>> welcome to bloomberg west. we are going to get a chock of your top headlines. angela merkel and francois hollande have left moscow after emergency talks with president vladimir putin. they try to diffuse the fighting in eastern ukraine. the talks were constructive but there is no resolution. the leaders will firm up a new proposal with input from russia over the weekend. the drop comes after u.s. added

257,000 jobs in january, capping the best three-month stretch of job growth in 17 years. the better than eight debt better than expected economic growth may raise interest rates sooner rather than later. and president obama is pushing his plan to allow qualified american students to go to community college for free. here is the president speaking at ivy tech in indianapolis. >> my number one priority is to make sure that the american people possibly just -- people's wages and incomes are going up. since the stock market has gone up, corporate profits are at an all-time high. corporate balance sheets have not been better in history. that is according to bloomberg. >> he does seem to make that an

important goal. turbotax has temporarily suspended its state filing tax returns. software services may have been used to file fraudulent returns. federal filing is not affected. the hunt is on to figure out what is behind the massive hacking attack against anthem, one of the largest that's ever about medical related data. this includes fingerprints of a state sponsored attack. tuna people familiar with the investigation say that it's worth pointing out. the fbi is on the case. why target a health insurance company? government workers get their insurance through anthem according to something familiar with the investigation. this is incredible that a nation would be behind the attack.

>> it is the kind of thing that criminals would normally go after. it seems to me u.s. government is part of a larger mosaic. these giant databases they can cross-reference for basic espionage. it is trying to build larger profiles. >> is it the fact they are just building the database of every u.s. citizen or are there particular things they may be after? >> they may be after a much

smaller group of people. those people are in that database. he and fact was an anthem customer and was going to reset his password. it was a wide net. >> it is just incredible that a company like anthem, all they do is collect data. protecting data is job number one there. is that direction of the investigation? >> there is a lot of information that will come out as the investigation goes on further. the fact they discover this attack on their own is a good sign. that is not an easy thing to do you i think there are lingering

question of how the attackers had been in there, but other data they may have had access to. i think those are questions that have ms. going to have to face now. >> a fascinating story. our cyber security reporter in d.c., thank you. north korea is becoming more active and interested in the cyber security world. how are the security experts responding? we're joined now from washington. this is an incredible story and i feel the nature of the threat is dramatically changing. >> that's right. not only are we seeing attack routes from china and russia now we are looking at the digital front lines. the report we put out this week focused on military intelligence. that is the core targets we're seeing these groups go after. >> has this been going on for a while or is there a real big change here? >> i think what

we're seeing is a recognition the fibers aces a domain with the same security risks and more security risks than we are seeing in the physical domain you we are seeing it from corporate entities that get hacked. we are seeing the 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 want to get to that in a second. i'm trying to imagine what does. what this fire i do? what happens on a detailed the as soon as you hear about the new threat? >> the key to any investigation is taking the time to understand what did the act -- what did the hackers to? how are they doing it and what are the tools behind it? we are always reluctant to jump to a conclusion about who is behind something.

we want to get the forensic details and not say, since this tool was used in must be the same group. we way to make those assessments. >> do an army of consultants march into -- get on a plane and fly to indiana and go to anthem headquarters, or is it a harvey keitel character? what happens on the ground? >> it happens in every investigation. the most import thing is having the guy with the one ton brain in the room. whether it is the chinese that are behind it or in enterprise like cyber criminals, you want the smart guys thinking about the new way an attacker might have gotten in. >> picturing a guy with a one ton brain. what a problem to have. >> we know a few.

>> i want to talk about a serious story. i am amazed that that board countries like syria and north korea can be on the forefront of hat. -- of hacking. is that not the right presumption? >> you are touching on a court assumption we have been having for some time. it is that you can have an adversary with very little resources. they are able to take down a huge corporation. are they able to get military intelligence that is creating impact on the ground in a four-year conflict? these are the dynamics that are happening with actors that aren't particularly well known for their military capabilities in the past.

>> syria was using fake profiles of hot chicks to lower jihadists. tell me what happened. >> they were taking pictures. they build a skype profile with a woman. she will start chatting up someone presumably on the battlefield, start getting some information. then she sends a picture of herself. and the picture is laced with malware. the attacker has the ability to cover my cell phone and the computer. >> were they after a specific battle plan? >> that was the core of their report. everything from munition lists and weaponry to went to bring

stretches down to the battlefield down to humanitarian information, and of course the conversations that are really the key military intelligence. what supply route to they need to look at? it changes the dynamics of the conflict. >> it is incredible it is actually happening. we really appreciate it, what it -- what an amazing story. twitter has not figured out how to answer the problems of user growth of the company's cofounders are sending tweets in support of the ceo. what are -- what is the story of the really interesting quarterly results? that story is next on "bloomberg west." ♪

month -- >> the video is incredible, showing the plane just after takeoff. one engine wasn't working and maybe they shut down the other engine. pilots undergo new training. 35 people were killed in the crash and 15 survived. a new government chose a bank executive to run the state run oil company. he takes over a company that just saw its ceo and five top executives resign admit a corruption scandal. investors do not like this choice. shares are falling in concerns

-- falling with concerns of the new ceo. alcatel loses the company -- that number boosted by many year-long running cost controls finally taking a fact. this year is the final leg -- final leg of a three-year restructuring plan. fourth quarter up 97%. 579 million. the company did posting our -- a narrow loss. it shows signs of slowing from last year. when will greater -- when will twitter fix its user growth program -- user growth problem you go a really interesting and confusing quarter for twitter. the poorly written press release didn't help, with a through in confusing user growth.

they said they lost uses because of an ios transition. they send the user growth is now going to go back to what it was a year ago. >> they talk about it being traditionally a slow quarter. i think the story was good and the stock has short up 17% today. >> i maintain i don't care about stocks. you do see a big turnaround reflected in the share price. what is going on with the growth? >> they have obviously identified it is a problem that is slowing. all of the work that goes on behind the scenes takes a long time. it takes many quarters for that to start growing. >> what is going on behind the scenes? >> they rebuilt the product and engineering team. now they put some focus on getting the best people in there to get the focus on this problem and finally solve it.

this is a product that is interesting and applicable to a much larger audience. there is a user growth problem. >> it is interesting with this company. there was a leaked memo about abusive users. there was one sentence that grabbed me. the entire management team agrees with me as if she has the support of the ceo. the councils doing a great job fixing things. there was a barrage of tweets from the cofounder. williams out there talking about our cold founder, saying there isn't a single person who has been thinking longer but twitter than that. he was one of our first angel investors, our chief operating officer, the creator of a revenue engine. all these tweets from people that really, the rumors were

they were pulling against him. then i think he has done a great job. there have been a few quarters for them. i think he is rebuilding the team. they have a really good vision and you are starting to see that product momentum come in. >> the number that looks really interesting is revenue per user. it seems like figuring something out or is it advertises figuring out how to use twitter to promote? >> twitter is still really early in the revenue story line. there are a lot of levers they can continue to turn area >> -- to turn. >> what is the data that twitter should be able to generate? it seems like that is the goal for twitter things they're going to have the biggest audience of

any media company out there. >> a unique viewpoint is mostly around interest. >> it is about your aunts and cousins and friends from school. he doesn't understand you are changing interests. they are talking about getting this content and third-party site. a really unique view of others. >> is the immediate see what makes it unique -- the media see what makes it unique? >> advertisers jump into that one moment in time and put a message in their. it makes it hard for advertisers to be able to jump into that.

there is also the big opportunity and big upside. >> thank you very much. up next we will talk about pandora and the company aiming a big game changer. that story next.

, pandora is based in oakland, california. the company is singing the blues. the most they have been down in a single day after some disappointing news. they did add a 5 million active new users.

lucas, a really interesting quarter for pandora. 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 cannot win. they had a sharp decline. this time i don't know that content costs for the issue -- you were referencing analyst notes earlier. what people seem to be responding to our their revenue and profit both missed forecast. and their guidance for next year was not as good as they had hoped because they said they were going to reinvest in all profit operations, which means nothing returning to shareholders. there is a lot of uncertainty

about future cost us pandora has worked hard to cut the percentage of cost that they are playing. there is some uncertainty about what the cost will look like for pandora. they have made a couple of direct deals. berlin is a consortium that consult with a bunch of independent labels. to cut out the middlemen that are responsible for negotiating on behalf of those labels. it is a way of raising that uncertainty and establishing direct relationships with this data and trying to be a better partner for the music industry. one of the big themes is while there has been a stretch and conflict they now want to

improve those relationships going for it, which they had hoped will also sway investor concerns. >> i feel like company that missed analyst estimates an understanding -- they are still growing in terms of users. their revenues are not flowing from one to the next. >> they said on the call yesterday that the terrestrial radio industry is something like a $17 billion industry. it is far and away the largest radio service, pretty much the only one of its size. it is still struggling to grow at a rapid rate. >> lucas shot, an interesting report. what is the future of transportation?

here is a hand that may include some self driving cars facing challenges and regulators next on bloomberg west.

>> technology and transportation go hand in hand. it's a thing that changes the way i walk into work. 30 years from now cities are going to be very different and transportation is going to respond. the topic, future transportation. take a listen as they speak about what regulators can do to

encourage new technology. >> one as 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 actually game faster approval into the marketplace. we have to look at our own regulatory framework. this is not only at the federal levels but at the state and local level, to make sure we are being as flexible and adaptive as we can be. that is what the future is demanding. our transportation system isn't the old system that it used to be. it can be a very dynamic and innovative area. if the regulatory system is too antiquated, we are going to lose opportunities to move forward.

>> you are aware of our car activities and so forth. does the federal government support -- this is essentially regulated by the state and the federal government supports we are doing? in other words, what is the view of all this initiative? >> our main northstar is safety. as long as we are convinced that it is safe i think we are then talking about how do we go through the process of getting it certified and out to the market. from our perspective we see a lot of promise for innovation to do a lot of things we care deeply about. we have seen an 80% reduction in fatalities and accidents in cars since 1960. >> 80%?

>> due in part to technology. the technology was everything from the seatbelt to different lighting systems in cars and so forth. we now believe that a lot of reductions in fatalities in accidents that we take for granted today can be reduced with the adoption of technology. we are bullish on technology. part of the reason i am here is we are here to say the department of transportation wants to lean in and get more automation deployed. we have to do some more homework. >> lots of questions on aviation. there is the free flight programs, the modernization of the faa.

what is the status of the law with respect to the use of drones? as i understand it there is a deadline to produce an answer to other questions. >> currently commercial use of an unmanned aircraft is banned. absent an exception. what the faa has designed is a process on a case-by-case basis that reviews applications that come in. we are seeing many of them come through. we allow for exemptions in the movie industry for the use of unmanned aircraft. we have been working through development with what we are calling a small unmanned aircraft that will provide a

lot more flexibility for the commercial use of these devices. that is work that is ongoing through the faa and through the white house. we are moving through that process as quickly as we can. them after that discussion schmidt and fox took questions from the audience, including the future of passenger chains on the east coast. , i do think we are going to see high-speed rail in this country. i am seeing some activity in texas and florida that encourages me this will be something that happens this country. >> of the next we will talk to a company that makes a sundance worthy movie with an eight dollars iphone app area amazon

fire tv, apple tv, we are there.

>> the technology and equality debate has found a new venue in the desert. burning man, a weeklong festival that attracts enthusiasts and burners was a hotbed of controversy as the clamping -- the glamming has been outed. felix, i know that you know this, but this is a hot issue. are they going to make it or break it? >> they really blew up in september this woman wrote a tell-all account about her experience working as a

bartender and server or as she put it, a sure. >> they call them sherpas there? >> this portrait was incredibly unflattering. it turns out the guy was named jim tenenbaum, who was the founder and ceo of foresight capital. he also recently joined the board of directors at the burning man project which is a nonprofit organization that ran all this. people were furious that this was violating everything burning man stood for, and not only was it an egregious invasion of the 1%, but this is somebody who is supposed to be promoting the core values. >> and those values are -- >> i think they are cool. i talked to people who go to burning man.

they feel like their lives are changed. they reconnect with their core priorities. people have this serious experience when they go to this. >> one of the 10 principles that is really at stake is the idea of radical self reliance. everybody that goes there has to participate, volunteer, do things with themselves. wealthy people have always been going to burning man, but people like there was this leveling effect. even if you are a captain of industry or celebrity, you throw on your costume and go out there and party like everyone else. what upset people about this camp was there was a staff of dozens of employees. anybody who pays for the camp had to pay $16,500 for the week. anybody who didn't have a wristband wasn't welcome inside the camp to get drinks. it was an exclusivity that

bothered people. it was one thing to throw a lot of money into a burning man camp. but if you do that you are supposed to welcome everybody in. >> and make it open. it is one thing to wall yourself off at burning man. we did this story last year about this documentary. it got a lot of attention on showtime and represented what the core spirit of burning man was all the way back to when it was in san francisco. it really captured the magic of it. i am wondering if because the magic is so magical that the more disgusting aspects are not coming out about burning man. >> it reminds me of a lot of startups in the operation that has these core values. how do you maintain those values? for the story i interviewed one of the cofounders of burning man. his point was essentially, some of these camps are distasteful

but from his perspective he would rather have the 1% coming to burning man, because ultimately he felt burning man will change them more than they change burning man. >> have you been? >> i have not. i think we should definitely go this summer. >> i don't know if i can pull it off. what is interesting to me is the technology community at the highest levels ceos, some of the biggest companies in all of silicon valley are both part of that rich man's road there at burning man, but take this very seriously. >> it is a great thing. it is unbelievable some of the things people are making out in the desert. as long as you are willing to share every thing you build with

everybody else, i think people are happy to have it come out there. one person that founded distasteful was describing to me they were bringing in an l.a. nightclub or las vegas nightclub into the middle of burning man. i think that is what his people off the most about this. everybody is welcome. when you are there, you have to be open to everybody. you have to share everything. >> thank you very much. let's get a check of the bloomberg world headlines. authorities raised -- seven vehicles, his mobile phone, and cash among other assets. it is part of his trial for alleged insider trading and

market manipulation. four of his startups have been part of the ebs group and now have gone a corrupt. for the first time today saying the mass collection of internet and phone data in the country was illegal until late last year. u.k. investigatory powers said the sharing program within the u.s. fire related free speech laws. the court said internet -- said current rules are now legal because of the disclosures made by the government in december. bidding for the next round of rights to air premier league soccer matches closes today. they couldn't pony up some serious cash to broadcast the world's most popular game. more than 4.5 billion dollars for three seasons of football. you have eight dollars and an iphone. you could be the next spielberg scorsese, spike lee?

making movies on the iphone. that story is next.

>> this is bloomberg west. the film can drain surprised audiences at the sundance film festival by predicting -- by detracting -- by depicting the gritty life of a transgender prostitute in hollywood. the claimed film was shot almost entirely on an iphone, thanks to an eight dollars app. the company behind the ad joins us now on the phone from seattle. this is an incredible story. i feel like the democratization of filmmaking, taking a lot of the cost only and letting the film makers make what they want to make is an incredible thing for movies. >> i think tangerine is a

perfect example of be an lit in traditional circumstances. it is a perfect test case for any unique story you want to tell, having the opportunity to do it. if you tell it well there is an audience for it. not only did it premier but it got picked up for worldwide distribution magnolia pictures. i think it is a fantastic story and a validation for what we are trying to do. >> talk to me about how the app works and what has to be done to the images that stream in. i did a piece the other week about a selfie stick. i was amazed at the quality of the video of my iphone 6. it was hard to imagine a phone could be that good. what the you have to do to make the images even better? >> increase the data and the bit rate as one of the core benefits that we do giving them feel that

given the film maker more visual information. it will hold up better in. you think you as a soldier and they must is made, white balance, and that way you can die a live. the whole core objective is bringing it to everyone the world over on a mobile platform. >> is the goal to create an app to allow films to be made? or is it to help people take videos with phones that are so

their videos of babies are cap can be of higher quality? >> as the word gets out about the app, certainly at the consumer level, it was initially conceived for film students, filmmakers cinematographers. it has been picked up by newspeople and journalists the world over, especially in europe. i think that is our core competency and functionality was year towards people who already have some expertise in the space. the response has an overwhelming. we are starting to notice a trend of a lot more and easiest and consumer oriented individuals who do want to improve their video by any means necessary. we think we have a lot to offer there. >> how important is that film

and the critical acclaim it is getting? >> it has been huge. sales have broken records consistently since variety first broke the story on friday. that is fantastic. but it just validates what we have been trying to do for the last three and a half years and hadn't give everybody the power to tell their own story and share their voice with the world. i think you used the perfect phrase, the democratization of filmmaking. it can be filmmaking, documentary, news. >> didn't you do an ad with bentley? maybe the advertisers would be a bit more creative as well.

>> that was a shocking opportunity and another great validation of how much the gap has shrunk between mobile and traditional high-end camera gear. they did a fantastic job. >> cool stuff. founder and ceo of the company behind the app. here to tell whole lot is jim hankins. i like the surprise. it's not that i feel -- them at least 150. >> it is a range. >> it is the number of how many former apple people work at tesla. tesla is employing more former apple workers than any other company. it is influencing how the cars are being designed, how they are being experienced and sold. >> i am constantly critical.

it is a wonder. >> traditional lawmakers are struggling to hire people. it is another challenge they face. >> i wonder how much the deal were apple -- the global case were a lot of tech companies decided to collude and not let people poach employees from one to the next. >> apple is try to take his employees back. >> why aren't other comic or's are featuring that seeing the same? >> who wants to live in detroit? >> you live in detroit. it is a lovely place. tim hagan, thank you very much. you can always get the latest headlines all the time on your phone tablet, bloomberg.com and bloomberg radio. more "bloomberg west" next week. ♪