Amazon has kept its number of prime users secret. Some holiday stats offer clues as to how popular it really is. And from wearable devices like google glass, the ipad is in the classroom. We debate the top ads of the year. Lead. Rst, to the after a week of setbacks, the Obama Administration gets a victory in court over nsa surveillance. A federal judge in new york ruled that the collection of phone call data, including numbers dialed and duration of calls, is legal. The judge threw out a lawsuit against the program filed by the American Civil Liberties union. The judge writes that the technology allowed al qaeda to plot attacks remotely. The program represents the government counterpunch. Another federal judge said the exact opposite last week, ruling that the collection violated the constitution. For the latest, lets had to peter cook in washington. Different judge, different outcome. That is exactly right. You have two federal judges into different jurisdictions. One is in new york. The other is here in washington. They have reached to different conclusions. This tells you that the debate is not yet over. This is likely heading on to the u. S. Supreme court. Judge pauley is a clinton appointee. Case andd the imclone a case on unpaid interns. He is ruling in favor of the federal government. It is a big win for their supporters in congress as well. Congressman,he gave his reaction to this. He says that preserves a vital weapon for the government in the war against terrorism. He hopes that judge pollys decision will ease the adulation for Edward Snowden which has become so pervasive. One judge, one outcome. Different from what we saw in d. C. On the 16th. To clarify for anyone who does not follow every bit of information on the story, outside of the courtroom, the Obama Administration has been looking to make changes. They have looked to put their voice out on how they feel about this. How do the stories come together . You have a couple of different tracks. You have the legal track that will continue up to the u. S. Supreme court. Then you have the president responding to all of the criticism and calls for change. He told us before he left that he would announce some of his own changes in january. He will followup on the recommendations of the panel. They offered him ideas. It is not clear that he will adopt all of their ideas, but he says the changes are coming. You have members of congress proposing their own changes to these programs. This is going to complicate that debate in congress. There are strong feelings on both sides. The nsa has gone too far here. This ruling only complicates their efforts. The president will be back in january. President obama has spent time meeting with many of the tech leaders, from here in silicon valley. We have followed how they have reacted to this. Where does this leave them . It leaves them, right in the middle. That is where they have been before. They are in legal limbo where the government is asking them to provide records. They are not in a position to oppose that. The big question is this idea put forth by the president panel. What is the companys hold on to this information and not the government . The government could ask for later. Does that create a greater distance or make it more tolerable from a constitutional standpoint . That is the debate that will play out. The companies have been quiet about that. That is one solution. Thank you so much. Joining us with the latest on nsa surveillance. Now to amazon and new clues about a part of its business a usually does not talk about. Amazon prime. It released stats about the Holiday Shopping season and revealed that it added more than one million new prime members during their week of december the third week of december. They had to halt signups. Jeff bezos says that amazon prime now has tens of millions of members worldwide. To talk about this, our guest host of the hour. He is an educational platform and offers homework help. Julie hyman is also joining us with the latest. Lets start with you. The take away from the numbers that amazon has shared with us. That tens of millions number that jeff is those mentioned in a statement a lot of analysts have extrapolated that to mean that they have in the low 20s range of amazon prime members. The good news is that those members tend to spend a lot more on amazon. I have seen estimates that they may spend six times as much as the average user. They pay 70 for that annual membership. It amazon pays their shipping cost. Amazon is eating the cost of that. These are attractive customers for them. They have also said that on the peak shopping day, which was cyber monday, they saw a 39 increase in the number of orders. Enough looking at a note that says that the increase yearoveryear is higher than anticipated. Looking for 26 billion in sales. They say there is a little room for amazon to meet that. Dan rosensweig, lets bring you into the conversation. Happy holidays. Talk to us about the power of prime. How important is this Membership Program for amazon . Historically, it was probably even more powerful than it is today. Historically, there was a power and battle between walmart anybody online. The power of Free Shipping was a huge moneysaving. Going forward, as products become more digital, we will see. I think it will become more expensive for amazon. A lot of people use it that would have used it anyway. We will see if they will start weaning people off of that Going Forward. You have seen them try to do other things. I think it was genius early on. They built a loyal audience base. Most of those people who are buying all of that through amazon would buy it anyway. Them keepnvestors let losing money, i think they will keep doing it. I do not think it is as important Going Forward as that was. Tooley, what do these numbers tell us about the broader Online Shopping season . There is a lot of optimism that has been surrounding the season. They predicted we would see sales go up 15 . Thelatest numbers say that Holiday Season through december 22, we saw a 10 increase. That was focused on desktops. That does not include mobile. We could see a few more Percentage Points added. These amazon numbers do seem to show that there is a lot of demand. Keep in mind that amazons numbers are about the number of orders. One of the Big Questions coming out this Holiday Season is are we going to see the same trend in Online Shopping that we have seen offline . Lots of discounts. Are we going to see that increase in traffic at the same time that margins are going to be squeezed and sales might be compressed because people are paying less for the stuff they are ordering. All right. Thank you. He will stick around because 2013 was a big year for tech ipos. 45 Technology Companies went public. His company was one of them. Dan will be back with us. Welcome back. That data breach at target may have been worse than we thought. Target says that strongly encrypted data was also stolen in the breach. Be numbers can only encrypted by independent payment processors. Target says that the numbers are still safe and secure. The breach affected shoppers that went to target between november 27 and december 15. 2013 ended up to be a take year for technology i the os. Ipos. 45 companies came from the tech sector. That is the most technology ipo since 2000. Among the big names, twitter. Back with us as our guest host, Dan Rosensweig. You moved in the last couple of months. We sold a house and move to a house. My daughter came home from college. My wife did everything. Our ipo is reaching an anniversary. That is anniversary it of itself. You were doing your ipo roadshow the same time that twitter is doing it. Talk to us about the process. Shed some light on why this is the year for tech ipos. The process is grueling. Youre on the road for nine straight days. You meet with 65 one on ones. You tell your story. It is exciting to represent your company and employees. It is a grueling process. It is a process that needs to be read visited. I do not understand why with all of the technology that exists that you cannot do the things electronically. The reason that a lot of Companies Went public this year is that they were right to go public. They have been around for a long time. The company was seven years old. If you look at the successful ones, facebook, twitter they have reached the age where Revenue Growth is strong enough. Profitability is strong enough. There was a gay reception for ones who had come out earlier. Pandora and others who have been successful. Also, your job is to raise capital. At the best rate that you can raise it. It turns out that the Public Markets were much more willing than the private markets to give companies the value that they deserved. What you saw was just the beginning. Wendy 14 will be even bigger. What changes when you are a Public Company . Facebook and twitter have gone company. The flow int affect the valley. Does that change anything . It changes a lot of things. A lot of ceos will say it changes nothing and theyre not telling the truth. You have a whole constituency of public investors. They do have a voice in your company. They own your company and you run it differently. If you think about all the companies that we like, most of them spend their time talking about modernization. Facebook started to focus on mobile and modernization. Now video and video ads. These are things they probably never wouldve heard about before. Twitter is introducing new ads. All good for the business. Even google. When they went public, they moved their engineers off onto search modernization. Priorities change. At the end of the day, it all equals out. These are Great Companies trying to build hundred Year Companies and tear out the right balance. Coming out of the gate is not the easiest thing. Another theme was leadership changes at older Technology Companies. The obvious one is microsoft. The company is still looking for its new leader. What do you make of their situation . When i make of it is what we have seen. There is probably companies that have been public for 100 years, there are not many of them. Theres one from the west coast, wells fargo. Companies, ibm is probably the only one that has been public more than 100 years. Technology companies have not been around that long. They have to learn to go through this leadership transition. Youre seeing a lot of companies my former company, yahoo , struggled with change for years. There are two models at work. Ebay under john donahoe. And adobe these were older companies that went through model transitions and leadership transitions. You start to see the beginning of that with meg whitman. Microsoft will be a difficult opportunity or challenge for whoever takes it. You mentioned yahoo . Do you think the microsoft board has observed at the yahoo scenario and what has happened with morris the . I think that microsoft goes on its own angle. They have a view of what they want. Marissa has done a phenomenal job. A lot of the benefits outside of yahoo is alibaba. I am excited about the guy who did that deal. It is a wait and see whether the core business will actually change. Theyre looking more at the ebays and adobes in terms of mapping the model. Stick around. We have more questions for you. We want to know about your thoughts for 2014. Dan rosensweig is joining us. Well be right back. Welcome back. I am jon erlichman. You are just now getting your christmas presents, youre not alone. A surgeon must minute orders left the livers scrambling. Retailers had to offer gift cards in exchange. Were talking to john from open sky. Some people are blaming fedex and ups. Some are blaming the retailers. We could probably blame ourselves up we are pushing the buy button late in the process. What do you think . There is enough blame to go around for everybody. You had consumers waiting around to the last minute. You had ups who shouldve gone out sooner to communicate. You have to message her audience when they need to order to make sure the packages get delivered. On open sky, we have thousands of merchants who agreed to fast ship products. If you ordered by the 22nd, they would guarantee delivery. They would live up to that. I really think that theres enough blame to go around. Consumers need to order earlier. Ups needs to communicate better and retailers need to not squeeze in the last order when they know it will not arrive in time. What about where they are ordering . For example, if they are ordering on their phone. Amazon shared wild stats. Toys per second were being ordered on mobile devices. Anecdotally, what do hear about what people are buying on their phone and when . The second fuse matters . This is the year that the phone dominated the ecommerce landscape. We saw more than 60 of our activity on mobile and tablet devices. One of the things that you see is that nobody people are buying 24 hours a day. Theyre not just waiting for cyber monday. Phone think the purchasing relates to is that people are looking to discover more interesting product. They go to open sky or pinterest or other platforms like ours and find interesting goods. On open sky, we have one unified card. They can buy from thousands of merchants. Consumers want to shop not just at the top 10 retailers. They really want to discover more interesting products. A lot of angry shoppers can now take their frustration to social media. How fearful are the brands of the twitter haters . You are catering to a lot of smaller retailers as well. I would imagine that a few things that are negative could be detrimental. Skyhe average item on open was shipped within 14 hours of the transaction. If you are one of the big retailers and one of their systems candidly are complex and robust, they do not have the ability to move as quickly as the small and mediumsized businesses. Their life but lifeblood is serving customers. Your question is a good one. When someone has something bad to say, how do you handle it . You have to apologize and solve the problem. Make sure that you are human. If you do not take care of your customers, they will tell their friends. They will not be your customers for long. 15 seconds left. The whole amazon crew drone conversation. Will this open the door for drones . No way. No chance. Never going to happen. It is incredible pr, but it is not relevant. The last thing people want to see our drones flying around their neighborhood. John donahoe of ebay suggested something similar. Take you and happy holidays. Time now for on the markets. A look at what is moving on the markets every hour. Olivia sterns is here. Stocks are moving sideways. They are edging lower. You can see that the dow was off by 11 points. The s p 500 is off as well. The nasdaq is down by about 11 points. That is being dragged down by twitter. More in a second. Lets get a check on the treasury markets. Up aboves up three percent. This is the first time they have been up at that level since september. The second since september 2011. All in speculation of improving economic data. We may see the fed taper a bit faster. Were are also watching shares of twitter. Chairs are dropping after a 180 rise from its ipo price. Perhaps it is because they were downgraded after the surge. The stock has climbed too far too fast. That is it for on the markets. \ this is the Early Edition of bloomberg west. You can also catch is that are later time. 3 00 to pick it now for the top headlines. More Severe Weather is hitting the united kingdom. Rains and winds over 100 Miles Per Hour are battering parts of england and wales. Storms have left thousands without power and caused severe flooding. They have also shut down trains and caused numerous airport delays. A merger in the aviation industry. Textron has reached a deal to buy beechcraft 41 . 4 billion. Beechcraft emerged from bankruptcy earlier this year. Both companies had struggled with the downturn in orders due to the recession. And Dallas Cowboys quarterback tony romo officially out for the rest of the season. Coach Jason Garrett says he underwent back surgery after being hurt in sundays win over the redskins. Kyle orton will start for dallas against the eagles on sunday. The winner is headed to the playoffs. Now to our special yearend series. The top five. As we wrap up the year, we look ahead to next year. We are talking about the top five gadgets we will see in 2014. Our guest is Dan Rosensweig. He is with us, along with brian heater. Brian, thank you for joining us. Interactive learning told is your number five. Tell us why. I think they are ready. The percentage gdp that is spent on learning is huge in this country. Everybody our in this country is in higher education. Usings are going to start their dollars toward told that help their kids to learn math and science and other things. If you look at what just happened in the last month, or all of those hours of free cod ing time there will be a push to give their kids something of value. This is stuff that you know very well. Get yourwould love to reaction before we get to your number five. We have seen it is really stunning. Were seeing a lot of interesting initiatives in schools. Code. Org has been huge. Were teaching kids new coding. Were seeing them reframe the way that they do education based around these devices. Ok. Were going to move on. Brians number five is google class. It was kind of a 2013 thing. We may see more adoption in 2014. Why is this on your list . This is really only the beginning of this device. Everybody that we have seen our developers or reviewers. To actually get these things onto peoples faces and get developers really excited to see what sort of thirdparty they could create, this will continue to be huge. They will be huge in the next couple of years. Google glass is leading the way. Dan rosensweig, are you a google class guy . I am not. The next three or four years will be an enormous market for it. It will be more of a professional market first. People who spend all of their lives in front of a screen. They will ultimately use it. It is a consumer product. A small group of people will think it is cool. As a new yo