cory: welcome to "bloomberg west," where we cover innovation, technology, and the future of business. i am cory johnson. u.s. stocks in the first quarter, a selloff. the nasdaq and s&p, up for the quarter. ninth straight quarter of gains. talks over iran's nuclear program continue tomorrow in switzerland. diplomats are struggling to reach an outline for an agreement. here is iran's senior negotiator.

>> we are concentrating on finding the best solutions which are mutually agreed to by everyone. these efforts would be continued until we have those solutions. cory: any agreement would only be the main points. diplomats will have until june 30 two hammer out the technical details. lufthansa acknowledges the copilot told them six years ago he battled an episode of severe depression. he is the pilot believed to have deliberately crashed the flight into the french alps. legal experts say the airline may have to pay around $315 million in compensation if the airline is determined to be at fault. the judge overseeing radioshack's bankruptcy says he

will approve of the sale to standard general. standard general's plan is to keep the stores open in a cobranded arrangement with sprint. a major deal in the cable industry charter communications buying brighthouse networks it will cost $10.4 billion in cash and stocks. brighthouse has 2.5 million cable subscribers. after losing out to comcast in its bid. and homemade goods site etsy has updated its ipo filing with the price --16.7 million shares priced somewhere between $14 and $16 each. that puts the net proceeds somewhere around $182 million. etsy will be launching a roadshow tomorrow. it plans to go public on the nasdaq under the symbol etsy. which spells at sea.

-- etsy. amazon testing a new service. the user can order laundry detergent or coffee simply by pushing a button. arkansas is about to enact its so-called religious freedom law, just like the one causing controversy in indiana. the arkansas passed the bill and the republican governor says he will sign it. indiana's governor urged the state legislature to clarify his law. opponents say it legalizes discrimination against gays and lesbians. parents spoke in indianapolis -- pence spoke in indianapolis today. gov. pence: after much reflection, i have come to the conclusion it would be helpful to move legislation this week that makes it clear that this law does not give businesses the right to deny services to anyone. cory: the major backlash from

this, governors have banned nonessential employee travel to the state. and tech companies from apple to salesforce have spoken out loudly. i spoke with the cofounder of earlier cloudera. , it has pulled out of a data conference in indiana. also, oracle and emc. here is why they were one of the first companies to speak out. mike: first of all, equality is a constitutional right. very simple, very direct. on that basis this law was a , problem. not just on that basis, though. we believe equal rights for all citizens, including lgbt citizens, are fundamental. it is good for business and it that is a morally right thing for us. to stand up for that class of citizens as well as for others. there were lots of problems with the indiana law. we are happy to see the governor begin to address them.

and we look forward to seeing more. cory: i was struck by how quickly the tech community has jumped out against this, making a lot of loud noises. as marc benioff is want to do. do.your company yelled, apple really getting out there angie's list quickly speaking out. why do you think tech companies have taken the lead? mike: mark did a great service in the tech service. in focusing attention on this law. this law is different from the laws in many other states. not to say those laws don't have problems. this one was especially but egregious. by focusing attention and by giving the tech community, which has a lot of influence among businesses in indiana, he gave us the chance to affect the course of this law. and, i hope, to lead to its revision for repeal.

cory: tim cook, the biggest company in the world, talking about all of the other states that have similar laws. have you thought what this means for the other states? will you have to decide whether those laws are acceptable? mike: it is a good question, but it is not just a cloudera question. i think one of the services that mark and tim and the tech community provided was to focus attention on all of those other laws. there are some substantial now, differences. we have not read all of the statutes in detail. but, i think there is a national conversation underway about what is permissible, what is written into legislation, and what that ought to mean for businesses like ours. i think it is a very helpful development and i look forward to continuing that conversation and finding more ways that cloudera can be supportive of rights of all people. cory: he had some interesting

things to say. check this out. gov. pence: i don't believe for a minute that it was the intention of the general assembly to create a license to discriminate or the right to deny services to gays or lesbians or anyone else in the state. and it certainly was not my intent. cory: do you believe that? mike: i will not call into question what the governor intended. what i will do is highlight what the governor and legislation did. and that is, they wrote a law that legalized discrimination against classes that ought to be protected and that are in federal law and in other states. the state of indiana lacks those protections. if this outcry leads the state to write reasonable protections, we have accomplished something pretty great.

we look forward to seeing what the governor does in that regard. cory: even in indiana, we saw huge protests. the "indianapolis star," not known as a bastion of liberalism, really powerful full cover saying "fix this now." freedom of restoration act taking a powerful stand on this. , i wonder if the voice of business and the almighty dollar speaks louder when businesses such as yours decide to pull business away from the state. mike: i believe most people in indiana believe in equality. and want civil rights to be an forest for every one. i believe that to be true. when we pulled out of the big data conference, we were not

directly harming the governor or the legislature. we were frankly taking and economic toll on a bunch of business leaders who may not share the views of the legislation. we had an opportunity to go and engage with prospective customers and that was costly for us. we believe it was the right thing to do. by encouraging moderate voices in indiana to speak up in support of civil rights, i think we've had some effect. in driving the dialogue in the as a broad communityin driving the dialogue in the right direction. i am pleased to hear some encouraging words out of the governor this morning and i look forward to those words turning into action that makes a difference. cory: i want to read what the big data group had to say --

clearly, it is being felt in indiana and those voices are being heard. mike: i am glad to hear that. we look forward to continuing to engage. i am glad to have the opportunity to highlight this issue and apply some pressure. cory: a $52 million bet on cyber security. we will show you why. ♪

cory: i am cory johnson. a look at how tech is changing the san francisco skyline. but first, a check of your "bloomberg west" headlines. a former military ruler has won nigeria's presidential election. goodluck jonathan conceded the race earlier today. harman international buying thing olufsen's business. the prices $165 million. harmon will have exclusive

rights to use the plate technology for cars such as audi and mercedes. and, microsoft is at it again, a new tablet is skinny, lighter. it also runs a full version of windows. not the slimmed-down windows rt from earlier. $500, preorders start today. what if the target executives who got hacked and were able to identify the card reader hackers that were used? the security company titanium allows companies to track every server connected to the network. the company raised $52 million led by andreessen horowitz today. this follows the initial investment of $90 million last may. steven joins us now. i cover this stuff like crazy. i have for a very long time.

i have a hard time figuring out the difference between these companies. what is so unique about tanium? steve: the instant response across the network. how many devices are connected to the internet across your house? most people go, 1, 2 -- cory: a couple dozen. steven: you probably do not know the number. how fast can you figure out which ones are connected, what they are running? that is what we let you do in 15 seconds. a million different cash registers, pcs, laptops. to figure out what is going on on all of them in 15 seconds. cory: all of the information all of those ip addresses, the lights above us are ip-controlled.

steven: what matters the most is getting the most up-to-date instant information. it is not a data solution. it is a communications solution. in the old world, those tools were all about a database. by the time you are done, it is out of date. tanium brings management and systems data. cory: does it work the same way as spiders were used? even before googles, oh where programs would ping the different parts of the internet and collect information. steven: the way the tools used to work, they would ask all computers all at once what is going on and wait for all of them to answer. it would take a lot of special

networks and databases to store that. tanium says, look to the guy to the left and to the guy on the right. cory: it is like a buddy system. i get that. but what are the types of hacks? the types of hacks are changing dramatically. the state-sponsored hacks. like north korea. steven: the most interesting thing about the breaches or infiltrations, they often involve what looks like legitimate use of something that is going on. they involve a combination of programs and networking. cory: we have seen a lot of cases where someone gets into the network and stays there for months or even more indiana one year. steven: sometimes they have legitimate credentials and plant the program over here and it talks to a program over here which starts to collect

information, which sends it. tanium lets you have this complete view of information. which machines are sending a packet over the network. which machines are running a certain program. but all instantly. when you understand a breach is going on, you are often given a pattern. like look for these three , programs on these different machines. you have no way of knowing. but, cory: i do not understand -- if some of these hacks are slow, why does instantaneous detection matter? steven: the breaches are using known infiltrations, but in certain patterns and certain arrangements around the company, and they take time. you cannot figure out they are going on. once you figure out something is happening, you need to shut it down instantly. and that is where the instantaneous response really comes in. so the way to think about it is

these breaches are -- i just got a memo from one of the security companies telling me to look for these things on my network. the problem is there is no way to do that. these memos pileup. sothese memos pileup. they are called indicators of compromise. they are just in the inbox of every security professional and they take days to go through each one. with tanium, it takes seconds to go through each one. you can rifled through them very quickly. most of the time, you cannot predict what is going on and you have to react and respond. cory: now i understand. i actually know something about security now, look out. thank you very much. a little knowledge is a dangerous thing. silicon valley, it is it still the it place for tech companies? maybe not. real estate developers cannot keep up with the demand for office space. you can watch as all the time on bloomberg.com apple fire tv, a

lot of options there. ♪

cory: i am cory johnson. we know tech companies raise billions of dollars in funding you can see it in the san francisco skyline. the demand for office space is changing the nature of the city. everywhere you look in this city. here is a look at tech's real estate boom. san francisco knows a thing or two about boomtowns. taking commercial real estate to new heights. 2.1 million square feet will lead the market this year alone. 6 million expected by 2019. uber, dropbox, airbnb all looking to expand.

fueled by hundreds of millions in funding. these new companies are breaking with tradition, choosing the urban campus over suburban silicon valley. the trend has driven up competition for space. >> we certainly -- one of the fastest transactions we have ever done. the demand we are seeing is absolutely breathtaking. cory: it is not just that building. salesforce is set to lease half

cory: many developers are unfazed. >> this technology is in every business now. when you talk about tech, it is a broader category of companies. cory: tech giants are not just looking for a building, they are creating campuses. uber, 400,000 square feet of space yet to be built. we will talk about jay-z's take on spotify. federal agents busted, an amazing bitcoin theft. ♪ cory: you are watching

cory: you are watching "bloomberg west." i am cory johnson. turkey has been hit with an extensive power outage, the biggest in 15 years. the cause being investigated officials not ruling out the possibility that it was a cyber attack. in greece, the prime minister is asking opposition lawmakers to put an end to austerity measures. he tells parliament and any deal

must include restructuring of the country's debt. >> we want a new agreement for development, a new agreement that must have the necessary restructuring of the debt. no country can safely come out to the markets. this is the sour truth. cory: greece submitted a 15-page list of supposed reforms. comcast created a new investment company. they will put $4 billion into the fund. he is investing $40 million of his own money into the fund. hewlett-packard is suing autonomy cofounder and former cfo for $5.1 billion. the suit filed in london. h-p says executives gave an overly optimistic view of the

company's health before the acquisition. applepay encountering some hurdles. a survey says two-thirds of users report problems using the service at the checkout counter. the average apple pay user may 2 .6 and store transactions in the first four months. the aftermath of the verdict of the ellen pao-kleiner perkins trial, the conversation about discrimination has only grown stronger. lynne hermle is a legendary defense attorney. i got her key takeaways from the trial and what the tech community can learn.

lynne: great to be back in my office. great for kleiner perkins to prevail on everything. cory: the jurors were stunned when they saw all of the cameras. lynne: just a tidal wave of reporters, overwhelming. occasionally, people would tweet or e-mail me. cory: what made this case unusual? lynne: cases don't change industries, not what they are about. this case was the right issue at the right time, wrong case wrong forum.

a very hot issue in silicon valley and people feel passionately about it. the media coverage made everything different. you could hear comments in the audience. the jurors were distracted by the clacking of the keyboards. cameras in your faces. cory: did that help you? lynne: it is a distraction you have to look beyond. you are always worried, what is the press reporting and if the jurors are reading it? this jury seemed to be very careful about following the judge's admonitions. cory: i heard you were very aware of what the jury is doing all moments in the courtroom. lynne: you have to watch the jury and you have to see if they are having a bad reaction to you.

i would not say i am staring at them all the time. it is important for trial law your to read how you are coming across. cory: do you believe there is a culture of sexual discrimination in silicon valley? lynne: i do not see it. certainly not in the client i worked with. i hear that all the time about big law. i am a senior woman partner in a big law firm. part of my job to find out. cory: it sounds like you are saying it is not there. lynne: i do not think it is there. cory: the narrative has been quite the opposite. lynne: the numbers are quite bad. cory: 6% of venture capitalists are women. kleiner perkins was proud to boast they have 20%. why isn't it 50-50? lynne: it is not 50-50 because

there are not women in the pipeline. venture firms have been shrinking in the past years. there are not women entrepreneurs. there are not women in science and tech. and unless the culture fixes that, unless we put women in math and science, the numbers are not going to change. cory: lynne hermle, kleiner perkins defense attorney. jay-z takes on spotify musicians backing his efforts. that is a big story and in interesting one when "bloomberg west" continues. ♪

♪ cory: this is "bloomberg west." jay-z's music streaming model, why this one is different than all the others. federal agents arrested for stealing bitcoins. but first, a check on bloomberg headlines. aston martin is exploring partnership prospects to develop an electric car. andy: tesla has done a stunning job. cory: palmer went on to say that aston martin is not partnering with tesla.

but talking to other partners in silicon valley. another example of march madness, final four tickets fans wanting to see kentucky finishing an undefeated season. building up prices. the average price, $1900. a record 25% higher than the previous record set last year. the world's most successful musicians have unveiled a tidal. an artist-owned music streaming platform. they want to challenge spotify pandora, and the like. jay-z joined by kanye, nicki minaj, i sure. what a menage. tidal does not offer anything for free. it is designed to get more money to the musicians who make the tunes. here is asher. usher: the ability to have a

sense of control is what tidal offers. cory: is this deal significantly different from royalties? david i.: it is most important to the songwriters who write the music. you saw yesterday a large group of very famous artists talked about the service. this is about the songwriters who write the songs. they may not be famous. this is a service that will compensate them more fairly than other services like pandora. that's really do everything in their power to not pay songwriters at all. we are thrilled about this announcement. david g.: it sounds like there is still room for growth. this is a congested sector, but it is not saturated by any means. we have heard complaints, most famously from taylor swift.

a few months ago when she told her catalog from spotify. it is obviously something that has come to the floor from many musicians. we do not know a lot about the revenue sharing agreement. we do not know a whole lot about the revenue sharing agreement that has been announced by tidal. cory: david, let me ask you about that. you bring up a complicated point. the music industry pays more to the songwriters than the performers. the songwriters have cleaned up in the past, but that shifted a little bit with digital. what do you think? is that the big difference? the songwriters will be the beneficiaries? bmi and ascap not so much the performers? david i.: the songwriters are struggling in this new digital economy.

they get a small fraction. they are regulated by the government, where they cannot say no. they have no choices. if you are a songwriter that gets a very small percent of the revenue, it makes a big difference whether it is a free service or a service like this service that asks consumers to pay a fair price per month. it makes a huge difference to songwriters. if you take a service like pandora, pandora itself is keeping more than 10 times what they pay the songwriters. for me, it is about the songwriters and them being paid fairly for creating the songs that to make these types of services even possible. cory: pandora complains they have to pay so much more than competitors or radio or last.fm. david i: pandora complains, but

yet they pay songwriters 4% of what they earn. their founder made more for himself than he plays every songwriter combined, and they are doing everything in their power to pay less. a service that is owned by artists, that cares about artists, is a positive sign for songwriters. cory: does this create a bifurcated market? david g.: in the past, the pressure has been to reduce the price of subscriptions. most of these services have a premium model. it is yet to be seen whether people out of the gate will be willing to spend per month.

something they are pushing for is the fact that if you play the -- pay that to premium, you will be able to listen to music that is not compressed. right now, folks i talked to that is a niche market. i think what tidal it is banking on is that it maybe people will be willing to try that out. but, you know, again we have to see if that will catch on. cory: you mentioned taylor swift. taylor swift, garth brooks jason l dean, really big artists who have made a lot of dough. they were absent from the announcement yesterday out of all these other artists. why do you think that is? david g.: jason aldean was there. we have seen tremendous growth in streaming. we are sort of at this and

flexion where if you look at it the market for streaming revenues are way up. the market for downloads going down. we are not at the point where an artist like taylor swift can say, i will go with one service alone. i am going to go with one service alone. in order to make money, you want to be on as many services as possible. you can take a stand, but there is still not one road to go down alone. cory: where is this road leading? you mentioned pandora specifically. radio stations are paying even less. david i.: the old model is he -- you would play your music on radio in the hope the song would be purchased. that is no longer the case. the radio itself is the model and of songwriters are not paid fairly, they cannot make a living. it is more than just about money for taylor swift and garth brooks.

the reason taylor swift pulled her music is because taylor swift believes her music has value and she did not want it offered on a free tier. spotify was not willing to accommodate that wish. the thing about this that i am so encouraged by is what they are saying to consumers, music has value. you ought to be paying for it. you pay for things like bottled water. why wouldn't you pay for music? and if you only have things going to few -- to free songwriters cannot make a living. you would have a loss of a high percentage of americans songwriters who cannot earn a living. the average american pays about $500 a year on music, but about 100 of that is for live music. if you are a songwriter that does not tour, you are not able to get any of that income. services have got to have a price point so you can make a living if you are a songwriter.

cory: interesting stuff. thank you very much. well the drama continues as two , former federal agents are charged with money laundering and wire fraud and stealing bitcoins from silk road. it is an amazing story, next on "bloomberg west." ♪

♪ cory: the bwest byte is when we focus on one number that tells a whole lot. joining me to tell us a whole lot is charles allen via skype. charles, what is the byte? charles: 2 is the number of the day today. that is the number of agents arrested in the silk road case. this is an amazing story. it is a testament it is not for illicit use. i think it sets the stage that this technology is here to stay. cory: one of the federal agents,

a dea agent and a secret service agent. secret service in this country is also charged -- in fact it was started to counteract town to on this so road case, these agents apparently creates some fake account and siphoned off $800,000 worth of bitcoin. tell me what happened. charles: you basically nailed it. it is, you know a classic case , of greed. we actually have a very unique kind of story on this case in that sean bridges showed up at

our coo's home in the morning about six weeks ago in regards to a quarter million dollars of bitcoin we ordered and got stuck in customs. so he -- he showed up with two other agents at 7:00 in the morning asking a bunch of questions. and we could not figure out why. and then they asked a lot of of companies that to we have invested in further follow-up questions. now it is starting to dawn on us, maybe he was trying to rob us, too. cory: bridges is the 32-year-old secret service agent charged in this case as well. you guys were in the midst of this. and this was continuing on. that is nothing to do with the complaint here? >> nothing to do with the complaint. he showed up late february. it got stuck in customs and ended up in a standard investigation.

he somehow ended up on the case and showed up at our coo's door and asked questions well beyond what would be standard for a customs release. and then, you know, he started looking at our portfolio companies and asking them questions. we were squeaky clean and i do not think there was anything there. and so it really made us think. what is he? is he looking for the smallest thing to try to blackmail us? it will be interesting to see how this whole thing unfolds. cory: charles, please keep us informed. the story is like it is out of the movies. these two guys charged with stealing bitcoin while they are supposed to be investigating and prosecuting a bitcoin theft. interesting stuff as well, charles. thank you, we appreciated. you can get the latest headlines all the time. more "bloomberg west" tomorrow.

♪

>> the following is a paid presentation for focus t25 brought to you by beachbody. >> you think you don't have time to work out? >> my commute is almost two hours per day. >> i have kids, a husband, a dog. >> i am working 12 to 14 hours per day. >> now all you need is 25 minutes. >> before i blink it is over. >> i am already sweating.