>> live from pier three in san francisco, welcome to "bloomberg west." i am cory johnson. a check of your top headlines u.s. added 257,000 jobs in january, making the last three months the best stretch of job gains in 17 years. average hourly earnings up .5%. here is economics professor alan krueger. >> we are seeing wages moving higher and inflation moving lower. that is moving towards healthy

real wage growth, what we saw in the late 1990's was was -- was 1.5%, 2%. it is better than the declining wages we have seen so much of the last 30 years. >> the unemployment rate picked up. more americans were entering the labor force, trying to find a job traded the s&p just cut greece's long-term credit rating to b minus. liquidity constraints have got the timeframe for greece to reach a bailout deal. the euro zone government say they will not grant greece's request for short-term financing. the french president and german chancellor are in moscow to meet with vladimir putin. the big goal is to stop the bloodshed in eastern ukraine. merkel is said to be pessimistic about putin's willingness to end the crisis even with the threat of tougher actions from europe. back home it's an ugly day for

tech companies. shares of yelp following the most ever in a single day, actor -- after active users declined. shares of gopro also getting hammered. investors also concerned that the company's coo has retired or left the company so soon after an ipo. now to the lead, the hunt is on the figure out what was behind the massive hacking attack against and some, one of the nations largest ever in medical related data. two people familiar with the investigation say it is pointing to russia or china. the fbi is on the case. but why target a health insurance company? hackers could have been seeking information about defense contractors and government workers who get their insurance through and some. joining us is michael riley, who

broke the story. this is incredible that a nation-state could be behind the attack. >> you look at what was stolen, social security numbers, e-mail addresses, addresses. is the kind of thing the criminals would normally go after. you now have 80 million of them. it's not the kind of thing you would think that normally spies would want, but it seems to me that the u.s. government is considering this as part of a larger mosaic where chinese cyber spies are stealing all sorts of medical data from pharmacy companies, from hospitals. they seem to be building these giant databases they can cross reference for basic espionage purposes. some of them might be to get into the computers of a select group of people and some of them might be to build larger profiles. >> are we to imagine that if

china is the culprit, they are building a database of every u.s. citizen or are there particular things they might be after? >> i think they are after a much smaller group of people. these big insurers, hospital chains, pharmacy chains -- those people are in that database. michael daniel said yesterday that he in fact was an anthem customer and he was going to go out and reset his password. it's a wide net, but then you narrow it down. >> change his password, he should change his name. it's incredible that a company like anthem all they do is collected data. protecting data is job number one around their. are they worse at this them they should have been? is that the direction the investigator is trying to figure out? >> there's a lot of information that will come out as the investigation goes on further.

by some accounts, the fact that they discovered this attack on their own is a good sign. it's not an easy thing to do. there are lingering questions about how long attackers have been in there, what other day-to-day they may have had access to, and those questions are going to be the question that anthem has to face now. >> it's a fascinating story. michael riley, our cyber security reporter in d.c. from china, to north korea, asian states becoming more dangerous in the security of the cyber world. laura, this is an incredible story. i feel like the nature of the threat is dramatically changing. >> that's right. not only are we seeing attack groups coming from china, from russia now were looking at additional front lines in syria. the report we put out this week

focused on military intelligence, the court target we are seeing. >> has this been going on for a wild and we don't know about it or is there a real big change here? >> what we're seeing is a recognition that cyberspace is a domain where the same security risks and more security risks than we are seeing in the physical domain are being recognized. we are seeing it from corporate entities that get hacked. we just talked about two nationstates. we are seeing a variety in the playing field of different actors and different targets expanding on a daily basis. >> the serious story about them using hot babes -- i'm trying to imagine what anthem does. when and some calls fireeye what does fireeye do as soon as you hear about the threat of the new hack? >> the key to an investigation is taking the time to understand what the attackers do once they

got in the network. were they stealing data, what type of data were they stealing, how were they doing it, and what were the tools behind it? we are always reluctant to jump to a conclusion about who is behind something. we want to get details and not just say since this tool was used at a bank, and must be the same group. we wait to make those assessments until we really know the lay of the land. >> how do you do that? is this like a harvey keitel character? what happens on the ground? >> it depends on every investigation. sometimes we are on the ground. the most important thing is having the guy with the one-ton grain in the room. -- brain in the room. we have been doing this for the last 10 years. whether the chinese or an enterprise like cyber criminal are behind it, you want the smart guys thinking about the new way an attacker might of gotten in.

>> the guy with the one-ton brain. >> we know a few. >> i can only imagine. i want to talk about the sirius story. i'm amazed that such backwards countries like syria and north korea can be on the forefront of hacking. or is that not the right presumption? >> you're talking about a core assumption we've had in the cyber community for a long time, the concept of asymmetry. you can have an adversary with very little resources, sometimes very little amount of time and planning behind these activities, and they're able to take down a huge corporation, cause an enormous effect. in the case of syria, are they able to get military intelligence that is creating an impact on the ground in a four-year conflict, creating a

tactical advantage for the other side? these are happening with actors who are not well-known for their military capabilities in the past. >> i want to tell the syria story. syria was using fake profiles of hot chicks to lure jihadists. tell me what happened. >> that might be slightly sensationalized. >> that's my job. >> they will build a skype profile with a woman as actor behind the chat. she will start chatting up someone, presumably on the battlefield, start getting information. the best question she asks is are you on your android or your computer? she sends a picture of herself. that picture is laced with malware. then the attacker has the ability to compromise the phone, the computer and the military battle plan behind it. >> they were after specific

battle plans? can you do -- when you do your post-threat assessmenttell? >> that is the core of our report. when to bring the stretcher bearers to a battlefield down to humanitarian information, and then of course the conversations that are the key military intelligence, how do you plan a battle, where are we going next, what supply route do we need to look at. the core was military details that would thwart and change the dynamics of the conflict. >> i would say it's right out of a spy novel. fireeye threat intelligence manager, we really appreciate it. amazing story. twitter has not figured out how to answer the question of user growth, but the company posco founders are defending managers.

what is the real story behind twitter and it's really interesting quarterly results? we will have that story next. ♪

>> this is "bloomberg west." time for a check of your world news headlines. a pilot set up a wrong engine this week in taiwan. the video showing this plane going over highways just after takeoff grade in the investigation they found one engine wasn't working. maybe they shut down the other engine after the first lost power. 35 people were killed in the crash. at least 15 survived. brazil's government has chosen a bank executive to run the state run oil company. aldemir bendine takes over the new company.

shares are falling on concerns of the new ceo. the company swung to a profit the number boosted by cost controls finally taking effect. turning now to twitter, fourth-quarter revenue of 97% to 597 million dollars. the company posted a narrow loss. monthly active users grew 20% year-over-year. it shows signs of a slowing from last year. when will twitter fix its user growth problem, or have they already? really interesting and confusing quarter for twitter. in my opinion, the poorly written press release did not help. they said they lost users

because of an ios transition or a platform transition. user growth will go back to what it was a year ago. >> it talks about the quarter being traditionally a slow quarter. overall the story was really good for the quarter. >> i always maintained that i don't care about stocks. but i do care. you see a big turnaround reflected in the share price. this is what the analyst did not know what was going on. what's going on with user growth? >> they have identified that it's a problem and it is slowing. all of the work that goes on behind-the-scenes takes a long time, many quarters for that to start compounding and growing. >> what is going on behind the scenes there? >> they have stabilized the management team, rebuild the product and engineering teams. they put a core focus on getting the best people in there to focus on this problem and solve

it. this is a product that is interesting and applicable to a much larger audience. there is a youth -- user growth problem. >> since you brought up the management issue, which is interesting with this company, there was a leaked memo about abusive users. in a memo there is one sentence that really grabs me, something like the entire management team agrees with me. those questions are sort of out there. costello is doing a great job out there. there was this barrage of tweets from the cofounder out there. they are saying there isn't a single person who has been taking longer about twitter than dick, and saying dick was one of our first angel investors the creator of a revenue engine, and our ceo assembled a team. all these tweets from people --

the rumors are, they were pulling against them. >> it has been an interesting few quarters for them. the management is stabilizing. you are starting to see that product momentum really start to come. >> i need to do more work on my financial model for twitter. it seems like they're really figuring something out. >> twitter is still really early in the revenue storyline. there are so many things they can do around targeting. there talking about off network advertising and what mobile is going to do. there's a lot of levers they continue to turn. advertisers are starting to get more savvy in how they leverage twitter. >> what is the dated that twitter should be able to generate that will put it on a different level than all other advertising mediums? twitter thinks they will have the biggest audience period, of

any media company out there. >> the unique viewpoints they have are about interests. >> more than google where the searches showing people -- more than facebook? >> it's about your aunts and cousins and friends from school. google is about specific intent. it does not understand your full interests. that is what is unique understanding your set of interests. as they start to look off network they also start to understand what kind of places you go and browse to. >> is the immediacy of that information what makes it unique? >> during the super bowl -- last year they had the oreos thing. that is truly uniquely twitter. what makes it hard for advertisers to jump into it, and

also what is the big side an opportunity -- upside and opportunity. >> thank you. up next, we will talk about andorra -- pandora. a big game changer for the music streamer. ♪

>> pandora based in oakland california, right over there. the company is singing the blues big time today. shares down the most they have been down in a single day in two years after some disappointing news about the company revealed in the earnings announcement last night. pandora did add 5 million new active users from the previous quarter, but what's the problem? lucas shaw covers the company for us from los angeles.

lucas a really interesting quarter from pandora. stock is reacting huge. i feel like the issue has always been the same, the content is too expensive and pandora can't get around that. >> it seems like pandora can't win. if you look at every earnings report in 2014, they had a sharp decline after each one. this time, i don't know that content costs were the issue or it may be some of the analysts were saying you were referencing analysts' notes earlier. what people seem to be responding to our one, their revenue and profit missed forecasts, and two, their guidance for next year was not as good as they had hopes because they said they were going to reinvest all profit in operations, which means nothing returning shareholders, and analysts did not like that.

there is a lot of uncertainty about future costs. pandora has worked hard to cut the percentage of costs respective to revenue. there is this ruling by the copyright ratings board hanging out there that is supposed to come down at the end of this year. until that happens there's a lot of uncertainty about what the cost structure will look like for pandora. >> talk to me about what they are doing to get around that cost and the deal they have done. >> they made a couple direct deals. berlin represents a ton of independent labels. they made a deal with marlon -- merlin to cut out the middlemen responsible for negotiating on behalf of those labels. it's a way of erasing some of that uncertainty and establishing direct relationships with these labels, sharing data and trying to be a better partner for the music industry. one of the big themes for pandora has been while there was

a stretch of conflict with some of the labels, they now want to improve those relationships going forward, which they hope will assuage any investor concerns. >> i feel like when companies missed analysts' estimates, the analysts of done a crummy job of understanding the company. if you talk to people in terrestrial radio, they're telling you they are getting lunch eaten by the world of pandora and spotify, but the revenues are dripping from one to the new regime. >> exactly. they sit on the call yesterday that the terrestrial radio industry a $17 billion industry. pandora which is the largest internet radio service is still struggling to grow at a rapid clip. it doesn't hold a torch to $17 billion. >> lucas shaw, thank you very much. interesting report.

what is the future of transportation, 30 years from now? it may include some self driving cars. ♪

>> you are watching "bloomberg west." i'm cory johnson. technology and transportation go hand-in-hand. planes, cars, trains automobiles -- is a thing that changes the way you walk into work. 30 years from now, cities will be different, and transportation will respond. the topic, the future of transportation. take a listen as fox speak about

what regulators can do to encourage new technology. >> we have to work on two fronts. technology is being incubated. we need to find ways to be at the table with the idea creators so that we can help you shape those technologies in ways that will actually gain faster approval into the marketplace. the other piece of it is that we've got to look at our own regulatory framework. this is not only at the federal level, it's at the state and local levels too, to make sure we are being as nimble and flexible and adaptive as we possibly can be. that's what the future is demanding. our transportation system isn't the old, creaky system it used to be. it can be a very dynamic, innovative area. if the regulatory system is too slow or antiquated, we're going to lose opportunities to move

forward. >> in google's case, you are aware of our car activities, autonomous cars and so forth. does the federal government support -- this is regulated by the states and federal government supports what we are doing . what is the federal government's view of all these initiatives? >> our main north star on any new technology is safety. as long as we are convinced that it is safe first and foremost, i think we are then talking about how do we go through the process of getting it certified and out into the markets. from our perspective, i see a lot of promise for automation to do a lot of things we care deeply about. number one, we have seen an 80% reduction in fatalities and accidents and cars since 1960 -- >> 80%? >> 80%.

mostly due in part to technology. technology was everything from the seatbelt to different lighting systems in cars and so forth. we now believe that a lot of the reductions in fatalities and accidents that we take for granted today can be reduced with the adoption of technology. we're bullish on technology. part of the reason i'm here is because we are here to say that the department of transportation wants to lean in and try to get more automation deployed. we've got to do homework on our end too. >> another area you are responsible for has to do with aviation and so forth. the free flight programs, modernization of the faa -- there is the question of drones. let's start with the drone question.

what is the status of the law with respect to personal and professional use of drones av's . what is legal what is not, and then as i understand it, you have a deadline to produce an answer to some other questions. take us through the agency's view in all of this. >> currently, commercial use of unmanned aircraft is banned absent an exemption. what the faa has designed is an exemption process that on a case-by-case basis reviews applications that have come in. we are seeing many of them come through. we have allowed exemptions in the movie industry for the use of unmanned aircraft. we simultaneously have been working through development of what we are calling a small unmanned aircraft rule that will provide a lot more flexibility

for the commercial use of these devices. that is work that is ongoing at dot through the faa and at the white house. we are moving through that process as quickly as we can. >> after that discussion, schmidt and foxx took questions from the audience including the future of passenger trains on the east coast, a high-speed rail project linking san francisco with los angeles. >> i do think we will see high-speed rail happen in this country. you're going to see it happen right here in this area. i'm seeing some i can but he and texas and florida that encourages me that this isn't going to be something -- that this is going to be something that will happen in this country. >> that was google's eric schmidt and dot's anthony foxx. coming up next, a sundance-quality movie on an iphone app. ♪

>> i'm cory johnson. this is "bloomberg west." the technology inequality debate has found a new venue in the desert. burning man am a the weeklong festival that attracts artists and take enthusiasts and burners -- talk about a hotbed of controversy, as the glamming of burning man has now been outed. we'll burning man do something about this, and kick out the 1%? felix i know you know this, but this is a hot issue out here about the risks to burning man. are they going to make it or break it? >> they blew up in september. this woman wrote a tell-all account in september about her experience working as a bartender and server or as she

put it, a [indiscernible] in this burning man camp. this portrait that she wrote was incredibly unflattering. it turns out the guy who organized this camp was a guy named jim tenenbaum, founder and ceo of forsythe cpaiapital. not only that, but he recently had joined the board of directors at the burning man project, the nonprofit organization that runs this whole thing. when she wrote this, it blew up and people were furious about how this was violating everything the burning man stood for and not only was this sort of egregious invasion of the 1%, but also by this guy who is supposed to be promoting the core burning man values. >> those burning man values are -- >> i think they are cool, and it's an interesting thing. >> i talk to people who go to

burning man, and they really feel like their lives are changed, reconnecting with their core priorities. people have this series experience when they go to this thing. >> one of the principles at stake here was the idea of radical self-reliance. everybody that goes there has to participate, volunteer, do things for themselves. in the past -- wealthy people have always been going to burning man, but there was this sort of leveling effect. even if you are a captain of industry or celebrity, you throw on your costume and go out there and party like everybody else. you cook your meals like everybody else. what upset people about this camp was that there was this staff of dozens of employees. they had to pay about $16,500 for the week. they were given wristbands. anybody who did not have a wristband wasn't necessarily welcome inside the camp to get drinks. it was the exclusivity that really bothered people.

it is one thing to throw a lot of money and spent a lot of money at the burning man camp. if you do that, you're supposed to welcome everybody in. >> we did this story last year about this documentary "spark," that got a lot of attention on showtime. it represented the core spirit of burning man, all the way back to when it was on a beach in san francisco. but capture the magic of it. i wonder if because the magic is so magical that the more disgusting aspects aren't really coming out about burning man. >> in some ways it reminds me about a lot of stories were you see a little startup indie operation that has core values and suddenly it explodes against bigger and bigger, and how do you maintain those values. for the story i ended up interviewing larry harvey, one of the cofounders of burning man. his point was, some of these

camps are kind of distasteful to us but from his perspective you would rather have the 1% coming to burning man because ultimately he feels like burning man will change them more than they change burning man. >> what an optimistic point of view. have you been? >> i have not. this made me very curious. we should be there this summer. >> i don't know if i can pull that off. it's a fascinating thing. the technology community here -- at its very highest levels ceo's, some of the very biggest companies in all of silicon valley are part of that rich man's row at burning man, but really take this very seriously and feel like they're inspired by it. >> it is a great thing. the creative spirit the art cars you see, what people build there is unbelievable. as long as you are willing to share everything you build with everybody else, i think people

are happy to have the tech ceo's come out there. the one person who was at this camp and found it distasteful was describing it to me as sort of bring an end l.a. nightclub or las vegas nightclub into the middle of burning man. that pissed people off the most about this and made it into such a controversy. welcome come out to burning man, everyone is welcome, but when you are there, you got to be open to everybody and share everything. >> great burners story. >> my pleasure. >> let's get a check of your bloomberg world headlines. authorities razed a mansion in rio de janeiro. the action came after a brazilian judge ordered the assets of a billionaire and several embers of his family seized -- members of his family

seized. four of his startups have not gone bankrupt. -- now gone bankrupt. the u.k. ruled that they spy agencies -- saying that the mass collection of internet and phone data in the country was illegal. the u.k. investigatory powers tribunal said great britain's data sharing program with the u.s. violated free-speech laws. the court said current rules on internet surveillance and phone data are now legal because of disclosures made by the government. bidding for the next round of rights to the premier soccer league match closes today. he could pony up serious cash to broadcast the world's most popular game. "bottom line" with mark crumpton coming up. wha'ts up? >> the u.s. employment report

left many economists stunned at its strength. numbers added to a three-month again but has not been this good in 17 years. add to that the biggest wage increase since 2008. it would seem the jobs market is poised for an impressive 2015, or is it? will the federal reserve see the labor market data as a green light to raise short-term interest rates sooner rather than later? i will ask michelle meyer of bank of america merrill lynch. i will see you in a few minutes. back to you in san francisco. >> the numbers are amazing. i'm glad you will dig in. you got a dollars, an iphone you could be the next spielberg spike lee. interesting story about making movies on the iphone. ♪

>> i'm cory johnson. this is "bloomberg west." "tangerine" surprised all by portray and the gritty life of transvestite prostitutes in hollywood. -- by portraying the gritty life of transvestite prostitutes in hollywood. the film was shot almost entirely on an iphone 5s thanks to an eight dollar app. this is an incredible story. i feel like the democratization of filmmaking, taking a lot of the costs away and letting the filmmakers make what they want to make, could be an incredible thing for movies. >> yes. "tangerine" is an example of a

film that would have trouble getting green lit in traditional circumstances. it is a perfect test case for the world of any unique story you want to tell and the opportunity to do it, and if you tell it well, there's an audience for it. not only did it premiere at sundance, but it got picked up for worldwide distribution by magnolia pictures. it's a fantastic story and a validation for what we're trying to do. >> talk to me about how the app works. what has to be done to the images that stream into an iphone? i did a story about the selfie stick. i was amazed that the quality of the video of my iphone six. -- i phone 6. what do you have to do to the phone to make the images even better? >> increasing the data and bit rate is one of the core benefits that we do.

he gives the filmmaker moore visual information -- we give the filmmaker more visual information. we give the filmmaker as much control over the manual functions as possible to notch his focus and exposure but shutter speed and white balance. that way you can ultimately dial in the shot you want. the core objective is to mimic the controls you would find on a camera that's $5,000, $20,000, and bring it to everyone. >> is the goal to create an app to allow films to be made, april app, or is the goal to help people take better videos on their phones so that they be crawling and cap videos can be of higher quality -- cat videos

can be of higher quality? >> as the word gets out about the app, if it's more of a consumer level. it was initially conceived of for film students, filmmakers cinematographers, broadcast professionals. it has been picked up by news people and journalists the world over, especially in europe. that is our core competency, and the functionality is geared towards people who already have some expertise in the space, but the response has been overwhelming. we are starting to notice a trend of a lot more enthusiasts and individuals who do just like to -- like you said want to improve their video by any means necessary. we think we have a lot to offer their. >> neill, talk to me about "tangerine."

how important is that film and the critical acclaim it is getting? >> it has been huge. it has been a worldwide sensation. sales have broken records consistently since variety first broke the story on friday, says the initial midnight screening. that's fantastic. it validates what we have been trying to do for the last three and a half years, and that is give everybody the power to tell their own story and share their voice with the world. i think you used the perfect phrase, democratization of filmmaking. it isn't just fictional film. aiken the documentary, news -- it can be documentary news -- >> didn't you do an ad with bentley as well? maybe advertisers will be more creative as well. >> yeah, that was a shocking

opportunity and another great validation of how much the gap has shrunk between mobile and traditional high-end camera gear. we think the film maker did a fantastic job. >> neill barham, of cinegenix. thank you. "bwest byte," we focus on one number that tells a lot. what have you got? >> a least 150. it is a range. it's a number of how many former apple people work at tesla now. tesla employs more former apple workers than from any other company right now. it is influencing how their cars are being designed, how the user experience, and how they're being sold. >> i'm constantly critical of tesla's financials.

the car is a design wonder. >> it comes at a time when traditional automakers are struggling to hire people in silicon valley. it's another challenge they face against this upstart company. >> i wonder how much the deal were apple wasn't letting anybody -- the global case for -- a lot of technical companies decided to not let one company poach employees from the next. >>you mentioned the other carmakers. why aren't the carmakers having that kind of success? >> who wants to live in detroit? >> you lived in detroit. i was born in michigan. it's a lovely place, but it ain't silicon valley. thank you very much. get the latest headlines all the time on your phone, tablet bloomberg.com and on bloomberg radio. ♪

>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." the business and economics with a main street perspective. to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines today. shelby holiday looks at the troubled times of golfer tiger woods. emergency talks on the crisis in ukraine intensified. we begin with bloomberg market corresponden