31/01/2013 World Business Report


31/01/2013

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with Sally Bundock and World Trying to win back friends on Wall

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Street. But Facebook shares fall despite a 40% jump in revenue Plus

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- high spirits. Why posh drinks are proving

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recession proof for distilling Welcome to World Business Report.

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Since the world's biggest social network floated last year it has

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been battling to justify its $100 billion valuation, and its shares

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have lost well over a third of their value. It has more than a

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billion users worldwide, but can it really turn that popularity into

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profit? Well, last night its second earnings update since going public

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began to answer some of those questions. Revenues from

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advertising jumped by around 40% from a year ago, to almost $1.6

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billion. More importantly, much more of that revenue came from

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mobile users, a key concern of investors, as that is the direction

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the internet is going. But profits plunged some 80% to just $64

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million. Facebook is having to invest heavily to get that

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advertising revenue, and that has Wall Street worried. Shares were

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down as much as 11% in after hours trade before settling down about 3

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per cent. Here's Michelle Fleury If you were to catch up and your

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friends latest update, forget your PC. Why reverse I getting Updates

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on the go on devices like this. The company has been referred to as a

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mobile company. For the first time in the company's is to be, mobile

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uses top to face that Mac desktop users. Revenue for the war's

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largest social media company grew 40%. It is thanks to a strong

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performance in mobile advertising. Along with a revenue, costs are

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also rising. We make a decision to continue in 2013. This will cause

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expenses to grow at a faster rate than we expected. One press in

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development is something called a graph search. It allows you to

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search your own network. It was the biggest launch yet as a public

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company. Investors are unconvinced. Shares remain below the price of

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the stock market debut. This man believes the concerns are overblown.

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They are proving their majority. They are steadily growing. They

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have been answering key questions over whether they wouldn't ever

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make any money. It is substantial progress. What a boost octet, the

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reality is that the company is moving forward nicely. -- was ever

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the stock did. The company is under pressure to make money. The

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challenge is to make sure that we do not untrained it in the process.

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We now have more analysis from a technology analyst. I think the PC

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just ran was right. This is a company that despite what Wall

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Street may be doing is on the move. They are expanding. I was at the

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campus last week. I could not many see lots of employees about, but

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news that a new campus was being built across the street. This is a

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company that does have a lot of expenses. They are investing long-

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term. Mark as a Bird sees it as a marathon, not a sprint. He hopes to

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be able to see significant profits on the way forward. Employees and

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stockholders will agree. reaction was very short-term in

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your view? It is not looking at the long picture? I think it was short-

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term. Facebook has initial expenses. Long-term it has a good outlook. I

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cannot predict the future. The big question for me is not expenses,

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but whether what they are selling well be in demand and if people

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will turn away. They have to keep innovating. They have a lot of work

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to do. That will cost money. Short- term they may continue to have

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returns not as profitable as expected. They have to tread

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carefully. I'm seeing people say that they will leave Facebook

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because they're worried about what is being done with pictures and

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information. They have to get that right, don't they? That is right. I

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work free company which does work with Facebook. We have written

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about Facebook privacy. It is important. They understand it if

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information they will turn people away. You say they understand that.

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They are owned inns to ground. They did it very wrong. They made a

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mistake. -- Instagram. The company fewer mistakes recen

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used to. Their chief operating officer has officer hass is

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an energetic company. Thank you. Global drinks giant Diageo brings

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out its half-year profits in a few hours' time. Diageo's sales and

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profits have held up well throughout the past few years of

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recession and slow economic growth in the West. But a lot now depends

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on what stake it can gain in the emerging markets of Asia. Jeremy

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Howell reports. Won an Indian tycoon wanted to sell off a quarter

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of his company, they leapt on the chance. They have a 40% share of

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the Indian spirits market. They are now bidding to take a majority

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stake. Imported spirits are expensive in India. The government

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puts tariffs of up to three-headed % on them. If these are reduced,

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the market could boom. A spirits market is important for them. They

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will have 15% of their operating profit coming from Asia. There is

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critical. United's spirits would give access to the growing Scotch

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market. Without the import duties the market in India could be the

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largest. Drinking spirits is an expensive habit. He would have

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thought that during recent lean times, the market would have dried

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out. But this company has been doing quite well. In the US they

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are increasing sales by an average of 5% a year. Profits are

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increasing by 7% a year. These are good times to be a spirits producer.

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They are rapidly becoming the thing to drink. So spirits have been

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increasing. They are taking market share. There is partly due to young

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women. Beer drinking more alcohol than prior generations. They are

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more likely to drink a spirit then a beer. The resource away changing

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tastes in young men. Eastern markets like China, where the

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company is seen rapid growth, it could take decades to build up

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strength in the market. They must make the most of changing tastes in

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Mantua, Western markets. Particularly in the United States.

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In other news: Blackberry's long awaited new smartphones have failed

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to please investors. Shares fell some 12% yesterday after the

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company launched two handsets powered by the new Blackberry 10

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operating system. There's a lot riding on them - analysts warn they

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could be the company's last chance to catch up with Apple and Samsung.

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Most people expected the US economy to slow over the last three months.

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No one thought it would actually shrink, but it did. By 0.1%. The

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first contraction since 2009. The fall in output was blamed, in part,

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