>> live from pure three in san francisco, welcome to "bloomberg west." i am cory johnson. here is a check of bloomberg's top headlines. the u.s. stocks of a race their losses for the year after a big day on wall street. energy shares were the big winners after wti brent crude gained more than 4%, and pfizer's deal to buy hostile rougher $17 billion lifted the shares of both companies. verizon wants cash to buy spectrum and to pay down debt. the company says they've made two big deals.

verizon is selling to frontier communications for $10.5 billion in cash. verizon is selling wireless towers to the already indebted american tower corporation. a quick round up of tech earnings -- "call of duty" maker activision, stocks tumbling. the company says a strong u.s. dollar will hurt profits going forward. former parent vivendi plans to sell the rest of its stake in activision. $867 million worth of stock, although a little bit less after-hours now. go pro, shares surging 75% in the key fourth-quarter. the camera on the stick is going to get better. they are talking about a new camera on a stick called the hero 4 camera. go pro profits, $122 million in the quarter. earnings report, not so rosy for pandora. the internet radio service added 5 million active listeners in

the quarter, but the overall growth rate is slowing. yelp posting profits of $32.7 million in the fourth quarter, a lot of it due to a tax item. another tech company reported earnings today, twitter and linkedin both reporting. let's start with twitter. for the court to revenue up 97% year-over-year -- fourth-quarter revenue up 97% year-over-year. the company announced a narrower loss of 120 finally dollars. monthly active users rose 20% year-over-year but that growth rate is lower than last year. twitter says it is set to add 13-16,000,000 users in the first quarter, which would be faster than what they first reported. wall street liked that. shares were up in after-hours trading.

has twitter really turned it around when it comes to making money? have they figured out how to add users more quickly? twitter is a company you followed from the get-go. what do you make of these results? it is interesting that they have such a crummy addition of new users, so much so that they had to say, next time is going to be better >> they lost 4 million users, right? >> only 4 million. >> there were 288 million active monthly users. >> their ability to add users like they were a year ago is gone. >> i think that was the one piece i wrote, pointing out that the only question people should be asking twitter is, where is the growth? without growth, all of their big plans don't go anywhere. that is the biggest challenge as a company they have. they still are not clearly able to say how they will be able to work on that. >> their contention is, don't

worry about people coming to our site or regular users. twetsets will be seen by non-tweeters. >> like it used to be? it's the game of playing hot potato, sending it from one place to another. i do believe that they have to figure out growth by thinking about their product, not as twitter, but what does twitter power? i think they are thinking of-twitter experiences from an advertising perspective, not from a product perspective. if there was no twitter interface, what with the product look like? those are the experiences, which will possibly relate to people who are not into twitter. >> you're absolutely right. they did lose 4 million users. i was wrong. i told you some day i was going to be run. what did you make? you were on the call.

>> the 4 million users, those are the users they lost due to an ios eight integration. they are blaming apple for part of it. it is true that the company is under pressure to increase its user base, because that is the engine for all of the other moneymaking. if they distribute tweets elsewhere, tweets created by people who use the service, and today, what they did is they came out and said, we've delivered on all of the promises we made to you in november about the new products we would be creating. the seven-our analyst meeting where they said, here are the things we are going to do to make twitter more exciting to our current users and to expand our opportunities beyond those users and they made steps in those directions, but of course it's not contributing to the fourth quarter. analysts have to look at this number and say, ok, we know it's going to get better. we know how. twitter has told us how. we won't see the results for a

while. >> is it fair to look at twitter as lightning in a bottle where they have found something that is very engaging for a lot of people, but not everyone, and the monetization is still the question? >> co way to think about twitter is something you can never understand. [laughter] >> stay tuned to "bloomberg west ." >> it is the beauty of twitter. it you've all, adapts morphs into new experiences -- it has evolved, adapteded, morphed into new experiences. it's almost like a city. it adapts to the people inside the city. i think a lot of the people look at it from the monetization standpoint. they are only thinking about it from an advertising standpoint. i have been using it day in and day out for almost eight years,

and now it is starting to be driven, every decision is driven by revenue, not by listening to how people are using it. if they were listening tweet storms would be a product feature. this is a missed opportunity. they need to listen and learn and adapt their service from that. >> there is something to the medium, the limited number of characters, the brevity required the hashtags. is that the thing that intrigues you as a person who thinks about media? >> absolutely. the only thing i worry about twitter right now is the growing amount of snarkiness on twitter. >> what do you mean? as a fan of snark, i take that personally. >> as long as we can shut you

off that is what i'm going for. [laughter] when you are a media entity, you have to both enhance the positives and expose the negatives. what i see is, increasingly, it is becoming -- the tone is becoming more negative. as a result of that people who are very active users are finding, you know what, maybe i will back off. >> i want to get to linkedin. what will we see from linkedin results today? >> they beat estimates. they rose in trading. it has been a crazy day to have linkedin and twitter on the same day. [laughter] it's not fair. they are proving that they can expand into these new product areas. they are finding ways to create services out of linkedin beyond just the place where you go when you need a job. they have certain salespeople marketers.

>> sara, thank you very much. i know you are busy writing like crazy. fantastic stuff. thank you very much. coming up next on "bloomberg west," 94 euros radioshack filing for bankruptcy, but who was going to win from the company's collapse? that story is next on "bloomberg west." you can always watch us streaming on your tablet, phone bloomberg.com, or apple tv. ♪

>> this is "bloomberg west." here is a check on your top world news headlines. present obama appeared with the dalai lama at an annual prayer breakfast in washington despite warnings from the chinese government. obama condemned those who use faith to justify violence and terrorism.

saudi arabia continues to fight the oil market. the nation/it's selling price to asia to the lowest in at least 14 years. middle east producers are competing with producers in wet in a market and asia. swatch from switzerland planning to sell its own smartwatch in the next three months. the swatch smartwatch will let consumers make mobile payments, working with windows and android. radioshack has fouled for bankruptcy after a century in business, but the electronics retailer's name may move on. radioshack completed a deal to sell hundreds of stores to sprint, but sprint would allow the radioshack brand to continue as a store within a store concept. sprint and radioshack's largest holder standard general is in talks to i 1524 stores.

the rest of the stores will be shut down. joining us is senior analyst know all here birds. talk to me about what this deal means. what is confusing to me is who gets the good stuff. there's a lot of junk in the real estate radioshack controls. >> i think we are really going to have to wait and see. you have effectively with amounts to a stalking horse bid right now from standard general for up to 2400 stores, but with the agreement for 1750 stores to operate as a store within a store concept with sprint. you would assume that they are going to go through the real estate book and pick the best assets. because it is a preliminary bid and effectively something to kickstart the bankruptcy you could still get alternative bidders coming in who see more value. >> is this the kind of thing where the bidders will actually go store to store and try to pick out exactly every single

one of the 500 or 1700 they want? >> yeah, they are certainly going to be working by demographics. you're going to be looking at your class a space, class b space. if you are sprint, you want to look at where you are having redundancies. radioshack has a ton of redundancies, even within their own store base. >> it will probably look at the duration of the age of the lease. you don't want to take a lease that only has a year left. >> i don't know if that is necessarily going to be a problem. if you get a good quality tenant, they are going to be able to renegotiate the lease. radioshack's lease structure is not terribly long dated. they are mostly fives and tens. a lot of those are going to be short dated leases that are going to be near market rates. there is not so much of value in securing the leases as it is securing the location. >> interesting. what business is it that

radioshack wants to keep alive in the store within a store? a crummy, big part of their business has been selling feature phones and presumably sprint is going to get rid of that. what is it that radioshack is going to keep? >> i think that is going to be an interesting thing. they are probably going to keep a lot of their branded product a lot of the diy products. whether it's cases or whatever accoutrement you might need for your smartphone that you buy through sprint that might be an area where they are going to be focusing. >> it is interesting in an era where you hear some much about the maker movement the kids making these things out of legos and 3-d printers and runs, and yet you have discovered me that should be in the perfect position to benefit from that and it's getting nada. >> yeah, i think the announcement earlier last year

they announced maybe they would roll out 3-d printers to a handful of stores, but frankly, they ran out of capital to do the repositioning and remodeling. part of the restructuring is really going to be one, getting sprint to pick up part of the costs of the rent expense to hopefully free up enough capital so they can reinvest it back into the store and get the inventory turnover. when you think back to march or april, they were talking about 1/3 of their inventory being obsolete at that point in time. if you look at it matchup against sprint taking over 1/3 of the square footage, it kind of works out. it's just a function of do people use radioshack long-term? >> that business is selling>> cables and connectors and speakers. that is a pretty good little business. >> it is a good business, but you know, it is relatively commoditized. a lot of people are going to

competitive outlets, particularly online. if you can have it delivered to your door versus going into the mall, and for radioshack where you have 42 hundred stores, a lot of them aren't in great locations, so they have to offer something unique above the commodity product. people aren't going to go to radioshack for batteries. >> could another bidder still emerge, amazon or someone else? >> i don't know some much about amazon, but i think certainly you could get some other creditors engaged that might want to own more of the process. i think it is certainly possible. >> interesting stuff. noel hebert, thank you very much. hackers strike health insurer anthem. who could be behind this attack? that story is next on "bloomberg west." ♪

>> i am cory johnson. this is "bloomberg west." hackers strike again, and this time it was health insurance giant anthem thin -- the nation's second largest health insurer. information slight on tens of millions of customers and employees. investigators are pursuing evidence that suggests the attacks could have involved chinese state-sponsored hackers, according to three people familiar with the investigation. names birthdays, social security members, e-mail addresses, even income data was accessed. earlier, i talked with connecticut attorney general george jepsen who wrote a letter to anthem demanding details about this attack. >> we immediately pressed an inquiry with anthem as to how many consumers were affected. we know it is up to 80 million.

the kind of information impacted, which is far more concerning, and what is being done to make sure this can't happen again. >> jordan roberts in a bloomberg news and michael kaiser, the executive director of an organization called the national cyber security alliance, were able to talk to us about this. it is a fascinating conversation. let's hear what they had to say. >> the big problem here is that hackers see a lot of value in all of this kind of data. whether it is health data financial data, regardless of the nature of the information, they are after it for a lot of different reasons, and they are highly skilled. as you saw, they got a lot of data. they got 80 million potential social security numbers. >> that is the worst kind of data. it opens the door for some much future criminal hacking. hackers wanted it badly enough, and they got it. >> jordan, to tie that with

income they can target the ones with the most money right? >> the income is the interesting part of this. that is a sensitive detail, as well. there is a strong correlation between folks you would like to target for financial fraud and those folks making the most money. it is going to be a lot easier to pull big lines of credit on those folks. >> michael since anthem isn't here, can i blame you? your job is to try to help companies to not suffer from this kind of attack, particularly a company whose main job is collecting sensitive information about its customers. why does this continue? >> you can't blame me. i have no involvement with anthem at all. this continues to happen for several reasons. one is the system's people are putting in place are very large and very complex and very interdependent. as we've seen in this breach and other breaches, people are sitting on huge amounts of data millions and millions of

customers, and they are a target-rich environment for the bad guys. they want to go after this data. they are going to work very hard to get it. >> to what end michael? complexity is going to be there. things aren't going to get less complex as the data that governs us all becomes greater. we're going to get more data. what do you do? do you have to not worry about the hack but what they do with the information? >> you do. this information in particular is very valuable information. credit cards is what people become used to having stolen. that impact on consumers can be very little. here, we really see a rich data set about individuals that can be used by criminals to create false identities, to conduct identity theft, to do other things. in the cybercrime realm, this data is valuable and worth money. having millions of these records

is something they can sell and they can sell these large numbers of records on the black market. people will try to monetize it in different kinds of ways. that is how it will be distributed, sold in bulk. >> when north korea allegedly attacked sony pictures, we know what they wanted, to stop the release of a movie, which they failed at. now amy pascal has been fired. they got what they wanted, perhaps. what do these hackers want? >> it is unclear. it is a question that anthem is looking at very closely. i will say one thing -- what we know they wanted is a lot of information. we don't know exactly what they want to do with it, but what we do know is that they want a whole lot of it, and they want to keep their options open. this is pretty standard for hacking attacks. if you have access to a company that is not -- has not segmented its data center property, and a small group of individuals have access to 80 million social security numbers, you are going

to take all of it and sort it out later. some of the tools indicate that these were possibly state-sponsored hackers, sophisticated attackers but we really don't know what they want to do. you know that they wanted a whole lot of it. >> and they got it. "bloomberg west" will be right back. ♪

>> you are watching "bloomberg west," where we focus on innovation, technology, and the future of business. i'm cory johnson. paypal's cofounder shares his fateful encounter that led to the founding of the company in 1998. four years later, they sold the company to ebay. was that the right move? >> the paypal story is long and legend. looking back, was selling at the right thing, the right time? >> it's the kind of experiment that you can only run once.

there is no alternative. it is clearly extraordinarily successful today. it is impossible to argue the sale to ebay is not a step in that success. so clearly the true arc is correlated. could we have been bigger in farther along and less bureaucratic, more nimble as a standalone company? maybe, would it have been more challenging than our ability to expand would have taken longer to bring it to more people? possibly as well. it is impossible to tell. the team was very tired. we were in a battle with ebay because they had their own limits service they were not about to give up on, so probably the right call, but on an emotional front it was very difficult. on the business front, probably the right thing. >> what was difficult about it? >> it's your baby. it was this gangly teenager that

growth into a beautiful company. >> do not miss the full interview with max levchin. etsy has filed to go public. some of their core sellers are not thrilled. we broke the story and sellers expressed their outrage in blogs, forums, and imprison gatherings. yes, they are real people, too. why are they ticked off? we spoke with some san francisco sellers to find out. >> stuffed owls dressed like hipsters are rebecca's thing. she spends five hours decorating and sewing each of them by hand. she sells them for $50 apiece on etsy. >> etsy was the perfect platform for may. they were doing their part to gain customers and elevate the experience of handmade. >> that is, she says until etsy

became more corporate. >> they made some changes that caused a weird shift in the ecosystem. >> 16 months ago, etsy allowed sellers to use manufacturers to produce en masse. the goal was to allow sellers to expand their businesses at greater scale. the new policy has made it harder for consumers to find her pillows and compete on price. why not just use a manufacturer to compete? >> etsy sellers have this extreme emotional connection to their piece and they want the public at large to feel the same way, which they do, i'm sure in many ways, let at the end of the day it's a business. >> etsy was founded a decade ago by rob kaelin and two friends. the idea gain traction with artisans and caught the attention of big-name venture capitalists.

over time, success bred conflict over the core values. he left in 2011. now sources say the company is preparing for a $300 million ipo. the new policies could make it look more attractive to wall street. they charge for each listing and sale. the more transactions, the better. etsy declined to comment on the policy changes and the ipo. rob kaelin did not respond to requests seeking comment. but these changes are common leading up to a public offering even if it means offending some customers. >> companies need to evolve. those that do not risk being left behind. i think the trick is to do it in a gradual way that does not offend the original space. if the company moves too quickly, it tends to have a negative impact on the current customer base, which shows up in terms of revenues and margins

and all of those things. >> at an etsy t meet up, sellers have mixed reactions to the ipo. some say the changes are the price that you pay for being part of a larger ecosystem. but rick left the site when the policy changes were announced. >> for a site that kind of claims to empower crafters i did not really feel it was doing that. >> some see the ipo is an opportunity. they started a campaign to raise one $5 million had build a stake in the ipo. those used to expressing themselves through art are starting to do so with their wallets. >> leslie joins me from new york. making changes, just as the business is going public? you can change a fan belt while the engine is running, but it's not the easiest to do. >> you talk to founders who say

my business is going to save the world. that is the common joke around silicon valley. when you get closer to the ipo, the mantra of saving the world, you suddenly have to embrace this concept of wall street and growth and profit. those concepts do not always mesh well together. that is one thing that is happening at etsy. >> how big a risk is this outrage about the ipo? >> as you look to the stock campaign with one of the sellers trying to raise money and buy a stake in the ipo, they have only raised about $130 at this point out of one 5 million dollars as their target goal. none of these actions will derail the ipo. there's still plenty of appetite from wall street, plenty of interest from investors. that said, when you look at the ecosystem surrounding the company the sellers and buyers, there are certain values they focus on. as more sellers defect from the site, that the company and its community at risk in terms of what makes this company

attractive to investors in the ipo. >> for the craft people who found this perfect universe to sell their stuff, where else are they going to go? >> most of the sellers say there are no perfect alternatives to etsy. there are other places like shopify and weebly where they can sell their products, or they can build their own sites, but none of them have the attractive metrics of etsy. nobody only charges $.20 and 3.5% commission to sell your product. there really are no alternatives. that is why many sellers are taking to forums and blogs to protest the changes because they cannot just pick up everything and leave. >> i'm so wary of business is making these kinds of changes just as they go public. you wonder what it's going to be after the company comes out of the chute. i cannot think of a lot of other

examples. can you? >> other companies see the need to monetize before the filing is disclosed. one example from an analyst was pandora and how they decided to make their ad a little more invasive. as you listen to pandora, the music stops and you hear the ad. that upset some users, who defected to other sites when the ads were present. obviously, listeners have other places to go, but kind of hinting to the same idea of focusing more on monetization ahead of the ipo as opposed to the core values of providing a place for one line internet music streaming. >> leslie, thank you. it was good to see you last weekend good to see you on the show. up next being billed as the snapchat for the business world. a new app that lets you said

screenshots and other documents. what this means for the world of business, next on "bloomberg west." ♪

>> i'm cory johnson, and this is "bloomberg west." what is snapchat when you get rid of the naked selfies? it is confined, and off the record messaging app for the business users. it allows users to send an array of documents, and then it disappears. joining us is john brodie, cofounder of confide. talk to me about this business. >> it's an incredible business. you really hit it in the intro the spoken word disappears after we say it, but whatever we communicate digitally remains archived permanently and the

cloud spews copies everywhere and we think it's crazy end dangerous, particularly for sensitive communication. >> this is made for insider trading. or it was not. kinds of communication's lend themselves to this? >> anytime you see any e-mail that says confidential, don't forward, or, hey, i will call you, or let's get your personal e-mail and take this off the work servers that is an opportunity for confide. you think about job references deal points, conjecture or subjectivity on a sensitive matter, or even good-natured office gossip. >> there are certain industries where information is so dangerous that people have secrets. >> that's right, but people have sensitive information in every industry. we just announced confide for

business, which is the enterprise solution. we literally got about a thousand inquiries from 14 countries and 25 different verticals. everything from tech to media to entertainment, small and medium-sized businesses, fortune 500 companies. we think this is a global need across all sectors and industries. >> i wonder if it is appropriate for finance, where there are some any rules about keeping communication, every instant message across the chain , required to store that information. are there some industries where this is not appropriate? >> that is a great point. regulated companies hipa- compliant company's are the ones that will take time and really sort itself out. aside from those, we think the total market is extraordinary. >> i remember talking to the ceo of linkedin, jeff weiner it and the question was put to him, and

a world of facebook, why do you need linkedin? he said the cake stand. you don't want that on your professional network. i wonder, was snapchat your inspiration, and what have you learned from their success with users? >> snapchat has done an incredible job of building the whole disappearing, ephemeral category. you have to tip your hat to them. it's funny that you mentioned linkedin. we are laser targeted at professionals and business people. often we say we are to snapchat what linkedin is to facebook. >> the sony hack which we don't know if that cost amy task well her job or not today, but that raised eyebrows about the things that were said take it in another context when they reach the broader world. has that changed the adoption rate? >> it has been unbelievable. >> really? >> we were experiencing terrific

growth prior to the sony hack. it is accelerated, such that every week since the sony hack has been record-breaking across all metrics. >> that's fascinating. what in particular about that? there sensitive business information, we have this huge anthem health care act today. but the sony information, where their particular things that set off your new customers? >> first of all, if you go back 12 months, we have seen a lot of poster children of the dangers of digital communication. first, it started with eric snowden and the fear and vulnerability of surveillance and prying eyes. then we got to the icloud scandal with jennifer lawrence and kate upton, the fear of the cloud. a coleman ate it with sony. sony really internalized it. we said wow, could you imagine that everything we communicate it were exposed. friendly i think that is where we are as a society. we should expect every thing we

communicate by e-mail, im, chat anything digital can be exposed at some point in the future. >> john brodie, interesting stuff. president of confide. appreciate your time. now a check of the world news headlines -- no progress in the first direct talks between greece and germany since the 80 bailout government power in athens. prime minister's from both countries met in berlin. they agree to disagree, the meeting coming hours after the european central up power on the new great government to yield to the austerity -- to the new greek government to yield to the us measures from germany. ford will begin assembly of two minivans in spain. spain's prime minister and the fourth ceo said annual production will reach about 400,000 vehicles they shear. ford has invested $2.6 billion in 2011 to expand that factory.

and get ready for more katy perry, this time a mobile game. the company that made the kim kardashian game has signed up katy perry for five years. it is the first mobile game involving the singer. glu said revenues were up 78% in the third quarter. looking for a job in tech? it may be time to go for a run. an application that stands out amongst all the others, next on "bloomberg west." ♪

>> i'm cory johnson and this is "bloomberg west." google setting itself up to play a big future in transportation hosting the u.s. secretary of transportation at google headquarters this week. after taking a spin in their self driving car, they sat down for a discussion about technology and policy that might shape the future of transportation. eric schmidt mentioned google's system for lowering bay area traffic. >> in terms of the number of

people we move, it's the only way to deal with the fact we one employees here and at a couple of locations, and they are spread out. it has been a huge success. >> fascinating discussion. we will have more on "bloomberg west" tomorrow. the bwest byte, where we focus on one number that tells us a lot. david miller, what is the byte? >> 8.1. >> what is that? >> the number of miles i ran to get hired on the streets of san francisco. >> this is an app that monitors runs. mine don't usually spell things occasionally they are in the shape of objects which we cannot mention only air. you ran in the shape of the letters that spelled "hire me" and ended your run at strava's

headquarters. how much backtracking did you need to do? >> there was some backtracking. i needed to connect the letters. recently planned everything out with a route planner after submitting my application. i was playing with their product and seemed like a fun thing to do. >> and it's fascinating you did this. of course, you ran at 9.2 pace, backtracking on city streets that's pretty good clip. >> when you are running, you dupe up the pace. >> dodging cabs and uber drivers. i don't want to ruin the punch line, but did you get the job? >> they did reach out, but it was only a week and a half ago i did this. and take time. >> we keep hearing from ceo's, it's hard to find talent, i cannot find enough people. the unemployment statistics in the technology world is the lowest in this country and in this industry.

what is it like to be someone looking for a job? >> i think it's fun. finding a company -- >> looking for a job is fun? jeez. >> finding companies that are super passionate and responding to that is sort of the struggle. once you find that, you want to be working around people who are just as passionate as you are. >> the rest of the world hears about the perks of silicon valley, the free food and the gyms and all that stuff, and i think we are crazy out here. are you with a driver's seat where you can get the job that you want and you can take the right environment or money or whatever? >> personally, yes. i have worked at google before but the perks don't really matter as much to me as they might to a recent college grad. i'm more looking for an awesome team and product i care about. >> because you want to make something great or not suffer while you do it? >> making something great is

definitely the focus. >> because when i came to this job, one of my goals was no -- i had to do it and are links of my career, and with success that is the "bloomberg west" motto. i wonder if that is something your tongue to optimize for. >> i've been lucky so far. i have not encountered that. but i'm sure if i did work with people like that, i would want to make sure -- >> and what interests you? >> i use this almost every day to track my runs. i got super serious about running after he started using these quantified self-apps tracking my runs. really a geek when it comes to visualizing my exercise data. >> i think everybody in the world knows that you are a geek now, talking about visualizing your exercise data. david miller, thank you.

it the latest headlines all the time on your tablet, phone, and bloomberg radio. more of "bloomberg west" tomorrow. ♪