>> live from pier three in san francisco, welcome to "bloomberg west," where we cover innovation, technology,and the future of business. i'm cory johnson. the longest losing streak for u.s. stocks in 13 months. the dow jones suffering heavy losses today. oil broke the $50 barrier, dropping to $48 a barrel. john boehner urged house members to find common ground. >> we can build an economy that

furthers and obtains jobs, more growth, and more opportunity for the nation's middle-class. this is our vital task. >> this the first time republicans have controlled old houses of congress since all the way back in 2006. charter communications is launching a new cloud-based cable tv service that will allow software updates via the cloud and teamwork. cisco is also involved. sony has made $31 million in topline revenues from "the interview." the controversial film has been rented or purchased online more than 4.3 million times. verizon is looking to expand its presence online and actively touring partnerships with online services, such as aol.

people are familiar with the matter says prize and has -- verizon has approached aol about a joint venture or takeover. the company is not having significant acquisition discussion and is more interested in partnership. what is it about aol and its advertising technology that makes it attractive to verizon? joining us is alex sherman and paul sweeney. alex, what is it about this deal that makes sense for verizon? >> verizon wants to get into mobile video. it is something they have discussed.

everything that dish network is doing, trying to get into the mobile wireless service. the name for the game for these companies is to try to come up with a mobile video package and bundle it in with your wireless distribution service that you are buying from verizon. they bought intel online tv service. they put three different executives in charge of mobile video. where aol comes in is they have programmatic ad technology. they have a platform where an algorithm decides where certain advertisements are placed. this is like advertising 2.0 in a way. instead of relying on human beings, you rely on computers. you can package that with a mobile video service and your content starts to generate money. that's the idea for verizon. whether they get a partnership with a company like aol or a

straight-up acquisition remains to be seen. >> the company has made mobile video a big part of their push. the nfl partnership as helpless us watched so many beautiful highlights of the 49ers this year. >> yeah. >> it has been a big part of their platform for the last two years. what is different today? >> the idea is what verizon hasn't released yet. that is what we are seeing from dish today. it is a package where you can just get your tv service and maybe some add-ons. you don't need to pay for cable anymore. that is what dish is starting to roll out today, literally an online tv service where you don't need any more equipment from that. that is what we can see interest from players like at&t and verizon down the road. >> this is a change for verizon, looking at significant revenues possibly from advertising. >> it is a little bit. with aol, when you think about ad spending on the internet, there is virtually a limitless

number of websites out there and limitless amount of advertising inventory out there. historically it has been very difficult for advertisers and publishers to transact business. what evolved is this automated buying and selling of advertising inventory, the programatic ad-mine. tim armstrong has made a lot of investment over the years. aol made apadt tv to get into the business. aol has made a robust ad platform and that is one of the key technologies that verizon is looking at as they look to monetize online videos, as you suggested. they are really looking at some of the back-end plumbing to be a player in the business. >> it is also fairly amazing that this dial-up business has supported tim armstrong and given him a chance to build another business around advertising. >> tim armstrong has had a

couple of swings with strategies for your the local media business strategy did not work but it appears that programatic is such a significant growth story and overall ad spending. aol has built a good platform. the traditional 20-year-old dial-up generates cash and allows the company to make the investment. that has allowed him and his team to make some of the strategic investments. >> it's like the worst skis

slope in the world. you watch a steady decline over time but it continues to support aol to try to find business i wonder in your conversations with people around the deal if they see some value from that dial-up business? >> sure. it would make sense that a company like verizon with theoretically like to acquire the dial-up. that is in a sense what verizon already does, provide internet. the few customers that use dial-up, they could convert them to dsl or fios customers. you can look at aol like you look at yahoo!, like they have a cover business. in yahoo!'s case, it was the alibaba state. tim armstrong could arguably do a better job of coming up with a new business for aol. it is suggested that aol and yahoo! come together. you have to think that investors are looking at a the same way. you have three businesses.

you have media content programmatic ad technology, and an old membership business. that is three different things so it is probably time for you to unlock some value, to partnership or acquisition or perhaps even come to the table and thinking maybe we should just divide the company, which is the same discussion yahoo! is having. you have to think of the logical discussions going on in aol. >> you mentioned the few people that use dial-up. it had $650 million in revenue. people are hanging on strongly with their credit card. samsung thinks the frontier is the internet of things and putting money behind it. how risky is that in investment to the long promise and the not-yet delivered connected home? we will have that next. ♪

>> this is "bloomberg west." samsung co-ceo bk ewing took the stage at the consumer electronics show in las vegas promising an investment of $100

million into the internet of things. take a listen. >> i am making a promise. our components and devices will be open. [applause] we will make sure that others can easily connect to our devices. >> i liked the dramatic pause. what can we expect from samsung's latest investment? joining me via skype is crawford del prett. >> i had some conflicts. i met you at ces years and years ago. >> i forgot about that. that was so embarrassing. we were trying to build -- it was a bunch of journalists and analysts who were given the parts for pcs and we were asked to assemble them.

a pc back was a dominant computing thing and it was a giant, big box and i think i finished exactly last in the competition. good not assembled the pc. now we're talking about devices the size of a thumbnail that can do the same thing pcs can do. is samsung serious? >> i think samsung is serious. what i heard last night is that they are rising a sizable check to get into a state. what i heard over and over and also from jawbone in that is we will be an open platform. we want to connect everyone together. i think it is a shot at apple and a shot somewhat at android. it is their way, when you don't have a massive base to try to bring people to the party as quickly as possible.

>> if samsung is shooting android, is samsung shooting themselves in the foot? >> i think what they are trying to do is basically say if any wars breaks out between nest products on apple products in the future, that is fine. we will connect everybody and everyone is welcome in our play on the ioc. it is not necessarily a shot at your phone business. they want to continue to be investing in the phone business with android. they do not want to go on a proprietary direction. it is not dissimilar to what microsoft is trying to do with their wearables. they want to support all platforms because they want to be relevant in each of the ecosystems. >> it is helpful that samsung is describing this. these are sensors but the platform is more open than the ip base. what are the technologies that are helping this now? we have been hurrying about this from ces for forever.

>> yeah. there is a lot of different technologies that are going to come into play. some of them will be 2.5 gigahertz wireless. some will be things like traditional wi-fi. you are seeing some interesting technologies from companies about stepping up their ability to project images over wi-fi which is part of it. the message from samsung is the customer cannot be expected to figure out all the problems in their life and stitch them together in open platforms. that is where apple and google with nest will go in and say we will solve the backend technology. you have to learn about five gigahertz wi-fi. you can basically have it work. i think samsung is rushing to a world where it works seamlessly in the customer kind of loses that experience. that is the problem. samsung is saying we want to connect everybody. where does the customer get left? they are their own customs integrator.

>> it quietly was built into their devices for the last year. a hub for low-energy bluetooth devices that might someday be part of the heart of that. >> that is a perfect example. drop cam was out there is a point solution. nest is out there as a point

solution. they come together and google starts doing some of the hard integration of those technologies to create a more seamless experience for customers. when you look at a company like smart things, it is a company that samsung bought and was on stage yesterday. it is an interesting company but it requires you to figure out a customer, how to integrate it with my door lock, my keys, my lights. is it going to work seamlessly? these are going to be the challenges that land of the customer's lap over the next couple of years. >> i guess we are waiting for someone to be a master controller of all of these things and make it simple. it seems to be an open position. crawford del prete, thank you very much. drones on display. will they go mainstream this year? we will show you next. ♪

>> i'm cory johnson and this is "bloomberg west." week talk to a lot of companies about drones. how about drones from personal use? latest business is focusing on consumer drones. ces included high-tech camera drones. some of these crazy personal drones. >> ces is a height factory camera drones are clearly one of its most successful products the hype may actually be warranted. at the show this year, several companies are showing up new drones with features that could make them smaller, cheaper, and easier to use. we got a look at three of the most impressive models.

first up is dji. a chinese company. the company is also making consumer models. they are introducing a new model called the inspire one. it is a fairly traditional camera drone. you fly with a remote control or two remotes if you want one person controlling the flight path as someone else controlling the movement of the camera. it streams hd feed to your mobile device so you can see what the drone sees. it is what you can see it has people talking about. it shoots 4k video, which means supersharp video and the ability to zoom in pretty far. it also has mixed level stabilization tech. it will connect to as many gps satellites as it can to hold itself steady. even in strong winds, you will not have to correct the drone

position. it will do it itself. that will allow the inspired to fly itself a little. if it is disconnected from the controller, it automatically flies home. pleiades is launching its first product that's at ces. unlike the consumer camera drone, users can have it respond to voice commands or music. moving up and down with the pitch of a clarinet. while it is fun having a pet drone that can do tricks, space technology is a look at what the future of drones might be. once you give a flight path, the drone's on board cameras allowed

to fly itself. the camera will appeal to the narcissistic extreme sportsmen. it records video of your presumably awesome exploits. stick a go-pro camera on and the drone will fall you wherever you go. it is tethered to your phone's gps. you can also have an circle around your position. there are drawbacks. it can't avoid obstacles well following you, so you'll want to stick to open areas. you have to do something extreme enough to make an aerial tracking shot seem worthwhile, but if the company the company raised over $1.3 million. in the future, can we all have pet drones falling surround, live streaming every moment of our existence? that possibility just got a little bit closer. >> what are copies try to prepare for us at the start in 2015? we will ask a former fbi agent next. ♪

>> let's take a look at stocks traded today. a decline in the s&p, the fifth-straight day of the client. that is the worst losing streak in about 15 months. oil continues its plunge. ♪

>> you are watching "bloomberg west," where we focus on the future of business. we have entered a new age in cyber threats. nationstates targeting sony. is this what companies should be preparing for in the new year? security expert and law enforcement officials have been discussing that question this week at the international conference on cyber security in new york. shelby holliday caught up with

former fbi agent mary galligan to find out more. >> i think what we are going to see is more and more threats when we look at our mobile atmosphere. you have almost 50% of all holiday shopping this year done on a mobile device. we are using more mobile devices but security is not as good on that. i think we will see businesses restrict what you can do on a mobile device as a going to 2015. a lot of that will be driven by regulation and by companies looking at where where is their risk. >> we might be sacrificing our security on a personal note for efficiency, but how does that impact businesses? how can that affect businesses? >> by using a mobile device? it can affect businesses because it is a vector into their bigger network. anything that is a vector into your network is something i

think you will see people pay more attention to when 2015. look at the overall risk of not just our firewalls and are systems, but what all the things connected to that? that is really what the internet of things is about. manufacturing plants are connected to the internet. elevators are connected to the internet. and our mobile devices. anything connected to a network, how do i protect that? >> are companies prepared for attacks? at this point it is not if, but probably when. are they coming up with plans? do they have procedures in place to deal with attacks? >> you have the oil industry and gas industry paying more attention to what you have. what if this happens? it is not just about denial of service or theft of information. we are seeing destruction of hardware. we are seeing destruction of data. i think you will see an increase in 2015, a significant increase, of companies actually testing the business side of what if a breach occurs.

how are we going to respond? those that have a plan, a cyber response plan, will do better in the marketplace and those who do not. >> they can mitigate those risks. >> i think you will see 2015 be the year of how quickly you can identify an issue, how quickly can i mitigate it, and are mediated? it is not going to be about stopping the attacks. >> what about personalized attacks? we saw hackers steal a bunch of data, credit card numbers. at the end of 2014 we are seeing them much more personalized attacks, demanding things of businesses.

is that something we will see something more in 2015? >> i think we will, because whether you look at it as old-fashioned extortion, that has always been around. instead of sending a letter, you will do it through the cyber environment. hacktivism is on the increase. if someone is upset about something, how do they get that message across? >> is the government sharing information with businesses and vice versa, and are you seeing the need for increased munication? >> both sides say there is not enough information sharing. we need the country to have more of that. we see signs. no one senses it. you see the government wanting to share information but it is often classified or they cannot get the right person at the right time. if you talk to both sides, they

will tell you about the frustration and much more sharing needs to be done. that is why the industry needs to look at sharing. industry-to-industry sharing of cyber information i think we very big in 2015. >> what about legislation? we have a new congress coming in. are there certain laws that need to change or legislative roadblocks that need to be removed? >> you could look at safe harbor, which has been in congress a number of times. can you give corporate america a way to share information and the anonymous at the same time? the second thing we need to look at when we are talking about legislation is roomy look at regulation. if regulation becomes all compliance-driven, we are going to overlook the bigger threats. >> when you mention incentive, what are some incentives? >> let me give information to the government, but let me be anonymous. let me not have the negative publicity from perhaps having a breach. let me get my house in order. i think that would be a big incentive.

we find that most companies want to share that information. >> what about for the consumer? because so often, we hear attacks about something we use or a bank we might use. do consumers have a right to know when these breaches occur? >> i look at the consumers a different way. we want the efficiency of being able to shop anywhere, anytime and yet we don't want to take the extra steps we need to in order to detect their information. consumers should know as soon as there a breach. perhaps their information has been stolen. in 2015, we the consumer take more responsibly for information. >> that was mary galligan with our very own shelby holliday.

mercedes jumps in to self-driving car race. we will speak with the automaker's chief executive at ces later on "bloomberg west." you can watch is on apple tv and amazon fire tv. ♪

>> this happened at ces yesterday. sony's ceo spoke for the first time about the notorious cyber hacks against sony. listen to this. >> former employees, and certainly current employees, they were unfortunately the victims of one of the most vicious and malicious cyber attacks that we have known in recent history. i have to say that i'm very

proud of all the employees and certainly the partners that we have worked with as well, who stood up against some of the extortionist efforts of the criminals that actually attacked sony pictures and its employees. >> initially, sony did not stand up defending the movie "the interview," but the movie eventually decided to let the movie out andhirai praised the efforts of those ringing the movie to theaters. >> worked tirelessly, literally 24 hours a day, and sometimes days on end, to bring "the interview" to audiences in the united states and canada as well across online venues, in motion picture houses across the state. >> a stoner film and politics. that really happened. a skateboard turning heads at the consumer electronics show. that is brad stone on the one wheel.

he took it for -- i guess it is not a spin. take a look. >> we really consider one wheel to be a new board. it is similar to skateboarding but it has more in connection with wake boarding and surfing. it is a digitally-enabled toward -- board sport. >> you are a principal designer at ideo. why did you leave to start onewheel? >> ideo was my dream job. but i had this idea. like any adventure i was working on it in my garage and basement. we got the first prototype working and it was pretty cool. did some testing with friends.

put it on the back burner, brought it back, and it kept recurring. i think we need to bring this thing into the world. >> we are here on the las vegas strip and this thing is getting attention. people are walking by and looking at us writing it. -- riding it. how does it work? >> inside onewheel there is a powerful motor in the middle of the wheel. that is not something everyone gets. they ask, how does it move? it moves because there is a motor in the middle. the next thing they say is it must be hard. it is not that hard because it has sensors and algorithms. riders lean forward to go, lean back to slow down. use their heels and toes to make turns. >> this is an important week for you guys. your backers are now getting the onewheel. tell us how much it costs. >> it has been an amazing year. we raised a seed round of investment and we have got to manufacturing. we are building the product in san jose, california. it is close to our r&d center.

instead of flying overseas to work on it, we can work on it locally. and factoring is fully online. kickstarter members have gotten their boards. there are a few we are still getting out. there's a long list of preorders we are working through. we are selling from stocking getting into retail and 2015. >> how do you make it easier to use for newbies like myself, but also something that the hard-core skateboarders or

borders will love to ride? >> what we launched today is something called digital shaping. that is enabled by an iphone app that just wanted to the app store this morning. you can actually change the way that onewheel rides. you can started in classic which is dialed back, slower acceleration, more help with balancing. once you get the hang of it, you can slide into extreme. gives you maximum acceleration and the feeling that board sports people really love. >> thank you. i'd love to try it out. >> awesome. let's go. >> there you go. ♪ i'm going to try this now. >> nice. [laughter] >> this is a lot of fun. thank you. >> mercedes in the self-driving car race. we will hear from the head of the german automaker. ♪

>> this is "bloomberg west." there are more automakers than ever before at the consumer electronics show. besides proving their cars the most connected, we have been hearing that for years. they're moving to develop new types of vehicles you don't have to drive. mercedes is one of the brands making a splash at ces with a futuristic concept car, a self-driving car perhaps. >> i'm here with dieter zetsche the ceo of daimler. dr. z, you have one of the big hits at ces. what is this? is this a realistic glimpse of the future or a promise of hypothetical technology? >> it is totally realistic. this is a car that is a prototype that operates. it is fully autonomous and gives you space and room for your convenience.

you were sitting in there. you can sleep, you can get entertained, you can work, you can have videoconferencing with touchpads. you are in the middle of the internet at the same time moving from a to b. this is absolutely new. >> tells about some of the design inspirations. the appearance of the vehicle is so striking. what inspired the designers? >> we wanted to find the future, the reinvention of the automobile. that should be shown by the style as well. we were starting from where we started in 1886 when we invented the car. it was a carriage. with the wheels outside, you are sitting opposite with four passengers, like a carriage. >> i'm struck and talking to automakers here at ces how few companies are talking about google and its role in the automated car future. where does google play? you guys develop the automated technology yourself. >> i think google's main interest is for people 24/7 in the home and office. that is the interest, to get data about what people are doing everywhere. i don't think they are interested in the car. >> even though they are spending a lot of resources?

>> they are doing well and i have a lot of respect for the company. we are coming at it from the other side. the tech world and the motor world are merging and this is making for great opportunities. >> what needs to happen in terms of the regulatory environment for this car to drive on u.s. roads? >> we are more or less ready but regulation is not. that is good because we should go step-by-step what should be allowed. at that point in time, this car is driving autonomously but we are not a route to do that in normal traffic.

>> have you written in this car? >> of course i did. >> i would like to ask about two silicon valley disruptions. the goal of uber is to make buying cars obsolete. how does that affect your business and could it be an accelerator as drivers by mercedes cars? >> first of all, it is about sharing. we are sharing things. second, it is for convenience. the customer decides. when it is more convenient for customers, it might become disruptive. we don't try to dictate the path. we try to be ahead of the way. that is why we are number one of the world. we are happy seeing these things developing, trying to extend them and participate if necessary, or continue what we are doing. >> tesla. you sold your stake last year, 3%. why? >> it was a pure financial consideration. >> what is it like to compete against an entrepreneur like elon musk who can command a lot

of attention with a single tweet? >> he is a great guy, very impressive. what they have a combo is is impressive. i'm full of respect. at the same time, we know what we are doing and we are not afraid of anybody. we love competition. it inspired us. most people who own a tesla own a mercedes anyways. >> thank you, dr. z. >> thank you, brad stone and dieter zetsche. time for the bwest byte. one number that tells us a whole lot. one of the things that tells us that eric newcomer, you are breaking in on "bloomberg west." >> 70 million. >> that is a lot. >> that is how much the start up

glassdoor raised from google capital and tiger global. it gathers data. >> used in recruiting. where do they see the value in this? >> they really have all this user-generated content where you and i can talk about our current employer anonymously and give feedback on how they are doing. that brings in these jobseekers that think they can leverage people to build a huge business. >> i can tell everyone i love my current employer. my current employer is magnificent. who uses this data that glassdoor creates? >> reporters love it because we can use it because we can use to look at other companies, but more profitably, companies use it to recruit potential hires and see how their employees are looking at the current business. >> it seems like people have acquired or built their own. >> linkedin is a competitor, so they are looking to participate.

>> this $70 million round, what do we define about their future plans and where they are in the stages of going for this? are they setting themselves up for acquisition? >> they seem to be thinking about an ipo. that is what we talked about. the valuation is in the range of $1 billion. that is getting huge even by tech company standards. it seems like they are headed towards ipo. they have raised $160 million altogether. it gives them a big opportunity to expand globally. >> thanks for joining us on "bloomberg west." thanks to you all for joining us on "bloomberg west." we will see more "bloomberg west" tomorrow. ♪

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