Can Ceo Reed Hastings do to keep the momentum going . A massive snowstorm is west butng the mid businesses hoping to stay ahead with new smart files. A problem that will not vanish anytime soon for snapchat. Hackers broke into a database and swiped 4. 6 million user names and phone numbers. The information was published on redditt. The site was later taken down. In august, they were warned that they were vulnerable. At butched out to snapch have not yet heard back. Is aar to talk about it security and private researcher at the American Civil Liberties union. He is in washington, d. C. Joining us from cleveland is the ceo of tusted sec. This is a bad incident primarily because users are using the service because they think the company protects their privacy and security, but they has learned that snapchat taken a cavalier approach to their User Security and data. This should cause every user to question the entire purpose of the service. Securityes snapchats compared to other companies . Companies respond to the requests of security researchers , disclose them, and many of them even pay fees to researchers who report things in the right way. In contrast, snapchat ignored a report by security researchers. Ofit seemed like these kinds things are happening over and over again. Is there anything that users can do to protect themselves . When you are using a site you are depending on the security around the website and the protection mechanisms they have in place. Twitter and facebook has a lot of security features and snapchat is just becoming popular. The fact that it was ignored since august is alarming. But i do not think this is the end of snapchat. They will learn from this, but it does look really sloppy for how they handled this overall instant. I know several people who were on the list, and even though it had been taken down, it was republished. What can snapchat do to fix this , to make sure Something Like this does not happen again . The cat is out of the bag in terms of the data out there now. The real question is whether snapchat will overhaul its approach to security and respond in a meaningful way to the reports of security researchers in the future. The company did not take those reports seriously tom and they need to engage in some soul searching to figure out what went wrong and address issues like this in the future. Did put out a blog post alluding to the possibility that this could be an issue. David, what is your take on their response, acknowledging this can happen, yet, they say they have added additional safeguards, but it happened anyway. I would be really wary. The type of exposure identified look at they had access to the backend database which is running the application. When you have that level of access, i would be cautious about believing what they say ahead of time. Maybe give them some time to digest what happened, and to strengthen their security. This is a problem for a lot of applications. Only two days into 2014 and skype with microsoft was preached. This is a big problem that we are facing. It will be a big problem in 2014. David, as you mentioned, this happens every so often. It happened with yahoo , so what can companies and users do other than not using these websites . The main emphasis of these corporations need to be protecting customer information. It needs to focus on two areas where hackers focus on. Otherplications and things. These to be a call to action to focus on web application security. All of these things that hackers do our years old. These vulnerabilities are 15 years old. It is just programming things the right way to stop them from happening. 2014, call to action on web applications. Chris, you are one of the first experts at the ftc advising on privacy issues. What would be some of your advice today . So,f snapchat has not done they wanted to hire some good lawyers, an investigation by the state attorney generals, and perhaps a few classaction lawsuits. They will need to up their security game and see the advice of highly qualified legal counsel. Thank you so much for weighing in on the subject. Omething we will continue to cover. Another Security Breach we have been talking about is target. Lawmakers want to ask questions about the data breach that may have compromised 40 million accounts. We are in washington. What are senators hoping to get out of this hearing . It was only a matter of time before congress turned its attention to the credit card breach and now Senate BankingCommittee Members robert menendez, chuck schumer, and mark warner have called on Committee Leadership to hold a hearing as soon as reasonably possible on the safety of Consumer Financial data. The point of the hearing, does Congress Need to pass tougher Cyber Security rules . Senators want to examine whether Market Participants are taking appropriate actions to safeguard consumer data against fraud and identity theft, and specifically in targets case, how did hackers penetrate their system, and why did it last more than two weeks . No date on when the hearing might be. The senate is out of session until january 6. What kind of power does congress have in this space, or is it more of a public grilling . Expect to lawmakers make an example out of target but what is less clear is what congress will be able to do. As you know, they had little luck passing any cybersecurity reforms. This latest letter to the Banking Committee urges the federal trade commission to investigate the breach. Standing outside of a target store last week, senator menendez said they need to know if the ftc has the teeth to hold retailers accountable with fines and penalties. He has suggested they drafted legislation to give the ftc that power. The u. S. Trails other countries in switching from magnetic credit card strips to embedded chips that are harder to compromise. The current target for switching over is not until the year 2020, so we could see that sped up in mind of the breach. There are a few Options Congress can take without tackling the bigger issue of cybersecurity. In the meantime, we will be waiting for hearings like the one being called for and those ongoing investigations. Thank you so much for that update. They have warned riders about higher prices this year, but it did not stop the backlash over its surge in pricing see pricing policy. You can also watch us streaming on your tablet, phone, and on bloomberg. Com. To bloombergk west. Im emily chang. Read 433eessen did not months but he has been bigtime in the new year. Year,rst tweet this hello, is this on . He also called 2013 the best year in Human History and talked about education. Of course, we will keep monitoring his account, looking to more entertaining tweets. Has come under a lot of fire lately with its pricing policy where customers are charged more when demand is higher. That led the ceo to warn users ahead of new years eve that they would have to pay more for a ride home during peak hours, but the complaints are rolling in on twitter. Matt miller is following the story from new york. Uber warned passengers in advance that raising would be in effect. You do have to agree to search pricing before you take a ride. Is this unfair . Not at all. I would question the intelligence of people who are concerned about this, although i think people are intelligent in different ways, so i will not do so. It tells you on the screen the exact amount. That you will experience on the right you are about to take. You have to not only agree to it, but you have to type in the. Umber so that you are aware unless you are a robot, you have to process this information before you get in the car and agreed to pay the fare. If you have an issue with that, why wouldnt you travel in a different way . I went out on new years eve, taxis, the car service we have here at bloomberg, and i paid for all of those things. Wasing full well that uber doing search pricing, i took different modes of transportation. I do not know why it is hard to make those decisions, or that you can regret something you agreed to doing ahead of time anyway. It does not make much sense to me at all. Prices were definitely cheaper if you hold the different people across the other applications, other than uber. Why cant uber consider Something Like that, capping the price as opposed to the usual price . The great thing about the lyft policy is that the extra charge goes directly to the driver. Or problem is not that uber that its new competitors you searching, but the problem is that not everyone uses search pricing. If all modes of transportation we used had surge pricing, it would drive up the supply of people willing to drive in those times and drive down the demand of people willing to pay money to take that kind of transportation. Surge pricing that you would get than be 1. 1, 1. 2, rather three times or seven times. If everyone used this economic model, things would work out a lot better. Uber has been tweeting back at some of these complaining passengers. I would not quite call them apologies because they basically say, we warned you. Do you think there is a tone deafness coming from uber . This is a real sticker shock when you look at these receipts. No. You do not get the shock when you get the receipt, you see it before you book the car. I saw one guy saying he was an mba, from harvard, whatever. There are other modes of transportation in boston to take advantage of. You do not have to use uber just because it is cool and then get angry because you paid a price that you agreed upon but then decided was too high the next day. Certainly another story that we will follow in 2014. Thank you. Cards turned into a house of cash for netflix. Welcome back. Netflix is coming off of a better year in 2013. What does it do for an encore . Jon erlichman is in l with todays new hollywood. Netflix will be spending a lot in 2014. Absolutely. If you think about 2013, it was the year where they focused on the brand. They like to position themselves as one that people will gravitate towards. You may not need netflix, but we will give you a lot of reasons why you will. That with thew rollout of those original series, like house of cards. There is stuff here that you can get that you cannot get anywhere else. And as they introduced new pricing tiers, they are sending the message this is not an all youcaneat buffet at one price. Because we have this exclusive content, if you are watching at home with multiple viewers, there will be some different pricing packages. Of course, making this your focus is not cheap. As they continue with this in 2014, there are spinning big spending plans. The company has talked about the content cost being 3 billion dollars or so. Half 1 million in marketing cost as they continue to grow. And then they continue to spend on the technology. It is ease of use that generally makes people adopt products like what netflix is offering. Netflix has always been pretty brazen about talking about its competition, addressing the competition. Who are the big rivals this year, is it still hbos . The company likes to present hbo as its largest rival. Some say it is netflix versus the cable industry. Becausetalks about hbo hbo continue to do what netflix is doing now, this idea of getting it loose of content. Amazon and hulu will continue to be a part of the conversation in terms of the new Media Players to watch. They are spending so much to build their business around the world, you have to think about competing services in other markets. Now tv in the u. K. That is where there could be some more competitive battles in 2014. Thank you. So what do people behind the cameras think of the netflix strategy . Filmmaker ken burns says he loves the access to the content it provides, but is he happy about his films being on netflix . Take a listen. My traditional platform has been, for 30 years, distribution on pbs, which reaches the largest number of eyeballs. Every kid in america when i grew up had memorized the primetime schedule. Now we have hundreds of choices. We cannot possibly memorize and have appointment tv. I am thrilled with the access, thrilled with the idea that i can fly across the country and watch episodes of house of and that is terrific. Finally we yielded to the idea that the customer is king, not the programmer. This is liberating. We have been convinced sort out that it works. Everything is in flux. Modelis not really the that sends us into the future with any real confidence the way that we used to. Now we are in a new area in which the middleman rates the lines share. There are too many middlemen getting too much stuff on the cheap. Netflix is going to make a deal with pbs and we get a larger share of that because we are the most watched of the pbs shows, butg with downton abbey, it does not completely offset what the old hardcopy sales represented. There is a coming struggle. When those United Artists get together, as they did early on in the old hollywood system, what will happen . That will be an interesting turn of events, when the folks who are there say, this is not as good for us as it is for the people who are not doing anything other than pressing send. Documentary filmmaker ken burns, talking about netflix and tensions to come. It is time for on the markets. York. Get back to new first day of trading for the year. How is it looking . It is a little bit lower. You potentially have this the first day of the year, where you have things from last year reversed. Somont mining is up today, you can see the reversal happening after that record setting year for the snp and the dow, both closing and records. A big mover today. They were cut over at cowan. Sprints bidthat for tmobile is not likely to get government approval without making significant adjustments to divestitures. We are back in two minute. This is the Early Edition of bloomberg west. Im emily chang. Headlines. Erg top december was a big month for u. S. Manufacturing. It expanded at the second fastest pace in more than two years according to the institute of supply management. An increase in Construction Spending helped fuel the gains. 30 people have been killed after a bus plunged into a gorge in western india. Police say the bus hit a truck, causing the driver to lose control. India has the worlds deadliest roads with more than 100,000 killed in crashes annually. The 52 passengers aboard the russian ship stock on their ship in ice have been rescued. The russian crewmembers will remain on a chinese ship in antarctica until the ice breaks up. A blizzard warning has been issued in the areas of the northeast as a powerful winter storm approaches the region. Prepare for the storm which is expected to blanket some areas with as much as one foot of snow, officials are turning to technology. Michigan, minnesota, nevada, and new york will be deploying smart piles that will measure weather conditions and will help to prevent accidents and save millions in maintenance costs. What can we know about how this Technology Works . There is Sensor Technology that can detect the weather conditions mile by mile. If you are talking about a crew plowing roads, getting the information to them is what is most important. Once they have an idea of the conditions they will face, they can do a more effective job in terms of clearing the roads and salting the roads. , talking tooiled you from sunny san francisco, but can you talk about the forecast, what does it look like tomorrow . It is turning colder here in new york. The windchill factor is already in the single digits. Around it will go to zero. Looking at negative temperatures into tomorrow. The bitter cold comes in tomorrow night. Boston has a foot of snow in their forecast, so imagine how brutal it will be. Out on long island, it will feel like negative six. In greenwich, connecticut, it will feel like negative one tonight. I want to talk about what else is happening. A lot of snow coming in tonight. You can see this moisture coming into cold air. When a storm gets as big as this one, airlines are affected. Its take a look at some of the cancellations we have seen so far into chicago, quite a bit. 190 flights canceled. Cleveland and newark have also canceled flights. Airports will get worse tonight. How much snow are we looking at . It depends on where you are. Areas into eastern massachusetts will see the most of it. That is where we have a blizzard warning. In terms of the heaviest snow, eastern Plymouth County as well as cape cod. It will be a blowing, drifting snow event. San francisco is a Perfect Place to be. You will not be contending with this, that is for sure. Thank you so much, meteorologist donnie schneider. Tech start ups have seen the incredible runup in valuations in the last year. All raising funding and multibilliondollar valuations. This before most have notable sources of revenue. So are these valuations cause for concern . Alescine and cristina took the question to former paypal ceo william harris. He now runs Digital WealthManagement Firm personal capital. His thoughts and whether we are seeing a tech bubble. It is getting frothy, but it is different from 1990. It is not as extreme, first of all. Second, the increase in 1999 was all tech, on the nasdaq. They went up three times the rest of the market. Today it is broadbased. About the weather and all the Digital Technology we have. Digital is everywhere. Where is your red flag on digital . It is real, the whole thing. Just think about this one thing. How much time do you spend with people while they are looking at their phone . It is constant. The world has changed. Changed, buthas what is the singular biggest risk to sing Silicon Valley enthusiasm . Overestimating the impact of social media. The valuations are so incredibly high and they have yet to come into their economics. What about the infrastructure . We had a conversation about this , linking in, like oil pipelines, the Cisco Systems of the world, into your programs. What about the infrastructure . Think the infrastructure is coming along fine. Particularly, people trying to innovate, it is so much easier to innovate today. You can get it up and running in a heartbeat. Think of it as the fixit for your cars. Saving