♪we're having a party happy birthday, grandma! ♪we'll be swinging ♪dancing and singing ♪baby come on over tonight emily: embrace mobile video or else. i am emily chang, and this is "bloomberg west.” coming up, a silicon leader, sounding the alarm about how vulnerable companies are two cyber threats. also, the demand for wireless internet. a life raft. i will be speaking to a ceo, and apple adds the chatter it is looking to build a car. all of that ahead on "bloomberg

west.” and now, from kleiner perkins, releasing an annual report that is considered a bible in this industry, and there is a lot of stuff today in the book of meeker it will see everything from more drones to india emerging as the fastest-growing smartphone market, and is it all about mobile? joining me to take a deeper dive into the report is our bloomberg news reporter, matthew, and jonathan abrams, who was a cofounder back in the day. sarah, what are the most important things we need to know? break it down? sarah: what she does is she takes the great things happening and distills them down, so we have three hours on our phone. we have about 40% of the internet, about 40% of the world population on the internet, so there are just some things that are incredible, and some things

that just jumped out from a growth perspective is that advertising is still mostly on the desk top. we went to see more advertising happening on mobile. that is still very young. and she says the consumer internet has been very quickly populated by apps and games and everything, but there are still sectors of the economy that have not been touched by the economy yet, or in a very impactful way. emily: one of the things she pointed out is how users are sort of reimagining the internet, not just as content creators. jonathan, is that something you are seeing? jonathan: curation is all what

we are about, and using tools like facebook or twitter, they are basically seeing that person made an editorial choice, so really, everyone is a creator in some way. emily: interesting, she points out that there are monthly active users that are stagnating. matthew, what is your thought on that? matthew: there are some platforms that have been around a long time. the growth, i think, is stagnating. i do not think the growth over the long-term is going to stop anytime soon. sarah: she did point out about the messaging app. matthew: yes. live video. those are the things i think that people are talking about now. one of the most interesting things, particularly with video content, we have started with appointment viewing, via television. you sat down to watch some content, and we've gone into on-demand, where you watch 30 hours of "game of thrones" over two days, and now we have gone

back to appointment viewing and the community experience that that brings, in particular. emily: she brought a shout out to video content and a big shot out twitch, specifically 100 million monthly users, up at 122% watching live video on your platform. matthew: yes, that is right. it has been quite the ride. we launched in june 2011, so we are just about four years old, and the growth in that community and the passion and engagement in that community around video live video experience, particularly with regard to video games has just been really astonishing, and i think it is one aspect of a larger trend like i said, which is a gathering of people who want to

engage around real-time content. emily: do you guys by her idea of shooting vertical video will take off? jonathan: turn your phone into taking family video, so when you are editing the family videos, they are not parts going back with this, and now snapchat and these things, so who knows? obviously, it does not work great if you are planning to view it on your screen tv, but just on your phone every day -- sarah: with snapchat, some are much likely to go through the whole thing, so for twitch, are you guys thinking in terms of vertical video, as well? matthew: we are still equally getting towards more equally divided between a laptop sort of pc experience. also, over-the-top, people are watching on their big screen televisions, as well, but we have 25 million mobile installs,

so we have a growing mobile base. it is kind of a tough challenge to solve to create both a mobile experience and an over-the-top experience that translates in both environments, right, but we certainly have both. emily: you mentioned the mobile messaging part of it. talk about how mobile messaging apps will turn into more content. we already see people like facebook doing instant articles, and it was one company that just got bought because they cannot go it along to wear do something like nozzle fit in? -- cannot go it alone. where does something like nozzle fit in? jonathan: we are seeing more in my nuzzle feeds. nuzzel and nuzzel users are ok

but it is obvious that facebook and snapchat are trying to be more platforms, and outside of the u.s., people are getting news from those. but in asia, people are, there are platforms that are actually becoming platforms, and people are playing games or discovering news with those platforms. emily: what is interesting to me, i love nuzzel, and i use it every day. twitter should be doing what nuzzel is doing. what about shutting you out, like they have done with others? jonathan: i think everybody should be doing what nuzzel is doing. what we are doing is tried to solve people's overload problems. we are trying to get people the stuff they really need to know

about without doing the work. i think everybody should be trying to solve that problem. i think it is a big problem. we are really not there yet. we are still a six person company who only launched a year ago. emily: so, quickly, what do you guys think, matthew and sarah, about the world that mary meeker has imagined? matthew: people that understand the media consumption environment, that users are in now, people that really understand what a mobile strategy is for your company particularly if you are in media, social media, video. if you do not have a very serious mobile strategy, looking out over the mid-to long-term, you are too late. emily: which companies are doing that? sarah: we have seen extreme growth. especially in asia.

you mentioned wechat. it is not just mobile. it is global. india is a market to be looking at right now, and we have all of these new communities of people coming on and using phones for the first time. so what can be added to those messaging apps -- emily: thank you so much for joining us on "bloomberg west.” the annual google conference is less than 24 hours away, and if they keep tradition, the next version will start with an "m.” after last year's version of lollipop.

make no mistake, google operating system still dominates. new research shows android has nearly 80% of the market, but it is down ever so slightly from one year ago, and apple thinks the times are turning. tim cook said they continue to see more switchers, meaning android users are going to the other side, switching to iphone. another problem, goldman sachs estimates that some of the android came from apple. and what about switching to bing? all things to keep in mind as google mania kicks off. and apple pouring more fuel on speculation that it is working on a car. speaking at the conference in rancho palos verdes, just enough to keep us asking for more.

and starting this summer, new chevy models, including the 2016 having access to the apple car play and the android auto. here is their director of ecosystems. director: we realize that people use smart phones in their cars all of the time, and it is on us to find a safer way, a better way to integrate with that. emily: but gm is not the first out of the gate. hyundai said the 2015 sonata will be the first connected android to android auto. up next, mary meeker says phones are giving hackers access to your data. what tech companies and others can do -- giving hackers easy access to your data. ♪

emily: we turn now to another a story we are following, palo alto companies, record revenue. growing by 56% in the third quarter, and they have also announced they are acquiring a company which provides security for cloud applications.

the terms of the deal were not disclosed. and staying with security, kleiner perkins associate mary meeker's says cyberattacks will not be slowing down anytime soon. shocker. meeker calls for more professionals, saying that many relied on third parties to protect from attack, so what does this reveal about what is going on with cyber security. michael chertoff, who also served as secretary of the department of security, is here. 70% of the breaches are not detected by the companies. secretary chertoff: i believe that, because a lot of companies do not know what is going on in their network. in fact, many networks do not even know who is on their network, though there is to know who is on it and what is happening on it. emily: the doj just awarded a big contract to a company here in silicon valley. how big of a deal is that, to be

outsourcing to a private tech company? secretary chertoff: outsourcing a lot of the i.t. functions, the government does not have the ability internally to manage this. this is a way of deploying a collaborative tool that is secure across an agency. emily: how does the government make sure they are secure enough? secretary chertoff: they do have something, so there are certain criteria, but it is also on the contractor to make sure they are doing the right thing, and, of course, we saw in the snowden event you had a contractor who employed snowden, and snowden used his access to steal a lot of information. emily: the information stolen from the irs website, can this company help, or private tech firms? secretary chertoff: the irs has a deeper problem. it was the harvesting of data

that was collected over a period of time. what i understand is that they mailed in refund requests or sent in refund requests, using data they had received from a variety of sources, including social media, meaning people put it on themselves, not realizing they were getting criminals some of the keys to getting at their identities, so i think it is more than just a single contractor or single program. you have to build an ecosystem of security start to finish. emily: a ceo recently said he thinks we're going to see google, ibm, big companies like hp buying these companies. who are the targets? secretary chertoff: it is a hot area. you may have big enterprise and smaller companies because they want to round off their offering. and this is an area, if i can use a cliché, there is a lot of disruption, and some of the key out of the box can shift the

entire landscape, so you are wise to believe it is not one and done, you buy something and are finished. it is a dynamic process. emily: and cloud services are making it harder for law enforcement to access evidence. how do we find a balance between law enforcement being able to do its job and protecting ourselves? secretary chertoff: some of this has to deal with laws and policies, and i think we want to be where companies can have robust cyber security, and the government, if they use appropriate legal process, whether it is a court order or something else, to require that the data be turned over, but you do not want to weekend security and make it easy for the government, and nor do you want to make it impossible for the government if they have appropriate legal authority. emily: the nsa phone data collection program, there he divided on this issue at the

senate. how do you see this playing out, and how do you want it played out? secretary chertoff: i think there was something pretty close that they should be signing onto. here is what would be a tragedy. you would be a tragedy to let the whole program shut down, because people cannot agree on a perfect solution, because as we speak, this is the twill we used to track people who might be communicating with isis back in the middle east or with other terrorists, somewhere in the united states, and if we go dark on this, and people lose their lives, i guarantee you there will be a lot of regret afterwards. emily: ok, we are still waiting for the senate to make their decision on this. michael chertoff, it was good to have you here. secretary chertoff: good to be on. emily: a hard-fought victory for spacex. after two years and a $60 million certification process, the elon musk rocket can now compete for military launches.

boeing and lockheed martin have had a lock on this market up until now with their joint venture, but spacex thinks it can do the job for less. using a falcon nine as opposed to the atlas five from boeing lockheed, they may save extreme -- may save $60 million on a mission. it could be as soon as next month. next, tivo gaining the most subscribers in eight years, and now the company has some new items in the pipeline. and bigger than most of the s&p 500? details, next. ♪

emily: a story we are watching as soon as tomorrow, broadcom announcing it is being taken over a singapore-based maker of semi conductors, that according to those with knowledge of the matter. they provide short range connections for devices with a market value of over $32 billion, and if the acquisition happens, it would be the biggest ever in the semi conductor industry. and the daily byte, today's number $70 billion. that is the massive valuation that bank of america merrill lynch analysts estimate google's youtube is worth on its own. that would make the internet video site worth 85%, bigger than some of the biggest businesses out there hewlett-packard, time warner all with market caps below that.

youtube is a big asset deserving of a big valuation. get this. in the time it to me to read this story, some 150 hours of video were just uploaded to youtube. now, to tivo, the original dvr device. they are offering service beyond dvr and cable tv, appealing to cord cutters with its service that records programs with an hd antenna and offering programs within the tivo's user interface. there is an increase of 27% in users year over year. here with me is tom rogers, the tivo ceo. joining us from new york, thank you for being here. tom rogers: thank you for having me. emily: what is the strategy to keep growing in the age of disruption in the cable industry and how we are all consuming

content? tom rogers: well, your little bite on youtube said it all. it is all about getting content from traditional tv sources from recording, which we have done for a long time, and then streaming services, netflix, hulu, being able to get all of that on demand. the issue is you have so much content coming of people from so many ways, there is real chaos for the consumer. what our position is how do you put all that together easily and elegantly so you only need one remote, one user experience, one way to search across everything, no matter what you're trying to wind to get on tv, one way it is all filtered. whatever you want to watch on demand, whether recorded or

streaming is sitting there for you. that is the tivo proposition. emily: let's talk about what is happening. charter buying time warner cable. is this good for consumers? is this good for business? john: consolidation will continue to be a fact of life. we have been the evangelist for, look, is a better way for people to have a television experience. you can make a great interface and do not need to have all of these boxes. we have become the leaders in the cable industry of providing the software for operators to be able to put together the likes of traditional channels, like bloomberg, with new streaming services, like a netflix, and put it all together into a single way you can find whatever you want, get it to whatever mobile device you want for your personal taste however you want, but our hope is that consolidation does that, and obviously the big players have a

way to go. emily: i will be interested to see that. tom rogers, ceo of tivo, thanks so much, and thanks for watching. ♪