Incidences. Rsonal we talked about what it takes to unify, where our differences were, and how we can these gaps going forward. Mark trump spoke separately with mitch mcconnell. A federal judge has ruled that some of the Affordable Care law is not allowed under the constitution. The legal challenge was brought by house republicans, a ruling that was stayed pending a white house appeal. The New York Times reports dozens of russian athletes at the sochi olympics or smart of a staterun doping program. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the country. I am mark crumpton. Emily im emily chang and this is bloomberg west. Facebook responds to accusations that the social network has been suppressing conservative news stories. We will bring you the latest. Apple shares slip below 90 as with alphabet at its heels. We will discuss the increasingly bearish road ahead. The winklevoss twins are back. This time, they are bullish on bitcoin. We catch up with them live in las vegas. First, our lead. Facebook faces accusations that its human editors are more involved in choosing what you read than you might think. Gizmodo sourced several anonymous contractors who accused the social network of censoring its trending topics by pushing certain stories and suppressing others like conservative stories. The chairman of the Senate Commerce committee sent a letter to Mark Zuckerberg saying if facebook presents its trending topics section as a result of a neutral, objective algorithm but it is subjective and filters is a or suppress particular political viewpoints, facebook misleads the public. The guardian is reporting it obtained documents that shows facebook relies heavily on human input. In a statement, the companys Vice President of Global Operations said the trending topics are result of algorithms, not people. But there is a team of people who play an Important Role in making sure what appears in trending topics is high quality and useful. He went on to say the trending topics are personalized for every user. Joining us for more jerry smith. Bob odonnell. And our bloomberg intruding editor David Kirkpatrick. My guest host for the hour. What is your thought on all of this . David first of all, there is much ado about nothing in terms of the supposed malfeasance around this trending new stuff. Why people are going to keep focusing on how facebook does control what people see, because facebooks news feed is a black box. It is the primary source of information for a growing percentage of the world population. So, it is a really legitimate question to ask how do things get in there . On the actual issue of the trending stuff, what they were doing is not much different than what any News Organization would do. I think his statement shows he does not understand how algorithms work. Emily the way it actually works is different then facebook wants you to think it works. Jerry facebook is saying, we have an algorithm. We also have human beings who are also involved in the process. And i think that is a good point is the fact that should win maybe think about facebook as a Media Company . There are people on twitter saying maybe facebook should have a public editor sort of like the New York Times has. Right now facebook is so powerful in terms of dictating what people see that there are human beings who are making some of the decisions in how these trending topics are being seen on facebook. So, maybe we should see facebook as a Media Company just like bloomberg or the New York Times. Bob i agree. I think facebook is a Media Company. The story is the fact that facebook has this much influence on the news that it becomes an issue. There are plenty of other people who aggregate news and use algorithms, that we are not talking about them. To me, that is really the story. The other thing is, there is no objective algorithm. David mentioned that. Algorithms are sets of rules. There is nothing thats perfect. All of these things have some degree of bias. That is life, that is humans beings. Emily so, how about, is it a problem because just how powerful facebook is . More powerful than the media if you think global. It has been said they are the worlds number one source of news. More people get their news from facebook by far than from any other single source. Therefore, there is a unique set of responsibilities incumbent upon them. To some degree, they are still a little immature as a company to know how to deal with that. Emily really . David by the way, being a new source and having editors is a new thing. The guardian explains that it was only in 2014 when the ice bucket challenge was trending over ferguson that they decided they had better put some people in there to keep the algorithms from getting out of control. Emily all algorithms are trained by humans constantly. What makes this different . Jerry this is also, i think, something the Media Industry itself, theres a lot of anxiety at publishers about, you know, what is facebook going to do . Right now they are promoting live video. Were seeing all these Media Companies that are churning out live video. There are entire Media Companies whose Business Model is based on what does facebook want . So, you know, like we said, i mean, this has been how facebooks algorithm works has been a black box. Today we got an enormous amount of detail we never had before. Emily perhaps it made sense to be more straightforward about just how much human intervention there really is. Bob again, we are going to see these algorithms improve over time. Facebook is a Young Company when it comes to this kind of news aggregation. There are going to be a lot of efforts done to improve the process by which it is done. You cannot just focus on things that people are talking about on facebook because those are not always newsworthy, and there may be things they are not talking about. Those kinds of things are going to get developed into these algorithms, and they will get better over time. Emily do we need to hear from Mark Zuckerberg . David i think Mark Zuckerberg needs to talk more about the power his company has amassed. Unfortunately, a lot of the things he will have to decide about probably from a social policy perspective would push them in a less commercial direction. When you have a commercial institution with this social power, it raises fundamentally new questions the world has never faced, and it is not just about news. Politics is an equally problematic area where this question of could they swing elections is a very real one . Emily David Kirkpatrick. Nvidia shares getting a boost after forecasting sales that beat estimates. The worlds biggest maker of graphics chips used in highend gaming. This corner of the market for highend gaming pcs is still growing. Semantic issuing a forecast more positive than analysts expected. The World Biggest maker of Cyber Security software is in the middle of a transition. Looking for a replacement for mike brown and trying to recapture momentum lost or newer, more noble security startups. Its latest report the country is stemming some of the decline slightly in computer, consumer and enterprise sales. Coming up, well head to the salt conference in las vegas and hear from tyler and Cameron Winklevoss and why they are still bullish on bitcoin. Emily lets head to las vegas where the salt conference is underway and Erik Schatzker is standing by with gemini cofounders tyler and Cameron Winklevoss. Erik . Erik thank you very much. I am here with the winklevoss twins. For those of you string wherever, cameron is in the gray suit and tyler in the dark suit. Its a bitcoin spot exchange. As of last thursday, we got approval from Governor Cuomo to add another digital encryptor. Erik what does that mean, being a licensed regulated company . Our cap requirements are similar to a bank. We look and feel and we have to go to the same procedures are bank does. It means we are regulator and we are safe and secure venue to buy and sell bitcoin. Erik does that mean, because people have accused of the currencies of being a store for a hideout for people who want to do things to run afoul of the law. Now that you are licensed and regulated, does that mean that you will share data with Law Enforcement . So, theres going to be situations like any Money Service business where Law Enforcement might compel you for certain reasons, but we do not do anything with actual of subpoena or something with legal enforcement. Erik are there customer requirements you have to comply with . That is part of being regulated. We have a bsa state secrecy act that has been vetted by the new York Department of service which is the highest regulator in the land of new york. Know your customer, it is the principle, one of the Core Principles of our business. It is spelled out in our user erik a number of people, bankers included, have talked about the promise of the block chain technology, but they have distanced themselves from bitcoin as a medium of exchange. Can you just disentangle one from the other . We think the open block chain is very different than some of these bank chains. It is similar to how the internet is what we think the bitcoin is like, versus aol or compuserv. That is not really the open internet. It will improve the banks and how they settle and whatnot. But were not competing for that. It is a very different space. Erik how so . Does the things that people use the block chain to build will be different from call it bank provided services how . They are open. So anyone can build on it just like anyone can build on the internet. You may not be able to build on jpmorgans block chain. There may not be transparency. Theres just different they are private, right . So, you do not know what is going on in there. Versus an open block chain, if i send you bitcoin, the whole world sees that happening. Erik why is there this idea the computers need to talk to each other using a crypto currency or transact using a crypto currency when on security exchanges around the rolled, there are all kinds of computerdriven trading strategies that around the world that transact in multiple currencies we use every day. We are seeing the future of autonomous actors and agents like self driving cars and things like that. You cannot bank a machine. A machine cannot go to wells fargo and get a bank account. But they can get a bitcoin address. Those trades are not settling. When you buy your share of apple it settles in three days. A bitcoin settles when you send it. Erik instantaneously. The same thing with ether. When you are buying a couple coffee or hiring a self driving car, you cannot wait for three days for that car to pick you up. Erik why do you guys Bitcoin Bitcoin described as tokens, as call options . The token ether is used on a bitcoin network. If you believe these networks are going to grow and there is going to be a lot of demand for them, you can buy a token or effectively bet on the future valuation. It is like indexing the entire bitcoin, the entire ecosystem. Gemini is the only exchange in the world that is actually licensed to buy both bitcoin or ether. If you want to do it in a licensed manner, then we are the place to do it. The internet, you could not in the early days buy a piece of the internet. You can buy a piece of bitcoin. Erik thank you for spelling it out for us. Cameron and Tyler Winklevoss at the salt conference in las vegas. Emily i want to bring back my guest host for the hour. What do you think of the rebirth of the winklevoss twins . Im glad that they are occupying themselves with bitcoin instead of trying to start another social network, because i do not think they proved themselves very good at that, despite the fact they were able to argue well enough to somebody in some kind of legal situation to get a gigantic settlement which basically gave them the money they are using to invest. I actually, from knowing the story of facebooks early days extremely well, find it very hard to believe that Mark Zuckerberg learned anything particularly actionable from them that really defines any significant aspect of what facebook finally became. So, i dont think that they are the inventors of the concept of facebook or social networking. In fact, what they were doing at harvard was really very similar to something that had actually existed at stanford two years earlier, something called club nexus, created by a guy who later went to google and started a social network. This is a very muddy history. And Mark Zuckerberg did work for them. I think he did not do a very good job for them. And they were angry about that. The fact they got hundreds of millions dollars out of it, also their third partner did very well. Emily do you think they have the potential to be great entrepreneurs . David i have no idea. They are rich you who have some good ideas. They did buy bitcoin early. And they have got a good appreciation on their bitcoin based on what i can tell. Give them credit. But there are a lot of people with a lot of money that want to do interesting things. Emily David Kirkpatrick sticking with me. Coming up, apple shares dip below 90 putting the iphone maker in danger of passing a key milestone. We will discuss next. Emily apple dips below 90 a share, putting in danger of losing its title as the worlds most valuable company. The stock has erased all gains made over the last two years. Alphabet is close on its here with the market cap of 494 billion. Ais latest blow coming after bad string of milestones for the company, posting its First Sales Decline in a decade in losing the backing of carl icahn. Supply chain scares triggered the most recent declines. The nikkei saying that shipments of chips for the iphone 7 will be lower than level seen in the second half of last year. Bearish reports which makes the iphones. Logon precision which make the camera modules pointing to a shift in sales momentum for apples topselling project. Still with us to discuss, our bloomberg editor David Kirkpatrick. Apple erasing all the gains from the last two years. How significant is this . David it is something that has been coming for a long time. If you really watch apple. What we have seen is the world of computing devices, first pcs, now smartphones, hitting their peak and apple has driven the profitability. Look at the percentage of revenue they make from iphones and other Hardware Devices to that part of the business. What we have seen them do is slowly but surely trying to shift towards other things. But there is a number of dilemmas they are facing. First of all, the Services Business is the one that gets the most attention. When you dive into that services number, a lot of it is what it would called digital retail. If you are selling an app, selling a movie, that is a onetime sale. Services implies like apple music. That part of the businesses very small. The other challenge they face is moving into other categories. Some people say apple is a follower. They will see what other people do. My argument is, i am not sure they can continue in that realm. I think they need to think about making new innovations. Another thing they will also have to think about is dipping into that war chest. They have hundreds of billions of dollars there. They can make some Game Changing acquisitions. I think they are going to need to do that to start to drive some of this pressure off of the iphone. If they keep depending on the iphone, i think it is going to be a tough shortterm period for apple. Emily apple has a 20 billion cash 200 billion, excuse me. David i like this odonnell guy. I agree with everything he says. They could get a big revenue bump that way. It is a weird problem to have that they had a product that got so gigantically successful it blew the entire company up and made everybody think apple was the iphone company. Any product is going to plateau at some point. I do think they have a lot of potential other product areas that could grow over time. The watch could be big business. I think their car software that they licensed to other Car Companies could be big. Maybe their own apple car, depending on what that turns out to be, could be big, an iphone is going to remain a gigantic dismissed for the perceivable future. Just maybe not a growth business. Emily where is this going . A venture capitalist who has been hard on apple says he thinks that amazon will have a 3 trillion market cap in a decade. Carl icahn said that apple would have a 1 trillion market cap. Bob a lot of these productions have been crazy. Lets talk about the car. Lets talk about the reality where apple is. We are entering the era where i dont think we are going to see the kind of Breakout Products that smart phones and pcs were for some time. We have got vr, wearables but none of them are going to get anywhere near as big as these other categories. That means youve got to have multiple bets. The car thing is interesting. I was in detroit talking to carmakers. There is this sense that the possibility for disruption in the auto business is huge. However, there is also a lack of awareness by Tech Companies on how hard it is to build a car. That is going to be challenged for apple to overcome in the near term. Emily bob odonnell, thank