emily: hewlett-packard gets "back in the m&a game.” ceo meg whitman tells me how she sees the industry rearranging itself. ? i am emily chang, and this is "bloomberg west.” two big shareholder meetings happening in san francisco. sergey brin tells his investors the company needs to continue taking big risks. we are counting down to the twitter shareholder meeting. will the company be able to improve the weight is perceived on wall street? tim cook calls out silicon valley for monetizing user data. the change he wants to see on facebook and google. welcome to the dot-porn era.

to our lead -- a "tectonic shift," that is what meg whitman calls the growing m&a trend in the tech sector. i spoke with her about the record-setting deals we are seeing from broadcom and a votto, to intel buying all tara. you mentioned tectonic shifts. do you think we are going to see more consolidation? meg: that is typically what happens when industries get disrupted. i can't tell you how that will play out, but i'm not entirely surprised at some of the m&a that you've seen in recent weeks. emily: any sectors you would point out where you think it might happen? meg: i think there are two kinds of m&a. as you point out, consolidation of big existing players, but there is also all of these new startups that are coming up that are either going to go public and be great independent standalone companies, or are going to become a part of bigger companies.

we have to be watching and thinking about what the right thing for us is in both those areas. there's a company like aruba. a very successful company, but in the long run needed to be part of a bigger company to leverage. no one has a better connection to customers globally. we operate in 170 countries. we sell to almost 150,000 value added resellers. you can find hp products anywhere in the world. that's a product we can -- a value we can provide to aruba. we plugged them into our distribution system. emily: when you are looking at mna, what do you think about valuations? do things seem expensive to you? meg: certainly in the startup environment, it seems expensive to me, but i will say, if you find a company that is completely disruptive and has a chance to take the chair from an incumbent, those valuations might be worth it. we are quite disciplined buyers.

we understand that these acquisitions for the most part need to be lucrative. we have to be responsible to our shareholders. i think we've been quite disciplined over the last four years of what we will or will not buy. emily: you can catch my full interview with meg whitman tomorrow night on “studio 1.0.” break down some of the things she talked about, we've got bloomberg's jeffrey mccracken, our top m&a reporter, and crawford del pratt. she said they are going to be on the hunt. how significant do you think her comments are about consolidation? crawford: i think they are quite significant. for starters, meg has been talking about for a while getting hp's balance sheet in order and getting back in the m&a again. this is the next chapter. hp has been very much on the

sidelines doing deals like aruba. i think they are going to get much more aggressive, and i would expect they are going to be looking at security. i would expect they would look at areas like iot. i think some segments and services could be attracted to them. emily: aruba, a company they bought for $3 billion. jeff, what do you make of her comments? how does tech compare, m&a intech, compared to other sectors? jeffrey: tech has been a liger. health care, former, biotech even the old cable companies you've seen a lot more activity there, but this year, tech has started to come back, especially because of the intel deal. we are looking at, i don't know a 600% jump in tech deals so far this year as of june 1. what is going on in tech, they have started to see some slowness in growth. they are not getting the double-digit returns they are used to. i think companies are looking

and saying, if i buy this other competitor, i can do what is a standard process in an man day. -- in m&a. i will take a big overlap. i will take out i.t. i will take out things that cost us a lot of money. we can grow that way. emily: crawford, where do you think we could and should see m&a at the two hp's after the split? crawford: i do think you will see deals at the two different hp's. it is interesting to see that hp enterprise -- i think they are going to continue to simplify their offerings to help people move to the cloud, help people protect their data, as well as getting more insight out of their information. that says acquisitions in the security space, acquisitions in the information space, information management space, as well as deals like eucalyptus in

the cloud space -- allowing you to run things like amazon on premise. that is where they are going to focus. what people may not be getting is that i think hp ink, the printer and pc company, could be a quiz at it. i could see them potentially looking at specific areas around services. emily: that is something we are going to continue to watch as this split is carried out. crawford, jeffrey, thanks to both of you. tomorrow night, be sure to catch my full interview with meg whitman on "studio 1.0" at 7:30 p.m. eastern and pacific. time for ready, set, fight. tim cook takes a veiled swipe at google and facebook for "gobbling up user data and monetizing it.” although he didn't call them out by name, cook told the privacy conference that internet companies build their business by "lulling consumers into complacency.” on google, that means the company is tracking activity

across the web, including scanning our e-mails. facebook knows what we're up to even what we share on other websites. tim cook says apple isn't interested in our data. to be clear. apple does collect our data and uses it to help advertisers target their ads. it's just that apple doesn't have as much data as google or facebook. some commentators think this could disadvantage apple in the long-term if companies leverage their data to provide a smarter experience online. we'll keep an eye on how the privacy battle continues to heat up. up next, everything you need to know ahead of twitter's annual shareholder meeting. will the company learn to tell its own story to investors and users, like a billionaire investor chris sacca? nasa is launching a flying saucer. the agency's plans to head to mars, ahead on "bloomberg west.” ?

emily: a story we are following -- google holding its annual shareholder meeting today, and cofounder sergey brin releasing an impassioned letter to investors, defending some of his far out and expensive projects from smart contact lenses to self driving cars. while investors have questioned how such projects are adding to the bottom line, brin says real change comes in revolutions not evolution. in about 20 minutes, twitter opens up its shareholder meeting, and there are questions facing the company.

earnings have been a disappointment, and wall street's patience is running thin. billionaire investor chris sacca published an extensive post today sharing his biggest concerns, including the abundance of public doubt and misunderstanding when it comes to twitter's vision. he is still bullish and says a lot of the problems with twitter are fixable, writing that twitter will need to take huge risks, deeply question its key assumptions, and launch materially new stuff early and often. here with us to discuss whether twitter can pull this off, om all three of us are power users. i will start with you. what do you think about some of the things that sack is recommending? josh: i think google makes so much sense when you think about twitter. if there is one big take away from that note, it's that -- i

think everybody is seriously thinking, what does twitter do? what is their long-term plan? google would be a perfect home for twitter. it gets great search data, all kinds of new search data, and user understanding from twitter. twitter is a place where you can have a safe haven and a cushion financially to build business. emily: do you think google should buy twitter, and do you think twitter would sell to google? om: that seems to me the most viable exit option. it needs to do something with social. twitter seems to be the right play. the larger piece. it reminds me of another deal from another era, aol and netscape. you go to a place where you retire peacefully, and soon you are forgotten. emily: is that good for twitter, josh? josh: twitter would need to continue to operate as a mostly

independent company, and google would need to kill google plus. they would need to get that product out of the way and put any resources they can into something like twitter, which is thriving in many ways, but it's not growing at the pace like facebook. frankly, it may never get there. twitter is more like a public service then it is a social network, in my mind. emily: what about these other things sacca is talking about, having human editors curate tweets? there are 500 million tweets a day. is it possible for humans to curate that? om: you have to parse what chris is saying. it's an 8500-word memo. if you look at what he's saying he is saying human interactions -- right now, there are only two or three ways to interact. you can either retweet it and share it, or you can like it.

those are the three interactions you have with a tweet. what you need to know is -- you need more ways to interact with the information. that is the human part. taking that human interaction and using that to create a better experience, using better data mining, smarter data mining, i think that's where the company needs to help figure out new ways for people to express how they feel about a tweet or what they want to do with a tweet and what the tweet really is. that's where the company has to focus from a product standpoint. that said, i think if you read chris's great memo, it is full of a lot of tactics. strategically, twitter has to do something drastically different. it has to learn to fail. it has to learn to experiment in public and not be afraid to do so.

it has to learn to be a much smaller, much more nimble company. it has to unlearn the last five years of twitter. that is where the big challenge is. i think the company's product value hasn't gone away. we all depend on twitter for news. emily: do you think that twitter is willing to take those risks and do you trust them to? josh: i agree. there has not been a huge amount of risk taking. the product itself is so self-contained. you think of tweets as the single entities, atomic units that float around, can be embedded. it has never felt like a home for anybody. they need to figure out how they make twitter more of a home like facebook has, or it's going to be a side service to the main dishes that most people have on the web. emily: i spoke with dick costolo recently on "studio 1.0," and i asked him to articulate his vision. sacca is saying twitter hasn't done that.

take a listen to how he describes what he think's twitter is and when it grows up. dick: i deeply feel that the platform is the very best way to connect in real-time to what is happening in your world. emily: twitter is the best way to connect to your world? dick: things like live, in the moment -- this is an amazing thing and happening right now, live broadcasting, live video. it's going to be the future of the platform. i think that is the future of the platform. emily: how satisfied are you with his response? do you think he is articulate in the vision well? om: i don't know whether he is or he's not. i can't really tell. that is a small segment of a much longer conversation. i think it lacks the little bit of nuance and context. that said, we are all looking to demonize twitter at a time when

they are facing competition from all different places. they are facing competition from facebook, snapchat, instagram, and whatsapp. those are four major players taking our attention every day bit by bit. it's not an easy task. i think it's easy to stand back and make comments about, twitter has problems. yes, they have problems, but look at the other problems. snapchat is a great company, except they are not doing too well with their advertising. there are a lot of issues with everybody, and i think twitter being the company it is, which lives in public -- it is going to have to learn to succeed in public and fail in public. that is the challenge with twitter. emily: josh, are these fair questions to be asking? is dick costolo doing a good job? should he still have this job?

are we demonizing twitter unfairly? josh: i think what is interesting is twitter's competition. when you compare what other people in the space are doing to what dick's answer was, everyone is trying to be the place where you communicate in real-time. the right way to answer this question is -- i can't speak on everything he has done. some of it has been great. some of it has not been as great. what is the use of twitter or the purpose of twitter, and the answer sounds like it could be the answer for snapchat or instagram or vine. that's a little bit troubling. it really needs to have a statement of its own that it can stand on, and i'm not sure that it's really made a case for itself to a broader audience. to people like us, i know om and i are both heavy users. we are in the news. we have to do it. i don't think it has made an impact on the broader audience. part of it is because it doesn't

seem to have the position that it needs to take. emily: i'm going to have a much more in-depth conversation with chris sacca himself tomorrow. i'm going to be sitting down with him for "studio 1.0.” thank you both for joining us. this conversation is certainly not over. today in "out of this world," 50 years ago today, an astronaut ventured into the space void for the very first time. ed white floated out of the gemini 4 spacecraft and walked through space for 23 minutes. he later said the spacewalk was the most enjoyable part of his trip, calling the order to return the saddest moment of his life. nasa is hoping to make history again by sending humans to mars in a flying saucer. the spacecraft will be attached to a huge parachute will pull it 120,000 feet above the earth's surface. the parachute breaks, causing the saucer to engage an engine to get even higher. nasa is planning to launch the

spacecraft tomorrow at 1:30 p.m. eastern. up next, move over, dot-com. the future of the inter-net is a pr nightmare with domain names like .xxx. we will meet the creator of .porn next. ♪

emily: it is time for the daily byte, one number that tells a whole lot. today, 14 gigabytes. that's the amount of mobile data the average north american smartphone user is expected to use every month by 2020.

this according to ericsson mobility report. that is a massive six-sold increase from today's norm from 2.4 gigabytes a month. what could we possibly be doing? we crunched the numbers. you would have to stream 117 episodes of "bloomberg west" to hit 14 gigabytes. of mobiledata use that is one option for you. it may be the new frontier for brand management. internet domain names. we are not talking about the usual dot-com sites. the internet's governing body approved hundreds of suffixes. celebrities were given a 60-day heads up to buy up possibly embarrassing names like taylorswift.porn. is it a clever business game or exploitive? joining me, ceo stuart lally. his company manages .porn and has sold about 15,000 of these names. thanks so much for joining us. defend your business for me a little bit. how is it not exploitive?

stuart: there are many new domain names. we had been running the .xxx domain very well for the last four years. the whole point of the new domains is to allow people to easily remember website addresses and to have more convenient ones, rather than 20 were 30 characters. someone could have palmbeach. dentistry in our case, somebody could have ameteur.porn. bayarea.florist. .com is rather cluttered with 116 million registrations. this subject was talked about for many years. emily: there's obviously legitimate uses, but what about the trolls? how do you address that? stuart: this was something

discussed in depth by ican in conjunction with the intellectual property people. there are methods in place. there is an -- it's quite easy to get an infringing website taken down within a 48-hour period. there are challenge and mechanisms. some well-known brands and celebrities decided that prevention was better than cure. there are methods after the event to deal with any problems. emily: like what? how should celebrities and brands try to send this off? -- fend this off? the internet seems to be growing faster than they can manage. stuart: it's not dissimilar to bricks and mortar. anyone who has intellectual property has to protect it. if somebody opens a burger bar and sticks mcdonald's over the top of it, mcdonald's corporation would have to do something about that. this is like a shopping mall, i guess, in cyberspace, and people can decide to preregister using

their trademarks, which they get a first shot at taking the names, or they can deal with infringers after the event. there really isn't any other solution. emily: there are some regulatory changes coming up where the u.s. body that oversees domain names may be handed over to a multinational organization. what do you think needs to happen in regulation? we got about 30 seconds. stuart: icann is that current body. as a strong advocate of free speech, i prefer it to stay in the hands of american oversight personally. emily: stuart lawley, we will continue to follow quite a sensational story. that is everything on this edition of "bloomberg west."do not miss my conversation tomorrow with former square coo we will see you at 1:30 p.m. pacific. meg whitman on "studio 1.0” tomorrow night.

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