Driven by playstation 4 and xbox one titles. Consuls were down 32 . Go pro shares down big today, losing more than 12 today. This was after apple was granted a patent for a remotecontrolled camera system, leading some to believe apple will create a go pro competitor. The Patent Application specifically mentions go pro and hd camera that is resistant to damage. Susceptible to damage. Last nights National College championship game was the mostwatched Cable Program ever. More than 33 Million People watched ohio state beat oregon. It earned espn ratings of 31 . Up 31 from last years title game. Now after the hacking of sony home depot, target, jpmorgan you name it present obama is sick of it. He is renewing his Cyber Security law. The long stalled bill would encourage companies to share information with the government. In exchange, they would be shielded from liability. Here he is speaking in arlington, virginia. At the national Cyber Security integration center. Our financial systems, power grids, pipelines, fuel systems run on networks connected to the internet. This is a matter of Public Safety and public health, and most of this infrastructure is owned and operated by the private sector. So, neither government nor the private sector can defend the nation alone. Its going to have to be a shared mission. Government and industry working handinhand as partners. The president is also proposing to prosecute botnets and give powers to shut down those involved in fraudulent activities. Joining us to discuss the enhancement to security, our guest. Eric, let me start with you. The proposal ill be president , is that what is needed to fight cyber crime . Currently, we have various information sharing communities that are already in the private sector, helping to share information. The legislation being reproposed, cispa, is to help the government. This would do nothing to stop Something Like the sony hack. It is really more to help Cyber Security problems in the government by enabling data access into the private sector. I wonder, erik, just the fact that they are sharing information, will compel the companies to take this more seriously and have a standard set of rules when attacks happen . I do not see this legislation at all enacting that. I think there is separate legislation that could happen to drive that agenda. But cispa in its current form, really, i do not think will provide a lot of improvement in the private sector. Robert, what do you think . I totally agree. I would offer a couple additional comments. There are unintended consequences when you have this kind of legislation. Loss tend to be poorly written. One example, the Computer Fraud abuse act has restricted our ability in the Computer Security industry to do certain types of investigations let me unpack that a little bit. How so . It has made it difficult for us to do broad scale scanning of the internet to see what is vulnerable. There are projects that are attempting to do exactly that. They are meeting with resistance from certain groups that believe they should not be able to do that kind of thing. Erik, its been 4 years now. This bill, in various forms, has not passed. Is anything different now that would help get this through congress . Not really. There are minor changes here and there. But the reason why this bill has been proposed then rejected again and again, is because privacy advocates are making the point that this essentially warrantless surveillance. The concept is cispa is trying to get all the Information Form from from the private sector to the federal government, so that when cyber crime happens, there is no process for warrants to go grab that information. The federal government can instantly correlate all the data and enact on it. I think thats great to enable Law Enforcement to be more agile. But, the way it is currently implemented gives all the data to the goverment. I would love to see some sort of privacy masking of the data. So then, the data is retained, but in encrypted form. Then the government has to get a warrant to decrypt or access the data and correlate it. Collect the data, but dont collect it in a completely unencrypted manner. The notion after the snowden leaks, to see what the nsa was doing with warrantless wiretapping and so on, it seems unlikely that people are going to be really thrilled to turn in their credit card information, their shopping data, every thing else to the federal government. Yeah, absolutely not. Also this has the ability to allow companies to masquerade data sharing as investigations which we already sort of have the problem of Large Organizations spying and using that data to market. It would be very difficult to prove if something was purely an investigation are being used for or is being used for another purpose. Even with masking, which is a great idea, there are still other ways you can use this metadata we have all heard about to derive information about the u. S. Populace. All right, robert and erik, thank you very much. Breaking news i want to get to. The online crafting marketplace etsy is crafting a deal to go public. It is a website that focuses on crafts. Leslie picker has just broken the story here he joins me from new york. This is fascinating. What can you tell us about the deal . What we have learned so far as they are working with Goldman Sachs and Morgan Stanley on a deal. This ipo could raise 300 million. Pretty sizable. We might have a battle of the companies east coast, versus west coast. So far 2015, the east coast is winning. Tupac versus biggie . I dont think this is going down. To raise 300 million, would be a large stock. With the private valuation of over a billion dollars . Exactly. When you talk about the average float size were talking about an ipo of 15 . That is at 2. 5 billion valuation for this company. It is sizable. When you look at their business model, a kind of resonates where with where alibaba was. A platform for small businesses. Individuals making a profit selling on their site, which of course is easy to scale. That is their appeal. Their ceo told Bloomberg News back in 2013 it is profitable. Weve not seen their Financial Sense then, but if they are profitable, that could also be a plus. Bloomberg News Reporter leslie picker, thank you very much. Shoppers dancing in the aisles for the first dotcom boom, but was it a bust . But has instant card figured out the key to making profits in local delivery . Im cory johnson. This is bloomberg west. The grocery delivery instacart has raised more than 2 million. But with competition from tech gianst like amazon and google and the ghost solve Grocery Store deliveries past, what makes instacart different . We find out. Grocery shopping is getting an overhaul. A number of companies are going into the business, notably instacart. Rather than try the app, i decided to try. A little overdressed. I can handle that. The app is the simple part. Pull, select your groceries, hit order. Behind the scenes, it is complicated. They partner with stores like all foods and costco. Whole foods and costco. They stroll he aisles, poke the produce, scan each item as they go. Making sure they get the right stuff. They make money by charging 4 to 6 per quarter and sometimes per order and sometimes charging more if they actually went to the store. They operate in 15 markets and is growing quickly. Dotcom history is littered with the wreckage of failed delivery concepts, but this uberlike smartphone powered outsourced model may give them a better ending. Thank you very much. All right, so i have got something i can do if this tv thing does not work out. What do they do that is different younger . For more, im speaking to heather wake. Heather, thanks for giving me a job for an afternoon. For a short time. I have this webvan tattoo across my chest. I am intrigued by this. Before, they are the poster child for me for the dotcom era. It went to nothing because it was this huge infrastructure play. Yours is different. Very different. We do not have the infrastructure that webvan had. Smartphones are prevalent now. People can make orders via smartphone, ipad. And the shoppers use the smartphones. To do Grocery Shopping for the customers. That is a big change. I cannot tell you how many venture capitalists have set in that chair and said, i am sick of hearing about the uber of that and this. But this is really an uberlike model. Where both the consumer and the provider is using the same technology. Right, and is very convenient for the customer to place the order from the local stores that they know in their neighborhood and have it pulled by one of our personal shoppers who is doing this as a job. Supplemental to Something Else they are doing on the side. Where the interesting things going through the experience in the store, certain items did not scan correctly or some were not available in the size requested. It really involved that sort of person who knows what they are doing shopping for the goods and services. Was that a learning experience for the company . Yeah, i think so. We had to ensure we are training our personal shoppers in such a way that we are providing a great experience for our customers, but also picking the right produce or being able to make decisions for the customers as the personal shopper, to make sure the customer is getting what they are looking for and a great interaction at the end of the day. I learned how to find out if a pear is ripe. Did you know this . You poke it at the bottom. We teach our shoppers that, as well as buying a ripe avocado, all sorts of things. You charge a price for an item based on what you charge. Not based on the store. Does instacart ever take a loss on an item . Right now, we are working with our partners across the board and not have differences in prices for the customers whether it be an of charge writedown charge, but there are circumstances where there are differences in prices for the customers, whether it be an up charge or a down charge. Do you see situations where you could take advantage of commonly ordered items and acquire those in size so you can lower the cost, or is this never going to be part of your model . Were looking to use a new round of funding for three different things. One is category expansion. Second is geographic expansion and finally technology enhancements. That really changes the not really changing the model itself or how we are making money. Category expansions . Such as . Looking beyond grocery. Looking to other retailers and giving the ability to deliver items to customers within an hour. How do you decide what kind of categories work . Why did groceries work for the fairly low ticket items depending on what you selected. Why is it that grocery items worth . Worked . We actually selected one of the most obligated verticals out there. It is a way to get it off the ground. It is complicated, so it is complicated, so we would get easier along the way and better be able to serve customers and managers. How do you decide whether something is worth doing . I think it is looking at what customers would want on demand and sameday delivery. Ask i was surprised. Customers will reach out to our pick me up something for dinner. Yeah, get dinner, special requests, anything they are looking for, and the shopper will get it for them. All right, thank you, instacart general manager. Amazon is looking to cash in on the selling power of woody allen. We tell you about his new gig, next. Im cory johnson. This is bloomberg west. After a disappointing 2014 analysts may have reason to cheer. Amazon shares were upgraded to a buy. Scarlet fu breaks it down for us. Scar, whats up . They had the worst annual performance since 2008, but that may all change. Citigroup analyst mark identifies three reasons. Pipeline growth remains strong. Holiday sales support the fourthquarter numbers and margins are ready to reverse the trend. In other words, the money that they spend on warehouses, video content in 2014 is not likely to get worse. It may even get better. 2014 may have been the low water margin. If you look at the margin over the last five years, they have risen from 2011 22013. 2013. They stumbled last year to 6. 7 . Citigroup predicts margins could expand to 8. 2 for this year. We wait to see how that carries out. But if you look at the past year, there is reason to be optimistic. Optimism always blooms this time of year. Thank you, scarlet. Speaking of Amazon Amazon changed this week. They got attention from hollywood. They are hoping to get a lot more. The company has decided to sign fourtime Academy Award winner woody allen to create his firstever tv series. Fresh off of the momentum from their first Golden Globes win over the weekend for transparent. What kind of name is amazon making for itself . Join me from los angeles, a senior media analyst. Paul, its interesting amazon had award success, because we have no idea how the business is doing of streaming the content. Yeah, i think this was huge for amazon. They got so much attention from the Golden Globes and certainly transparent getting the win in that category was very big. And obviously having Jeffrey Tambor who was incredible actor, jill soloway, who worked on six feet under for hbo eight or 10 years ago, they are bringing a lot of tell it the table. A lot to the table. And i think talent is becoming agnostic as to the platforms on which they will share their wares so to speak. Woody allen is an icon, a huge name, and for amazon to get woody allen is a big deal. That raises awareness for amazon in a major way. This is an iconic director known obviously for his film work on the big screen. Certainly his movies have done very well on the small screen as well. This is just a great move by amazon. I wonder if it is Something Else actually. I wonder woody allen is a classic case of a director whose work some people like and most people dont. I wondered this is true some of there is room in this new Distribution Strategy for the long tail, the people that some people love and most people want, but the economy is there now, the economics are there now where you have more than a few channels to watch and more than a few ways to pay for them. That is right, and woody allen is very polarizing both in front of the camera and behind the camera in his personal life. No question that platforms like amazon take a chance by putting woody allen in charge of a tv show, something his never really done before, and they have the bandwidth, they have the breadth of audience where this just brings attention to them. I think it is part of bringing attention to their roster. If you look at for instance netflix and orange is the new black and house of cards, hbos original series now these entities have the resources and now have the bench of talent to create this original content that is getting lauded obviously by the critical side of things, the Critical Community for the work and such. Awards. This is to me, for amazon, a great step toward building that roster of having great actors, writers, directors, producers. In the name woody allen, like him or dont like him, he is a big name and everyone knows who he is. It heightens the awareness of amazon for sure. And maybe the Golden Globes were really a game changer for them. Paul, thank you. Ibm broke the record for the most patent filings in a single company. More than 7500 new patents last year. What does it mean for the Revenue Growth . That is next. You are watching bloomberg west, where we focus on Innovation Technology and the future of business. I am cory johnson. Ibm has topped the patent charts again. There were 7500 patents granted to the company for the second the 22nd straight year. They have been granted more patents than any other company. Ibm has been the worstperforming stock on the dow for two years in a row. Patents good, company bad . Our guest joining us right now. He is a patent attorney. From new york. Alex, let me start with you. Patents are a big focus for the company. What benefit do they get . They have been a big focus for 22 years. Traditionally, patents are thought to signal where future innovation might come. New ideas, new things where theyre staking a claim and using their big research forced to figure out what is next. The big question like you said, is can they use these patents to write these constantly falling sales they have had for the past three years . The report next week. Whether they are making products their customers want, it is a big question. Chris, let me ask you. I want to say invention, good r d, good, technology, good. What are the real value of these patents from ibm . It is largely a numbers game when youre talking about 7500 patents. That is a heck of a lot of patents in one year. Keep in mind that the u. S. Patent office granted a record amount also. Some degree of inline with the growth you are seeing at the Patent Office. The growth in the patent said they are securing, it does serve their three Main Business models with respect to outgoing licensing, reducing litigation costs, and dividing design providing them design freedom. All three of those are served right having a large amount of patents. They are Lightyears Ahead of the secondplace finisher. There is value that is serving that. I do understand the point about the dips with respect to revenue in the last two years but largely they are bidding across a lot of different technologies. A lot of Growth Opportunities with respect to Cloud Computing and cognitive computing. And Cyber Security. I think the thought here is that will play dividends in the next two to five years. I remember once a long time ago repo