emily: we begin with google. they face the biggest direct as the european union slapped the company with antitrust. how did it come to this? they began looking at searches.

now that you has -- eu has filed charges, accusing google of being anti-competitive. did -- the eu claims it favors its products over others. leading the charge is a top danish politician. >> comparison-shopping is of course limited. and it is the first fight where we have a complaint. the

however, we will continue to look at google's conduct in other areas. emily: they also opened a code into android, she is still investigating search results for hotels. googled controls 92% of the search market in europe, compared with just 75% here in the united states. in response, google is not backing down. they say, while google may use be -- may be the most used search engine consumers and competitors have proven to widen the mark. in 2013, they launched a similar investigation but closed it. if found guilty, google could be signed. -- find.

still, legal experts believe such a fine is highly unlikely. i spoke with a antitrust lawyer and a former coo of google europe. >> this is been going on for quite a while, it is not a new revelation. the statements of objection are relatively bland. i think a lot of it will come down to is google dominant, and how they view that dominance. if you look at a universal search, if you look at how people shop for hotels, consumer electronics, credit card banks etc., they use mobile apps. yelp says 40% of their

restaurant bookings come straight through their cap. app. number two is are they abusing it? google will always say, how do we give consumers what they want. i don't think they will of ever said, let's place our products first. they would have said, consumers seem to like vertical specialist search. let's change our format and see if they like it. every time google makes product searches, and changes, there are no surprises that people have had -- been hit and complained. emily: how serious is this allegation against google? how serious is it that the eu has ratcheted this up to formal charges.

paul: i think it is just an interim stage this marks the end of the first phase of the investigation. the statement's of objection is a short surmise of where it has gone to in its investigations. now google was have -- will have the opportunity to go in more detail. there is no finding in liability. it is the direction of travel in the commission's thinking. we do not have a conclusion in terms of if there should be a fine. if there is a fine, it could be a big percent of its turnover. i think it is fair to say it is serious. google has been trying to settle this through forms of commitments. unfortunately, that has not worked. they may have to offer concessions, it has not been

able to close it by that channel. emily: in the worst case, how could this hurt? cory:rey: i looked back at the google ipo today and it said they were unbiased. people believe google was -- will give them accurate search results. if you typed in a flight you will get these wrote -- results across the internet. i did a kayak search and a google flight search and guess what, i found cheaper flights on kayak. that says to me, the real risk is that the information is sometimes biased in terms of google favored results. that could hurt more than $5

million. emily: then, what is your reaction? ben: my reaction is that they may become irrelevant. it is a proven fact with lots of data with desktops and mobile less and less consumers especially sophisticated ones are searching their search -- starting your search journey with google and they are finding better deals elsewhere. google has an obligation to its customers and shareholders to improve its results. that means improving formats. that means march -- more church -- more choices. they will become irrelevant. kayak is still winning, why

would kayak worry about google question m? google wants to do more of the same, rather than lose its battle. i think the fine is far less worrying to google than saying you cannot do vertical search. that would mean the google experience would get worse and worse compared to the virtual search specialist overtime. i think the fine is far less worrying than google having to stop innovating. emily: paul, paint the most genetic scenario. does google have to breakup in europe? paul: i don't think it could come to that. it could be that google would in search of a concession

although unlikely, it could have a formal breakup. i think as your guest said, the most worrying aspect is that google will be forced to comply with the legal practices. emily: paul, ben and our own cory johnson. up next, hillary clinton is in the race for the white house but the digital campaign will be different from the last time she ran. her former senior adviser joins me next. later, how will social media be a game changer in 2016? coming up on bloomberg west. ♪

emily: this is the best of bloomberg west, i am emily chang. hillary clinton has finally announced her candidacy for the white house. the response has been overwhelming with over 500 million video views in the first hour of her video. i spoke with alec roth, her former senior adviser and asked what his involvement would be. alec: i think she wants support for her presidential run. when we connected, she was in

ohio on her way to iowa. emily: how did she feel? alec: the rollout has been a huge success. it has been bananas. they came out with this new video, and within the first 18 hours, it was viewed 5 million times. one of the other presidential candidates is rand paul his video had been watched 250,000 times. i think 20 times as well as the next tech savvy candidate is not shabby. emily: do likes and followers on twitter and facebook, do they translate into votes? alex: we are far past the days of ronald reagan doing a perfectly executed campaign

event with the flag positioned just so, and then he shows up again three days later. you have to have a continuous dialogue with the american people. you have to educate them about who you are and why you are running. that is what really matters. the 5 million video views matters in so far that 500 million people listened to what she had to say. emily: using social media is a given these days yet she literally just joined facebook. she joined twitter relatively late. why has it taken her longer than some of the candidates to embrace these platforms? alex: the biggest reason was that when she was secretary of state, it was a lousy job to use social media. in diplomacy there is so much nuance, so much attention given to every little comment, every little semicolon, it did not

lend itself to liking and unlike in. i was off for diplomats using social media, but i do not blame her for not using it. emily: the republicans have caught on. marco rubio saying he is on snapchat, how big are hillary's challenge is going to be in the hit to change republican media landscape? alex: in 2008, obama won because he figured out how to use technology effectively. in 2012, the republicans were still fairly incompetent. mitt romney's technology platform broke down on election day. that will not happen in 2016. whoever the republican candidate is, bush, cruise paul, they are all technology -- technologically savvy.

i think will be a challenge for hillary in that they are going to be competing fiercely with her and whatever democrats run against her in the primary as well. emily: what is her mindset when it comes to leveraging technology, leveraging these new tools? obviously we thought different kinds of campaign announcements what else? alex: we will see which tools get used, we will see an unprecedented use of big data in this campaign. social media was defining any 2012 race, i think the -- i think it will make a big impact. emily: alec ross, former senior adviser for innovation at the state department. the 2016 candidates are already sparring over twitter and youtube, but when it comes to tech and politics, campaigns including marco rubio's are

already investing and big data to learn more about competitors. i spoke with someone who has seen firsthand obama's campaign. >> i think rubio's approaches clever. he is going up against a incumbent who has a huge amount of technology behind him. he -- rubio's strategy is about raising money from investing in areas where they can have a big impact in terms of efficiency. that is how it data will help. emily: areas like what? >> if you think about where the campaign can spend their time, certainly as a candidate going through and doing traditional fundraisers in hotels will bring some money but if they can use

optimization and testing to improve the effectiveness of their website and online presence, that can raise money through small donors. emily: what is more powerful big data or money? who would you rather be? >> big data is a way to become big money. if you look at the history of the hillary campaign versus obama in the primaries in 2007 the first quarter, hillary used traditional means to raise slightly more than obama. through many small donations, obama was able to beat a traditional big fundraiser. emily: former head of analytics through -- for obama's 2008 campaign, dan. tim armstrong explains new technology. ♪

emily: this is the -- best of bloomberg west. aol is taking aim at google and facebook with new advertising. on monday aol unveiled a new ad platform designed to help advertisers figure out how to spell dollars -- spend their tax dollars. it will allow brands to measure the effectiveness of their apps across all formats. cory johnson spoke with aol ceo tim armstrong. corey: what is happening today is the biggest food at in media from the way traditional media was done to the way it will be done in advertising which is the targeting of advertising in a much deeper level.

jim: today tim: i think as you just subscribe -- described, it is the most powerful time. for marketplaces. aol is stepping up as the most powerful futuristic marketplace. it is exciting externally, but our teams internally are more excited. cory: you guys have done so many acquisitions of little companies, is this the stitching together of all technologies in a single platform? tim: we made some really large bed -- betsy before anyone else did. when you think about those three areas overall, we have knitted together, aol platforms together with exciting acquisitions.

if you take a step back, aol is a top player in video, distributed content on facebook for social no one has a more danced system -- more advanced system and aol. the stitching together of our strategy has been important. we have not changed in five years. cory: when i think about this, i think about what clever marketers do. i have the ceo of carl's junior. they recognize they were not mcdonald's so they wanted a particular ad that would reach a young male customer. they were clever the way they reached tv markets and markets on the web. it sounds like what you're

talking about is the shift from demographically focused advertising to results of focused. tell me how that might work in a real case example. tim: if you are into it, which is one of our partners, they are taking advantage of a singular trends, which is media was built in bulk and since to consumers in bulk. now it is being built on a similar basis in many cases . we are in tax season right now intuit can talk individually to consumers. when you think about it, the future of connecting with people will be on a singular basis. that is why social networking is important. our platform is the first platform to take advantage of

the single-a nature of the c giller content going to consumers. when you look at a recent tv statistics, the fact that almost all human beings are walking around with machines in their pockets that are essentially as pot -- powerful as a cable box, all of our systems are built to essentially deliver high-quality content and high-quality advertising in a similar way -- singular way. that will be a significant shift for the entire media and internet business for the next two or three decades. cory: how can you track and add on a smart phone? tom: mobile is about device targeting, for us we have about 100 ilion devices in the united case that we recognize and understand and we can cross-link. that creates a powerful union.

if you think about the way consumers consume media on digital, a broadcast network, today we can cross format target you in general. it actually makes what cookie targeting was in a more powerful way. when you think about advertising in the future, a lot of people think technology will deflate ad prices over time. i would make to bets, one will get better and more creative the second is, ad prices will go up. there are a lot of ads and you do not know how they work. imagine how much people will spend when you know how each ad works. emily: tim armstrong with cory johnson. hundreds of commercial planes

could be vulnerable to hacking according to a new government report. we talked to one of the researchers behind that report next. ♪

emily: you are watching the best of bloomberg west where we focus on innovation and technology. in-flight wi-fi connects travelers to the outside world, it could also give hackers a way into planes on the computer system. the government accountability office reports that hundreds of commercial planes could be vulnerable to cyber attacks. many modern cockpits rely on the same wi-fi that passengers use. a hacker could commandeer a plane and shutdown systems. how can airlines and faa keep

hackers out of the sky? i spoke to dr. gerald billingham . >> i think it is important to understand that we are talking about the potential for this kind of intrusion to occur rather than saying that this is an imminent threat because faa is in fact taking precautions. we are talking about the future as more and -- aircraft become more internet dependent. emily: how exactly does it work? if the plane is on cabin wi-fi, connected to the cockpit system back where you seek -- that is where you see the vulnerability? >> the example he gave is in the cabin, passengers have broadband available to them. they can upload a program onto their computer.

if that program has malicious software in it, and again this is important, if in fact the ip connection on the airports is able to connect with the cabin and avionics, then you have the possibility. right now what happens is there are firewalls that prevent that kind of incident occurring. keeping in mind, firewalls are software too. up-to-date, faa has only special rules preventing this. we are pointing to the fact that 10 years from now when 60 to 70% of the fleet will be like the new aircraft we see today in terms of the dreamliner, there needs to be regulations and standards so that this does not become a special condition.

emily: mark, you guys are usually examining threats like this, how bad is this? mark: i agree with the doctor the big issue is as security professionals, we are concerned about technology to -- touching each other. obviously there is a great concern when you think about the avionics of an airplane or the communications of an airplane being able to touch the same wi-fi or entertainment system that the in-flight passengers use. as the doctor said, while they may be contacted with firewalls or other devices those are regularly defeated by bad guys. we have to get better about thinking about building security into these controls at the design phase. i posit that building security

in the design of the aircraft is just as important as building safety and efficiency features. the world has changed. as things are more and more ip enabled, we have to think about this from a security perspective , just as much as a safety perspective. emily: planes that could be affected, the boeing dreamliner, gerald, which first finish -- which percentage are we talking about being affected here? i heard planes newer than 20 years? aren't most newer? dr.: i would say that the fleet is being renewed. what is important now, as was said, to build insecurity and

build in cyber. that is what we were talking about. the older fleet had more separate controls, and not as many points of potential contacts across the systems. a third of those are ip-based. going forward, it will be 60% by the end of the decade. that was the point of the report not to cause concern of imminent danger, but to point out that cyber security challenges change every day. the faa must in fact not only build security end, but make sure the manufacturers build it in but constantly monitor it because the threat changes every day. you need to be one step ahead. emily: in the worst case, you are saying a hacker could

commandeer the system, mark worst-case scenario, but a hacker bring a plane down? could they fly a plane into a building? mark: that is the worst case. i do not think anyone is predicting that. that is certainly be concerned we have. we need to keep the control separate. so that that potential does not exist. when you think about this, when you have a wi-fi network unconnected -- connected to an aircraft it is just like a wi-fi anywhere else. you could potentially have bad guys on an airplane that could compromise the network on the airplane itself. segmenting bees networks is important. emily: up next, another crash

landing for x this week. we discussed how difficult elon musk's rocket catching plan actually is. ♪

emily: i am emily chang and this is the best of bloomberg west. close but no cigar for spacex. the elon musk company successfully launched a rocket into space, but they fell short of the goal. elon musk live tweeted the whole thing. the rocket landed on the drone ship, but too hard for survival. it looks like falcon landed, but

it tipped over. i spoke to lori garver and washington about what is next. lori: people have been trying to take advantage of the reusability of rockets for decades, and i think this is so incredibly close that we will be able to see this happen in one of the next couple of launches. i cannot speculate anymore than elon has. the fact that now twice in a row, they have found the drone ship and been able to land on it , too hard for survival is still a success. let's not forget the rocket itself has launched successfully and it will be docking with the international space section -- station on friday. emily: in case anyone is worried about elon musk, he tweeted he

would treat himself to a volcano layer if it worked. >> remind me of my excess lateral velocity. emily: don't crawl into your volcano. cory: everyone should get a volcano. it is a dry heat. for all of the things elon musk has done, this is an enormously ambitious thing. it is important for the government to have a u.s. space company. with nasa out of the game, there are in or miss payloads of military and spies of things that have nowhere to go. it is important for this country to have this. emily: lori, what kind of

oversight is necessary to make sure this is safe? lori: this is very similar to how we have been going into space for years. i take issue with nasa out of the again, we are not out of the game. they are in the game. five years ago president obama outlined a new way of partnering with the private sector to advance the -- advanced space transportation. we would be spending much to money -- much too much money is we threw away an airplane every time we flew. the government has been utilizing the private sector to launch its satellite yes, even though they are important military satellites as well as payloads for decades. the spaceship was retired a few years ago with 3-4,000,000,000

dollars a year that has helped us to create the space station. now with the private sector being able to do it for pennies on the dollar, that is the right path. emily: give us a better idea of what he is grappling with here. what kind of technology is necessary to make it reusable and save money? lori: reusability has been a holy grail. we know that is what it takes to reduce the cost permanently and have sustained space activities. we at nasa have been recorded -- working on it more than 15 years, we have a different vehicle that would lead to a fully reusable vehicle, the investments are too high. because the technology, but uriel and propulsion were not

advance enough. the private sector is innovating to do this on a ship in the ocean because they cannot get the capability to get licenses to land on land. this is a great innovation. of course we used the space shuttle engine that came back and we refurbish them to fly again. the space shuttle took a number of parts that were expendable thus the cost continued to be too large. emily: if this will happen, do you think it is just a matter of time, how much time? lori: within the next year, elon will have landed spacex successfully so starting that reusability, they have six launches now, they are in a 12 launch contract. i think people will be going on

competitors vehicles with boeing in the next couple of years. emily: lori garver in washington , and our bloomberg editor at large, cory johnson. coming up, house calls. that is coming up next on the best of bloomberg west. ♪

emily: welcome back to the best of bloomberg west, i am emily chang. sprint is making house calls and could deliver and set up a new smart phone inside your home. as competition heats up with t-mobile, it is trying to differentiate itself by praying -- bringing the in-store

experience to homes or offices. i spoke with them about the deal and about how they tested this program before launching in kansas city this week area >> we did this with a group of select customers in kansas city. they asked for direct to you and we had experts go to their home and offices and take them to the whole experience. it is a thorough experience. i don't know the last time you went to be store to buy a cell phone, but if you are switching carriers, it takes a long time if you are switching from one operating system to another. it can be painful to transfer contents, most people are not tech savvy. before we launched, i wanted to

experience it myself. i went to a customer's home and the customer was delighted. when we felt the customers were delighted, we said let's announce it. we will do miami and chicago later. emily: you have an interesting story, as i understand it, you started by selling phones out of your car in college. you made house calls. how did that inform this decision? marcelo: that was in 1996 when i was in a different company. back then it was different, customers had never used a cell phone. we had to take them through the whole experience. things have not changed that much. if you get your new smart phone, the amount of things you can do is a lot.

a lot of customers do not want to order one online because when you go home and open up the box you have an intimidating latest galaxy or iphone and it is not easy. i have so many e-mails from customers telling us, i lost all of my pictures that i had in my phone. we thought this would be a clever way to basically go to the customer's home and more importantly, it is delighting the customers. by the time they are done, i can tell you these are customers recommending sprints to everyone. emily: there seems to be a race to the bottom when it comes to different carriers t-mobile has been pushing prices down. to customers care more about price or convenient? what kinds of phones are you selling the most of, higher end ones?

marcelo: customers want to get the latest device. we realized that and we launched the first phone leasing, iphone for life, that gives you the ability to get a phone and every year you have the ability to get a new phone. you get a lot of people who have a two-year contract and the technology comes up once a year. imagine you sit in your home, you have a one year lease on your phone and every year you change your phone and you go to an at, you click on your app and you say where you want the phone to be delivered, and you choose where and someone shows up and exchanges your phone. that is a type of experience. emily: sprint ceo, marcelo.

a struggle to keep artisans happy. next on bloomberg west. ♪

emily: this is the best of bloomberg west, i am emily chang. wall street may have high hopes for aetsy. it is pricing at $16 a share. many of the artisans. are not so thrilled. leslie pickel visited some merchants to find out why. leslie: stuffed owls address

like hipsters are rebecca is thing. she spends five hours of sewing and decorating each one by hand. she sells them for $50 a piece on atetsy. rebecca: it was the perfect platform, they were doing their part to elevate the experience of handmade. leslie: that is intel at sea until etsy k more corporate. it allows sales to slip. the new policy has made it harder for consumers to find her pillows and compete. leslie: why not use a manufacturer to compete? rebecca: at the sellers the sellers

have connections to their pieces. at the end of the day, it is a business. leslie: it was founded five years ago. a copy attention of big-name venture capitalists. over time, success bred conflict they rejected any stray from the company core values. now it is going public. the new policies could help it make -- help make it more attractive to wall street. it charges $.20 for each listing. they declined to comment on the policy changes. if these changes are common even if it means offending customers. >> companies need to evolve.

those that do not, will be left behind. the trick is to do it in a gradual way, or way that does not offend your original thing. i think if a company changes to quickly, it could have an impact on the current customer base. leslie: as a team meet up, sellers have mixed reactions to the ipo. some say this is just part of the price you pay. rick left the site when the changes were announced. rick: or a site that claims to empower crafters, i did not feel it was doing that. leslie: some see it as an opportunity. they have started a campaign to build 1.5 million. emily: our ipo reporter, leslie

pickel. that doesn't for this addition of the best of bloomberg west. you can watch our regular show monday through friday. catch you later. ♪

>> nothing offends these members of the mount parnassus garden club like a lawn.