clinton aides should be questioned under oath about her use of a private e-mail service that should extend well beyond the limited explanations so far. senate majority leader mitch mcconnell says they won't vote on any supreme court nominee submitted by president obama but will revisit the matter after the presidential election. senator mcconnell says the president is within his rights to nominate a replacement for the late justice antonin scalia. but senate republicans will exercise their right to withhold consent. despite fierce opposition from congress, president obama is sending lawmakers his plan for atsing the military prison one time away in cuba. transferring detainees to sites in the u.s.. says that undermines national security and american values. nevada holds its republican presidential caucus today. front runner donald trump is hoping for a third consecutive win. the battle for second place could be close.

global news 24 hours a day. ♪ emily: another suitor for yahoo! appears in the form of time inc. where does bill gates and stand on apple and encryption. we asked for the microsoft cofounder to clarify reports that he is on the side of the fbi. the market selloff is dragging syntax down with it. ♪

i day after apple called on congress to take up the matter of encryption and privacy the senate has proposed a measure that would make it illegal for apple or any u.s. tech company to refuse government orders for access to encrypted data. to help me break it down, here is kevin whitelaw. what do you make of this latest development? kevin: i think this is an interesting thing. we watched the encryption debate bubble up a little bit last year. this seemed to fall under the same category as a lot of things in washington where the two sides could be brought together. back when the san bernardino shooting happened. there was some talk about whether that could change the dynamic and it didn't at first. now the government might offend the case that has the potential at least in the senate to actually force legislation to go through.

this is not a republican versus democrat issue. split. really unusual that makes it hard to predict all going forward what might happen. dianne feinstein is coming out saying quite strongly i didn't think a company could set itself above the law. the fbi is doing everything it can to make sure americans are protected. opponents say this forces companies to become spy agents of the government. how do you expect this to play out? kevin: this was is starting in the senate. have a slightly easier time of advancing. you have a key democrat dianne feinstein who represents california where apple is based. on the side of this legislation. they insist is broader than just about encryption but it is about forcing these companies to

understand they have a legal presumption or requirements to cooperate with these requests. what that triggers on the flipside is from very liberal democrats as well as very libertarian republicans. they say no, this is an overreach of what the government should do. it violates civil liberties. a central law and order group and then you have folks on either side of the spectrum. talking about civil liberties and privacy. you will see that in particular on the house side. it actually might have a tougher time passing in the house. emily: apple has kept a fairly low profile in washington up until now.

is it tim cook testified before congress? kevin: everyone is waiting to see when he is going to make his move. he will have to take his case to congress. they could come as early as next week. what committee he might decide he wants to talk to. he has received at least one invitation. they will have to present their case. they have not done a ton of lobbying work. a lot of members of congress use their products. some interesting arguments. they said let's get a commission, let's get congress involved. some cynics would say you get congress involved to slow things down. emily: apple has at least until friday to respond to that order.

we will be closely watching this. another suitor knocking on yahoo! store. time inc. is now interested in possibly buying yahoo! for business. publisher of time and people in sports illustrated has gone so far as to hear presentations from yahoo! bankers. they began approaching private equity backers on monday. they are competing with others such as comcast. pain capital as well. adventure capital firm that invests in social data. how exactly would this work.

alex: this could be appealing to both yahoo! and time is that the structure of this deal would be called a reverse morris trust. when one company spins off they would be merging in the stock for stock deal with the company that is slightly smaller. time is actually well sized for this transaction. it would be a tax-free transaction. if yahoo! believes that it is undervalued due to the tax laws. conversations with the bigger players such as comcast and verizon and at&t. private equity firms are interested in yahoo!. it doesn't get the price of wants from one of these companies it could do this merger with time and then you could theoretically still get the upside of yahoos valuation because you would still own at in that% equity

company. it is appealing to both sides. emily: is it really good idea? the stock charts closely mirror one another on the way down. >> operationally this would be a disaster. 40% iiming gets close to think that it is a struggling company struggling to find itself in the digital world let alone the mobile digital world. you have, putting these two companies together would be a mistake.

emily: the ceo of time is very interested in this deal. talking about his digital strategy. joe: we are investing heavily in our digital content and our digital audience is up to now a hundred 85 million social. our digital audience over the last two years has grown dramatically. last year we produced 23,000 videos. short form videos new opportunity for us. a real opportunity for us in beta video. $30 billion industry. emily: why would it make sense for time to scoop up dying media properties?

alex: yahoo! has a billion users. joe used to work in aol. i would imagine that there is some knowledge in fact time has several people that came from yahoo! as well. there is some knowledge there is some knowledge thereby have a theoretically leverage some of the ad technology that yahoo! has similar to what aol had. , is times offer going to be better than verizon's, which actually owns aol now and it has a ton of money? yahoo! is a rounding error for verizon. emily: what you think is the best and worst case scenarios?

yahoo! still has strong assets. assets infic vertical finance and whether that are strong. the court it was holding yahoo! together was the e-mail hub. over the last year we've seen significant decline there especially among desktop usage but also mobile usage. that is pulling apart the core of what is yahoo!. if somebody could make sense of this and i certainly think that in 2016 there's going to be more mergers and acquisitions between technology and media companies. i just don't think this one makes any sense. that isid is a company still struggling to find a .trategy a blind man with an ax is a dangerous thing.

emily: dell's proposed acquisition of emc is gaining antitrust approval from the ftc. they cut that amount to $4.25 billion when banks offer up to $50 million in debt. one of the biggest credit markets llc in years. the same sort of financing may not be so easy now. bond markets have become much more volatile. making it difficult to conclude you with large amounts of debt. this is a good sign for the tech ipos? bill gates disputes a report that he backs the fbi in its

dispute with apple. this is a bloomberg exclusive. ♪

emily: shares rallying off the back of the latest earnings report. stronger than expected guidance through 2018. its gross margin could be in the mid-60's by then. today, investors were actual turning their back on the company. sending shares down some 50%. that ipos are coming back? will you highlight? cory: you saw this kind of increase in the guidance. i love companies that don't always follow the earlier

numbers. we really saw tremendous growth. most impressively, they were getting more revenues than they were even getting in terms of gross merchandise growth. they are selling more stuff but they're are taking it even more in terms of revenues. that is a very positive sign for this business. gil: the quarterly report was very good it was a very strong quarter for e-commerce across the board. it is lower-than-expected haitians. but i think investors will increase and appreciate the invisibility. the one concern i have is that their position continued to decline. they were cut by more than half in the last couple of quarters.

if they can't get enough sellers there won't be enough merchandise. their growth is decelerating very quickly. there were growing twice as fast just a year ago. of thema process reverting to the mean growth of e-commerce. eventually they will be growing 15% just like the rest of e-commerce. there are other properties in e-commerce like paypal that are better. but the quarterly figures were very good. emily: we've been looking at fitbit as well. see when it comes to a broader trend with these 2015 tech ipos that people of been so worried about floundering? change of market sentiment. from promise me to show me. there is concern about this just being a fad.

if you look at it sees marketing costs they are spending a lot of money to get new customers. 26% of revenues in the last quarter. fourth quarter was a big order for them in terms of spending and marketing. the guidance suggests that number is going to continue to be very high. edition of sellers. slowing growth. a company that is so young. even as they are spending so much more on marketing. that is what keeps his company from turning a profit. gil: pipeline to the really big hit with betsy's post-ipo performance. it is still below were closed that day. it is going to be very hard to convince private companies to do

that in this kind of market. the reality sets in very quickly that the private valuations go the publicr when markets make their better informed decisions. emily: does this mean a boring year ahead? cory: he will not be a boring year. stay tuned. open will does not see a lot of the companies they didn't raise enough money that are built around burning money to try to get big to try to get the ipo. we will see those companies start to collapse. with city executives start to leave. a massive disruption in the way the economy works here are particularly in the bay area. a lot of these unicorns falling horned faces.

emily: and we had a front row seat. thank you very much. what does the market selloff fintech? the connection with the big banks. after these messages. ♪

to dominatee race the cloud google may have a new customer. spotify is saying google cloud will provide its platform infrastructure everywhere. nicholas went on to say that google has an edge when it comes to storage and network services adding that this big project could take time to complete. tuesday's announcement is a big win for google which is an outstanding competitors to develop its own cloud business. bigon leads the market and margin right now. microsoft is right behind. but the competition is fighting to close the gap. having aks have been tough time. the sector faces falling revenues and higher compliance costs. increasingly facing the threat

of a broader economic slowdown. could this bodes poorly for fintech? is there fate tied to the bigger ?anking sector a lot of banks actually are investors in the start up. brooke: as banks run into harder times they may be less likely to invest in these kinds of startups. but we've been seeing companies raising record funds. you have to see these

firms seeing the market volatility in the same time and seeing these fears about an economic downturn. you have to think that they are going to be at least more cautious in looking at some of the startups. we are hearing about lending club raising rates to deal with the credit crunch. some of these companies there are questions about whether this business model that they have built of offering very low rates will be sustainable in a massive recession. most of these company's came about in the wake of the financial crisis. they have never really been tested by a big economic downturn. that is good people some kind of pause. does give people some kind of pause. they are not going to be willing to pay those huge premiums that we have seen. emily: he think that valuations could fall another 25 to 75% how will takefintech

the hit? brooke: it is not so crazy when you compare it to lending club which is down about 26%. it is easy to see how some of the startups could be seeing similar drops in their valuations. emily: do you see this investor sentiment actually hitting the ipo market as well? yes i think it is already hitting the ipo market. we have seen so few ipos so far this year. we'll see that continue to happen until we see less volatility as that hurts your chances of exiting some of these investments if you are a venture capital or private equity firm. is this an opportunity for one of the bigger players such as google to move into this space?

that is deftly the threat. if you are trying to compete orh somebody like google apple that is a huge challenge. we had citigroup talking about google buying aig and that is still something of a pipe dream at this point but there could be some top opportunities are these companies to get into finance especially with all the concerns about privacy and making everything more secure and we are moving toward a more digital world. emily: thank you so much for joining us. coming up, bill and melinda gates give us an exclusive interview. first up apple versus fbi. where do they stand. ? ♪

emily girl i am -- emily: i'm emily chang. we are joined by shery ahn

making headlines in -- with the stories making headlines in asia. pullback that began on tuesday has spread. earlier, shares in europe declined after china's central bank unexpectedly weakened its currency reference rate. airbag humbled may have been caused by design issues. they find that they rupture because moisture has seeped into the inflator's. the watchdog is expanding its investigation to include all to airbags.gs -- takata

the takeover battle for sharp has been going on for six months . the board is expected to make its decision within two days. plans to sell a stake to a chinese investor fell apart after it came under review. the deal would of seen their injecting $120g, billion into western digital. the roadblocks that chinese firms are encountering as they seek access to computing know-how. emily girl what is becoming -- emily: why is it becoming more difficult?

faced aney have increasing number of reviews in chineseears because interest and u.s. technology has drawn fire from lawmakers worried about risks to national security. this highlights the u.s. government's ability to chill agreements. authorities said they would investigate even minority share purchases when they carry significant governance rights. they may not be up for all the trouble involved. emily: thank you for that update. global news 24 hours a day. we will be right back. emily: the dispute between the

fbi and apple continues. apple is now saying they have received nine similar requests since october 8. bill and melinda gates weighed in on the matter. let's listen in. >> it is a challenge to update the policies, including those issues of when does the government have a right to know? having a really good debate about when is that appropriate, -- the extreme view that the government always gets everything, nobody supports that. having the government be blind, people don't support that. i were you blind-sided a bit, came in and saw headlines that said bill gates backs fbi. >> i was disappointed because that does not state my view on this. i believe that with the right safeguards there are cases where the government on our behalf, like stopping terrorism -- that

is valuable. but striking that balance, has takene government information historically and used it in ways that we did not expect going all the way back to the fbi under j edgar hoover. have theg we can discussion. i believe there are sets of safeguards with the government should not be completely blind. >> what is to be done in this case? will decide this and i believe apple said whatever the final court decision is, they will abide by. in the meantime it gives us the opportunity to get this discussion. these issues will be decided in congress. the patriot act and how that gets evolved. you don't want to take the minute after a terror event and swing that direction. nor do you want to completely swing away from government access.

you are to strike that balance that united states leads in setting an example. >> is it the same stage now as environmentalism. it's becoming as fundamental to these people as greenery to a previous generation. like to feelwould like their information is kept , because- particularly more and more of your activity is in that digital log. >> they put it all out there. >> when people are empowered by technology in terrorist activities, it's not just that they can kill a few people, its nuclear and biological they can kill a lot. we do what the government to be out there trying to stop things from happening. it's not completely in one

direction. >> if you look at the early liberals to refuse to open people's letters because they were frightened. you've generally seen yourself as a sort of liberal. >> i think that governments always are there to try to maintain order and having some awareness of what is going on, the u.k. strikes the balance differently than the u.s.. there are some degree of terror activity. london, of cameras in the u.s. will always want to be making sure the government doesn't overreach more than most places. >> you have used technology to empower the developing world. there are fears that type of connection does lead to terrorist type of behavior.

at a use that for good. >> you yourself have said at one point maybe your 14 or 15 you did hacking. -- it'se so focused on a tragedy when these things happen but it's a small number of people. look at the amazing stuff that technology does. used at scale in tanzania and the philippines and you see people saving a dollar a day or two dollars a day you say i still have this on my phone to pay to keep my child in full that has a profoundly different effect on society. you have women saying for the first time that i have access to a bank account. i do not own money and have to renegotiate with my husband over household finances. that is hugely forward momentum. we have to where is it enhancing the world.

to counteract that, what do you say when the woman from flint michigan writes you a letter and says you are making extraordinary advancements in tanzania but what about me? i lost my job four years ago. i don't have the skills for the job they replaced it with and my home is valued at zero. what do we say to that woman? >> we say that we do care about people in the united states and we are trying to rebuild the country in those ways which is why we also put money into the u.s. system. helping to train people through community college is one thing that people do. we feel that with our own philanthropy we are focused on the part of the world where most people focus, but we focus on the u.s., too. >> are you sure you do not want to run for president? [laughter]

>> definitely not. pro apple supporters are rallying outside the fbi headquarters a week after the fbi went to court to force them to weaken iphone security. the internet rights group fight for the future organize several events outside apple stores in united states, the u.k., hong kong, and germany. the encryption debate is proving to be good business for one startup. the messaging app that encrypts messages end to end has surpassed 100 million users. it's still less than the 45 theion messages set daily cofounder is also pledging his support of tim cook in this encryption debate.

>> the ceo of chip designer arm holdings says that the company is looking to the car industry for its nest -- next growth spurt. this week the focus is still on the global business. seeger if he'sd worried about the business. >> smalltime shipments are throwing down -- slowing down as everyone has expected. it's gone through a phase of hypergrowth. it seems like everybody has a smart phone these days so naturally the industry is showing data that. it's a market that still very vibrant. >> they are still found in most of the world's smartphones including the iphone. coming up, jack dorsey and mark cuban joining forces speaking out against visa restrictions. we discuss what they stand to lose next. stay tuned to find out who is

having the worst day ever. the future is not as full as it looked in 1989.

emily: whole foods and insta cart are taking their partnership to the next level according to a report from recode. the grocery store chain is now investing in the on-demand grocery startup. the deal makes insta cart the exclusive delivery partner for whole foods. they could use a boost to the brand. the stock has dropped 45% over the last year. is not justey challenging the government over encryption. tech ceos are asking congress to rethink a new law that limits

travel for people of middle eastern it's dissent. a letter penned by leaders in the tech community claim that the law stifles business development and limits seed funding. joining me to discuss is an angel investor. so these travel restrictions or something that really upset you personally but you also say it is a threat to the economy. the law essentially restricts european from visiting america. europe has said they will respond by restricting all americans. in silicon people valley are shocked and offended by this. it's offensive time it happens but it's doubly offensive when it's against a group that you work closely with day in and day

out in the trenches. valley. pervade silicon the highest rates of google, twitter uber and dropbox. every were you look either founder or investor or key executive is iranian american. >> there are a lot of individuals backing this letter but what about the big companies? >> the net on the letter but during the same period that the law was passed, both mark zuckerberg and the ceo of google wrote their own separate essays advocating for tolerance and saying that they stand by muslims. withr as where they stand don't agreeoups who on everything else have come together to agree on this. >> it sounds like the white house is just reiterated their position. >> the core of the issue is the

law. the white house has been dealt a lot where it is kind of problematic to implement. they either have to implement it in a discriminatory way or the honor system. check this box if you are a possible terrorist and then we will kick you out of the country. we would not allow a lot to stay on the books if congress had mandated special travel papers for european jews or european people of color. we would not want to wait and see if the next president will be as tolerant as the current one. emily: there are issues coming up in this election and i wonder how you and your comrades in silicon valley have been watching this election and how it has played out much to the surprise of many. speak for everyone. the people who signed this letter came together a rather simple principle which is that there is a balance between

upholding national security and upholding american liberties. this particular law has gone too far. for the election i would say that this discussion is part of a bigger picture. the bigger issue at play is whether we are going to allow fear monitoring -- fear mongering and intolerance govern our country. emily: how do you see the election playing out? >> i wish that i knew. i am not an expert on printing that. talking about your efforts of getting more young people coding, what is the latest on how that is going and what is the state of affairs? state of the union, president obama basically announced that computer science is not just an optional skill. it is an essential skill writing, andding,

arithmetic. he asked for $4 billion to help make computer silence available in every school in america. you may say it is the president's budget, republicans will not go along with it but last week republican and democratic governors came together and said this is the one part of the budget that they both applaud and a group of governors has created a budget to work together and make computer science a standard topic in schools. emily: thank you for joining us today. it is great to see the work you are doing. private equity a firm is showing interest in buying the online photo comfy is not saying who. thomas is reporting that h lee approached about a possible sale but the firm will not come it. shutterfly says that details of the deal were sent to others in the investment community without knowledge or permission. they say they are not but areing a buyout

focusing on hiring a new chief executive. can facebook top google and twitter at their own game? we discussed the implications of the new search function next. >> if you like us on the news at.can now listen online more of bloomberg west, next.

emily: is facebook moving into astroturf, intter released a newok feature on its platform. now you can search for all public posts not just material posted by friends. how will the new search function impact the current user base? could facebook become a competitive threat? for.ook has tried this

why is this different? >> the have tried it before but not in a way that spoke to how people wanted to use search. they did something called graph search that was complicated. you had to say like my friends who like wearing high heels -- it didn't make sense. it was like talking to a robot. this is something that is supposed to allow you to tap into the knowledge of the 1.6 billion people on facebook, all of the public posts bringing you information on what is happening now and also how to travel, which restaurants -- everything. emily: it is within the facebook walled garden? >> that is where they and the value. what people are saying about donald trump and the articles that appear in the new york times and not so much what those articles are.

if you are going on google you are researching, twitter you are life updates, and on facebook you are supposed to get the context and the reaction from people who may even be original sources about the content. emily: how big a threat is facebook to twitter and google? >> the big issue now is that people who use facebook do not use it to search. isn if what they have built something valuable and as i have worked on the story i have tried it, iot and got used to still think it's a natural behavior for facebook users. you not going to do a facebook search first. if they change user behavior it could be a huge threat. >> and what to talk to about story coming out of brazil. the communications minister says

brazil is interested in a $250 million undersea cable. it's part of their attempt to avoid u.s. fines. brazil announced the construction late last year after learning that the u.s. national security agency was monitoring the president's communications. what do you know about google and facebook's involvement? >> with heard that they're interested in using the cable. whether that means that they want to avoid u.s. spying -- idle think that's the main reason. for facebook and google, anything that helps them send their data over faster speeds is extremely valuable right now. especially is a move into more video streaming virtual reality. all of these methods of using the internet on smart phones that will be a lot more intensive with data.

with mark zuckerberg coming out not going all the way, what do you make of facebook's broader position on encryption and spying aside from the fact that they are probably happy that it is not them facing off with the fbi. >> when you have inside of the phone that could threaten all >> they have the power to encrypt things more stringently than they already do. towith facebook they do want toe the line a little bit they want to make sure they are being hard on terrorism. twitter is doing the same thing. they delete it hundreds of thousands of isis accounts but they don't what to be the poster child. apple is in a tough spot that is not enviable but they are leading the charge in the companies must stick with them or not the tech companies.

>> sara, thank you for joining us. >> it's time to find out who is having not the best but the worst day ever. foresight isn't quite the future that marty mcfly envisioned. amazon has quietly removed all hoverboard from its website. a search for the item returns zero results and an ad takes you to a nonfunctioning amazon page. the boards have been under scrutiny for reports of the occasionally caught fire. jenny were they offered refunds for anybody who bought a board on the site. that does it for this edition of bloomberg west. you have salesforce tomorrow and hp earnings. ♪

is here, hel gates is microsoft's cochair and cofounder of the bill gates and melinda -- bill and melinda gates foundation. he has gathered investors to put billion's clean energy research and development. the group known as the breakthrough -- they include mark zuckerberg, jeff bezos and more. they have initiatives announced in november at