>> you're watching "bloomberg 's let's take a look at markets here today. currently closed for a lunch break. here's how they went in the morning session. just fractionally down.

+++ today on the hang seng. we are seeing a turnaround >> you're watching "bloomberg west." >> i'm emily chang, this is "bloomberg west." the d.o.j. picks away apples legal argument of not being able to -- yahoo! adds two directors to the board. can they give the company a much needed lift. amazon goes to hollywood. we'll hear from the head of the amazon studio. first, u.s. government strikes back in a legal fight that's expanded beyond apple including dozens now of the world's biggest tech company taking stand of the protection of encryption. the d.o.j. is seeking to narrow the focus back to one iphone 5c. apple opposition to a federal court order to unlock one of the season bernardino shooter's phone. apple wants desperately needs this case not to be about one isolated iphone.

that there is probable cause to believe there is evidence of a terror attack on that phone. meantime, apple out with its own announced just hours before the company confirming it is holding an event on march 21st. which a is new iphone. joining us now to discuss alex webb cover apple and tim higgins. tim i want to start with you. coming from the justice department, how has it evolved. has the government updated its original point? >> they're really hitting apple hard, saying this is a diversion. it needs to become a more national debate. making the argument to the court that this is not a burden on apple because apple created this situation by building guy devices beyond the reach of a government. emily: revealing new bits of information. for example, i thought it was kind of a bombshell that apple has provided data to the chinese government thousands of time. 4000 requests, apple has 74%.

>> apple talked about this quietly in the past. there was an interview in the chinese newspaper where they talked about this. apple -- justice department and the u.s. attorney making the case that apple has repeatedly allowed search warrants to be issued and has given up data whether it's in the u.s. or 27,000 cases or 4000 cases china mentioned. they regularly reviewed these things. part of the tests of this act is the reasonable burden can the company actually do the work being asked of it in the search warrant. it filing makes a great point. this is very capable. apple dedicated this topic.

emily: apple announced it will be a product event. business as usual on the 21st. day before this big hearing where a judge is going to rule on this apple fbi issue. these are the kinds of things that the apple boy and girls live for. what do you make of the timing? >> one hand, they got a huge stage to address the world. it's going to be elephant in the room. flip side could be, look, ewe will try to refocus on the product. we're about making great product. if they do that, that could also a viable tack fix. emily: what products are important enough that they wanted to announce the day before the big hearing?

>> it's going to be two things. pretty sure from sources, it's a new iphone. which will be smaller. it's going to be about the small size at the 5s. that's the one with the flat edges. there's a new ipad. they're going to be sort of the iphone low end of the range. >> watch bands. emily: it's interesting, they will be announcing lower end iphone that can be more accessible to people around world. >> i guess to the point, every phone they sale makes it more likely, some phones will be used by people who find themselves subject to search warrants. it is interesting. apple specifically said, they don't have to go down feature to go down market. here they are coming out with something that might be targeted towards asia. that would be a lesser phone in terms of features and size.

emily: something else about the government's argument today. it narrows back to just one phone. i was speaking with the attorney general about this very issue if it really just one phone? aren't there 14 other phones you trying to get information about. take a listen to what attorney general lynch had to say. >> it shows this issue is going to grow. but, in every single one of those cases, same as if we were looking to go into someone's house and look at documents, we craft a request. we narrowly taylor it. we want to look at what the law allow us to look at. emily: this is the argument that is most troubling to me. it's not just one phone. there are multiple phones across the country and around the world that government want access to. isn't apple just going to say,

it's not about one phone at all? >> that's what they have been doing. they want to make a global conversation. the fbi and d.o.j. filing today, saying this is about one phone. this is not about creating a master key or backdoor. it would remain in apple's hands and apple headquarters. emily: alex, take us into the bigger context in regards to the business. apple is predicting sales to decline. yet, all of these thing are happening at once. >> we had a piece that came out little bit earlier talk about the interest in apple. it has reached lowest since april 2012. that implies that perhaps, all of the doubts having priced. lot of people are expecting the stock have to recover. there is going to be a decline. lot of people are predicting that. the question is, whether it's the first or second big step, second big decline, where we are now. emily: all right, alex webb and tim higgins and cory johnson. yahoo! add two new board members. we'll take a look.

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emily: former apple executive named coceo of bridgewater associates that oversees more than $150 billion. the news comes as investors look to cap stocks. ruben will replace greggenson. now to yahoo!s to revolving door. the company appoint the two new directors. returning the size of the board to nine. the newly appointed board members are catherine friedman and eric brandt, former chief financial officer of broad come. what's odd is the timing. it's also the same week that yahoo! was set to have a meeting with jeff smith.

shares of yahoo! closed down over 2% thursday. joining me on the studio is brian womack and eric hippeau. who are these people? >> that's interesting. these are two people that have history of doing deals. former broadcom ceo. catherine from morgan stanley, she did deals here on west coast. this is really bringing on two people that do deals at a time when yahoo! is looking to make deals.

of course, in the context of when investors won, it comes interesting. there's a proxy -- this can be seen a defensive move by yahoo!. emily: dangerous boardroom jujitsu. i love that line. it does make it harder for outsiders to take control of the board. this is the same week that yahoo! is posed to be meeting with -- supposed to meeting for the first time. eric, what's your take here on the timing and the ultimate intention here?

>> my take it's a last ditch effort on the part of the yahoo! board to push away the activist who want to have a representation on their board. i think that's a very dangerous move on their part. i think they're all guaranteed to face a proxy fight. it might delay for another six months. they could lose big control of the board if there is a fight. emily: brian, how does it meeting happen? >> we don't know all the details on what's happened this week. we do know that, this is an important shareholder, whoever needs to be meeting with them. that said, this is a key point in the proxy world time line. we are getting close to that deadline when they put up their nominees. and at the same time, let's not forget, if they sell the company in the meantime, maybe some of this is all for not, if they can get that deal done. emily: that was my next question to you eric. do you think adding these board members, does it confuse even further what marissa meyer wants to do here? >> i'm not sure what marissa meyer want to do. the board has announced, they are looking at strategic alternatives.

there's a lot of confusion as to whether marissa meyer is on board with this particular project. this is all very dangerous. if you say you are looking at selling assets, putting the company up for review, you have to do it. you can't just play games with it. it could look like they're playing games. emily: what do they need to do to get majority of the board at this point? >> they would need to put up a nomination slate. here's what we want to come on to the board. this is done before a lot of companies. essentially they're saying, hey, we're going to take control here. we're in charge or at least these investor groups are in charge. we want to drive this forward. obviously they talked about sales.

emily: eric, how do you envision the rest of this year play out based on this latest twist? >> i think it will be tumultuous. i think they're facing a proxy fight. i think they're playing with fire and they could very well lose control of the board. emily: at the same time brian, marissa is trying to streamline the company. she's laying off people. she trying to cut costs. we dug into the bloomberg terminal and found a number of jobs high level jobs still vacant. >> that was actually interesting thing. she has been under pressure, why haven't you made cuts. why you got this place more efficient. she did some pretty aggressive things. now she's kind of going forward. we're cutting costs, we're focusing and shutting down these things that aren't performing well. now we're going to grow. that is a nice goal. the big question is, will investors care. they've been waiting a long time. she's been there since the middle of 2012.

it's already 2016. emily: all right, brian womack, yahoo! reporter, eric hippeau. thank you so much for joining us. coming up, we hear from the man at the elm of amazon studios and find out what the retail giant trying to prove in hollywood. ♪

emily: amazon is continuing to make strides as a player in hollywood. expanding its original series and green lighting featured film part of a $2.6 billion. >> roy price is one of the most powerful people in hollywood. he's going to spend about $2.6 billion on condition -- content. lot of it is original content. same way in netflix uses house of cards. >> the message from an industry point of view, we're going to set a high bar and we're going

to make the great version of the show and we are -- we're interested in doing things in a new and different way to make the show better. every show we produce, we think about it as we want the show to be somebody's favorite show. we're not looking to do middle of the pack show. unaneled world, to -- on demand world, people is have to watch it to demand it. >> welshing we came to that conclusion. somewhere around 2008 because it just seem inevitable that everybody was going to want their product to be different, special and to serve customers in a unique way. it seems like an opportunity that we could dig into and create something really unique.

>> why not take the best content that's out there already and make a distribution plan? >> when do you that, you get the stuff from the outside. but then you put the little cherry on top with something special developed just for your pleasures -- customers. it's something unique for your service. >> what makes an amazon show and amazon show? >> there's a certain depth that you can go after and the context of a streaming service. depth and complexity of characters. because the shows are on demand, you can expect people to watch one episode after another. i think you can be a little more layered and interesting with the story telling, with giving out the information, the stories can

what are the metrics? >> what are the metrics of a successful amazon show? >> it's relevant. how many people are watching the show. are they just watching episode one or they carry through the end. that tells you something about how satisfying the show is. bausch in particular done well there. i think the other question is, are people talking about this show. is it reaching people who maybe aren't amazon customers yet or people who haven't tried the video service yet or whatever. get the word to those people and have them try it out. >> are there things that you're able to do with data with book sales and that no one but amazon can do? >> if there's a book series, you have a lot of insight into how its selling. number one. do those people tend to be prime customers and watching prime video up.

similarly, even if there isn't a book series, we're doing tv series. obviously we know a lot of people who are huge fans of woody allen. i think we'll be able to do a good job reaching out to that community. we can do a good job identifying customers who responded to that kind of show in the past and reach out to them. >> explain to me in math how

this business works >> ultimately, idea that people -- we want people to subscribe to prime. because an incredible deal that brings shipping and video and music and photo storage and all of this stuff. prime video is part of prime. original content is part of prime video. original content includes great shows for adults. we wanted the golden globe. great shows for kids. we won emmy for best preschool show last year. great movies, which are coming out in 2016. and a lot of license content and that all is part of prime. people subscribe to prime and that the economic prime fiends prime video in the original content. >> when you're a subscriber of prime and subscription base grown over the last year, it's up more than 50%, it's definitely working for

customers, people tend to get more engaged with amazon and shop more. it's good for them and it works out for amazon as well. >> when you see netflix what do you see? >> they're a great service. they're part of this whole phenomenon of subscription video. there's room for multiple players in this whole subscription video thing. >> are we getting to a spot where the original creator of the content is what you're doing with netflix? where catalog and other people stuff is less important? why we are in -- >> we are getting to an area where the value of kind of a solid show, pretty good show is not what it was because it used to be hit show at 8:00 and you have a hit show at 9:00.

you need that show at 8:30 that going to keep enough people around to get them to 9:00. but, on demand world, you don't have those hammock shows. the role for the good or pretty good show, it's not as important. in developing shows or developing movies, the hard part is not so much distinguishing between something that's bad and something that's good. hard part is distinguishing between something that is good. it's like totally solid and something that is really distinctive and it's going to capture the right guys. it's going to be one of the best shows of the year. people are going to be talking about. that's really the more challenging part.

emily: cory johnson our editor at large with roy price, amazon's head of studio. when we come back, the silicone valley bank goes to london. we take a look at britain's version start-up theme. ♪

the chinese currency is strengthening after the chinese central bank raised its limits. the governor will hold an annual press conference on this. key data on retail sales is coming out.

lawmakers in myanmar are selecting a new president. they are choosing between two candidates. one put forward by democracy in one put forward by the military. he is constitutionally barred from that. suspend the relevant clause of the constitution. south korea's latte group may be among those bidding for vietnam stores. holding also submitted offers. c stores in vietnam could fetch a high price. bp is avoiding some key lawsuit.

they blamed bp for the losses they suffered after the ban on offshore drilling that was imposed after the gulf of mexico bp oil spill. those the headlines. let's check in on how markets have been trading. asian stocks are making a comeback. now gaining for a second consecutive day. the shanghai composite is up. the hang seng is gaining momentum. was in negative territory but not anymore. telecoms and utilities are a rebound in japan.

the highest in two months. emily: this is "bloomberg west." as u.k. start-up scene flourish -- silicon valley bank roughly $4 billion in management. is expanding into the united kingdom. this is a bank that helped 47% of the u.s. tech companies that went public in 2015. bloomberg's carly sat down with gregory becker in london.

>> what is interesting, you want an entrepreneur. you want these companies to think about being independent. you want them to build independent companies. that's kind of the first part. what we found on the survey, there's also realism to it. roughly 56 to 59% of clients are saying we believe in acquisition is the exit strategy over the long term. i think that's realistic. it's actually conservative. when you look at the data, m and a is about 95% of their exits. i'd say it's more of a realism that m&a, the final exit strategy >> with regetting realistic with the evaluations? graduate question is how long would it take to find that stability. it's not like the public markets adjusted immediately. private companies, the evaluation change when the next

round of financing is raisessed -- raised. some of the companies raised $50 million to $100 million, they may have cash that can last a year or two years. they may not have a evaluation question they maybe able to grow into their evaluation. if it's earlier, we see what the markets is going to value that company at. it depends upon when they need to raise capital. >> do you think the market, do the market get ahead of itself? >> yes. absolutely. it depends upon any given company. my comment is a broad generalization. the mark get ahead of itself. you can look at some of the companies and what they're doing, is unprecedented. i been with silicone valley bank for 23 years. to me, this is a question about companies being priced for perfection. which is a little bit different than saying the business models don't make sense. i think we'll see evaluation production. some companies will grow into evaluation. some companies will fail. that's just a venture capital model. i don't think we should be surprised.

>> would that be a dramatic failure? >> i don't know for sure how it's going to play out. these companies got incredible mass. if you look at all unicorn companies out there in the u.s., clearly, some of those aren't going to make it. what's different, again, these companies do have large revenue. going after big markets. the probability they'll go away completely is a lot less likely. probability they'll raise lower evaluations is lot more likely. >> interesting in unicorns being born in europe as well.

lot of great data that spun into rival the amount coming out of u.s. what about silicone valley bank helping foster the growth in europe? >> the u.k. is more than 100 employees here. u.k. is a great market for us. london is kind of the hub to allow us to look other parts of europe. markets we're looking at and germany will probably be next on the list. you look at a level of venture capital. it's very consistent what you seen in the u.k. >> what is the geographical trend coming out of china. i'm interested to know you did the source and gathered data on

china. what differentiate the start-up coming out of china? one big difference you see between china and u.k. and u.s., what their expectations are for exit. what you see in china, very high portion of companies expect to go public. part of it is, there hasn't been for a lot of m&a transactions happening in china. philosophy why we want to acquire something we can hire developers and build it ourselves. it's pretty consistent across all three geographies. bank ceo gregory becker speaking in london. one stock we're watching is square. showing strong growth but dropped today on three potential areas of concern. first square capital. this is the still small business lending service housed under the software arm of the company. some say this business could be

huge for square but with high margins comes agreer risks. ceo jack dorsey spoked to he over the phone. >> these are small and microbusinesses that were not able to get advances from their banks from the past because a lot of these advances were just too small. one of the things that we're focused on and what we're seeing as a behavior is that our sellers are actually asking to pay down the advance fastest and get another one. emily: second concern is of course, competition paypal. first data apple venturing on square's turf. dorsey told me no one is competing with square on all things. just parts of the business. third, is of course split responsibility. dorsey is leading two public companies.

both twitter and square present opportunities. i asked him whether he think running both companies is sustainable and good for both companies long term. >> my focus is making sure both companies succeed and that's exactly what i'm focused on. i think both companies in different phases and market dictates different things for both companies. emily: dorsey did reassure me the company will start making the money before the year end. saying profitability is in his line of sight. now nasa is not giving up on the next mars mission. the insight lander was supposed to launch earlier this month. but was canceled due to a key construction. instrument malfunction. it's now rescheduled for may 2018. the goal of the trip is to investigate the interior structure of mars. it will drill down 16 feet and measure subsurface activity.

when we return, diving deeper into the london tech theme. can the city start-up keep growing. later all eyes on vietnam. why he thinks it's a texting on the rise. ♪

the company would charge $150 for a secure antipiracy box that grants access to new film. the service isn't cheap while the movie maybe available within a 48 hour period, you still have to pay $50 per view. coming up this weekend, be sure to catch that exclusive interview we'll have an extended conversation from his home in los angeles talking about facebook, spotify and more. let's get back to the start-up theme in london. the whole sector is now valued around $44 billion. making london the biggest technology hub in europe. the city claimed 13 unicorn companies and investor interest is growing. russ shaw technology ambassador for the mayor of london is in the united states. he joins me now from new york. russ, thank you so much for joining us. london tech scene is growing robustly. perhaps the hottest start-up city in europe. i'll give you that. how recent is this development?

>> i think this development has been building over the past five to six years. we've seen something like $10 billion of investment going into the sector. i think as each year continues, we see more and more money, more and more start-ups we're starting to see good exits. momentum is there. emily: london rent is among the highest in the world. it is not a cheap city. what are you doing to help start-up overcome those hurdle and encourage growth? grandparent we're seeing -- there are a lot coworking spaces. there are plenty of incubators and accelerators. many start-ups can get access to these facilities and cost of rent in these facilities is pretty low. that is very helpful. we're also seeing tech move to many different parts of london. going out further east. it's going to the south of london.

many of these companies are saying, look, i may not be right in the heart and central of london, they are finding other places around the city where rents is more reasonable. we have to keep on top of it. we have to make sure that property is accessible. emily: i want to take a look at uber. boris johnson has been fighting uber from the very beginning. the look cabs aren't happy. what is your position on uber? >> i think we need to take a balanced approach. i think what we saw from london, we think theyover reacted. uber was out there with a petition. they managed to get 100,000 signatures in a short amount time that sent strong message back to the leaders in city hall and to transport for london to say, hey, wait a minute, many londoners value uber. it's an important part of the economy. it's growing. the traffic patterns are moving out and you can see many people saying, i want to use uber.

we need to have a balanced approach. black cabs are an important part of the city's history. emily: now, defeat the opposition, uber has been growing exponentially in london. specifically, what regulations would you like to see uber operating by? how are you advising the mayor on this issue? >> what we're saying, rather than doing anything drastic at the moment and there was a call for example where customers would have to wait five minutes before the uber could set off and things like that. let's sit down and bring some of the folks from uber in. let's talk about what will be practal. let's not over regulate the sector. let's get the right parties around the table and have a proper discussion. what is the balance here?

how do we make sure black cabs which play a vital part of the economy, don't feel overly threatened by this. at the same time, companies like uber, sharing an economy is so important. emily: now mayor johnson is also campaigning actively for the u.k. to leave the e.u. our college in london is reporting that it's impacting the tech and start-up companies. they're seeing investors back off. how does london address that >> the technology sector has been pretty strong saying, being in the e.u. is very important. i run a group called tech london advocates. we surveyed that group a few months ago.

87% of our advocates said they want to remain in the e.u.10% weren't sure, 3% said let's have a break. we've seen other surveys whether it's from tech you can. coming out with similar results. clear message that says, we really want the u.k. to remain in the e.u. the challenge is, we don't know what lies after a break. there is uncertainty there. what would that actually mean. we don't exactly know. the other side of it, there's a positive story for staying in the e.u. there's an initiative called the digital single market initiative which would make it far easier for the scale ups to transact with each other to have reduced expenses and to make sure legal expenses aren't significant. we're trying to make sure this message gets through but it's a personal decision.

emily: we're going to continue to foul. russ shaw, technology ambassador for the mayor of london. have fun. thanks for stopping by. coming up now, 500 start-ups increasing its stake in southeast asia. why investors sees potential for another new tech hub. ♪

emily: update to our top story. apple quickly swinging back to the u.s. government after the justice department released a firing. saying apple was desperately trying to make case. it came as no surprise apple's general counsel saying the company will stand by its legal rights. the company is both desperate and trying to sneer the company. the u.s. is the only government to have asked the company for a backdoor. but warn that if the u.s. have the precedent now, the rest of the world will follow.

vietnam may be just the next tech hot spot for innovation. the company most famous tech export was the 2015 gaming hitfloppy bird. here with me now david mcclure founding partner of 500 start-ups. why vietnam? >> lot of people in vietnam. lot of people online in vietnam. internet is exploding all over southeast asia. i think there's a lot of hot sectors we're still focused on. basic things that make money. that will be around financial services, probably around healthcare and education and lot of ex-commerce. you got giant firms say we're not going to invest my money abroad. >> i think they're very smart guys. mark is one of my investors. i wouldn't rip his opinion.

emily: personally he isn't an investor in 500 start-up. >> i think their expertise is in the u.s. and english speaking markets. that's great for them. just because they don't choose to go to other international markets doesn't mean there's not an opportunity for us. emily: what kind of competition is there for investment in places like vietnam? >> not a lot. a lot of emerging markets still pretty new. especially at the stage we're investing which is at the early stage. there's not a lot competition at allly. usually we're the first check-in there's may be only a few of funds that are active. >> it's awesome.

we happen to be an investor. our managing partner was very early investor in that company. i know founders here, lyft and obvious. i think it's a great business. travis is doing great and lyft is doing great. emily: lyft and grab they have some alliance to take on uber. >> everybody who is not uber is competing with uber. travis is pretty formidable competitor. emily: i know you're on the road half the time. what from your perspective what goes into figuring out where the next big tech hot spot where you need to be? >> i spend a lot of time traveling. we're investing in those

countries out of our new fund. we raised $200 million fund. we're also starting funds in each of those regions. we have ten of those off the ground so far. most of those are people who are native to those countries. we think there's a lot of opportunity to go direct and really get in early on a lot of those companies. particularly places like vietnam, thailand, latin america and middle east. emily: dave mcclure, always great to have you here on the show. thank you. now, to find out who maybe having the best day ever. perhaps future commuters in slovakia. transportation technology says it's looking at building a super fast transport system with the government. one hour drive would take eight minutes in hyper loop at full speed. it's unlikely a hyper loop could travel full speed. you get the drift.

it will cut down your travel time by a lot. that does it for this edition of "bloomberg west." thanks for watching, we'll see you tomorrow. ♪

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