emily: tim armstrong with corey johnson.dreds of commercial planes well, 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 inte

joining me here in the studio corey johnson, our editor at large in new york. we've got tracy cofounder of the mobile marketplace. also with me here in san francisco. thank you all so much for joining us. corey, you cannot get me the watch. can we confirm that? >> we cannot confirm that. i didn't get you one today. >> you're not going to surprise me with a watch in the middle of the show? >> if i told you right now, it wouldn't be a surprise. i did go to the store this weekend to look at the watch. and, you know i played with it when it first came out. actually, my daughter, my eight-year-old freaked out when she saw this thing. the notion of the functionality all the things it could do. it was so exciting to her, in a way it wasn't for me. i wonder if that sort of speaks to the surprise of the user interface. >> now, steven, you do have the watch. what are your favorite things? >> i've had it for a grand total of about 16, 17 hours now. so it's still in that kind of honeymoon, getting used to it phase. >> hold it up, so we can see it. >> i've got it right here.

joining me in the studio is our editor at large, corey johnson. -- editor at large, corey johnson. -- cory johnson. what is your reaction to this? guest: this is not a new revelation and the statements, i have not seen the statement of objection -- we will see what comes out. i think a lot of it will come down to is google dominant and are they abusing that dominance? if you just look at how people shop for hotels and consumer electronics, credit cards, etc. they increasingly use vertical specialist sites and google is not part of that process. for example, yelp says 40% of their users come through their app with no use of google whatsoever. are they abusing it? my observations are that google does the experiment and says how do we give consumers what they want? i don't think they would ever say let's place our products first. they would have said consumers seem to like vertical specialist search. let's change our search format and see if they like it. the final thing is every time google makes audit searches and -- every time google makes product searches and algorithm changes, it kn

corey johnson will continue at the rsa conference.rket makers will be back after the break. ♪ stephanie: you thought we were done? when we return, we have the story of a mother of coffee and a silicon valley -- a mug of coffee and a silicon valley dreamer who put them together. erik: what's behind the pork shortage at chipotle? we went to pick farms to find out -- to pig farms to find out. stephanie: i have never been to a pig farm, a haltho farmg. i've never actually been to full length. -- i've never actually been to chipotle. ♪ >> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. stephanie: welcome back. "market makers" we look at markets around the loop. we want to get back to the breaking news desk for our own chief correspondent scarlet fu premier jiang yi-huah the action out of europe. it is not just about greece what is happening in the market? scarlet: there was a german investor confidence survey this morning which showed an unexpected drop. european stocks fallin

corey johnson, bloomberg west editor at large. corey will be live all day from the security conference in san fran talking with top executives including the vice president of ibm security. be sure to tune in for that interview 2:30 p.m. the software giant prosperous quarter revenue coming in at -- the software giant's first-quarter revenue coming in. cloud services taking hold. it seems ibm still a small part of their entire business. shares of about half a percent. i want to bring in on a rod -- >> for the core business it is still declining. the cloud business did wrap up quite nicely. as did the analyst six -- as did the analytics business. it is making up for some of the loss but it is going to take a long time. betty: is what to take years. a great interview a few days ago. she talked about the changing business. the change under ibm underneath her. i want to play for you part of what she said to charlie. >> last year, we divested $7 businesses. they were also negative profit. value that is not just in a shareholder's mind, t

cory johnson spoke with aol ceo, tim armstrong. corey is happening today is the biggest food at in -- biggest pivot point 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 l -- level across mobile, internet ott. today's lunch is probably the forefront product for the next generation of internet advertising systems and i think as you just described it is the most powerful time for marketplaces in the world. i think aol is stepping out as the most powerful futuristic marketplace. it has been five years of work. it is exciting externally, but our teams internally are more excited. corey: 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 bets before anyone else did. when you think about those three areas overall, we have knitted together both aol's historic platforms together with some of the most exciting acquisitions i think in our

i am corey johnson. a check of your bloomberg top headlines.nment has ordered local governments to move their money to central banks. reese remains in a standoff with this creditors, trying to unlock further bailout money. european union leaders will hold a meeting later this week talking about migrant wo

tell us, corey johnson, what is the ultimate vision for the company despite walking meetings, which then common. cory: except for the walking meetings with me looking freakishly tall next to the normal size jeff weiner. this was a struggling business at almost 10 years old by the time it didn't ipo, but wasn't talking about the -- did an ipo, but they were talking about the transaction. facebook gets a lot of attention for the social graph, mapping identities and the relationship of friends and families, and their relationship. he kept about the economic graph that should be the center of linkedin's business. check this out. jeff: at heart, lincoln is about -- linkedin is about matching members to opportunities. enhancing your job, a new skill that enables you to be better. we have data on skills members have, and what skills they might need to advance or find a new job. with linda -- lynda.com, we have data about the skills, and now a world-class library in terms of content that enables people to acquire the skills and realizes opportunities. cory: in terms of how that works, people mi

corey -- cory johnson: compare that to the 44 million average that they rounded up when they sold ita tremendous year-over-year sales gain. units up 138% year over year. it was not that bad of a number one you're ago. forget what the analysts expected let's just look at this is a business, a rapidly growing business with their most profitable products growing the fastest. this looks like a strong quarter moving up to another one. erik: -- alix: china sales, that is something we want to look at coming in at 15.8 2 billion. you own the stock, michael, what do you think? michael: the other beat that i am so happy that cory: is on with us, the last time they reported they had a massive increase in their buyback and dividend picture and this time around 200 million, which he talked about, is eye-opening, do you not think that? cory: it is. it shows what a cash machine is businesses. take a look at what they are doing at the same time. a huge capital spending program with suppliers essentially paying for the capital equipment that they will need to make the the building this outrageous hea

corey: welcome back. i'm cory johnson.een waiting for a news conference from luzon, switzerland. -- lausanne, switzerland. they have a couple of podiums but no people yet. as soon as the people are there, we will bring that to you. let's check the headlines beyond that news. robert menendez has appeared in federal court to address corruption charges. the democrat is accused of using his office to benefit a friend and can train -- campaign contributor. yesterday menendez vowed to fight. senator menendez --: the people of this great state have elected me to work for them and that is exactly what i plan to do, no matter how long it takes to clear my name. cory: he will for now sit down from the foreign relations committee. al qaeda stormed government building and and about 300 prisoners commit including government members. ties to al qaeda in the arabian peninsula, they said they discussed jihadist views with an undercover officer and told the officer then relearning the science in order to build upon. on a lighter note, much

cory johnson spoke with aol ceo tim armstrong. coreyat 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 ha

cory johnson has facebook earnings. corey: i do.k reporting 3.5 billions of that alien dollars of sales on the -- $3.5 billion of sales on the corner. compare that to just a year ago when they had 2.5 billion. in one years time they went from $2.5 billion to $3.5 billion in revenue. earnings per share, $.42. they thought it was $.40, so it is better than what wall street analysts had predicted for the quarter. operating margins at 52%, that is good for any business. that gave the a net income of $512 million. that is less net income than the previous year, but that is actual number. the non-gap number, the adjusted number taking out stock-option expenses $1.2 billion in profits are you a very strong quarter for facebook. -- in profits. a very strong quarter for facebook. i should also mention headlines crossing for qualcomm. cutting forecasts for the second half of the year. i think you have some of that. scarlet: this is something a lot of analysts were expecting from stockton. welcome is making it official by reducing its outlook

we have bloomberg west editor-at-large cory johnson standing by in our san francisco bureau. coreytake us through this. cory: i think it's the most important issue, the idea that this one company, comcast, will be able to control as much as 50% of the homes receiving broadband and have a lock on that business. right now, there are debates. i think there is no other way to get through a high-speed connections into the home for most america, other than comcast or time warner. while they don't overlap geographically, it can bind company would have a massive footprint in terms of providing internet access and all the things that go with that. this is an issue that has been of great concern. this company is spending tens of millions of dollars in lobbying trying to get their point across. if indeed the antitrust authority is looking at this and deciding not to do it, they will be flying in the face of a lot of money spent on lobbying. comcast has been pushing really hard to get this deal through. * -- mark: should we read anything into the timing of this news? cory: we expected they wou

cory johnson joins us from san francisco, and corey, how do you get around it when you don't have internetd showers are amazing, and i love this story, because it really tells us what airbnb is, and how disruptive it is for the hotel business. there was a great moment last year when the cofounder tweeted that marriott said they were going to add 30,000 rooms over the course of the year, and he said i am going to add them in two weeks, so that is the kind of on capital constrained growth that airbnb can offer. the fact that it took myra lansky to build a hotel in the riviera that had 352 rooms and he doesn't and a couple of days, that is what we are looking at with this business, and that is how disruptive it is to the entire hotel industry, not just in havana. alix: just because they added those listings, it does not mean those listings are going to be rented, so because -- just because there are accommodation issues? cory: that's right, just because you can build it does not mean they will come. airbnb made more revenue than marriott, so this is a global brand already and it is growing at

johnson, who broke the story. ok, i have been thinking about this and i am skeptical. corey you first. you helped break the story. cory: there is an offer on the table. would any off sell the company? it is not up to him -- would the ceo sell the company? it is not up to him. the board has to make the decision and there response -- their responsibility is to evaluate the decision. it is a business that shows tremendous topline growth, but slowing dramatically. it is also a business with his village for profits or cash flow -- zilch for profits or cash flow. they have been spending a boatload on marketing. that is why there are no profits or cash flow. somebody is going to want topline growth at the expense of a lot of earnings and a lot of money. emily: you have covered salesforce for a long time and you share my skepticism. >> i think this is going to be tough to pull off. we know that large tech doesn't work. we know mark has done a great job of running the company organically and that culture is a very important thing to him. we know oracle has said no. we think microsoft could be t

cory johnson joins me from san francisco. help me break down the numbers. coreyis reporting 1.03 million dollars in sales. that is week. -- 1.03 billion dollars in sales. that is weak. they tried so hard to get it right this time. they are doing worse than expected. furthermore, the big picture is interesting. they are trying to avoid intel everywhere they go. they are still selling chips into pcs and notebook. the businesses declining dramatically. they have had some success winning -- making the chips for the nintendo boxes and the sony playstation, for the xbox 1. intel is doing a little better because they are winning market share. alix: any word on the stronger dollar? any word on that? cory: i do not see it yet in the release. amd has to have a more sustainable business in the places where they are operating as they tried to avoid intel. alix: they are exiting their server systems business. what does that mean for the makeup of amd? cory: the server business has been interesting. a tremendous change that has gone on. facebook google, apple, amazon web servi

i want to bring in cory johnson comedy senior editor at large for bloomberg west. coreyross margin so important for this company than it is for other companies? cori: the guidance for growth is 64%. in her the gardens. intel is all about how well they can make their chips, how much volume they can put through their plants to make a lot of chips and make them with substantially good yield? intel has become a master of this creating yield of the most difficult technology they could imagine five or 10 years ago. reducing a lot of chips. when you make a chip, sometimes you get failures, but there yield is high. keeping those yield high keeps gross margins high. that gives you profits and free cash flow. it does not seem like a big deal to lower the guidance from 64% to 62% but it is because it is in the wrong direction for intel. it has historically been a sign we have seen particularly for intel that can often begin with gross margin decline. it is a super important number for this company may be more than any other because it is the first sign of things going bad. in the p

cory johnson in san francisco what more can you tell us? corey: some financial advisors have been consulted with by salesforce after they received an acquisition offer. we do not know who the acquisition offers from and what bankers they have consulted with good but we have multiple sources with that. furthermore, we see reaction the stock market shares of salesforce went bonkers as soon as we put our story out on the number terminal and continued to rise until the stock was halted just because of the volatility. the stock is up 12%. salesforce is a very expensive stock by just about any standard. if we look at earnings-per-share , based on a pe basis, after acquisitions, it has not generated any catcher many years except for last year. but they have done a lot of acquisitions and their main business of licensing out soccer by the seat has helped them grow revenue substantially. alix: why do you think now is the opportune time to takeover offers when the stock is at a record high? cory: it has set many records as a high. i am a blast-empty kind o

corey we are all trying to find ways to be smarter in online advertising. give the context for us. cory johnsondreds of millions of dollars tried to figure out this problem. -- aol has spent hundreds of millions of dollars trying to figure out this problem. they acquire things like the huffington post. they thought that was the place users would go and they would see ads. now, they had figured out a bigger deal. they are stitching together all the acquisitions. the main goal of this is to take all of the advertising platforms , huffington post or some random website or tv or wherever the advertising put stuff and figure out what is working and what is working at that moment. imagine you have an ad for the avengers on facebook. you find out that ad is doing well or maybe not doing so well. you want to also try television. you run this promo on tv and start to get some results on tv. with this new platform, you will be able to measure in real-time what is happening with you arer ads and ship the dollars to the places where it works. that is a dramatic example of programmatic advertising. this new

corey can speak more to that -- cory can speak more to that. that might be another reason why investors were so disappointed with this performance. alix: thank you. also, cory johnsonwest editor at large and on a phone, robert what do you make of this massive decline we're seeing in the stock and the quarter? robert: while they hit the revenues on the dot basically for q1, the buy side is a little bit higher. probably $750 million on ebitda. but they were way below. the midpoint, 672. on the profitability side, there is a question as well. much lower. should be about $200 in q2. the full-year was also narrow with the eps. almost three dollars, below two dollars was their guide. and the emphasis would be on revenues. alix: robert, isn't this the analysts missing the boat? cory was pointing out, look, the company is growing. they were up 30%, $638 million. there is growth. they are making a lot of money. isn't this an analyst issue? robert: you did see in the core business, you saw palette solutions, you saw international slowed dramatically. i think that will be a question mark. u.s. is ok, mid 30's. to your point, yes, it is more a question of what do you want to p