks up and down, trying to get stories out of them. spun outother company of their associates. >> terry and i did that in 2002. had millions of customers and was encryption technology for e-mail. we restarted it, enhanced the product, made it enterprise, and grew it. >> as part of the company, but they were not focused on it. how do these acquisitions happen, they going to business and they keep it for medicine in the corner and die echo what happens -- and i? what happens? >> it was no longer any mandate of network association at the time.

for data that is sitting in storage, so that your information systems like social security numbers and credit card information will not be stored in clear. employing -- we -- that is what we are doing them of the new ceo kenneth m and that is passion >> it is a lot opportunity is on both half. >> we heard about semantic and hewlett-packard. these start to swarm on and say what to they have and might be interested in getting rid of? >> we work in those companies.

in certain cases there will be opportunities to address some of these issues. we should mention ebay as well with their paypal spin off. maybe there is something they are not focused on. >> i imagine like any investor, deal flows are the biggest problem. do you start by saying this company is going through issues, let's see what they have, or do you look through hot areas? >> we start on both sides. in many cases what we also do is look at major opportunities. particular piece of business without understanding where to take it on a growth path is not exciting for us. we go through the process of collecting a left. and a right. come -- right. together. >> the returns tend to be a lot better then average adventure capital, or slow and steady in terms of the profits of those

companies? >> the returns have been phenomenal. in this particular case, for the companies themselves, sometimes they start with no revenues. zero to 150 million overtime. >> thank you very much. interesting story as always. >> bottom line with mark crumpton is coming up at the top of the hour. mark joins us with a preview. what do you half or us? >> there has been another multibillion-dollar deal in the u.s. health care sector. merkel will spend $8.5 billion to buy cubist pharmaceuticals. allow merck to grow products in jug resistant bacteria. -- grow products to deal with drug-resistant bacteria.

>> coming up, the kim kardashian game has been a hot commodity for game maker blue mobile. with theive interview ceo is next.

>> this is bloomberg west. first launched the kim kardashian game in june, the company stock at a huge boost. since then shares have been on a .lide how does the company planned to reignite that success and build on the kardashian brand? joining me for an exclusive interview, the glue mobile ceo will talk about the stock in a moment. >> we had chris just a couple of

weeks ago. we have courtney and chloe joining just in time for the holidays. there is a lot of mis-perception around how long this game will stay in the top 10 grossing. >> how long -- how involved have they all been? what is it like to work with the rest of the kardashian's? >> kim is on point. they are all approving their images and there is a lot of iteration on how people look and how they will be in involved. kim has been doing a lot of this for us directly. >> you have a contract until 2019. what if she is no longer popular by then? investors do seem to be worried. that is probably unfounded. if you look at the history of ,he kardashian franchise obviously we have taken a big bet on that.

publiclys have been disclosed. if you look at the size of minimum guarantees versus royalties she has been paid -- i think her brand has just given started -- just gotten started. this the tip of the iceberg of where she will be in five years. said you are paying significant royalties. how much does it cost you to have the kardashian's involved? you are looking at the most significantly profitable year for you. does this way on those profits? >> the misperception is that stocks are enhancing profitability. even q3 was $15 million, it is guided to be another big quarter for us in q4. a blended basis, royalties are running at something like 12% of total revenues. down ins going percentage terms because it will be a lower percentage of q4 than

q3. >> i know your cfo has sold his stocks. >> i would never look at selling so much as buying. people self are a lot of reasons. there is retirement planning, buying houses, getting divorces. they only by for one reason. i bought them stocks just yesterday. i think the distinction has never been greater in our history. >> why should we be betting on the kardashian's? this is a huge driver of growth for you. >> there are four games. deer hunter is 57. are a franchise company and four of our big franchises are going to do well for the next year. >> a philosophical gaming question.

we have been talking about grand theft auto, which allows you to have sex with prostitutes and kill them. it is a different kind of gaming than the games you guys are making. >> we are a mobile game focused company. we want our titles to be featured prominently. we keep our games 12 plus, and sometimes cheap. a deer hunter game, they have little violence compared to a consul game. things like racing rivals and the kardashian game, they are very family friendly.

>> how do you build out the glue empire? is make sureor us the kim kardashian hollywood game has a five-year plus were run -- plus run. this game is more entwined for this. other people interact with it, which we probably could add to the game. look out for that next year. we will chat about that next time. there is room for other celebrity games. in discussion with other big names and social followers transmedia make experiences, make a game that mirrors your real world in the virtual space. to seeill be watching who those people are.

great to have you here on the show. thank you for stopping by. we are focused on one number that tells a whole lot. what have you got for us today? >> the holiday shopping season is upon us. i spent all they at the amazon fulfillment center. todaystudy released just says amazon is already a big winner in mobile shopping. amazon got 36.3 percent of all e-commerce dollar spent in the u.s. for this holiday season so far. they are doing twice as well as the second competitor, ebay. >> we were looking at a study out of google that shows that shopping on mobile was just off the charts, including people literally standing in line at retail store shopping on their phones. i see things in a store and think, can i get this cheaper on amazon?

>> because of the opera study, half of those shoppers were either on ebay or amazon. it is interesting that amazon is taking share there. who do you think is the next celebrity game from glue mobile? game.ily chang >> i could make a lot of money if the kardashian royalties are any indication. would you play at? >> i are ready play the emily chang game. it is so much fun. >> you would be the villain in my game. >> probably. forget this tv show thing. will talk to them about that after the show. thank you for watching this edition of bloomberg west. all the latest headlines on

bloomberg.com and bloomberg radio. ♪

this is "bottom line," the intersection of business and economics with the main street perspective. to our viewers in the united states and to those of you joining us from around the world, welcome, we have full coverage of the stories and stocks making headlines this monday. bloomberg's chief washington correspondent looks at the spending bill deadline and negotiations to avoid another u.s. government shutdown. su keenan follows it down to five lows. shelby