mark: let's begin with a check of your bloomberg first word news. presidential candidate ben carson is leaving the campaign trail, speaking today at the conservative political action committee can't in maryland. carson said he is suspending his bid to the white house. he raised more money than any other republican contender, 58 million dollars since he began his bid last may.

democratic presidential front-runner hillary clinton says the nation needs a new bargain to create better paying jobs. clinton is campaigning in michigan ahead of the state's primary next tuesday. she is proposing a callback of tax benefits for companies that ship jobs overseas. crews are starting to dig up old lead pipes digging up water mains to homes. children under six years old, senior citizens, pregnant women, people with compromised in the in systems, and homes where there are high levels of lead. brazilian police raided a home and took into custody, president -- released after four hours. he called his detention and politically motivated media spectacle and promises to fight charges and a corruption scandal. global news powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton.

emily: this is bloomberg west preview coming up we hear from california governor jerry brown. we talk elections, the economy, and silicon valley. plus our mutual funds marking down startups? we talk about the rapidly changing funding environment. and lincoln's capital was slashed in half. first, to our lead, the story that could set one of the most important precedents is this decade, apple versus the fbi. it has escalated to a new heights with the head of the fbi asking apple to move its vicious guard dogs and apple rallying silicon valley allies to its side. >> our only concern is with warrant encryption.

>> while there isn't a middle ground i know of that requires apple to go to work for the government, we have a constitution. >> the constitution is not a suicide pact. it was built to defend this nation. if all of a sudden we are saying we don't have to and this. >> if it really was critical information, they would. emily: putting all discussion of president assad, how can the guy get into this iphone? -- all discussion of precedents aside, how can the fbi get into this iphone? use survey to a lot of different security experts who say the fbi can get into the phone on its own. >> a lot of experts say the nsa

can definitely do it. they are the most well-funded spy agency on earth and have a very powerful crypto hacking tool. they probably don't want to help out because when it gets into courts their capabilities could be revealed. the fbi doesn't need the nsa. one of the methods is actually to copy the content of the phone so when the iphone erases all the data, they have another ship that works as a file backup -- another chip that works as a file backup. it only cost $60 and is used to upgrade the phone. on the software side, experts say the fbi should find and exploit crack's in software.

there are flaws found in apple stuff all the time. what the fbi can do, it needs to find the vulnerability and get the data. experts are saying these methods aren't easy. they say the fbi isn't probably trying, because this case is about setting a precedent. emily: the fbi is in trying? think there are four easy ways to get into this phone. paul: the fbi can look for software bugs, they can look for channel attacks, look at radio emissions from the device and figure out information you they can figure out glitch attacks and cause it to load an unsigned operating system version by bypassing signature checks. or maybe they can pull

information out. to do those you have to invest an effort and the issue isn't this particular phone. this isn't an important phone. emily: the case is predicated on the fact this is an important phone. paul: it is an important one for the fbi and an important one for apple. but not for a law-enforcement investigation. because there will be no trial, going to the nsa wouldn't even meet with situation -- emily: wouldn't they want to do everything they can to get that tough off the phone? -- get that stuff off the phone? paul: i think the issue comes down to there are formats in which they can do this. the problem is none of them are easy. they take an investment of time

and effort. it depends on which ones you do. finding a single bug in which you can find and exploit can take -- find and exploit -- find an exploit takes time. presumably the intelligence community has done this and we can see that in some of the releases of the past new year's. -- past few years. what they are trying to do is make it an easier effort by setting a precedent that allows apple to do it for them effectively. emily: amazon, which has backed apple in this fight has quietly stopped encrypting the fire operating system. paul: the issue isn't whether or not we are going to have good or bad security. it is a question whether or not u.s. companies can be court ordered to do things to circumvent their security.

we had this detente where the intelligence community is taking advantage of accidental mistakes, of which there have been a fast number -- been a vast number. i think what the fbi is seeing is they are looking at the gap between the information they can collect about a target, which has been growing dramatically over the years, but the amount they can't collect is also growing. the amount they do get has gone up dramatically. cloud services has put into effect huge repositories of information. the fbi hasn't -- has a slightly old copy of that data. the good thing is we are getting this public dialogue and it is important dialogue to have to figure out whether we want security to be the priority or not. emily: there are reports that the system is hackable.

what would it take to create an un-hackable operating system? >> what apple is trying to do and going to do is attempt to make an iphone that is unbreakable by apple. they are trying to defend themselves from a court order that could compel them to do this. the attacker, nsa, anyone else looking for a vulnerability, they are relying on mistakes made in the development of the device or the development of the software. >> we are nowhere near getting our computer security so good that nobody can i -- nobody can break anything. >> provable securities is incredible he difficult to attain. apple only needs to rely on the fact -- emily: i could talk to you for

hours but we will have to leave it there. always great to have you here on the show. selena wang of newburgh news in new york -- of bloomberg news in new york. california governor jerry brown weighing in on the presidential campaign and donald trump. he gets very candidates next. -- very candid next. ♪

emily: who was the big winner of the republican debate? it may be hillary clinton at the presidential candidate posted nine tweets, netting a total of 10 million impressions. republican front-runner donald trump led the pack, picking up 800 additional followers -- the debate averaged 14.5 million viewers according to preliminary ratings. i sat down with governor jerry brown for an exclusive interview on the political landscape, silicon valley, and climate change. i asked him how he thinks this primary season will play out.

gov. brown: they are divided between republicans and democrats, conservatives, liberals, religious fundamentalists, libertarians, and all the rest. we have a crisis of governance in the face of an increasingly dangerous world. people are upset. the candidate see is not all that inspiring. it is very difficult in the midst of this kind of challenging complexity. we are going to have to do better to win the support of the american people. emily: some are saying the primary could be the last stand. is that nomination inevitable?

gov. brown: mr. trump does not have a majority. it's happened in unpredictable ways -- things happen in unpredictable ways. stay tuned, there is much more that happens. it is very open. emily: does it scare you he is that close to the nomination and presidency? gov. brown: i would like to sound scared. there are a lot of things i'm more concerned about. i'm concerned about the big issues acing america. getting together when it is on the supreme court nominee, when it is increasing search and development and dealing with the negative consequences.

i would like that to happen. if we have a dysfunctional congress, ultimately we are going to get back to president. i would like to do my part. emily: who are you supporting? gov. brown: i'm not supporting anybody at this point. emily: would you accept a vp nomination? gov. brown: i haven't been offered one. emily: would you be interested? gov. brown: not particularly. i ran for president, not vice president. emily: do you see a demise of the two parties? gov. brown: i'd say the republican party hasn't quite gelled yet but it is getting close.

events happen in politics. comments made. it looks like it is shaping up, it looks like it is coming together. i would give us a few more months. emily: is donald trump fit to be president? gov. brown: i think the idea he's going to build a wall and make mexico pay for it is absolutely preposterous, and it will bring such tension with our closest neighbor. a dumber idea i can't imagine. it is dumber than it is dangerous. emily: you have other states, other cities trying to be the next silicon valley. how can you be sure where top talent is cultivated? gov. brown: you can't just come here and think you will create stamford, apple and facebook. the evolution has come to world war ii, the spacing and information technology. it is based on a system of higher education, the openness to new entrants.

people come here and in a matter of months they can find an important job. in a matter of years they become ceo or president. if you look at most of the job -- most of the governors, they all moved here. within a matter of decade or

two, they are running for higher office. a lot of these other places are much more culturally conservative. in that sense we have to be very careful to nurture. but i'm not worried about other people grabbing it. emily: you were born and raised in san francisco, you know how the city has changed, how expensive it has become, the tech community has been blamed for widening inequality. is that fair, and if so what

emily: to facebook overhauling its tax structure. carolyn high has all the details from london. carolyn: facebook is set to pay millions of dollars more in taxes the u.k. and try to improve transparency. facebook would stop reading -- stop reading sales through ireland, where it has been benefiting from a lower corporate tax rate. and instead would book u.k. sales in great britain.

this comes after the social begin giant was criticized for u.k. tax bills that were less than my own. a tax bill that was less than any other average worker in the u.s. -- in the u.k. would tend to pay. they are paying the equivalent of $6,000. the tax situation has been a growing theme. with google agreeing to pay $184 million in back taxes. although it is mainly served to stir up more controversy. as yet, it is unknown the exact amount facebook would have to boost its payments within the next tax year. smaller business sales without staff intervention, that would continue to be rooted.

the immediate reaction is positive as it seeks to introduce new rules for what it seeks to be aggressive tax planning. other companies that have previously been in the microscope are starbucks, amazon. back to you. emily: bloomberg's carolyn hyde in london. how google engineers are working with unicef to map out where the zika virus may hit next. this newly developed mapping technology later in the show.

and they scored is that the pay millions more in taxes in the u.k. as it tries to improve transparency after facing growing public criticism over tax avoidance. from april, they will stop rooting advertising sales from bigger clients through ireland where it had been benefiting from a lower corporate tax rate and instead will book bigger u.k. sales in great britain. this move comes after the social media giant was widely criticized back in october for u.k. tax bill that was less than my own. was less thant any other average worker in the u.k.. they were paying 4327 pounds. that's about $6,000.

systemr to placate the google agreed in january to pay back taxes. this really served to stir up more controversy as the figure was still deemed to be way too small. unknown the exact amount facebook will have to boost payments in the next tax year. smaller business sales will continue to be routed through ireland as it is still the international headquarters. the immediate reaction from the u.k. government is positive. other companies that had previously been in the microscope are the likes of starbucks and amazon. a further goodwill gestures come from these u.s. juggernauts anytime soon. back to you. carolyn hyde in london.

committee out, how google is working with engineers to map out where the zika virus might strike next.

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follow every pitch, every play and every win. change the way you experience tv with x1 from xfinity. >> mitt romney said he would support any effort to deny donald trump the republican nomination at the party's convention in july if trump does not have enough delegates to win outright. romney spoke with bloomberg politics co-managing editor mark lauer. >> even a lot of your own political allies and advisers say, and i think he would probably say, that is the most likely outcome, donald trump and hillary clinton as the nominees. what will you do?

gov. romney: i would vote conservative on the ballot, and if there was not one i was comfortable with i would write in a name. mark: romney said he might contribute to super pac efforts to block trump from getting the nomination. americans are joining the labor force in droves. payrolls grew by 242,000 workers in february, exceeding most forecasts. the workforce is going at the fastest pace in more than a decade. the share of the population with a job as the highest since 2009 and the 4.9% unemployment rate matched and eight-year low. president obama discussed the numbers and election-year politics. president obama: i don't expect that these pacs and this evidence will convince some of the politicians out there to change their doomsday rhetoric, talking about how terrible america is, but the american people should be proud of what they have achieved, because this speaks to their resilience, innovation, creativity, risk-taking, and grit.

mark: the jobs will be watched closely by the federal reserve. astronaut scott kelly has been back on earth for a few days. kelly spent 340 days in space, the longest single spaceflight by an american. he met with reporters to discuss his mission and a potential trip to mars. scott: i think we know enough and we are close enough that if we made the choice, we are going to do this, we are going to set a goal, a time, i think we can do it. mark: kelly says his muscles and joints ache, his skin is so sensitive that it burns when he walks, and he cannot sink a basketball shot. tony dyson, the man who built r2-d2, has died.

the droid became one of the world's favorite robots. global's powered 24 hours a day. i am mark crumpton. more "bloomberg west" is next. ♪ emily: funds from fidelity to blackrock have been marking down portfolios. what is driving trend? can it accelerate? joining us to discuss is matthew wong and mark milian. mark, i will start with you. give us the lay of the land. what we have seen so far from these mutual funds. mark: the mutual funds are required to every six months

reevaluate the price of their holdings and disclose that information publicly. within the past couple of years, we have the a lot of these mutual bonds make investments into what we call unicorns, these giant tech startups that are valued over $1 billion. they have to figure out what these things are actually worth, because you don't really have a price that fluctuates because they are, the shares are not traded regularly. they use a number of different factors, like if it is drop ox, what is box doing? that is the company closest to dropbox's business. emily: what funds have been most active here, and what trends are you seeing? matthew: there are a few funds we have seen more active than the rest, blackrock, management. one trend we did see happen at the end of q4 was a slow down. the other thing we are seeing is some of the funds still fairly active in 2016, tex investments

in 2016, oscar, snapchat among them. we are seeing a decline in new investments by these mutual funds. emily: last week we saw a sort of push for mutual funds in private tech companies. mark: that is right. a number of investors piled into facebook. it was the most visible example of a super-hot company that everyone wanted access to and it delayed a long time going public. now that has become the norm. every giant tech startup is doing that. everyone is waiting for uber and

these different companies to go public, and now uber is is valued at $62.5 billion, more than facebook ever was as a private company. it is insane how long these companies are staying private. emily: if these mutual funds fullback, is that bad news for some of these companies that are trying to raise money at later stages? does it seriously impact their ability to raise? matthew: one thing to keep in mind is mutual funds are one piece of this big private market puzzle. there are lots of investors that have flooded into the private markets, mutual funds one of them. corporate venture has been active. we have seen asian money, a couple of names like alibaba and 10cent invested in these money. one thing that is interesting is the hedge funds have not been active in investing the u.s. they have pulled back in terms of investing.

alibaba and 10cent, they have invested 25 times more than they have acquired. the mutual funds are one piece of the puzzle. if they pull back, there are other options. with the markdown, you are starting to see startups think about where that capital is going to come from if they need a raise again, and there are different players at stake, but a lot of different issues at hand as well. emily: mutual funds have less information than is about these companies, right? mark: not necessarily. emily: not necessarily? mark: they often times have preferred stock, so they get access to the books. emily: but they don't have a seat on the board. mark: they don't really have access into the room when the big decisions are being made on a quarterly base. these companies trade in the public market, and many of these

companies are so close to being public companies. they operate in many ways like public companies. fidelity's and blackrock -- if uber were publicly listed today, here is what might be happening with the stock. uber has not been marked down. emily: would you say the mutual funds are having a disproportionate impact? matthew: no, i think -- when startups started raising from the mutual funds, i think 2014 was the year we start to see a lot more when investment got involved and that is when we saw the spike. the big advantage was they could raise this growth capital from these investors without having to be as transparent or have fluctuating stock price or valuation. that has turned out not to be the case.

i think it has put an added emphasis on terms we are seeing a lot more, like unit economics and profitability. that will be good in the long term. because the markets have not been as kind to the tech markets, will start to see maybe some consolidation in some of these overcrowded areas where the mutual fund money that has come in is part of a larger boom of investments. that is worth looking out for. emily: matthew wong, analyst with cb inside, and are very own mark million. he will keep watching. it has been called the amazon of africa. the africa internet group officially africa's first unicorn. the e-commerce company has closed a $327 million funding round, valuing the company at 1.1 billion. the french insurer axa are

investors. samsung has been edged out. the dutch technology company has filed the most patent applications. phillips said 2402 patents came in ahead of samsung. samsung has been the leader last three years. we will see if the company can take it back in 2016. the premiere of season four of "studio 1.0." we are things off with jeff weiner in his first interview since the company's market cap was slashed in half earlier this year. tune in for the exclusive conversation on sunday right here on bloomberg television and you can subscribe to the "studio 1.0" on itunes, sound cloud, and other podcast platforms. ♪

emily: one stock we have been watching this week is sun edison. the solar company settle a $29 million lawsuit to that lawsuit had been weighing on investors. sun edison shares are still down more than 90% over the last year. jpmorgan called the settlement a modest in, but a potential sign of continuing issues with tec cash balance. this is a software company that secures electronic documents. the stock surge has a boost of confidence among investors for the ceo's plan to diversify away for low market sim cards and other markets. google leveraging technical expertise to help curb the

spread of zika. an open-source mapping program that shows potential outbreaks drawing on data from various sources, including weather and travel patterns. google announced a one point $1 million grant for unicef to be used for a vaccine development. joining me is the head of the philanthropic arm of the company. it is fascinating how google can help. why are you taking this on? jacquelline: when the who declared this a global public health emergency, it was clear

this would be an epidemic that we need to take her seriously. as is always the case, we think the best response is one that combines the best of corporate america, the best that governments can bring, researchers, scientists. these are global emergencies. emily: talk to me a little bit about the technology. jacquelline: we want to give the technology to people on the front line and doing important work. we went to unicef and said, what are you working on that we can also be helpful on? they are trying to develop a data compiler, open source. think about whether, disease incidents. anyone of these data sets by themselves may not give you a clear picture, but if you bring them together and correlate them, that can bring a picture of, where is sica headed? where might it go next? emily: brazil is the epicenter

of this and it looks like zika is linked to this horrible disease, micro and severally. how close are they to finding a cure, a vaccine? jacquelline: the challenge with zika is we do not have effective diagnostic. it is hard to tell who has been infected. treatment is difficult. that is why we need money in that area, and that is partly what google is funny, but we are in the beginning of this epidemic. emily: you are working with you to raise awareness across latin america, "sesame street." jacquelline: we know we have a billion people that go to youtube.

we went out to our creator community and asked them to help raise awareness in their channels. we got partners like "sesame street." emily: what is the message they are sending? mark: they are creating their own content jacquelline: they are creating their own contest. they have a relationship of trust and they can develop public health messages to give a sense of peace to people, help them understand, what is zika? do it in ways that make the most sense for their audience. emily: on the other side of the world, you are announcing that google is giving chrome book to nonprofits to give to millions of refugees to give them access to education, asylum applications. jacquelline: with the refugee crisis in europe, similar thing. this is a situation where we think google could be uniquely

helpful. we donated about 10 million euro. we did a global matching campaign when we went to the general public and said we need to all caps together and help. we matched donations one to one and raise over 10 million euros. we really heard from folks on the frontline that this set of refugees was unique in a sense that one third of them came with smartphones. emily: why not give them a prepaid android? jacquelline: we are looking at all sorts of ways we can be held. i was just in germany last week at a refugee camp and actually went into the lab where the chrome books are being made available. there is a huge line waiting to use the connection to the internet to help with the asylum process, get in touch with family and friends, look for jobs, keep pursuing their education. many of the migrants are educated.

emily: thank you for telling me of the efforts you are making. it is great to hear. chinese influence in the u.s. movie industry is to grow. carmike cinemas is going to be purchased. it would create the largest cinema chain. china's richest man owns the majority stake in amc. >> it does not change our scale in china at all. amc is almost entirely a u.s. movie theater chain. we have 385 theaters, two of which are outside the united states. carmike's 280 theaters are all within the united states. this is about reading a national footprint here in the united states. because we will be so big, we will not only be the largest movie theater chain in the u.s., we will be the largest movie theater chain in the will.

emily: a sneak peek with my conversation with jeff winner. turn in sunday the full interview on "studio 1.0." ♪

emily: this sunday, we kick off season four of "studio 1.0," where i sit down with lincoln ceo jeff weiner. this is the first interview yesterday since the market cap was slashed in half. weiner announced he is giving away his entire $14 million stock bonus to his employees. jeff: we weren't expecting that kind of response. when you look at the core elements of our business, they remain healthy.

if you look at north american fuel sales for our product, store sales have remained consistent. the core of marketing solution business lines is still be fastest-growing business we have on scale, and post the launch of our reimagined flagship app, we have seen an acceleration in engagement. the core elements remain healthy. emily: analysts went so far to say we are sorry, we were wrong. his or something investors were not understanding? jeff: i think it is expectation. companies that experience hypergrowth for an extended period of time, there is an inclination to extrapolate that growth over time. in history of every hypergrowth company there comes an inflection point where the expectations of analysts start to outstrip the fundamentals of the business.

the question is not whether or not it will happen coming it is how companies execute through it. emily: analysts say there are various pieces about what linked in is. you are a slower growth company, more like a software as service company. what is right? jeff: it is all relative. growing at 30%, growing in the mid-20's, that is pretty healthy growth by virtually any measure. emily: you gave a rousing speech to employees at all hands meeting and said linkedin the same company, you are the same team, i am the same ceo. how does jeff weiner, the person, feel about it? doesn't sting a little? jeff: i would not say it stings. there was some surprise. you want to make sure you are there for the people who matter most. are we able to create value for our members and customers?

nothing has changed in that regard. you want to make sure employees are ok, especially those who have not experienced something like that before. there are a number of us on leadership team that have worked at companies that went through similar periods. some of the most valuable companies in the world have gone through similar corrections and they never lose sight of the long-term mission or long-term vision. it is about continuing to execute. emily: "techcrunch" posted an article. linkedin is now a best a business card holder, at worst, a delivery service for spam. how do you respond? jeff: i think everyone has their opinions and it will not de-focus us in any way. the company is the exact same company it was. our core product offering has never been stronger. i think we have the best roadmap

that i have had in my seven years at the company. it is about creating value for members. emily: do you think you can re-exhilarated wrote? jeff: that is the objective overtime. you want to address opportunities. emily: has this latest situation impacted morale? jeff: it brings people closer together. the more you go through these types of challenges, you meet these challenges head-on and are successful in recognizing nothing fundamental has changed her i think the stronger the team becomes, the stronger we become as a company. emily: for the full version of this exclusive conversation, food into the premier of season four of "studio 1.0" right here on bloomberg television. that does it for this friday edition of "bloomberg west." we will see you on monday. have a wonderful weekend. ♪

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