>> welcome to the early edition of "bloomberg west." i am emily chang in our focus is on innovation, technology, and the future of business. and markerberg andreessen are cashing out millions of their facebook shares, selling the stock as part of a just announced secondary offering worth nearly $4 billion. hackers stole data from up to 40 million credit cards used it target during the height of this year's holiday shopping season, accessing the information theugh swipe machines in checkout line.

the nfl wants to throw a flag on the fcc which is considering listing the blackout rules that keeps some games off tv unless the stadium is full. is technology already trumping this 40-year-old rule? million shares of facebook are about to hit the market in a secondary offering. it is the first one since the social network went public 18 months ago. facebook will sell 27 million class a shares and mark sucker berg is selling more than 41 million shares and mark selling 1.6s million. in a statement, facebook says -- the secondary offering that nearly $4 billion and

facebook shares are trading down on this news. cory johnson is in new york with more in today's drill down. should investors be worried? >> i don't know if the stock eating down one percent is a reaction but the float out will go up. always focus on businesses and non-stocks but the stock has been very interesting because ofre has been a reflection what is going on with the business. as the company started to go public, they did not have

mobile, the stock really sold off after the ipo. it is interesting they have chosen this time to do the secondary offering and allow mark zuckerberg and mark andreessen to get out of a large position. >> who else is selling out? >> the company will sell some shares and raise money for general corporate purposes but mark zuckerberg is selling a lot of shares as well as mark andreessen. when we look at the why of the selling, it's interesting. what mark zuckerberg is doing is taking his stock options and realizing the stock options and buying the options. as a result, he could be incurring massive gains because the costume initially was virtually nothing. that taxable gain will be paid off by the sales of these shares. in actuality, he will end up owning more shares at the end of the day because of the converting options. some of the shares will then be sold to pay those taxes. >> let's talk about what mark zuckerberg may be selling. could it be because he thinks that it is a good time to get out? they say is about paying taxes but facebook has been doing well lately. >> we don't know what his tax rate is. he will invest 60 million dollars worth of his options. it is worth about $2.3 billion.

when you look at the underlying business results, what you see some things are getting better at facebook and the business is rapidly growing. that growth is continuing so there does not seem to be obvious signs of slowdown. when you look through the numbers and see them exercising 60 million options, it seems like it's about what the text ellwood the. it probably does not indicate he is lightening his load of facebook shares. >> thank you. the secret service says it's investigating a major credit card reach that target. the retail chain says hackers gained unauthorized access to 40 million credit and debit cards between november 27 and december 15, the peak of the holiday shopping season. in a statement, the target ceo better at facebook and the business is rapidly growing. that growth is continuing so there does not seem to be obvious signs of slowdown. when you look through the numbers and see them exercisings preserving the trust of our guests and we had moved swiftly to address this issue.

customer names, credit and debit card numbers and cvv security codes are all at risk, stolen from the point of service swipe machines at target stores across the country. .ith us now is dave kronister he joins us via skype from st. louis. this happened at the pos machines and it is actually worse. explain why. >> in some ways, when you are dealing with the actual pos systems themselves, you are getting the tract data. you are getting the credit card information but you're also may be getting the cvv number that may be in there as well as the account names are him there are of organizations that will

not encrypt internally as well as externally. getting directly into the pos system -- they don't know if they breached thepos devices or it was the server at the backend. either way, you have a lot more account information you typically will not see on an online transaction. >> why wouldn't a company like target encrypt this information internally? >> this is speculation. there are a lot of defenses you expect to see on your organization. with these type of attacks, only two percent are actually ever detected. in our economy, we tend to look at the people detected and say they are doing something wrong. some of of this technology somewhere, there is going to be some unencrypted data. you could have an encrypted connection between your two

stores. you can have an encrypted database but at sometime, someplace, some application is going to have to deal with that information unencrypted. there will always be that weakness. >> is there anything target could have done to prevent it this? is this something that is just difficult to prevent? we are in ethical hacking firm and we break into companies all the time. we have people and clients that do a great job. they have to be perfect all the time. it's very difficult. one of the things that we could actually change in america -- this is primarily a north american issue -- if we would technology,t chip credit card numbers go away. it becomes a certificate authentication issue. all of these problems pretty much go away. this is why you don't see this in europe. unfortunately, there has been a

decision because we use so many credit cards that it is too expensive to upgrade. instead, we take the loss. everybody has to deal with getting new credit cards and these companies are getting find. thee would just change entire structure of credit cards to more of a smart chip, it would help our different retailers so much more. it is almost impossible to detect this type of attack. >> this breach happened over several days. it is the busiest shopping time of the year. how did they miss this? it's one thing not to catch it once but over an extended. of time/ time?eriod of >> we don't know who the hackers are. over 50% of all attacks have some sort of malicious insider. if you have someone inside that

may be helping along, that makes it very difficult. a lot of people think that when you look at network traffic that you will be able to detect right away what is right and what it's not. there is a lot of data going over a home network let alone a large retailer like target. it is very difficult to detect. of thesejans that most hackers are using to gain access to these systems is not require vulnerability and are designed to actually be stealthy. we spend hours just looking at a single computer that we know was that to try to find malicious traffic. imagine trying to do this on the busiest time of the year when you have all the traffic going back and forth. i'm thinking about the things i bought at target over the past few weeks. what can customers do if they bought something in the store or

something online, what should we be doing? >> watch your statements. you should be doing this all the time. understand that your credit card is going to be compromised sometime this year. i am on my fifth credit card this year. do not rely on a single card. make sure you use signature transactions and not pin. they are not protected at the same level as your signature transactions are. try to use prepaid credit cards or debit cards if you can. understand that this is the world we live in until we decide to change the way credit cards are used. this is the way it will be, we just have to minimize the risk. >> we will closely follow this story out of target. thank you for being with us. is trying to end a 40

year rule that keeps major sporting events off tv but the nfl is opposed. we will talk about that next. ♪

> welcome back. it's only about a two mile drive from intel headquarters in santa clara to levi stadium, the new home of the san francisco 49ers. intel has signed a partnership team.ith the football the stadium plaza will be named intel plaza complete with a fan experience zone where intel will show off gadgets.

intel will also be a pervert tech provider for the stadium -- a preferred tech provider for the state in which is set to open next year. the nfl says it will strongly oppose a proposal by u.s. regulators to eliminate the sports blackout rule. the rule is 40 years old and encourages fans to attend live sporting events by keeping the games off tv while tickets are still available. the nfl said in a statement -- cory johnson is back with more from new york. >>intel will also be a pervert the federal communications commission is saying that professional football has the most blackouts of any sport. all 224 gameshed they broadcast. this is an interesting story. a football fan, it is close

but the oakland raiders, i cannot see in my local market is often, they have been blacked out a lot over the last few years. >> people are not coming to the games as much as they used to depending on the franchise. we don't really know what the full effect will be. it is saying that it only helps or potentially helps the pay-tv guys are it more and more sports , you have to watch it through a pay-tv distributor. >> how does this help pay-tv? the nfl has a big deal for the nfl ticket. get paid bigl money from the national broadcasters like cbs or anybody who picks it up and pays for it. you has a cable subscriber or satellite subscriber, when you pay your bill, you are actually little toward the major broadcasters.

they charge the distributors for that and take that money and pay they nfl or the mlb to pick up those sports and that is the ecosystem that is trying to be preserved among the tv guys. when you blackout local games, you don't pay for television, you put up a pair of rabbit ears and pick up the signal, those are the people that get hurt. it is a small percentage of the tv viewing population that does it this way. >> i look at the brand, in my case the oakland raiders, being damaged by not having as many local people as they might have with a bigger audience. clearly think this drive ticket sales. >> it supports the franchise even if it's not doing so well, they want people to go to the games and make sure the franchise is still valuable even if they are down in the rankings. might say it is outdated thinking but many people think tickets are expensive and would rather stay at home and watch it and get some beers and bring their buddies over. >> do the pay-tv guys like this role? >> they have not expressed either way.

it can ultimately help them and they will not be out there in front of it saying that they applaud this. they don't want to upset either side of the equation. onesabbit fans are the that the blackout helps? exactly, it's a small percentage of the population. of the raiders games i have seen in the last few years, i wish they were blacked out, to because they have been so terrible. thing where the bad teams get worse because no one is seeing the games and they are not getting financial support. the nfl -- major league baseball has a favored detection given to them by congress but not so much the nfl. >> thing where the bad the nfl is arguably the mot democratic in terms of how they dole out the money and the salary caps. they want to make sure all the franchises in big or small markets have a level playing field.

they are holding onto the blackout rule partly for those reasons. >> edmund lee, thank you very much. >> thank you. larry ellison may be known for his of high-speed sailing but there is another oracle executive with an even more explosive hobby. that's next on "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. ♪

>> this is the early edition of "bloomberg west" and you can also catch is that are later time. mike workman has two loves in his life, coding and setting off fireworks. he is at oracle but by night he is in his homemade fireworks factory in the middle of the arizona desert, testing his latest creation. these are not just small homemade shows. staged some of the biggest fireworks displays in the country, even designing one for his boss, larry ellison over the san francisco bay. take a look at this unusual hobby. mike workman,

senior vice president of hardware/software development at oracle. when i'm not there, people can often find me in the desert making fireworks, blowing things up. fireworks wheng i was just a kid. when you are 12 come you cannot be serious about making fireworks because nobody will let you. as i got older, i could afford better equipment and chemicals. the raw ingredients to make fireworks. fire in the hole. there is a lot of parallels between developing a product and developing something that people like to see in the sky. audiences expect that particular thing like loud noises, different kinds of textures of colors and sparks and sometimes different intensities. they like a lot of things going on at one time. when i explained i make fireworks,, people assume i am not. then it is partly true.

it makes a lot of kurds to make fireworks because they are dangerous. one of the things that is fascinating about fireworks to me is it is a blend of art, chemistry, engineering, physics, it's that energy that you are able to control long enough for of time to make something pretty out of something very powerful. >>i think most people like watching fireworks. people actually get a emotional. personally get very emotio if you take go music artfuldispyith timing and colors, it does something that affects me. i like to see what i built and what i do in the sky have the same effect on others. talk about a hobby. that is pretty cool. it is time now for "on the markets," a look at what is moving on the markets every half-hour. julie hyman is in new york.

>> not too many fireworks in the market today. that's a good segue. changed, moving between gains and losses. it had big games yesterday after the fed said the economy is strong enough that we can start to pull back stimulus. the dow is trading at a record again today. thes at its level now and s&p 500 and the nasdaq are lower. we want to highlight right age shares, falling the most since 2011 and it said its third- quarter profit rose -- road 16%. they cut its full share guidance. the company has been under pressure. conagra shares are higher. it beat analyst estimates and conagra reaffirmed its 2014 guidance on the shares are up

the most since september, 2012 helped by its acquisitions. we will be "on the markets" in again in 30 minutes. ♪

>> this is the early edition of "bloomberg west." you can also catch us at our later time. the sale of previously owned u.s. homes has dropped for the third straight month. the national association of realtors says sales dropped 4.3% in november, hitting their lowest level of the year as rising mortgage rates and the tight supply hurt sales. president obama will nominate senate finance committee chairman max baucus as the new ambassador to china according to two people with knowledge of the matter. willd he be confirmed, he take over the post at a time

attention when the u.s. and china have been clashing on everything from the n s eight to --nsa. prosecutors say the former news of the world reporter hacked into phones belonging to the royal family. prosecutors read an intercepted message from prince william to kate middleton in which he calls her "babykins." the facebook video ads have gone and starting today, some users will see the ads in the newsfeeds as part of the facebook testing program. how will they impact the more than 25 million small and medium-size businesses with facebook pages? we have the facebook director of small business and you guys have 25 million small and medium businesses with facebook pages? >> ) >> talk about the interesting ways these companies are using their pages to drive sales and engage with their

customers. >> we are excitedwe have the ff and the in the small-business sector sector, more than 25 million small businesses using facebook to reach the cup that -- their customers. we are seeing small businesses use their pages in many engaging ways especially with mobile. we know that consumers during the holidays or on their phones more than ever. the facebook mobile is this owners are using facebook as a way to reach those consumers with engaging posts, pictures, and holiday specials. >> it's a busy time of the year, you guys have some tips for them how to use their pages and drive traffic. in the small-business sector sector, more>> we thinkt way to engage with your existing customers and new customers. during the holidays, we see small businesses take advantage of that. one small business we saw recently is called little passports and they have been doing the 12 days of christmas special. >> i love this company. anybody out there who has little kids, listen up. momst was started by two to help raise awareness of geography for kids around the world. they sell a monthly subtraction

product of entertainment for kids around geography and they have been posting pictures on how people celebrate christmas in south africa with a colorful photo of kids using their kids.ts to engage the potential customers will find it helps people learn about their business. >> another company got on there is a service for dogs. it is a perfect gift of people obsessed with their pasts? >> we met them in new york earlier this year and they got started on facebook. one thing they took advantage of is the ability to target dog lovers. if you have a limited marketing budget, you want to make sure the dollars you have is going to the business and customers that matter to you. on facebook, they can responsibly and the graphics of people who like talks. >> you mentioned one million of

the small and medium businesses are advertising. how much are they spending? >> businesses are getting started on facebook for as little as a few dollars a day and then can grow their business. companies can become venture capital type of businesses. you can get started for a few dollars per day and use insight tools to figure out what is working and invest more money in the places that work. >> you announced video ads this week. is this something small and medium businesses would be interested in? >> we are excited about video ads. we know marketers love to use video. you can engage sight, sound, and motion. this is in the early stages and will be limited to a few marketers at the beginning, we of product solutions that might be great for small businesses who still want to use video.

if you are a smaller company, you can post videos on your page now and attach an extra budget to it to get more distribution to customers that might be interested. >> what are some of the international trends with the way small businesses use facebook? are there any areas around the world where there is more traction than others? is the growth you are seeing mostly in the united states? of i have had the privilege traveling the world and meeting small businesses in dublin, ireland, singapore, south people are we see really people and businesses are using face look in the same way. people want to engage with their friends and discover the things around them. picture a children's clothing line or food at a new restaurant, that type of stuff is universal. >> i did not know this about you actually started your own small business. you are uniquely positioned to understand the challenges and what they need and want. how have you used that to shape the experience for these businesses on facebook? fromne of my key takeaways

starting my own business was realizing how important my time was. small business owners tell them their time is as important as money and we try to create simple solutions. if you are a small business owner or small proprietor, you may be the ceo and marketing manager and janitor at the same time. we have promoted posts that allows you to use facebook in business the same way you use facebook otherwise. you can actually advertise on facebook. >> people are really people and businesses are what 25 million smb's, will the number be in 2014? >> we have made a lot of progress. we think we have a huge opportunity to reach many more. we are not sure what that number will be but we will keep working hard. director of small business at facebook, thank you for joining us. as many gear up for holiday vacations, where in the world can you use bitcoin? matt miller is back with day

nine of the 12 days of bitcoin next. you can also watch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. ♪

is the early edition of "bloomberg west." it is day nine of the 12 days of bitcoin and less than one week until christmas which means vacation for most of us. cory johnson is in new york with more on where you can use bitcoin in new york. matt miller -- does he realize that i am doing this? >> she thinks you are doing it. i will show you where you can use bitcoin. here is the deal, many people have pointed out since i show this map this morning -- as a

consumer, you can use bitcoin in many of these places that i have put in red. for example, china. there are still some people willing to accept your bitcoin in exchange for goods or services. to trade bitcoin there, it will be impossible. if you want to be a third-party software company that helps merchants accept it going, that's impossible. if you want to be a bank that except that going, if i want to travel there or start a new business in china using bitcoin, but if i want to go to india, that's a good idea. in europe it is widely accepted. >> , on. >> show us the coin map.org map and i will show you how many places take it going. it's amazing. each one of these numbers because there are so many places that take bitcoin, we had to --

13 in this one spot in the uk 99 and one spot in the u.s., 59 near san francisco. 75 down in san diego. >> there are only two stores in newfoundland. >> that's not true. >> people have tried to think of what can bring bitcoin down. i have been running these scenarios -- either nobody will accept it as a currency or some new currency comes out like light coin or zeta coin. or there is a flaw in the software and it ends up getting hacked. one thing i did not think of is -- what if regulation around the world outlaws it? >> like thailand or costa rica. >> we are a command economy, in

complete control of everything economic in this country. we are this communist party that is holding onto power as tightly as we can. >> that is the case in china but not the case in south korea. >> let's pull up the other map. >it's not the case also in scandinavia and germany and some of the socialist comp trees -- countries. you can use bitcoin and they don't mind merchants using bitcoin but they will tax the heck out of it. >> that could happen, too. >> you have to pay a back tax on it. it might not go to zero but the value will drop. >> communists and socialists don't like bitcoin. >> where am i in that map? yellowave made the u.s. not because they are socialist, yet, but there are regulatory snags to using bitcoin in the u.s.. you they arel tell

not an exchange because they don't want to be seen as a money changer because they have to apply for special licenses in 47 states. >> your christmas vacation is coming up. will you use it when you go to germany? i will definitely use it wherever i go. have you seen the picture of me at the half brow ho --fbrau house? this is before i got bitcoin but maybe i can buy that year with bitcoin now. munich is not a place but if you go to berlin, the lower east side of berlin, you can use bitcoin everywhere. >> what do you think, road trip? are you in? >> i know this is matt's series but the big story today

is the potential of bitcoin crashing. it seems every day some other bank or exchange and is not accepting it. now it's happening in scandinavia as well. where is this going? i just looked in my wallet and it's only worth $650. to be fair, two months ago, it was worth $100. two weeks ago, one guy pay $1200 in one transaction. >> he's not feeling too good right now. bitcoin is incredibly volatile and the price has gone up like crazy. when the chinese adopted it, it went through the roof and bbtc china was the most active exchange for bitcoin in the world. that is what sent the price up into the four digits. china pulled out, that pulled the price down. it's a movement that has a lot of impetus behind it. i know we will be watching

and i cannot wait for the 10th day of bitcoin tomorrow. we will be right back. ♪

>> welcome back to "bloomberg west." buy,u have more gifts to we've got a gift guide for some of the best gifts on -- for your tech savvy friends. we will find out more about what you can get. i was getting lost in your gift guide. there are so many good ideas. this is a purse, tell me about this. >> this is the eve4r purse, which was a kickstart her favorite. you have to drop your phone inside and it starts charging it immediately. >> how does that work? >> you have a pad you can rest your purse on and it emits a

charge for the battery inside the purse so that it has a battery to charge your phone when you're walking around. it is very practical and stylish. it is great for women. techiechef? you got your hands dirty while you are cooking. for five the ispoon dollars. if you have a tablet, you can be using your hands while they are dirty and you can turn it over and use the spoon to mix your batter. >> true multitasking. this might be my favorite -- taliban -- tell us about this. >> company 53 made an app call ed taper. they make tools for converting analog writing and doodling into digital. on youran app

tablet that for five dollars. if you have a tablet, you can be using your hands while they are dirty and you can turn it over allows you tooon scribble and this is a new product called book where you can turn the digital doodles into an analog notebook. this is an example of someone who plan and a home redesign and they are sketching on their ipad and it converted it back to an analog book. ofis an interesting way thinking of digital back to analog. most people are focused the other way. it is very sentimental for your kids drawings and all kinds of stuff. you want to touch and feel it and these are about $40. >> number four is the chrome cast? i used to work at google so i have a place in my heart >> for this. >> this came out this summer for $35. log it into the back of your tv and you can connect wi-fi from -- for your tablet or phone or at phone and can stream music or audio into your tv system. it's great for netflix and pandora and other systems.

allows you to scribble and this is a new product called book$35. it really beats the apple tvs of the world. millions of these have already been sold. >> three deep printing is popular but you don't have to spend thousands on 3-d printing? printing andhe 3-d which allows you to draw and three date. that in three day. this is a prototype. over $2 million to support this product and this is one of the first couple of thousand. it is not plugged in but i was doodling before the break. it is like a glue gun. it's great to teach kids about what 3-d printing is. it can take your imagination and bring it to life and you can use these different colors. it comes right out. >> you have so many more gift ideas on your website so check it out, thank you for stopping helping us procrastinators

get our shopping done. we will be right back. ♪

>> welcome back. coming up in the late edition of nfl saysg west," the oppose an fccly proposal to end the broadcast blackouts of games that do not sell out at the stadium. we asked the former oakland raiders ceo why the football league is fighting the change at 3 p.m. pacific and 6 p.m. eastern. beis time for bloomberg to back "on the markets." >> let's look at where stocks are trading. an dow is trading in

intraday record on the heels of the fed yesterday saying the economy is on strong enough footing to start to pull back stimulus to $75 billion in bond purchases per month which is not a small amount but less. our little all changed after the rally yesterday. we want to highlight a couple of movers, shares of digital ad agency rocket fuel or taking off today. it went public in early october and has been languishing but it was up graded today to a strong buy. shares of oracle are heading a new 52-week high. it reported earnings and revenue that beat analyst estimates for its fiscal second quarter and offered in-line guidance for the current quarter which was reassuring to investors. oracle has been trying to grow with web delivered software business. also darden restaurants shares are falling. that is after the company reported earnings and said it would look to spin off or sell its red lobster chain. the red left her business has been struggling.

in the second quarter, same- store sales there fell by about 4.5% even as sales at olive garden and longhorn steakhouse were still on the rise. says the way that red lobster is modeled is not the same as the rest of their business of they would like to separate it from the rest of the company. the company is also pulling back on growth and olive garden and will not open anymore new olive gardens and reducing growth in the other chains. there is 705 red lobsters generating $2.6 billion in revenues last year. that is what a potential buyer would be looking at. one of the entities pushing for this split up at red lobster is a company called barrington capital. the ceo there came out with a statement saying this is encouraging but we view the plan announced as if complete an in adequate. the plan fails to address

he says one of the possibilities could be placing real estate into a real estate investment trust. that is what investors, happy with the plan. another analyst questioned the value of the existing business and whether that would be attractive as an investment. if you look at stats on the casual dining industry, you see trouble there more broadly. average check has been going up over the past few years even as traffic has been declining. traffic is the core of the issue. from figures come to us npd group. over the past several years, you can see steady declines in casual traffic. that is the backdrop for this move being made by darden restaurants today. we will be "on the markets" again early minutes. " money moves" from nex ♪

>> we show you what investors and entrepreneurs are doing as well as what's going on in hedge fund, private equity, real estate and more. today, michael steinberg is convicted of insider trading. what was it like inside that courtroom and what does his conviction mean for the fund and for the founder? plus it is the season for angels. i will talk to one of the largest angels -- largest angel investors that has invested $58 million in 58 female led companies. and it is day nine of the 12 days of bitcoin. we will find out where in the world you can use the virtual currency.