FireEye Joins Forces With HP; Yahoo! Misses Earnings Expectations
NEWTON: It's the meeting of security and scale. FireEye, one of the world's top cyber security companies is teaming up with HP. Now, the deal will bring what has been an expensive security service to companies of all sizes. FireEye was already one of the dominant players in the cyber security industry. Last year, it helped Sony Pictures recover from its devastating hack. And just last week, it accused a hacking group of breaching networks across Asia over the past decade. Those hackers are suspected of having ties to the Chinese government. Now, David DeWalt is FireEye's CEO. He joins me now from San Francisco. In terms of us looking at the problem -- and I understand you have this new venture with HP, but let's talk about the problem first -- why do I get the feeling we're still playing defense on all of this? And is anything you're doing going forward going to change that?</s>NEWTON: Yes, a good question. And certainly I think we are playing a lot of defense, and that's because the offense has gotten so good over the last few years. And we've been reading about this, we've been seeing in the news. We're not only dealing with cyber criminals and cyber hactivists, we're now dealing with very strong and highly-funded nation-state actors. So, the offense is very good at what it does, and most of the corporations, most of the entities we deal with, are playing a lot of defense. And right now, it's a very challenging battle for most companies, as evidenced by your lead-in there with Sony and some of the other big retailers.</s>NEWTON: Why do you think it's necessary at this point to really change the way you operate in a corporate way to be able to take on some of these hacking events?</s>DEWALT: Well, I think that's a good question. And the answer, really, is we have to flip the paradigm around. And when you look at what's happened over the last decade, the security industry has been very reactive. Most of the technologies that we have developed are all about trying to find an alert, look for an event that might have triggered that the attackers were in the network. What we're trying to propose at FireEye and now with HP is a very proactive, very adaptive defense model. Become more offensive, look for evil, try to search for the bad guys ahead of time and try to block them in a different kind of way and really marry together people and product and technology in a way that human intelligence together with product intelligence makes for a stronger solution. So, this is premise of FireEye and Mandiant. And now together with HP, it gives us massive scale. And I think together, we can solve a lot of the problems that we're seeing if we really focus on the combination of those two.</s>NEWTON: And without giving away anything, does this mean that it's always better to have these kind of groups from within trying to poke at your holes and poke into your system so that you know what your vulnerabilities are. Is that a big part of it?</s>DEWALT: It can be, although it's just a small part. Actually, what we see is vulnerability assessments, or what we call threat assessments are important. It's always good to know what vulnerabilities you have. But nearly every company we visit has vulnerabilities. In fact, in many cases, has hundreds of vulnerabilities. The issue isn't do you have vulnerabilities, the issue is are you compromised. And this is really what we're trying to bring together with Hewlett-Packard is we want to provide a service that tells you, are you breached already? And we see that breaches are inevitable. And it's just a matter of time before you get breached. But the real solution is, if you do get breached, can you close the window? Can you reduce the risk window to minutes? And if you do, you're very successful in eliminating that risk. So, proactive, adaptive defense is key. The ability to really look for compromises is critical. And trying to change the paradigm, I think, is the future of the way cyber security will solve this.</s>NEWTON: That's so interesting that you say it's inevitable that you're going to be breached. And I don't now what you're going to say to my next question is, can we prevent the next Sony hack? Can we make that just absolutely obsolete?</s>DEWALT: My opinion, the answer is absolutely not. It just takes some motivated attacker right now. We've seen this with some of the high-end offensive activities that are in the market. If these actors want to get into your network, if they want to do destruction to your systems, it's probably inevitable that it happens. But in a lot of ways that we've solved problems over a global model, there might be victim one, but the key is not to let there be victim two through a hundred, or even more. So, what can we do to share intelligence quicker? What can we do to be more proactive so if there is another Sony, there's not a number of other victims at the same time? So, the criticality of public and private working together, governments and private companies, like ourselves at FireEye, working together is key to keep from having many victims instead of, perhaps, just one.</s>NEWTON: OK, Mr. DeWalt, you are one of the foremost experts in this. Your information is sobering, but we'll take it under advisement and hopefully things -- that landscape will change in the years to come. Appreciate your time.</s>DEWALT: Thanks for having me.</s>NEWTON: Now, Yahoo! has reported earnings for the first quarter, and yes, they missed. Samuel Burke is here to tell me why. OK, so, this is a company that everybody told me, search is over, search is over, search is over for them. They're going to redesign themselves. What is going on?</s>SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Well, they're searching for themselves.</s>BURKE: They're searching for their soul. And it looks like they're searching for search. For so long --</s>NEWTON: Oh!</s>BURKE: -- you heard her talking about -- of course, Marissa Mayer, the CEO of Yahoo! -- talking about getting money from video and getting money from social networks. They acquired Tumblr for over a billion dollars. But now it looks like they're refocusing all of their efforts on search, which is, of course, how this company came to life in the first place. It was the big search engine before Google. Let's just get to the numbers before we get into more of this. Earnings per share, Paula, 15 cents versus 18 cents, that's what analysts were expecting, so not good, a big miss there.</s>NEWTON: That's quite a miss, yes.</s>BURKE: And revenue, $1.04 billion versus expectations of $1.06 billion, so a miss on both earnings per share and revenue. But let's get back to this search for the search. More and more, we see her positioning herself trying to be a competitor to Google. It's really fascinating, because it looks like maybe some of the other things that she had tried haven't quite come to life. Buying Tumblr, for example, isn't bringing in the revenue yet. So now it looks like they're renegotiating some of their terms with Bing, which is owned by Microsoft, because that's what powers their search engine right now. And they just became the default search engine on Firefox, that browser, instead of Google. So what you see them doing all a sudden is going up and trying to be a strong competitor against Google, refocusing all of their efforts on search. They've come full circle.</s>NEWTON: Remember, we were talking about Alibaba, of course, and how that was playing into their results. At a certain point of time, how much are investors going to be spooked about this? Because it just looks like a company that is a bit directionless.</s>BURKE: They're already spooked. We heard investors already coming out and saying on Twitter that they're disappointed in these numbers. Back to what you said on Alibaba, the call, which is in just about 30 minutes, which we're going to be listening in on, they want to know more about this spin-off of Alibaba, what she'll do with that money. But at the end of the day, I think most of these investor questions are going to be about search. She's just renegotiated all these big deals. It gives Yahoo! a lot more power over Microsoft, their new contract. So, we think people want to know, have you changed strategies, Marissa Mayer? Is your focus on search now, as opposed to video, as opposed to the social networks?</s>NEWTON: Now, one thing you and I talk about all the time is this issue of the video. The video streaming, which leads to big dollars because it leads to a lot of eyeballs on your mobile device or wherever else you are. How can Yahoo! play that, and do they have the competitive edge there?</s>BURKE: Well, what Yahoo!'s trying to do right now -- first I should say, the reason why video is becoming more important is because banner ads, which used to be what these companies lived on, Google and Yahoo!, are becoming less and less valuable. So, they need to get ads from videos. What Yahoo!'s doing right now is trying to position themselves as a type of competitor to Netflix. They've purchased shows like "Community," which used to air on NBC. Now it's actually airing on Yahoo!'s website, on a website called Yahoo! Screen. So, basically, they're trying to get original content, which is what everybody's trying to do right now, and get the ads that way. We don't know if it's working yet, and that's one of the things that investors and we, the journalists, are going to want to know on this call. Is it paying off at all?</s>NEWTON: Yes. "Community" won critical acclaim, awards. Does that mean it's making money? It's another thing you have to come at. Ooh, it's always interesting when Yahoo! results come out, that's for sure.</s>NEWTON: Thanks, Samuel, appreciate it. Europe's shipping industry has a message for EU leaders: you cannot rely on our merchant ships to rescue stranded migrants.