>> live from pier three in 10th at cisco, welcome to "bloomberg west." i'm emily chang. tech ceos are in washington today to meet with president obama about nsa surveillance. he is the former cto of facebook. he will be joining us to talk about his latest project and his view on the future of facebook. a check on your bloomberg top tech headlines. turkey has lost access to twitter. the move coming just hours after turkey's prime minister blasted

twitter for goring court orders to remove content leading to a corruption investigation. he has threatened to block facebook and youtube. causing outrage. even turkey's president circumvented the band calling it unacceptable. new blog post in support of net neutrality, saying it must be defended and strengthened. without net neutrality, consumers will end up paying a lot more. he writes that netflix will strike deals with providers in the near future to protect consumer experience. just weeks after netflix cut a deal. microsoft outlined its policy on when it can search users e-mail account after revelations expand the e-mail of a blogger who allegedly received microsoft trade secrets. microsoft says it will not conduct a search of customer e-mail and other services unless the circumstances justify a court order.

microsoft will only look at relevant information. the company says it will publish a number of searches every two years. early story, tech ceos meeting with president obama today at the white house. it will happen in just three hours. mark zuckerberg and eric schmidt will be in attendance. yahoos ceo was invited but did not make it. all of them will be talking about the government nsa surveillance policy. megan hughes is in washington with the latest. what can you tell us about the content of this meeting? we know they met with the president before. why again? >> we know they will be meeting after 4:00. the only thing the white house will say is that they're going to be talking my privacy, technology and intelligence. thisook's ceo will be at one. he was not at the last one. eric schmidt will be in attendance. marissa mayer will not be

going. she was also at the last meeting. two big storylines that we are watching for out of this meeting. mark zuckerberg is going to be there. also tension between zuckerberg and the president. he called president obama expressing his frustration at the nsa policy and wrote a post on march 13 that they need to be much more transparent about what they are doing or people will believe the worst. the context for that conversation, revelations that came out from edward snowden that the nsa was getting access to users computers for spying purposes. the nsa says those reports were inaccurate. the other thing about this meeting, the timing. one week away from a key deadline. the president will beginning recommendations from his

administration to either and/or change the nsa's collection of bulk phonerecords -- records and internet data. internet companies are going to be watching that recklessly. -- that very closely. >> using the -- he is saying that the government is doing major damage. what is the impetus for this meeting today? >> it's interesting that zuckerberg is going to be there. a lot has happened. we have heard from the president. it a lot more about his views in a december meeting. he h took a backseat and was a listening mode. he laid out his views in january, nothing summer forms and saying he believed that the program was necessary and lawful . you had the privacy and civil liberties oversight board come out and say the opposite, saying

that there was not a national security purpose here. and that it should be ended. you still have a very contentious issue going into this meeting today. >> megan hughes in washington. i know you'll keep us updated all day long about that meeting. happening three hours from now. thank you so much. take a closer look now at one of the key types of data that has been collected by the nsa. telephone metadata. this is information about who you are calling and for how long. government officials say this data is not that revealing. it doesn't contain names or specific details about identities. researchers conducted their own study by creating a nap that analyzed call patterns through metadata alone and discovered participants had serious medical conditions, own firearms. one of them even had an abortion. all of this just from the metadata.

one of that researchers joins us now in studio. so much fornk you joining us. also what this is allen, founder and director of research at the sans institute. a training school for cyber security expert to eventually go into agencies like the nsa, joining us from washington. what was the impetus for your study? tell me about what you found. >> last year, when the first revelations came out about the nsa, the major program that was revealed was this metadata collection program. they were taking large amounts ta withouts' da warrants. part of the justification for this was that phone metadata t of not contain a lo personal information. this is not accurate. there was not a lot of proof at the time. we built an app that allowed people to volunteer their phone data to us so we could analyze it and get a truth of what you

are able to learn about somebody from their metadata. >> you got 550 adjustments. who are these people? >> ordinary american citizens. anybody who uses facebook is able to upload the metadata to us. it's usually people who are tuned into the issue. they are from all over the country. most of them don't know each other. they don't know us. throughandom numbers yelp and facebook directory and found very detailed information about people. that they were suffering from certain medical conditions and that someday called a fire firearms expert. not private.t is there is no names to numbers. is nof you call number x big deal. there are a lot of services online that lets you determine who owns certain numbers.

if i call a number and go to look it up, i see that's a business that sells firearms. combine this information to learn a lot about a person. >> what do you make of this study given the fact that the government has emphasized over and over again, look, it was just phone numbers. it's not that big a deal. >> i think he did great work. it's a wonderful thing to do to bring to light what can be found in that metadata. the reality is it's a tiny number of items that might be true. we can't guarantee any of their findings are true. we don't know exactly what happened. the implications we got by knowing the numbers -- it was such a tiny fraction of the data that unless somebody was actually focused on the person, my sense is this is a very small

problem and a much bigger set of issues. the research was great. >> your thoughts? >> that is true. you would have to specifically look at a person's data to determine this information precisely define these things out. the important thing is there really aren't legal or technical limitations on what the government can do now to prevent this. while it's probably true that the government isn't looking very closely at a lot of people 's data, they certainly could. >> what do you make of this second meeting between obama and the tech ceos? people like mark zuckerberg have expressed continued frustration. what does the president have to gain at this point for meeting with them again? have something to gain. the companies have something to gain. the order of how this meeting came about even though the president called it. it was because the companies

need cover. the real issue for these companies is in the privacy issue. that is clearly important. the real issue is the business. in otherosing money countries that are using the nsa's access to their data to explain why they are not getting contacts. business we have to do is make it clear that these companies are not giving up data from everywhere in the world. most countries demand any company that does business there follows the rules and their rules include access to the company's data. this is not a u.s. problem. it's a disclosure problem and the companies need cover. this is theater to say we will do a better job and fix it to try to give these company something to argue when they are doing business with companies and governments in other countries. there are renewed concerns

now about what companies did and did not know and what power they have. this new story about microsoft searching a bloggers' hotmail accounts. testifying that companies like google and yahoo! did know. even if they didn't know it was called "prism." i sat down with eric schmidt and asked him about the nsa. the state of google's relationship with the nsa ? >> what relationship? they didn't knock. they didn't call. they didn't send a letter. they just visited. >> do you believe him? >> i definitely believe he is telling the truth. whatever -- what i don't believe is the staff having an direction

with intelligence agencies. he is not in those discussions so he does not have a clue about them. purity andthat with truth. >> you think google did know and didn' help? intot me break companies different groups. tele-communications companies, the parties that do business with the federal government knew they were subject to disclosure and they had to do it. bys is handled down low compliance people. it did not tend to get to the top because it wasn't a public issue. was not aware of that in the telecommunications part of the world. runningxtent that he is something that has no government business and doesn't actually direct with the government, that is just a problem

that has to be covered under, was it lawful? he might not have known about nsa breaking into the system. fascinating research from you guys. if you have a chance, definitely look up the study. thank you so much for joining us. are you waiting for the release of the next iphone? a lot of people are. one analyst calls it the mother load of upgrades. we will talk to him, next. ♪

>> welcome back. i'm emily chang. iphone 5s was released five months ago. how long will we have to wait for the iphone six echo one analyst says this release will be the mother load of all updates. the senior director joins us now from new york. why is this the mother load? what are the bells and whistles?

>> it's going to have a lot of bells and whistles. the most important thing by far will be the larger formfactor. we were in barcelona two weeks ago and surveyed all the 20 new high-end smartphones and all of them had a 5-6 inch screen. iphone is not up to par yet. we think the larger form factor will be the biggest deal by far. >> how much bigger will it be ? 5.5 inches. that is a big step up from the current four inches today. welcomedhat will be a spansion. -- expansion. >> we did a survey that showed that people weren't that convinced about upgrading just for a larger screen. what they really cared about was battery life and having a better battery. will it be any better? >> when you have a larger

screen, that increases the surface area of the phone. it provides more opportunities to put bigger batteries in the back. i think battery life will improve on the iphone six. the building materials will be something that we are monitoring closely. how much it costs to many text the phone. the screen will be more expensive. a larger battery will be more expensive. hopefully everything else can come down in terms of cost so we could still have nice functionality with good margins. >> samsung's new galaxy phone also has some bells and whistles. you can drop it in water and it's fine. or android users going to migrate to apple because of this new iphone? >> i think it's a possibility. i actually almost migrated to a galaxy as for because i wanted

that five inch form factor. i didn't because i couldn't get off the apple ecosystem. be somethere could people migrating back off of the android platform because of the formfactor being up to current standards. this will be a phenomenal opportunity for the company to really accelerate its revenue growth. i think we see a pretty quick $75 move in the stock. we are pretty optimistic here on apple. >> what is this new phone going to be released? >> that's a good question. the current track is for late september. that's the lodge cycle of the iphone and the ipad. both of those products generate 80% of apple's gross profits today. we think it makes sense to split this up a little bit. we would prefer to see the iphone migrate when earlier launch. that's how it started back in

2007. that's our hope. we will know within three or four weeks whether that turns out to be the case. either this summer or early fall. .> brian marshall we will be watching for. thank you so much. >> the market for wearable tech is growing fast. one san is opening dogup owners will join the fray. that story and more when we return. you can watch a streaming on your phone, tablet and bloomberg.com. apple tv as well. ♪

>> welcome back to "bloomberg west." we've all heard about wearable technology. what about wearable tech for dogs?

whistle istly what doing with a fitness tracker that goes right on your dog's collar. take a look. there is the jawbone and the fit it. then, there's whistle. a wearable tech for your dog. >> it's all about communication between pet owners and their pet. trying to prove the relationship people have with their pets. bridge that gap of communication. fido'sched this disc to collar. it's all synced to the whistle activity monitor app. a letter compare her great dane's data to similar docs. >> i like to keep her a tall see it -- as healthy as i can. about $130. that may sound pricey. it turns out dogs are just man's

best friend. they're one of man's biggest expenses. $55013, american spent billion on the pets. then there's the ripple effect. to owners can use whistle see if the dog walker took a shorter route. >> when i go back in and put a picture from that day, illustrates the whole story. withistle just made a deal petsmart for exclusive rights to sell the gadget. they are the reasons so excited to work with whistle is they do want to bring that element into their stores. >> with the average american household already spending more than $1600 a year on their four-legged friend, whistle can find itself running with the big dogs sooner than expected. up, as mark zuckerberg visits the white house, we speak

to the former cto of facebook to find out what facebook knew about the nsa. joining us next. you can watch a streaming on your phone, tablet and bloomberg.com. ♪ bloomberg is on the markets. i'm julie hyman. let's look at where stocks are trading right now on this friday. we have had a bit of volatility already. it is the witching day. expirations of certain types of futures and options cause volatility on days like this. that is what we're seeing. the nasdaq is down .5%. the terms of individual stocks, ely added -- gilliad is being questioned by congress. the ceo has been asked to explain how he plans to make sure the medicine gets into the hands of low income patients. we're looking at nike as well. in the sports grill company forecasting that sales this quarter will beat estimates.

nike relied on international sales for 45% of its income and is expecting a stronger dollar will weaken its international profits. we will be back in 30 minutes. ♪

>> you are watching bloomberg west where we focus on innovation, technology and the future of business. i'm emily chang. musk ands ceo and elon ashton kutcher are joining forces to invest in an artificial intelligence company called vicarious fpc. the three of them are pitching in on a $40 million investment. they're working on skating the neo cortex. ai is one of the hot areas of tech right now with google -- from buying the uk's

facebook cto to start up ceo, it is an app for mobile tablets and desktops that allow you to share documents on any device. will it become the microsoft office for mobile? he joins me now studio. great to have you. >> facebook was a defining job for me. i had worked at google through its ipo. seeing that ipo -- >> you cofounded google maps. >> it's very interesting when you are reporting directly to the ceo and the company is going through an incredibly emotional time. it was very interesting for me to do and i formed a lot of deep relationships with mark and cheryl.

the thing that drove me was mobile. i work on mobile apps at facebook and we saw that people were only using facebook on their phones. in most of africa, people had not even seen facebook on a desktop computer. how saw the numbers and dramatically they were shifting. i realized this was one of the technology shifts that was as important as the movement from the mainframe to the pc. it was one of those technology shifts we will look back at and everything has changed. ony few people are working work software. all of the great apps on my phone were messaging, social networking, photos. i look at tools like microsoft office and they had not changed in 30 years. i felt this was too big of an opportunity to pass up. >> did they try to get you to stay? >> they did. the wonderful part about having a close relationship is they are very supportive. i'm happy about it. they have been credibly

supportive of me. >> you guys try to be microsoft for the mobile era? >> that's our mission. to do what office did in the pc era. the thing i think is different is what's cool about these platform shifts is when you go from something that has a keyboard to something that you use with a touchscreen and can use anywhere that's always connected to the internet, we will not see it looking the same. , microsoftxt week will release office for the ipad. is it a superficial port of this pc software to this new device? that's not what people actually need and want. incorporatewill messaging directly into the office. it pushes to your pocket just like blackberry used to. communication is more poor and then the document itself.

youou think about it -- probably have not written a memorandum and 5-10 years. you just do e-mail. that is reflected in the value. we hope to change how the product looks. >> you introduced a like button. is interesting. symbolic in a lot of ways. things that is driving companies like ours is the influence of consumer software on enterprise software. it comes from the fact that if you don't like a piece of software, you will go to the app store and install something else. that is driving demand for good products and companies. rather than sales driven products. it means that companies like quip that are user-friendly are driving i.t. for the first time

in a long time. i think the iphone thanks for that. >> what about google docs? more people are using google docs because it's so easy. >> i think google definitely is a competitor of ours. ashink we also view them fighting the same battles we are fighting. moving companies onto the cloud and moving them away from the traditional install pc software. like many complex business relationships. them butmpeting with the more companies that move into the cloud and embrace this new class of applications is helping our company as well. >> it's free for personal use but you are charging businesses a subscription. >> that's correct. that is an explicit strategy. our sales profit -- our hope is

over the long term that means we won't have to have quite as big of a sales force. we are not convincing people to -- wese goods but when it are not releasing numbers just yet. we have a very large number of customers across a wide range of industries. there's a technology company called new relic which is one of our customers in the valley. an as best thiss bes removal company in colorado. it was a neat experience to have customerspaying outside the beltway. it reflects the fact that for a companiesse that have ipads, they are seeking out something that works well in that environment. we are extremely popular in schools. a lot of high schools are giving ipads to students.

the new common core curriculum is becoming more ubiquitous in schools. it's all about collaboration. our product is a perfect fit for that. we have only been out for seven months. i hope to release more broad numbers. >> the ceo of quip. we will talk more about what you think facebook is doing right now, buying whatsapp. ♪

welcome back to bloomberg west. i'm emily chang. facebook has been making some strong moves when it comes to buying up other companies. sapp for buying what $19 billion. we are with the ceo of quip. did that surprise you? >> the price tag surprised

everyone in the valley. as far as i know, it was the largest acquisition of a venture backed company in history. an incredible price tag. on the other hand, didn't completely surprise me that mark was interested in messaging. having worked at facebook, there is a few key parts of facebook's product that everybody uses. the first is the newsfeed. the second is messaging. the third is the profile page. for those photos. ,hen you look at facebook that's how people are using those products. reflectss activity those values. these are the important parts of the facebook experience. they acquired instagram and what sapp because they were building in kabul products in one of those four key areas. -- building incredible products. apphey tried a standalone

with paper. is there a problem with buying versus building innovation? >> that's a fair criticism. technology is defined by how rapidly changes. the most successful technology companies are defined by how rapidly they can change with technology. the one thing that facebook has culturally is the willingness to change. i remember fire to the advent of mobile, we would redesign the newsfeed or profile page once a year. there would be protest groups and people are extremely angry with us. on the other hand, i think it reflects the fact that the company is not stuck in the way it does things. >> does that come from mark? >> i think it does. most founder driven companies, it certainly is. it does come from the top. the company is so big now, it's a part of the culture not. that culture was initiated and

created by mark. , i thinkok at it facebook will execute well in some areas and not in others. the fact that market so ambitious and willing to correct changingtakes through products or doing acquisitions, reflects one of the fundamental strengths of the company. >> what chance will facebook not be the dominant social network in the future? >> that's a good question. almost impossible to predict. is, typically the startups that end up disrupting your company is something you would not have even thought of at the time it was created. i think companies like snap chat is a great example of that. the first time somebody describes it, you're like, what ? they're really tapping into a new way of doing things. it's hard for me to predict. i think -- i look at the great

companies in silicon valley history like intel and google and facebook. they are defined by being willing to disrupt themselves and change the company and fundamental ways as the landscape changes. the famous intel story is going from selling memory to cpus. ad facebook, it went from website to the most popular mobile app. i think there is a lot of structural risk like with any technology company. on the other hand, i think that aspect of the company's very unique. peers tend to be the mainstream and during technology companies of our lifetime. the nsa.talk about mark zuckerberg is in washington. he has been very vocal about how blew it.rnment lo >> i don't have any insight into what's going on within and facebook because i haven't worked there in the year.

i can comment broadly that the challenge for silicon valley companies in the wake of the nsa revelations are that we are all global companies. even my small startup has translated into 10 languages. that is the norm for mobile companies and internet companies. the problem for us is that our customers are is read throughout the world. it is hurting our business. it is hurting the perception of american companies and the perception of cloud-based services. that is really challenging for business. the dialogue is healthy because there is a lot of considerations. are now businesses global businesses and those are very important. i am really happy that those discussions are going on. >> what did facebook know when you are there? >> i really can't comment on any of that. i don't really have much

personal knowledge of anything as it relates to the nsa. >> how about quip? how will you deal with customers'privacy? >> quip is deployed within companies. the type of information we are dealing with tends to be much more private and much more constrained to a single company. we don't have the same types of challenging interactions that social networks and other public forums have. data intalked about europe and asia -- making sure oftomers have the option where their data is stored. which is not a conversation we would have even considered those co. years ago. disruptivets how these revelations have been. -- would not have even considered those two years ago. >> the former cto of facebook.

libaba getting into the mobile messaging market, investing millions of dollars in tango. we will speak to tango's cofounder, next. ♪

>> welcome back. glassdoor has released its annual report on ceo approval ratings. topping the list, the ceo of linkedin with a perfect 100% approval rating. 14 other tech leaders were in the top 50. last year's number one was mark zuckerberg. he fell to number nine. there he page ranked -- larry page ranked 10th. tim cook received a 92% approval rating. ranked at number 49. in tango.investment an evaluation of more than $1

billion. cory johnson spoke with tango cofounder and cto eric. take a listen. >> i think with all the --ention about the muzzle the mobile messaging space, we needed to be repaired for the long term -- beep repaired for the long-term. prepared for the long-term. there's a much innovation in that space. it fit perfectly. >> there's a lot of attention on alibaba with the ipo. do you think they see this as their way to get into the u.s. messaging market? >> i definitely think that people are realizing how strategic mobile messaging is. these are apps that you don't just download and forget about. apps that you are checking when he-40 times per day.

-- checking 20-40 times per day. >> i wonder if this opens the chinese market to you guys. >> it absolutely does. startup, we valley have a presence in beijing china. we have an office over there. a presence in china is limited. there.we expand over we want to compete globally. china is a mega market. >> when you look at that market, you look at the different global markets in different ways? actually -- we are often in 24 countries in 60 different languages or so. in the middle east, tango does extremely well over there. the firsts we are social networking is.

the people have. for that reason, we are set up to be used in a different way. that has shaped the way we go about in that market. >> he is the real excited about this. ofhas mentioned a couple other companies in this arena. how do you distinguish within that arena what you are doing? >> it so important. there are 100 other messaging companies out there. we are one of the largest with 200 million members globally. our approach has been unique. not only do we offer free communications with text messages and phone calls and video calls, we also have a service for people having fun. you do that by going through pictures of friends and by playing games together or by sharing music. we think the addition of content is something that people enjoy

tremendously. it's more solar to the approach that asian messaging companies have taken. we are the only ones of the west to be set up that way. it's a good match for the west market. >> where were you when you heard about the price of the whatsapp acquisition? >> at my desk. i almost fell over. to put things in perspective, made facebook become the largest carrier in the world instantly. in some ways, it's a bargain. they got their user base for half the price. it made a lot of sense for them. >> i start to think about this -- it may be thick about the business in a different way. i wondered what this means for the carriers. because of the success of these free apps, there is a decline in their ability to charge money for texting. >> it's an interesting point. twice as many text messages are

being sent on mobile messaging onvices like tango that carriers like at&t or verizon. the market has already changed quite a bit. there is opportunity to partner up with us and offer a solution that is more focused on media that consumers will enjoy. ericngo cofounder and cto with cory johnson. it is time for the bwest byte. one number that tells a whole lot. jon erlichman is an l.a. what do you have? >> a bitcoin bite. 200,000. that is the number of bitcoin's found.he it has recovered 200,000 bitcoin's. a lot of people have talked about how much of this is

stolen. these were lost in an old digital wallet in an old storage file. that is the reminder that some of these early exchanges had a messy procedure going on. what's. -- whoops. we found them because there are lawyers breathing down our next and we need to find the missing as we can. >> this is so baffling. $450could say, hey, million worth of bitcoin's completely disappeared but we just discovered 150 million more. how crazy is that? a virtual currency can suddenly disappear. >> we're talking about exchange and was in the business of collectible cards and exchanging those and then moved into this, -- a lot are trying to go to the next generation of exchanges. >> thank you, john.

thank you all for watching. we will see when we return. ♪

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>> from bloomberg world headquarters in new york, i am alix steel in for mark crumpton. economicsottom line," with a main street perspective. a new into the return of cold war and we will have the latest on march madness. for viewers here in the united states and those of you joining us from around the world, welcome. happy friday area we have. her job the