>> the nasdaq fell 1.3%. apple slid more than 3% after analysts suggested a modest reduction in apple shares. two silicon valley companies are teaming up. cyprus is buying spansion fort $2 billion. the group that owns amcc is in talks to buy lions gate. they are interested in a majority stake although so far, lions gate has only been willing to sell a minority interest. they are also interested in buying a stake in ngm. idc predicts a big slowdown in smartphone growth in the next few years. expect 1.6 billion to be shipped this year, an increase, but will slow in 2015. android remains the dominant platform, commanding 82% of the market. is cyber monday starting to lose some of its importance? as of 3:00 p.m. eastern, online sales were up 8.7% from last year. that is an increase, but much slower than the 20% growth rate from 2013. mobile accounted for 39% of shopping traffic so far compared to 30% a year ago. how will cyber monday sales be at amazon, the world's largest retailer by revenue? amazon's for paired for huge volumes of orders, with the company using 15,000 robots at 10 of its the film and centers. cory johnson is at one of those fulfillment centers and tracy, california, about 60 miles east of where i am in san francisco. is a little different for amazon, isn't it? >> there are a lot of important things going on at this fulfillment center. it is cyber monday and it is the biggest day of the year for amazon and big for online retail as well. this is still important because of its location, because there was a time when amazon did not want to have facilities in states like california because they did not want to pay sales tax. they bit the bullet and it allowed them to change their business model. this is in tracy, california. it equal distance, about an hour from san francisco, san jose, sacramento. all reachable from this facility. it is notable because of the robots they are using. a $75 million application. they deployed robots in this facility to change the operation in terms of how the workers work, how they still searching goods when they come in off of the truck. how they pick them when they will go back to a customer. also how much they can manage. amazon executives say they can hold up to 70% more goods here in this facility because of the robots and cram the stuff together and find it later where humans have to squeeze between the rows and stacks. they ship a lot more goods out of here than ever before. >> cory johnson, bloomberg editor at large. we will see later in the show. as amazon and other retailers rush to ship orders, they are working to promote special deals and discounts to shoppers. many countries are turning to twitter to do so. it allows users to buy directly from their newsfeed. twitter is allowing brands to send discounts directly to you through its twitter's offer product. how much can this e-commerce boost business? twitter's director of retail joins us in the studio. it is a busy day for you. how busy? >> we have had a lot of great things happening on the platform the last couple of days. we are excited to see brands engage with consumers, not only pushing offers, but thinking about how i can add value to the shopper. can they provide behind-the-scenes information, maybe tips and trips, all to generate a lot of interest. >> twitter is not the first thing you think of when you think, i wanted to get a deal on black friday. how do you change consumer habits? i spend a lot of time on twitter during the week. i spent little time on twitter this past weekend a lot of time, unfortunately, on amazon. >> when you think about twitter, it is discovery. we are helping you find what you are interested in in the moment. that can be around interests you have today but it can also be around shopping. we think the holiday shopping is important and we are looking to drive the discovery for consumers. >> you are testing out a buy button. how are consumers behaving? >> the button is really exciting, but also very early for us. we want to think about shortening the distance from a consumer talking about the product, ultimately being able to purchase it. this is something we are testing today but we want to take the time to get right. we don't want to rush to get this to market. we want to make sure it works first. we are seeing if consumers are interested. we have a great campaign running today. they are promoting the ability to purchase a $30 gift card to twitter and they will get a voucher for a free popcorn of the theaters. if you want to see a film, this is a great opportunity. >> is that an exclusive deal? >> it is an exclusive deal. >> is the idea to get merchants to offer exclusive deals on twitter? >> exclusives are great. it is about capitalizing on moments of intent. on twitter, you have people asking for advice on what to buy and we want to shorten the distance from the ask to the purchase. >> what about the commerce products? >> again, can't comment specifically on it but really interested to see how consumers are taking about the platform from a commerce standpoint. we are seeing great traction there. >> what can twitter offer that other companies can't, other platforms can't? >> we go back to discovery. we have this live, public, conversational platform. we are heavily accessed mobley. when you put it together, it lends itself well to discovery. that provides opportunity for a brand to interact with a consumer. that is important. >> why not push a buy button out sooner when you have the biggest retail day of the year over thanksgiving weekend? >> as a business, twitter is focused on getting it right for consumers. there are opportunities to push products in the market, but we really want to make sure it is right and that it works well first. i think we are just going to err on the side of getting it right versus getting something out. >> in terms of the business, what is twitter's cut? if i buy something on twitter, what does twitter get out of it? >> we can't speak specifically to those numbers. if we do develop this product effectively and shorten this gap from talking and purchasing, it will work well for brands and we believe it will work well for twitter after business. >> chris 3-d, twitter director of retail. open cons down for you the next two days. or maybe not. hope it gets busier. if twitter the size to buy a shop, backed by justin bieber. you can watch is on your phone, your tablet, and bloomberg.com. apple tv, and amazon fire tv. ♪ >> i am emily chang and this is a "bloomberg west," where we cover innovation, technology, and the future of business. when the twitter cfo publicly tweeted last week about plans to buy a company, many in the tech community wondered who twitter is targeting. all the tweet said was, and it was a direct message fail as twitter has told us, -- various reports say the target is shots, a selfie app backed by justin bieber. it is unclear if any talks are taking place. what value would twitter gain if they bought shots? joining me now is an early shots investor, jim. i took a shot with our producer. it has been retweeted more than 2000 times. >> is a powerful product, indeed. >> who are these people? >> shots is a community of young adults, teens and between's, primarily age 13-19. the average age is 16. we have over 3 million shots on the product. it is growing quickly and all word-of-mouth. it started out with justin bieber fans and celebrity fans, but it has grown beyond that now. they are spending over 50% -- of that group are spending 20 minutes every day. this is an app that is becoming part of their daily life. >> are all these people real? when it comes to bieber, talk about bots. bots in general on twitter. >> these are all real people. i should explain why maven ventures was excited about investing in the company. the vision of the founders, two brothers, great product developers. they have been working on building these companies for mobile games for many years before shots. they understand the demographic very well. they want to bring to the world a platform that is made for the young demographic. there is no bullying, but is a fun way to express themselves. people like justin bieber and floyd mayweather share the same vision. that is why maven ventures got involved. we also believe that the world needs a place where young adults can express themselves in a place where they will not be bullied. i have a 13-year-old daughter and 16 year old son who spend their time on the platforms. even places like instagram which are safe, 46% of young adults are being bullied daily on platforms like that and we think there is a place for young adults to exist where there is no bullying. >> everyone wants to know. >> i don't have any more information than you or other folks. >> you are an investor. come on. >> regardless of whether there any truth or not, the company is doing great. we have over 3 million shotties, which is what they call themselves, and it is growing quickly. 50% of them are spending 20 minutes every day. if the founders want to sell, we back them. i think john and sam wanted to build the company for many us to come. >> the shots have a meeting with twitter on december 15? >> i can't confirm or deny that. there is speculation about other companies that twitter has been looking at. i am proud to say that two of the top three are maven venture investments. >> tell me how justin bieber got involved. >> the founder of the app is well-network. he met justin and they shared the vision of what he wanted to do a shots and justin immediately got this. public figures like justin bieber are putting themselves out there. for better or worse, part of their job, they will get in the media and some of it will not be nice and they will get a lead themselves. they want to create a place for their 50 million fans can express themselves in a way without being bullied. once they started shots, justin became a cash investor. >> how involved is justin today? >> very involved. he is posting photos. he recently posed on shots with his mom. she did a shot back to him, which was great. he is using it as part of his daily life. >> you are saying if you were to give advice to the founders, don't sell now. on the face of it, it looks like another photo sharing app. what makes shots standout overtime from the other options out there? >> when we look at investing with them early on, the first thing we ask all of our consumer startups are are you passionate about building a position worth fighting for? what does that mean we have 15 companies in our investment portfolio. a have a vision worth fighting for. there is a problem that needs to be solved that cannot be solved elsewhere. when we look at this, we say there needs to be a large community for tens of millions, hundreds of millions of young adults and teens to express themselves in a safe place and nowhere else can they do that. that is why shots needs to exist. it is not just another selfie photo-sharing app. the product is built in its own way and some of the new features we are launching this quarter and next quarter are going to make it for the unique. >> why isn't instagram safe? >> instagram essay for a lot of kids. the weight is built, you can comment. when you comment on instagram, a lot of comments are -- the kids are saying, that sure look stupid. there is no commenting on shots. everything you do is positive. there is only positive feelings in the community. that is unique within shots. the young adults using it don't even know that. they love the product because it is positive. they never say this is a safe place to be. it is a fun place to be, but they get the emotional connection because there is only positive commenting going on. >> there is an argument to be made that better twitter integration could lead to a better experience for shots users. that could come with something like an acquisition. >> clearly, there is reason why there is speculation. you can see a fast-growing younger demographic for twitter. like i said, the founders, and i stand by that i do not think this is the right time. this company is growing like crazy. it reached one million before facebook and twitter reached one million members. within the next year or two, i think we will be at tens of millions of shotties. >> how do you know this is not a trend, not a fad? >> that is part of what i do. we see 2000 copies a quarter. we see a lot of trends. we understand when there is a vision worth fighting for and 18 that can execute. that is where we make our big bets. shots hit all of our filters. we thought this could be a billion-dollar business. we have been lucky and fortunate at maven ventures. we were able to work with three unicorns. i do not know if you know the terminology. a billion-dollar exit company. i was one of the first employees at the first social network. you might for member friend stir. >> barely. >> we started a company called vevo and that became the third largest social network. we sold that for almost $1 billion. >> $800 million. not quite $1 billion. >> we will rounded up. the third company is called tango. it was recently valued at over $1.5 billion with alibaba putting some money into it. >> how do you spot the unicorns? everyone is trying to find the unicorn. >> it is something that we -- we have been doing this for about 25 years. part of it is sticking to the patterns and filters that we have seen. going back to, this is a great team, is it a vision worth fighting for? we only do consumer investing. we stick to what we know. we help build these companies and we will continue to do this. >> we will be watching to see if indeed you have found another unicorn. thanks so much for joining us here on "bloomberg west." i will continue to use shots if i'm going to get 2000 retweets. we will be right back. ♪ >> this is "bloomberg west." uber says it has discipline josh moore, who was under fire for using the company technology to track a buzz feed reporter. uber did not give details on what he did wrong or what the punishment was, but he will keep his job. he has not been disciplined publicly. more than 6 billion people are expected to have smartphones by the year 2020. how will the valley deal with the massive demand for data? you can watch a streaming on your phone, tablet, bloomberg.com, apple tv. ♪ >> time now for "on the markets." i am julie hyman. a selloff for the first trading day of the year -- of the month. the first day of december stock falling across the board. disappointing holiday spending numbers being reported an estimated for the weekend as well as gauging manufacturing and china and germany coming in below average. >> you're watching "bloomberg west," where we focus on technology and the future of business. i am emily chang. the number of people with smartphone subscriptions is expected to double by 2022 more than 6 billion. 90% of people over the age of six will have a mobile phone by then. these are just some of the findings from erickson's report. what other trends are we seeing and how is silicon valley preparing for the growth? i enjoyed by hans vesburg. did i say six years old? >> you did. that is our prediction. 90% of the population above six years old will have a mobile phone by 2020. what we have seen so far is a slow development. the next year will be an explosion. the reason is prices are coming down. the technology is reaching so for watch further out. we believe that 93% of the earth's population will have mobile coverage by the year 2020. the scale you have in the industry. amazing numbers, so everything is in front of us. >> we have been talking about smartphone saturation, concerns for samsung specifically. it sounds like smartphone makers do not have anything to worry about. >> what we are facing in the u.s., it is a natural thing. there are more than 7 billion mobile subscriptions and most of them are on 2g. many places on earth have 2g coverage but they are not going into 3g and 4g coverage and handsets are coming down in price. an average reduction of $10 in a smartphone means hundreds of millions of people can acquire it. >> how does supply meet demand? >> when you are in the more rural areas, it is a challenging thing. power is mostly run on diesel. we need to think of ways to get power out there. the same technology we deploy in the u.s. or in sweden, we deploy in africa and india as well. we use the same technology. then we get down the cost and scale. that is where we can have people six years old to have a mobile phone by 2020. >> erickson is a partner with facebook and samsung on internet.org to bring connectivity to more remote parts of the world. how much do you think they will be driving those numbers? >> the whole scale of enterprise and private money together will be the majority of it. when you come to the more cumbersome areas, we need new innovation. partnerships like internet.org is very important where we come with technology, they come in with new innovation oh aspects, and a company like samsung thinks about the devices coming down in price. you can think about the last billion. >> what is erickson doing from an infrastructure perspective to make it easier to get the internet ondumber phones in developing country? >> one thing we are doing in silicon valley is we have a lot of testbeds. you need to have apps working on 2g or 2.5g. not only on 4g. that is where it is most important. that is what we are doing the face for. we are upgrading all around the world and networks, because that is happening as we speak. and spending 5 billion u.s. dollars on research and development every year in order to have this technology in five years. >> what are the biggest challenges you have run into so far with internet.org? >> everything is coming from different angles. we are at a inflection point of industries. telecoms, and the internet industry. we are coming together. all of us need to work together to unleash all the efficiency. >> did mark zuckerberg call you personally? >> we had already established a relationship. asked if we wanted to join. >> is they mark zuckerberg? did he call you personally? >> we had a conversation he asked us to join. we thought it was a great idea. we are global. we have a role to play in this. >> you mention 5g. you just a partnership with ibm. what does that mean? what is 5g? what is possible with 5g that is not possible with 4g? >> the network will be aware of new types of devices and services in a different way. for example, items that need a low power consumption because you cannot change the battery until every five years. others can be connected that have low latency. the network will be much more service aware of different qualities. that is what we are developing for 5g. our expectation is that will be in 2020. we have been working on it for many years. now we are looking at things that are needed for 5g. >> what companies will win as a result of people using additional mobile data, and what companies will lose? >> when we started 2g, there were 15 vendors in the world that could supply. 4g, there are only four or five it is a tough industry. i believe that in my industry, erickson will be around and we will be much more of a player. i think the whole world will benefit from 4g and 5g because the barriers between people and countries are going away. you have the freedom to do business with people wherever. it is the technical revolution we're having in front of us. >> when we have another billion people? >> we see already now that in the next 24 months, there will be a billion more. we have 2.9 billion. >> a billion more people online? >> we have 2.9 billion right now. it was 2 billion only one years ago. with our prediction, we're going to have almost three times more people having access to internet in the next five years. it took us many years to get where we are today. we get an enormous scale effect from the infrastructure that has been deployed. >> what about everyone? when will everyone have it? >> i am working on that report for 2020 and 2030. the new goals that all the nations will agree on from 2015-2030 have to include technology, broadband, mobility, and the cloud. >> hans vestberg. great to have you on the show. interesting to see those \interestin to see those numbers. thank you. amazon is using thousands of robots to meet the demand of online orders. we would show you how it works. you can watch us streaming on bloomberg.com and your phone. ♪ >> this is "bloomberg west." microsoft has bought e-mail start up acompli. two dozen staffers will be joining microsoft at heart of the deal. the price tag is more than $200 million. sony pictures was hacked last week. new films like "fury" have been downloaded more than 500 million times. in retaliation for its upcoming release of "the interview," a story about two journalists recruited by the cia to kill kim jong-un. could north korea be behind the attack? joe loomis joins us. a cyber security firm that helps protect fortune 500 companies. who do you think did it? >> i think the tell is in the facts. we had a coincidence that we have a movie production company that is releasing a movie that is coming out or train a politically incorrect type of message. you are starting to see a new transformation of the new type of warfare that is coming along, where you have a foreign country attacking a corporation where you have a whole different game plan going on that you have never seen before. i believe there is a little bit -- the evidence points to the east on this one. >> you are talking about high-profile movies and actors, including brad pitt. he is in the movie "fury." they stole everything from the movie to actors identifications. what can a hacker group do with this information? >> a lot of different things. they can still your identity, take credit cards out in your name. they can leverage it. they can obviously disclose confidential information that might have legal consequences. it could make it a rough year for an individual when they have that information. >> how damaging could the piracy be? the movie "fury" has been downloaded 500,000 times. >> i have a background in piracy control. i will tell you that one of the only major booming businesses when it comes to hollywood is a major moneymaker for the united states. piracy, the amount of revenue lost in that -- think about it. if you are able to get that stuff relatively easily on the internet, are you going to buy the movie tickets for it? you are looking at tens of millions of dollars of revenue losses with the amount of piracy. the mpa and riaa have stepped up their enforcement on illegal downloads. when you have events like this take place when you have compromises, data taken, you are looking at losses that might not be realized initially but definitely tens of millions of dollars in lost revenue. >> it took about a week for the company to get back online. why so long? >> the sophistication of these type of attacks, you don't know how long the hacker group has embedded themselves in your network. part of that response you have to do is create the triage process. part of what you remember back when playstation went down for over a month, part of the triage process is taking things off line so you don't further the damage. if they chose to keep their network up, who knows what they might not have been funneling out additional movies and information that is confidential? part of that collateral damage is cutting the cord, then create the triage process and investigation and forensics. i am told that they are on the scene and their first operation is to do the best they can to protect the customer, but at the same time help them not further the damage even more. >> joe loomis, thanks so much for giving us insight into this hack attack on sony. not a good one for sony to be dealing with right now. still ahead, amazon is using thousands of robots to meet demands of online orders during this holiday shopping season. we will show you how it works. ♪ >> i am emily chang and this is "bloomberg west." cyber monday is likely to be the peak shopping day of the year. to handle the onslaught of orders, amazon has rolled out a new robot army. cory johnson spoke earlier with one of the amazon executives behind today's massive challenge at an amazon center in tracy, california. >> dave clark -- what is your title? >> senior vp of worldwide operations. >> to you, it is amazing to watch when things disappear there and reappear when they are ready for an order. how is this changing your operation? >> we have been doing fulfillment for 20 years and improving every year. this is a definite improvement to our last building. you think about the challenge we face and it is about the massive selection we carry. the site we are in today has over 3.5 million units of unique selection, over 21.5 million units of total inventory. to find a product for exact thing the customer wanted ship, it took a lot of time. >> there are 21 million items here? >> 21 million types. >> it is bewildering to watch children's toys and power drills and -- >> you name it. toys to vitamins to toy rockets. my family and i have two sons. we probably do 90% of our shopping at amazon. >> let me ask you this. does that stowing and picking method, is it effective with the robots? does it change the way it works? >> it fundamentally changes it because you eliminate the walk. everything we are doing is the value added element to the customer. it is making the product available for sale. this is available for same-day delivery in san francisco. order by noon, get it tonight. when it is delivered to the picker, it is there. when we were previously processing orders in an hour or an hour and a half, our fastest times are down to under 15 minutes. >> i have to imagine there is a tremendous amount of things you are going through in terms of that is actually going to help us with -- what? what are you learning the most about? >> three big pieces with the system. one is the capacity expansion. it is about getting more selection available locally for customers in the same footprint. in this building, we are getting 50% more product per square foot of space versus our previous generation. >> is not like the catacombs or library. >> because the system does not need walkways for people, you don't need the intermediate handling system and you get more density of storage. there is very few aisles. you are always welcome. >> talk about the location of the facility. it is interesting to me that it is an hour or two from sacramento or san francisco. how do you select locations and how does the change in amazon tax policy aide that? >> we are about getting closer to customers. then it is about speed of processing that you get and our ability to faster process for delivery those customers. as we scale the network, moving from one building to many buildings, you are able to get much closer to customers. when you have five buildings like we did in 1999, you are more of a regional fulfillment center. we have 50 buildings in the u.s., 109 globally. we are able to be much closer to urban locations were customers are located. >> the impact of sunday delivery -- i walked out of church and a mail truck went by. wait a minute. it was chock-full of amazon packages. >> it is amazing how fast customers have really adjusted and love the sunday delivery. we now have 19 sort centers across the united states supporting sunday delivery to thousands of cities. it is a tremendous benefit of being part of our prime program and through seven-day delivery. >> is it better or work for the pickers working with the robots? they -- are they working harder, or do they not have to walk 12 miles a day? >> i encourage you to talk to them. i think the pickers and stores enjoy working with the system because they get to do more of the direct things that customers appreciate. all employees or owners in the company and its owners, they know the customer value in terms of price. they know that what they are doing is directly what customers want, whether picking an order faster or making an order faster available. >> their job satisfaction is better because they are getting more and less? >> they get to deal with a new level of technology. they are getting to do with the new system and there are customers and things that directly benefit from it. >> dave clark, thank you very much. >> cory johnson is back with us now from the amazon fulfillment center in tracy, california. it is time for the bwest byte, one number that says a lot. what do you have for today? >> it is amazon-related. 78%. according to a study done by aol, 70% of online u.s. retail shopping done in the u.s. on cyber monday, 70% was all done on amazon. we don't know what the numbers are yet for today, but those are freakishly large numbers. -- 78% done on cyber monday. as big as cyber monday is to the world of online shopping, this kind of fulfillment center shows how amazon is gaining a really strong advantage over all competitors in the world of online shopping. because they have the fufillment centers all over the place, because they have these robots moving stuff around in ways their competitors can't possibly catch up to. they have hard-working people like lena here filling these shells and unpacking shells. it is a competitive advantage. one wonders if the 70% share of the growing online shopping on cyber monday will continue and share, not just in terms of size. >> i did a lot of shopping over the weekend. i like to plan. how about you? >> i know you do. >> [laughter] >> i am picking up things i want to buy. i'm further ahead on christmas shopping that i have been in your. there are new lay goes, some barbie things that are interesting to me, pop tarts, i'm looking at headphones. >> pick something nice out for me that is not a legal or a barbie. i appreciate it. ♪ >> from the moment he stepped on stage until the day he said good late- goodbye, the king of night was johnny carson.

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