He said microsoft is focused on building the next big thing, but adds that he is open to acquisition. It appears that corporations are not doing enough to fight hackers. A new survey from pricewaterhousecoopers found that the average number of security incidents at an organization was 135 over the past year alone. And 67 of the organizations responding were unable to estimate the financial losses due to the incident. Samsung is holding what it calls a major event focused on health later this hour. No new products are excited to be announced, but samsung is promising to start a new conversation about the future of health. Appleses just before worldwide developer conference next week where apple is expected to unveil a new forecast. Now to our lead story of the day , from search giant to carmaker, google is building more than 100 prototypes of the self driving car. No gasf this car has pedal, no breaks. It runs on software. Potential about the at a conference. Take a listen. The reason im super excited about these prototypes of the self driving car and the project in general is the ability to change the world and the Community Around you. Start testing the prototype later this summer with human drivers. The test cars will have manual controls as well. A small Pilot Program could be launched right here in california in the next couple of years. Our editor cory johnson is with me, just back from cambridge, and he is joined by a professor from cambridge, massachusetts. Google has been retrofitting for made by other companies its original self driving car, but this is a car that is made by google from scratch. Can you see google as the new u. S. Auto manufacturer . It is really big news. It is a transformative potential decision that google is taking on, because you can distinguish their approach as more revolutionary as opposed to evolutionary with the auto manufacturers approach. I think the value of the software that google will create, if it can really enable these robot cars to navigate the road safely, that can be transformative. Goes it looks sort of cute. They want it to look friendly. It is sort of like the vw bug. It does have an innocuous look about it. I know you drove a driverless car a couple of years ago. I drove in a driverless car. I did not drive it. Have you seen him on the road . I have not. I find them a little disturbing, and i for and i think other drivers will, too. It is an intriguing notion and you wonder how this fits into the broader plans for the rest of google. Is this going to help them get their . There . Let here a little bit more about why sergei brin thinks this is such a great idea. Take a listen. Next as far as the Service Questions as to how this will be operated and whether we will operate it ourselves or with partners, we will figure that out as it is closer to being deployed. These initial test vehicles will probably be operated by ourselves because it will be a very specialized thing. But in the longer term, its not clear. Certainly partner with a lot of companies, possibly move her. And he did make a point saying that google had invest had invested in uber. Is the taxi industry something that could be disrupted by these cars . They will have a lot to go through with improving safety and through washington before they get anywhere. John, youve done a ton of research on these specific problems that could arise. What challenges will google face . Googles approach uses very precise prior mapping. It is the largescale capture of information about the physical world that google is leading. It is like super gps. It is down to the centimeter level and it is giving them the ability to transform these vehicles. But there are still some challenges. Google are driven by data and this deployment of 100 test vehicles will give them data about how these systems might be used and how they can perform. That will help create value. I have mixed emotions. Im excited about the technology and the chance to save lives and make peoples lives better, but there are a lot of challenges. I wonder about left turns on busy roads, driving in conditions like snow, dealing with crossing guards and crossing cops. Google are really not letting off the brakes, as you said, and theyre really making a sustained longterm investment. They might still be a long way away, but i do see it as intentionally transformative technology. Potentially transformative technology. Thingse are a lot of within cars right now that can recognize when youre backing up out of the lane, control how you get into a parking space for parallel parking and things of that nature. But this persistent nature of letting the car drive all the time, what is the distance the difference between occasional versus persistent . There are major differences. When a human is ready to take control in the event of something going wrong, that is what weve had before. Level four is where google is going for the full route. The driver will not be able to take control of the car. Most other systems are going after level three. If something goes wrong, how do you alert the driver and hand it back to them . And there are liability issues in terms of the software as far as error by the software or the driver. I going to a lower speed, they can do this with a safer, smaller scale deployment. We might possibly be even decades away from full taxi driver capabilities, lets say, in manhattan. But this is an interesting way to get the data at a smaller. Cale way without the ability to give the human control, this car only has two buttons, stop and go. What if the stop button doesnt work . What do you do . The paradigm is that the stop button will always work, you know, that the software will have so much redundancy and sensor coverage. For example, one detail of the google prototype is, if im not mistaken, there is a blind spot very close to the car, which makes it difficult to do rescission maneuvering in a smaller place like a Shopping Mall parking lot. This smaller vehicle gives them get up close. Y to they will try to push beyond that safety envelope so that they do not have to have the human intercede. Professor at m. I. T. In mechanical engineering. Think you for sharing your thoughts with us. Thank you for sharing your thoughts with us. Welcome back. Im emily chang. Dropped acrosoft ceo few hints about his strategy in his first public interview as ceo. He said there are no plans to split the enterprise or to sell xbox or being. And here is what he said about acquisitions. I think we have to build something big. If along the way we have to buy things, thats fine. But we have to build something big. We build, lets say, three big take 3. 5 ifyou can and it isox into it, time for us to build the next big thing. He also said that while he is the boss, founder bill gates has been around helping the company in a number of areas. Of tech iposa slew this year and we expect that list to keep expanding. Advising many of those companies, including j. D. Com and keying is bank of america. From theins me now bank of america ipo conference along with the managing director of Equity Capital markets. Im here with j. D. Moriarty, who runs the Equity Capital markets group at bank of America Merrill lynch. We are here at the private companys ipo conference, helping ceos understand the public. Of going what is the single biggest piece of it bites you give to aspiring Public Market ceos . We started this in 2007 and theidea was to get past enemy in the ipo process, which is typically the end of the process. It is a long process. For Many Companies it is six months, and for others it is a year or more. You cannot know what is going on in the market. We encourage them to focus on their investor, how i potential investor would think about their areness, and whether they ready. And think ahead of time about who their investors are going to be. This is a chance to step back with some companies that might be going public as far away as three years from now and actually getting into that thought process with them early. Of ceos inet Silicon Valley right now, is going public a cool thing to do, . R would they rather wait those companies have had an open window for four or five years now. And there are many of these growing of these companies growing, topline at 30 . Have a lot of investment that gets a lot of attention. They have a lot of flex ability. We have been through a recent bumpy ipo market that started in march. The private market has continued despite that. I think people are waiting for there to be some reconciliation there. We will see if that plays out a lot. But with that private capital available, they are able to take their time a little bit more. And we have seen the average age of Companies Last year going fourc is 12 as opposed to during the. Com bubble during the dot com bubble. One of the things we saw last year was the diversification of the ipo market overall and a lot of Larger Companies going public, industrial, Consumer Health care. That is a good thing. As it relates to Technology Companies that are a little longer in the tooth relative to what we might have seen in 1999 the market welcomes that. Those are more proven models. And there is an abundance of capital sources. They are not dependent on the ipo market the way they were in previous cycles. J. D. Com, the company that you helped establish, reportedly 38 billion. This is the chinese version of amazon. Com. What can we expect in china . Similar things in the future . We are very proud of that company and happy at the outcome. Expanding that proxy for the rest of the ipo market is challenging. Huge markets come into play. When you Start Talking about Something Like 20 billion in market cap, that attracts broad global demand. It is different than a software or Internet Company here. You cannot read too much into the health of the ipo market i think you, but read something about the view toward chinese commerce. That is encouraging for a number of other companies. An example of an ipo like that for the buy side is really meaningful and different from a typical ipo. And as you mentioned, jd in the ipoeally well market. Where do you see others in the ipo cycle . Theres a tendency to throw the baby out with the bathwater and that is a little bit of what is going on right now. Since the beginning of 2013, roughly 30 of those are below issue price today. That is really investors shedding that which they are least familiar with and extending that into 2014 ipos and other classes as well. You have seen a reevaluation of those sectors and that explains that correction. We have a number of companies that have gone public this year and have not have done nothing but hit their plan and been completely revalued by the market. It is an interesting time, for sure. When we bring new investors to this today, they are focused on having lost some money. We need to get to some normalization. We need to get to a timeframe of where they are in trouble with what they own and we show that. They are very focused right now on losses and are risk averse. Statistics would have been much worse if i had given them to you two weeks ago. Hopefully, we are in a bit of a correction. Company wanting to go public that can afford to wait, would you do so . Today, sure. One of the things about the jobs act, it has brought about a lot of great changes. But one of the changes is that once someone files publicly, investors and the press tend to say, well, they are on schedule going to market 21 days later. Forreality is, companies years prior to the jobs that, or to this outlook filing public filing cadence, would wait for the right window. Marty at bankjd of america j. D. Moriarty at bank of America Merrill lynch. Back to you. Businesses are investing in Cyber Security to reject Customer Service and trade secrets. But can they keep up with cyber criminals . That is next on bloomberg west. Welcome back. Im emily chang. Cyber crime is on the rise as businesses struggle to build defenses against increasingly complex and difficult to detect cyberattacks. Releasedrhousecoopers an annual survey of some alarming trends. Cory johnson is with me and through skype, global cycle security leader david burch. Thank you for joining us. Who are these cyber criminals and what are they looking for . First, thank you for having me on today. The reality is, we see a number operatingread actors for a number of years. Number one, we worry about nationstate actors who are very good at what they do. They are very patient and have excellent attack techniques, and are difficult to challenge, to combat. We also have organized crime actors will solve these are also very talented, very intelligent threat actors who are good at taking in information and turning it into monetized value in a variety of different ways. We certainly worry about individual collectives that will focus on a business issue or a particular company to make a social statement or to promote political dogma. And we also worry about insiders , legitimate employees that have access to information that may be sensitive, that may be working in concert with one of the threat after groups i just talked about. Yes . Sorry, one of the things i thought was so interesting about your report because there was so much to get into but one of the surprising things is that there are hackers out there just trying to embarrass the companies they are hacking into. Can you explain that . I think that is one of the concerns of many of our clients today. Information that is very sensitive being accessed and then exposed for the world to see. This is absolutely a very real concern of clients all around the world. Part of the challenge is that it is difficult to predict where that type of attack activity will occur, and you have sophistication within those attack groups. Specifically i mean, if you have all of these different motivations embarrassment, financial fraud, people who want data to put to use somewhere how can companies effectively prioritize what the risk is . That is one of the important findings from our study. Most of the respondents to our study did not take that very important first step. Only 38 of ondents im sorry, we will have to leave it there. David berg, thank you so much for sharing those with us. We will be right back. You are watching bloomberg west where recover intermission, technology, and the future of business where information, technology, and the future of business. Im emily chang. How can samsung compete with other wearables like job own and apple . Awbone all they said, its not an announcement, but healthrelated and its worth making an announcement about. What are you thinking . I think it is an market a market announcement. Goodpace probably needs a Software Platform to tie together all the things they have going on. There are so many biosensors emerging and wearable devices emerging. They need a great that form to tie them all together. Platform to tie them all together. But if samsung the one to do this . Is samsung the one to do this . Any of the Large Tech Companies we are talking about the largest Tech Companies on earth between apple and not mention you did google, but google as well. When they make announcements about health, we get excited. In sanbased here francisco and we invest in earlystage telecom companies. What is interesting is why this market is happening now. I follow so many technological advances with the baby boomers, but the baby boomers are a little old for this stuff. Why is it coming out now . And apparently, nike is dropping out. The are reportedly not making the hardware. There are two things going on. The first why now . The have seen greater than 70 penetration with smartphones. Sensors toload the your phone. There rapidly they are rapidly coming into the supply chain. Are 25 of their cost relative to five years ago. For us, the focus on health care, the big change is we have underlion people accountable care. They say the biggest and fastestgrowing are Companies Like cigna. For a company like nike, that is a pure consumer company. Doing withre activity trackers, wearable devices, that type of motion tracking has essentially become commoditized through your phone. You can use a processor in your iphone and it does the same thing. Essentially, the software has eaten the hardware alive. Cory and i have talked about this off and on the show, because he wears his fitness trackers all the way all the time everyday. I have never been compelled to put it on. Once i see what my movements are like, i am like, ok. I was wearing the job own for about a week, but then it was just too much information. Where iteople who dropped out after about six months, according to this information. We think that is actually a long time. But they actually make it a daily habit . Absolutely. You want the mass market. Wbone, are nike or ja you want to mass market. What does that mean to the average consumer, tracking the miles everyday . How does that make their life better . To really want them incorporate that into their daily routine. If you look at the specialized devices out there, like the one theirsture, and you read review, it says works as advertised. We are lacking these specific cases, whether for health care or just for consumers. We are just missing that. I assumesture device, it aint somewhere on your body to make you stand up straight. It hangs somewhere on your body to make you stand up straight. Will not have one or two or three devices, but a market that will have 30 with smaller audiences. How do we create one platform . And if youre a company out there that is really good at hardware, or bioscience, or microfluidic, you can focus on your sensor to measure Something Like blood and not worry about the entire thing. You can focus on sensors. Maybe you put a patch on and wear it for a few weeks and throw it away. It allows more opportunity to focus on near or reuse narrow use cases. Fit is on top with 50 of the smart when it comes to watches in particular. And samsung as well. Do you see this as a freeforall . Or will apple dominate . It is absolutely a freeforall. We are at the very early stages. We are measuring are very basic and pretty well commoditized. There are a lot of things you can measure about the human body, whether recreation, skin response, hydration, so many things we can do by measuring the body. And i think we are waiting to clean up this space, and i think Consumers Want that. They want something that appeals with a really killer app, if you will. I know what that is, at least. Thanks so much. Ive learned a lot from you today. Thanks for having me. How does the north face design fabric that can withstand some of the Worlds Toughest temperatures . That is next in our special series, the great usdoors. And you can watch streaming on your phone, tablet, and on apple tv. Welcome back. Im emily chang. Weve just gotten word that the samsung event has started at the San Francisco jazz center. This is called voice of the watching theu are head of the strategy and Innovation Center on stage. This is a healthrelated announcement and samsung has said it is not a product announcement. We were speaking about it earlier, thinking maybe they were announcing some sort of partnership or Software Platform. There is certainly a lot to be developed in the wearable tech space. Lets listen in. Really excited about is generation three, the era of wearable sensors, sensors that will be able to monitor continuously, noninvasively, to provide data to help you be more proactive with your own health. Why should you go see a doctor when you are feeling good about yourself . Why cant you know more about your body . Think about your car, what you are driving. 30 years ago, 20 years ago, or even six years ago, you know, evene running out of gas the importance of the air pressure. These things are mandatory and you can see in your dashboard doing, andr is monitor the different features and performance of your car. Im thinking of something similar to human bodies as well. I think we should know more about us, not just waiting for the last minute when we want to see something. For me, i like the trains. I like to see how im doing and compare myand performance with the conditions of different parameters. With that in mind, we think there is an opportunity to address one of the Major Concerns we have, namely efficiencyproduct over cost. 6. 5 trillion dollars is a big number. , its think about that almost half of that number. It is increasing faster than idm t. This number has been doubling in the last 10 years. And i believe with an aging population where we have now 1. 2 billion people that will be over 60, including me, this is an opportunity we have to think about. And where im from, korea, and japan, the fastest aging countries in the world. Part of that is because we live the usebut also because is declining. That creates interesting dilemma for all of us here. I think we have to use technology to help us live better, whether it is mobile technology, nanotechnology, or a combination. We have to address this Alarming Health trend. With that in mind, i thought in ourhat happened mobile phone generation. I dont know whether you know this character. If you are old enough, maybe you have seen it. It is from wall street. You have seen this heavy phone. In fact, weve got one here. [laughter] it is heavy. Ook at the display it is black and white. And your talk time was 30 minutes. 4000. Was priced at in the Technology Field have been working on this. How do we solve this issue . Today, thek at it samsung as five s5, state of art. Only something that not wall street, but all of main street can buy. Smartphonesion in today is 1. 2 billion units to be sold in 2014, and it is steady numbers come on numbers that are driving out into the street. If you look at the Semi Conductor industry as a whole, going to mobile phones. It is driving growth. We think this has done a lot of wonders for the industry. But the question is, can we do more . Lets address the changes that have happened first. You can see tremendous changes in cost. It is almost 20 times last less than it was. T is much lighter and you are carrying nine sensors in your phone giving you , better microphone capabilities, much better imaging. All of this is with sensors connecting analog to digital. Most of the real world is in analog. It has to be converted to digital. To enable that, you need the sensors, these emerging the merging of these things. These are some of the opportunities that i see youve all think in the phone evolving with the phone that can be applied to health care. It is really combining the advancement of what weve seen in mobile technology, because in is a, the mobile supercomputer in your pocket. It is 40,000 times more powerful than it was back then. It is in your pocket. Can we use that phone to be of better use than just communicating, just sending messaging, just looking at the internet . The head of samsungs strategy and innovation on stage in San Francisco, making a a health announcement. Right now, we are waiting for him to get to the point, but importance out the of sensors and the aging population. Tom joins us from new york. What do you make of what he had to say . Any clue about what this announcement will actually be . So far, it sounds like they are going to announce, some would call it, and ecosystem for connected devices and healthrelated issues. The idea with this is this would be something more than potentially a smart watch or fit dan band. It would be connecting sensors to manage your health. If you are someone who is into exercise, or just want to do a better job of monitoring your heart rate, things like that. It sounds like the company will pursue something in the healthrelated fields, but not necessarily a piece of hardware. Samsung is not necessarily known for its software. Are they the company that can do it this right . Known for may not be their software, but if you look at a lot of their different products and how those products engage with, lets say, the android operating system, they are incredibly well positioned. If you think about connected refrigerator, connectives connected telephone television and things like that, they edited from they benefit from being in these different areas. For monitorings your health, that could be a potentially lucrative thing for samsung, and apple, and google as well. At a Health Advisory group in new york, giving us his advice on what he thinks is happening. Thanks for that. More after this quick break. But this week, taking a special look at how technology is changing the way we experience the great outdoors. The north face was one of the first to sell the goretex jacket, a lightweight rainproof jacket that has become a staple for many outdoor and sports fans. Our editor at large cory johnson has more. The north they started here in San Francisco in 1966. Technology has been an important thing with companies who evolve and test their product line. Lindsay joins us from the north face right now. What is the north face doing now that it was not doing 47 years ago . 48 years ago . I tell you, the design and the effort and technology that goes into every garment design is beyond belief. There are tests to look at readability, operation, bility, and things like that. Want to stay warm and dry. But that has always been true. That has always been true. Hat is different now . I would say our lab in alameda that helps us test prototypes. Building a Design Center in boulder to help us with knology. At thiswould i see Design Center . X you would see Mad Scientist running around. Business is devoted to consumer satisfaction. We have had to breakthroughs in the last year that we are really proud of that were not there two years or three years ago. We have made great progress. Which are . People love down, because it is compressible and a way to keep you very warm. The problem with down is that he gets wet and loses its thermal properties. A jacket with the same properties. It is super thin, but has the same weight and warmth characteristics as a failed down jacket. If it gets wet, it will still mean chain 80 of its warmth characteristics, whereas down will lose all of them. It is very light and compressible and you can fold it up into the size of your fist. You can take it on trips to everest or frequent trips across the nation. Launchingall, we are that. Technology that is able to reduce the amount of scenes. You can feel that right there. That is woven into the fabric. Launching this fall, two different pieces of fabric. It would be heavier, possibly allow for moisture to get in. It is not as light as it could be. This technology is a breakthrough. We are launching this in the fall globally and we think it will upset the industry. One of the things about your brand, it has come a long way and it went a long way. There was a time even 20 years ago when it really was the cuttingedge and the favorite of mount neier climbers and mountaineers. Then it kind of was in. What do you do to get that authenticity back . We have two focused customers, the hardcore achiever, and the competitors at the top of the pair made. We will continue to design and can indicate with those customers in an appropriate way and create a strong and communicate with those customers in inappropriate way and create a strong connection. We want to make sure we speak to those core athletes in the right tone and with the right product. Thank you very much. Emily . Time now for the bwest byte, where we focus on one number that tells a whole lot. Jon erlichman, our senior west coast correspondent is in l. A. What do you have . 86, that was the is that my angelou passed away at. Also a calypso singer and poet. First person of color to work on the embarcadero on the transportation system. And the writer of seven biographies. Can you imagine that much happening in your life . Absolutely incredible, and someone who even directed here in hollywood. Thanks so much. Be rememberedill as a force of nature. From bloomberg World Headquarters in new york, i am mark crumpton, this is bottom line. Today, president obama discusses Foreign Policy at the west point commencement. Also, as fighting intensifies in eastern ukraine, the countrys foreign minister speaks exclusively with bloomberg television. We will have a timely discussion on the value of a college degree. To our viewers in the United States and those of you joining us from around the world, welcome. Full coverage of the athens