tv Bloomberg Technology Bloomberg June 27, 2017 5:00pm-6:01pm EDT
declared they were against it, and a handful refusing to even back a procedural vote on the matter. reacting to the announcement say the fight is far from over, and plan to readable efforts to defeat it. senate minority leader says no matter the tweaks made over the next week, the bill is still flawed at the center. he says americans don't what medicaid flashed. democrats reacted to the investment say the fight is far from over and plan to redouble their efforts to defeat it. we really mean it. we are going to do it will more time. clearly this fight is going on. u.s. ambassador to the u.n. nikki haley says russia and iran " isofficially "on notice syrian forces carry out another poisonous gas attack on rebel forces. president trump ordered a missile strike on syrian targets in april after its military launched a chemical attack on rebel positions.
the u.s. said earlier it identified potential preparations made by president assad's armies similar to that attack. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm alisa parenti. this is bloomberg. ♪ emily: i'm emily chang, and this is "bloomberg technology." google searches for answers and an appropriate response after getting slapped with the biggest antitrust fine in eu history. plus, the cyber strike crippling systems across russia, europe, and the u.s. with hiso joins us take on the latest rant somewhere and how to contain the
spread. and microsoft continues its thinking inside the box with an announcement today on expanding his partnership with the file terror and the cloud. aaron levie breaks up the tie up. first, a cyber attack is spreading across the globe today, hitting dozens of companies and some government agencies. operators in new york, rotterdam, kiev, and copies like rosneft have all been victims. the strikes follow the global ransom where a salt involving the virus of last month's attack affecting 100 -- affecting hundreds of thousands of computers in more than 150 countries. joining us in london is caroline hyde. what do know right now about the spread? caroline: quite amazing, from chocolate to oil two central banks being affected by this. at least 80 countries have been hit. ukraine and russia seems to be
the epicenter of where this all started, and it started to leach out into europe and the united states. one of the big pharmaceutical companies in the united states, as well. at least 2000 networks have been hit. users have been hit. it is very similar to the one or rent- the warnercry somewhere. very similarly, the computer you find is shut down, and suddenly the demand for $300 worth of the currency if you want to be able to access your computer once again. interpol is involved. they are investigating, so clearly they are trying to lock down the spread. once again, it seems to be something exploiting the weakness of the microsoft operating system. emily: hang on a second. another big story out today. thecord antitrust fine by
european union as it issues the first penalty in its seven-year investigation of googles dominance -- in google's dominance and shopping search advertising. they slept google with a $2.7 billion fine for abusing comparison-shopping search results. now google has 90 days to stop favoring its own service or face sanctions. the regulator at the heart of this battle spoke to bloomberg television and laid out all of the evidence against the company. guest: what we have found and studied intensively, i think with 5.2 terabytes of data, is that there is a very close relationship between this ability and traffic, and traffic and revenue. has you see is that google taken that advantage for its own shopping comparison on the cost of its rivals, and being able to do so by misusing the dominant decision in general search. that is the key of the case,
that we have found google to be dominant. with dominance of course comes special responsibility to compete on merit. caroline hyde back with us from london with one of the googlerst people to sue on these grounds in europe. caroline: we are now joined by richard staples, the ceo of a company that has been hit by allegations that google has in some way been skewing the price comparison services, and therefore exerting their dominance. you are a price comparison company. tell us how your business was affected when google started to enter this particular area. guest: sure. we started in 1999 and grew up to be the leading price comparison site in europe. it was the dominant. we were in seven out of 10 countries.
doing really well. everyone had heard of us. we were well known in the u.k. and then google basically decided around 2005 or 2000 that suddenly these shopping price comparison sites were a threat. and they started to systematically figure out how they're going to take us on. what they decided to do was they were going to go to merchants and say to them, give us your feeds, give us everything from you, and we will send you traffic for free. first we weren't worried. and then a series of algorithms hit in 2011, and our traffic literally fell off a cliff. since 2011, we have lost 95% of our traffic that has come from google. and we are not the only ones. i don't know of a single price comparison site that hasn't been smashed to the tune of 95% or at least 65 or 70%.
it is all over the place. we are not just talking about european price comparison sites. we are talking about american companies, as well. caroline: so when you hear the allegations and the eu -- what you say? guest: i think they've got the decision absolutely right. i think google will try to make this out to the usa versus europe. they will try to say the big, bad commission -- that is absolutely rubbish. it all about google hurting consumers. the commissioner has done a fantastic job. caroline: how are they hurting consumers? guest: by removing competition. the only place i can really go to is google, and the price goes up. you got no competition. you've got no innovation. back to the question about why it is not a u.s. versus europe thing, there were a number of
ceos that came out yesterday saying they support mission or that's the commissioner. ceos of oracle, getty images, news corporation. there are lots and lots of companies being impacted by google, and i am very happy to see this decision today. caroline: what can google to to rectify that can google do to rectify -- can google do to rectify the situation? they will come back within 60 days, and i think the right thing to do is to say, if we are preference thing our own systems at the top of google, then we have got to get some of that real estate to the other players. that is one of the things. google are facing much bigger implications here because this is a watershed moment. this is the first time that somebody, a big authority, has come out and said, google, you have broken the laws. your core values are not what you ultimately be. the do no evil, sanctity of your
search is in question. totally in question. and you put profit ahead of what is good for consumers. to frankly, they are going have to change their business, not just in shopping, but in things like travel, local, news, maps. this is a potential decision that can impact right across the eu and the wider world. caroline: what about your own lawsuit quest mark -- lawsuit quest mark -- lawsuit? are you likely to get money back now and pursue that investigation now that the eu has ruled? guest: i can't talk specifically about the case, but i will say that it is following on from the eu decision, and we will definitely be pursuing that with a vengeance now that the decision has come through. we went to google and said, look, you have done wrong. this is some of the evidence.
and certainly the eu is part of that. we will not be the only ones, though. there will be a lot of other players out there who are going to go after google. caroline: i can't thank you enough for joining us to discuss everything. richard stables. at the university of. -- back to you in the studio. emily: i wanted to take a look at how that shares falling to their lowest level in six weeks. that helped drag down the nasdaq , which fell more than 1.5% today. paceenchmark index is on for its worst month since october, and is set to snap it seven months winning streak. the nasdaq has been up for 10 the last 11. up, a new cyber attack is making its way across russia, europe, and the u.s., one month
emily: a status update from mark zuckerberg. has 2 billion users, making it the first social network to connect that many people. by comparison, googles youtube easily announced it has 1.5 million users -- 1.5 billion users. he says their mission is to bring the world closer together. back to our top story. dozens of companies and government agencies falling
victim to yet another rant somewhere hack attack, including the likes of wpp and a pharma giant. more than 80 companies in russia and ukraine were initially struck by the petya virus that disabled users and told them to pay $300 in crypto currency to unlock it. joining us now, mcafee ceo chris young. your researchers have been looking into this. what have you discovered? guest: we have discovered that the real story here is the evolution of rent somewhere. we did see a global rent somewhere attack, but the way we have seen this attack work is we have gone from single instances where users were get fished, to now hybrid attacks where this rent somewhere attack used and exploit we saw in the proper -- in the attack we saw a few weeks ago, but it is now using new x to go -- new exploits
after credentials and attack machines that are necessarily unpatched, which was the case .ith wannacry -- with wannacry they now are affecting entire networks. that's what we started to see with wannacry, and we are seeing the next step of the evolution with petya. emily: what should companies be doing to protect themselves? isst: the number one thing make sure they are catching the vulnerabilities they have been alerted to in their environments. second they may need to be doing is making sure they are updating all of their cybersecurity defenses. make sure they have got the latest versions of the cybersecurity software working, adequate monitoring and alerting capabilities in their organization, make sure they got users on the alert for these kinds of attacks, as well. a really good, important source of intelligence when these kinds of attacks happen. emily: why are rain somewhere
attacks becoming so popular among hackers? guest: we believe it is a few reasons. number one, there is an case for then this red zone where attackers to monetize the attack in different ways that we -- different ways that we have traditionally seen when it is just stealing sensitive information. in this way, they don't have to steal any information. they can just look to receive payment in order to allow the user to move forward in using their machine. but we also believe what we are starting to see here with wannacry, as well as with petya, is a move to try and test what is possible. perhaps they are looking for a bigger prize down the line by affecting entire organizations whose operations can be disrupted i these kinds of attacks. we don't think we have seen the end here. we think we are just seeing the beginning chapters. emily: 12 how does the movie progress, and how does it" mark -- well how does the movie
progress, and how does it end? guest: we do expect to see more attacks like this. we expect the range where purveyors will try to use other forms of propagation, other forms of stealing credentials, which is what we are starting to see here in petya verses what we saw with wannacry. we expect they are going to test different methodologies and see which commendations work best for them, and ultimately seek to monetize themselves. in this particular case, many of the bitcoin wallets were hardcoded into the software itself. we have only seen small amounts, less than $50,000 worth, of payments go into those bitcoin accounts so far. we expect to see this continue to evolve, but we believe this is something that is just beginning, and that we have got a lot more of these kinds of attacks that we will experience over the course of the coming months and into the next few years. emily: what do you think is
driving these cybersecurity stocks down, whether it is symantec or fireeye or checkpoint? guest: i have the luxury of being a privately held company, so i'm not focused on stock price. what i think we really are seeing is a call to action for the industry. those who are cybersecurity practitioners, you have got to move to the next generation capability of cybersecurity products that are out there. a lot of our newer technologies were at the front and center of being able to detect and stop these kinds of attacks. touching continues to be a very important part of not only good i.t. hygiene, but good cybersecurity hygiene. as i mentioned earlier, users are important. tend tond to send -- see these things early, and they can be an important early warning of when your organization may be vulnerable to an attack.
working closely with vendors, with employees, and really driving a full lifecycle approach is what is very important for anyone who is responsible for protecting their organization. emily: all right, chris young, ceo of mcafee joining us. that so much. coming up, a competition in the cloud heats up. microsoft and box are expanding their partnership. we will get the details from the box ceo next. check us out on the radio. you can listen on the bloomberg app or bloomberg.com, or on sirius xm. this is bloomberg. ♪
cloud platform. it will allow for future integration between artificial intelligence and machine learning capabilities with box's cloud content management platform. i met with their ceo and asked what kind of customer demand they are expecting from this deal. guest: about 74,000 companies globally, including 64% of the fortune 500, microsoft their cloud services is in about 95% of the fortune 500 or more. there is already a lot of significant overlap between our customer base and there is in the cloud. we are hearing for more and more of our customers that they want to be able to leverage some of the more advanced scalability's, and be will to have things -- advanced capabilities, and be able to do things like store their data and more places around the world. emily: i know you may consider using microsoft's ai services. how would that work? guest: if you think about all the content and information we have in the box, there's billions and billions of files.
every one of those has different knowledge and information. really the only way to extract that knowledge or information is by using some amount of advanced technology, whether that is artificial intelligence or more advanced machine learning capabilities. things like being able to upload a video of this conversation and make it fully searchable, and be able to have various tags of different content that was discussed him of being able to upload audio and make a completely searchable, being able to summarize documents, translate documents and text. all of those kinds of capabilities are becoming more and more readily available the of microsoft and others -- available via microsoft and others come up so we want that plugged into box so our customers have the most intelligent way to sort and share their content. emily: is a lot of activity happening now encrypted currencies. crypto currency believers believe that the block chain will one day make cloud providers obsolete, and that all
of the cloud will be peer-to-peer. have using about this? guest: that would really be bad news for us if that happened. certainly we are more in favor of the cloud model. peer-to-peer has been tried a number of times over the years in different capacities, and obviously, from an academic standpoint, it is incredibly exciting, the possibility that you could have with a completely distributed network of systems and computers that could power all of the various servers that we use. but there are also practical limitations between security and liability. the cloud is awfully good at that at this point. where do you expect box to expand? guest: right now is an eight regions globally in some of the key markets where we have a lot of customer demand. our current customer demand in terms of where box is being used in were customers are trained for it certainly exceeds the eight regions we are in now. i think you can imagine us in
places like south america, where we are seeing more and more traction over time. in canada, throughout europe, and broadly in asia. long-term we are excited about the possibility of entering china, and some of the growth prospects there. a bunch of new markets over the coming years that we are paying attention to, and we certainly are going to need to have infrastructure in those locations. our preference is that we don't build that ourselves, but that we can leverage partnerships like amazon and ibm and microsoft and others to be able to deliver that technology to our customers. emily: have you intend to navigate regulatory and censorship issues in china, specifically? guest: this is why it is still a pretty early conversation. we think that there are different entry strategies that companies have been successful with. obviously joint ventures on the ground, being able to have isolated versions of your product. we are fortunate where the type of content that goes into box is not the same kind of content
that you generally see from a facebook or google as having issues globally. is much more corporate information. have a lot more customers that use box globally, including in china, for global manufacturing processes and distribution networks. sureob would be to make that customers could use a very secure, highly private version of box in any country they choose, including china, and we would only into the market one-week no comfortable week of provide that sort -- market when we thought comfortable we could provide that service. emily: coming up, our exclusive conversation with kiersten green and her outlook on the e-commerce sector as consolidation heats up. this is bloomberg. ♪
not like it, but that is ok. he is today at a gathering with federal republicans after the gop shelved their vote until next month. he says while it is good to get it done, he will understand if they do not. the u.s. has demoted china to its lowest ranking over its human trafficking record. it is in the same category as north korea, zimbabwe, and syria. rex tillerson and ivanka trump unveiled the annual report on trafficking today, saying there roughly 20 million victims around the globe. treasury secretary says his country wants to keep its economy anchored in the european mainstream as it leaves the e.u.. philip hammond stressed the need that it is at a dangerous cliff edge as britain plots its departure. nicola sturgeon delaying plans for a second independence referendum after voters turned away from her party in the u.k. general election.
sturgeon says she is rethinking the plan but would not rule out a referendum in coming years. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. it is just after 5:30 p.m. hearing tuesday in washington. we are joined by bloomberg's paul allen with a look at the markets. we saw a selloff in the states late in the day. paul: yes, not expected to impact the open in australia too much. futures are only off by about two points. nikkei futures looking mixed. keep an eye on toshiba. the agm will be held at toshiba today. we are not expecting anything on the delayed earnings. we may have news on the chip units, the self-imposed deadline to finalize the deal is today, incj.n bain capital and
toshiba is one to watch. on theep an eye in -- hong kong index. the hang seng, there was a plunge in 17 stocks late yesterday. mostly on the gross internet -- growth market. some stocks up 90%. some see a link with a broker as under regulatory investigation. a few more interesting speeches out of china today. i am paul allen in sydney. more on "bloomberg technology," next. ♪ ♪ chang, and emily this is "bloomberg technology." google losing its biggest regulatory battle yet.
european union enforcers say the search engine giant abuse its dominance to muscle out smaller search rivals. shares in alphabet have declined in the past two sessions. for more on what is next for google, what are the next steps for google right now? >> it is all about damage control. the main lawyer at google said the company is considering appealing. they have not said they will appeal yet. the other steps they will take, they have 60 days to show the european competition sheets that they are working on a six, to appease demands. after 90 days, they have to have that ready to go. tot is not a long time complete their search engine. emily: this could have a much longer term impact on how alphabet and google do business. talk about the broader implications here. alistair: broadly speaking,
google has never had to change the way it does its search engine for regulators or anyone else. it has always decided over the last 18, 19 years how to do that. this is the first time it will have to change something. it gets very specific and very broad. this shopping price comparison service they have, they may have to let other price comparison services in europe show up alongside those results. that is a pretty specific change, a big business for them. but broadly, there are these other broader -- vertical search engine's like travel and local search engines. the european union could use today's ruling as a template and get google to change things all over again. maybe in a years time. emily: this could be just the beginning for google. talk about the road ahead when it comes to the investigation
related to android. alistair: they mentioned android today a little bit. that is one of two broader investigations the e.u. is looking at. the other has to do with the advertising platform. android is arguably the most important one. and analysts said today, acquiescing on the shopping friend is small compared to what the company could have to do with android, which is take all of its google services installed on android phones around the world, and basically get rid of them, and allow phone makers like samsung and lg to put any services they want on these phones. barr, thank you so much for that update. online retail is expected to grow 8% to 12% in 2017, according to the national retail federation. that is up to three times greater than the growth rate of
retail overall. kirsten green has made her name by investigated -- investing in firms such as jet.com. forerunnered ventures. joining me now an exclusive interview, forerunner ventures founder and director, kirsten -- kristen green. as a retailars analyst and decided early on that e-commerce is where it was going to happen. you are doing research on foot you crystallize to this investment thesis. what was that thesis you started with? kristen: it is that consumers purchases will be reimagined. that is driven by digital attribution, technology. technology everyone is
adopting. that is shaken up the landscape. emily: you invested and sold to walmart. what you see in those companies, early on? kristen: most of the things we are investing and have a root business in selling discretionary items. purchasing around discretionary spending has to do with engagement, experience, and bringing something to life that has some element of entertainment or connecting personally to a customer. felt that the founding team needed to take on the consumer on how things were shifting in the ecosystem come on how they could use technology to give a better experience. and really, a better business model. is, what are they investing off of, how is it a better experience and?
how are they leveraging technology emily: so we're seeing spectacular successes and failures. what will we see more of? e-commerce is a hard category. like many categories of business are. there are success stories and there are failures. if i had to try to understand some of the core differences between the companies, i would lean on the fact of experience. would figure out how much of the core offering is really supporting the product they are eventually selling or the consumer they are addressing. emily: amazon is making a big bet on whole foods, surprising a lot of people. they are getting into clothing. you do not necessarily one amazon as your competitor. kirsten: amazon is a for medical competitor. we assume there figuring out how to address the consumer holistically from every angle. and we try to understand other opportunities to playoff that
strength, as they have. they're really an aggregator of demand. is there an opportunity for a company to use that? not for it to be a competitor, but is there a way to play in that ecosystem, too? emily: then you have amazon moving into brick-and-mortar. why is that? kirsten: there have been a lot of conversations about the --ortance of ominous -- omi omni-channels. which a all the ways in customer may interact with your brand, your product, your offering? the reality is, the consumers everywhere and the consumer wants what the consumer wants when they want it. to fill that demand you need to think about how you will get to those different places. sometimes that means you do transactions online or off-line.
emily: what is the next thing for kirsten green? kirsten: we are grounded in the idea of, who was the better model for bringing these businesses to life? so much of the consumer ecosystem and how they make decisions have changed. that has impacted the power of the product, the power of the brand. it is gotten more complicated. no longer think of having a good product as table stakes. getting the win is to offer a great service. that has to do with helping them filter through the clutter, being convenient, being personalized. ofy businesses are in stages meeting those demands, but there are still a lot of opportunities. covering have been this story, six women alleged sexual misconduct to -- he has resigned from binary capital, a firm he cofounded. lp is trying to decide what to
do. and they are trying to save the fund. what is your reaction to this story? kirsten: it is unacceptable behavior. i would like to think there is no room for that in our sector of business or any sector of business. it is completely inappropriate to make anybody feel like they're in a situation like that. emily: what should they do? think a lot of this business has to do with your character, your judgment, how your building relationships. unfortunately, they fell down on a lot of those aspects. our investors look to us to have high standards of diligence, of character, partnership building. if we don't, it is hard to be successful in the business. i think it is a challenge for them right now. askinglee hoffman is investors to sign a deed in c pledge, talking about third-party oversight.
is that enough? it takes totever keep moving things forward. a few brave women coming out and bring the situation to light and starting a dialogue, people finding out what their own gut reactions are. distress, orr, making sure they are not behaving that way. rightportant stuff in the direction. the decency pledge give something for people to hold onto. that is positive. emily: how should other investors and entrepreneurs decide who to do business with and who not to do business with? kirsten: it is a people-driven business. we make a lot of decisions about where we think take opportunities are into we will be in business with. we think about that every step of the way, when we bring on new team members, investors to the
company. it is the part of business i like the most, it is collaborative. we've heard so much about how silicon valley can be hard for women. had we make the valley better for women? kirsten: you could have more women out there doing business, more people embracing it. i feel like this year the media has been good for me in talking about successes. i think that is important and serves as a role model. keep working to make that happen. emily: kirsten green, founding member and chairperson of forerunner ventures. cryptocurrencies had a tough start to the week. we will dig into what caused a drop in bitcoin and what is next for the emerging currency. this is bloomberg. ♪
emily: we are turning to one of our top stories, the new cyber ,ttack from europe to the u.s. about 2000 users were attacked. the virus disabled users and told them to pay $300 and cryptocurrencies to unlock them. this is added to recent pressure on the price of digital currencies, like bitcoin, which is fallen more than 10% this week. now, to one of bitcoin's top competitive. isheory of -- ethereum having a tough time. the digital currency tumbled on theer $300 to $.10 gtx exchange. the founder and ceo of a hedge fund that invest in digital currencies, including ethereum.
i started by asking about the flash crash that took traders by surprise. two u.s.eek, ethereum dollars order book there was effectively a massive market selloff followed by margin calls which closed out margin positions and forced people to sell. it was a cascade of sell orders. it pushed the price down to about $.10. it was only one order book on the exchange, but quickly the price reached back to where was trading another stages. but there was a flash crash last week. emily: yet we see volatility increasing. why is that? this the beginning of year, bitcoin was trading around $1000, ethereum for around $10. although we have seen a short-term pullback on those,
prices, i dose think the long-term trend is strong. that: that said, one said my gut is that we are headed for a selloff in the crypto sector. but honestly, i do not care. i will buy into this correction or rally. because the morning -- important question is, where will these assets be in four to five years? >> i would agree with fred there. we are seeing the early innings of a massive breakthrough technology that is far from mainstream right now. i do think there is massive opportunity despite short-term volatility. emily: that said, it is scary that the value could go to zero in a matter of minutes. >> like i said, that was the mechanics of one exchange. it can rebound very quickly. on other exchanges they were not trading a zero. emily: how are these exchanges
regulated, compared to traditional ones? >> a lot of the trading happens on non-us exchangers. u.s.,hey are based in the the only difference is, they are not trading securities, they are trading cryptocurrencies. federal --they are federally regulated. emily: does this damage speculation that ethereum could overtake bitcoin in short order? i came on i came on a week agoi gave it until the end of 2018, and i would probably stick with that. while there is definitely a
remains risky, not more than you're willing to lose. but they are an amazing diversification away from traditional assets. emily: 10 years from now, what is the sector look like? >> 10 years from now, the market cap is clearly into the trillions. i think these technologies will fundamentally have transformed major sectors of our economy. emily: this is bigger than apple? >> much bigger than any specific company, this is as big as the internet. coming up, chinese telecom giant ranks fourth in market share in the u.s.. big plans to expand its footprint here. we will hear from the ceo of its global devices unit. this is bloomberg. ♪
struggling with a strategy to combat the rising popularity of other on-demand services, like spotify. the cfo will be named interim ceo while the board begins the search for a permanent replacement. we spoke about the state of the music business and growing competition. >> we expected to be flat for a while. we are surrounded by a glut of these free, on-demand services, that we cannot directly compete with yet. we are on our way to do that, building new products to address that. the growing engagement is a positive symbol for us. we just crossed a 24 hour a month threshold. emily: earlier this month, sirius xm said it would invest $480 million and pandora in exchange for a 19% take and three seats on the board. a chinese telecom company has emerged from a $1.2 million fine from a u.s. -- from u.s.
regulators. with the ceo and asked where he sees the growth opportunities ahead. market is america, china, europe, asia. north america, particularly the u.s., we are stronger than before, in terms of market share. we now have 10% market share over there. we will continue to grow the business over there. china, being the most competitive market, it is very important for us. now we are going to display securities. you will see that we will demonstrate leading encryption layers.gy, all four the chip, hardware layer system, and platform layer. those things will differentiate us into the business and public
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with the supreme court. justices agreed to uphold a limited version of president trump's travel ban from earlier this year. his order prevents travelers from six primarily muslim countries to enter the united dates. however, the court issued leeway for foreign nationals that can claim a bona fide relationship with a person or entity in the uni -- in the united states. looked at again in october. joining me is adam