14/06/2016 World Business Report


14/06/2016

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Those are the latest headlines from BBC World News.

:00:00.:00:00.

Now for the latest financial news with Sally.

:00:00.:00:07.

Does Microsoft have it's head in the cloud?

:00:08.:00:24.

Analysts weigh up the tech giant's move to buy LinkedIn for a whopping

:00:25.:00:27.

And Xbox goes head to head with PlayStation in the latest

:00:28.:00:30.

round of console wars with both sides unveiling new gaming

:00:31.:00:33.

Also in the programme, as we head closer to the UK's

:00:34.:00:44.

decision on its future in Europe the pound

:00:45.:00:46.

We gauge the mood among small business leaders.

:00:47.:00:49.

It's one of the biggest tech deals in history but is it the right fit.

:00:50.:01:02.

That's the question many are now asking following Microsoft's move

:01:03.:01:05.

to buy LinkedIn, the professional social networking website.

:01:06.:01:07.

It didn't come cheap either, Microsoft is paying $26 billion

:01:08.:01:09.

in cash for the networking site, which works out at $196

:01:10.:01:12.

a share, a huge premium on Friday's closing price.

:01:13.:01:14.

The company's shares tanked in value earlier in the year

:01:15.:01:16.

on a disappointing revenue forecast but as you can see

:01:17.:01:19.

when the news broke of the takeover it rocked back, rising by 47%

:01:20.:01:22.

and finishing the day at just over $192 a share.

:01:23.:01:33.

Well it has 106 million monthly active users which gives Microsoft

:01:34.:01:46.

the chance to boost its sales of its business and email software.

:01:47.:01:49.

However, the tech giant is effectively paying $248 for each

:01:50.:01:51.

of those active users leaving many to question if this deal

:01:52.:01:54.

For example Microsoft's last big acquisition lead it to write down

:01:55.:02:06.

almost the entire value it paid for Nokia less than a year after it

:02:07.:02:09.

Here's our technology correspondent, Rory Cellan-Jones.

:02:10.:02:21.

It is a social network for business, linking more than 400 million people

:02:22.:02:24.

worldwide, who make professional contacts, seek new jobs,

:02:25.:02:26.

But now, LinkedIn is being bought by Microsoft in the software

:02:27.:02:38.

The two partners explain why they thought this

:02:39.:02:41.

When you think about Microsoft, you think about professionalism

:02:42.:02:45.

to realise that mission than connecting the world's

:02:46.:02:50.

professionals, and making them more successful.

:02:51.:02:55.

Our mission statements have different words.

:02:56.:02:56.

But at the end of the day, we are really trying to accomplish

:02:57.:03:00.

Connect the world's professionals, make them more successful

:03:01.:03:03.

Just a quarter of LinkedIn members, 106 million people, visit

:03:04.:03:15.

That compares with the 1.65 billion who visit Facebook.

:03:16.:03:18.

But Microsoft is now paying the equivalent of $247

:03:19.:03:20.

Just for context, for the same money it could have bought Sky TV,

:03:21.:03:24.

a business which made big profits last year,

:03:25.:03:26.

when LinkedIn made a substantial loss.

:03:27.:03:28.

The company's last big move, buying Nokia's mobile phone

:03:29.:03:30.

business, went badly, the entire value of the deal written

:03:31.:03:33.

But Microsoft is turning into a cloud computing company,

:03:34.:03:38.

storing customers' data on its own computers,

:03:39.:03:40.

them all kinds of services now including LinkedIn.

:03:41.:03:42.

The hope is the network brings with it something very valuable.

:03:43.:03:45.

The data about each worker in the workplace, their contacts,

:03:46.:03:48.

who they have worked with before, who they would like to work with,

:03:49.:03:51.

is extremely valuable from an enterprise perspective,

:03:52.:03:53.

and for Microsoft to sell services around the world.

:03:54.:03:55.

Some LinkedIn users took to the network to express concern

:03:56.:03:57.

They may need convincing that connecting with Microsoft

:03:58.:04:00.

As well as going on a rather expensive shopping spree in the last

:04:01.:04:05.

24 hours Microsoft has been burnishing its gaming credentials,

:04:06.:04:07.

announcing the release of not one but two consoles at this year's E3

:04:08.:04:10.

They're just one of the companies hogging the limelight

:04:11.:04:14.

at the gathering with Sony arguably stealing the show with its

:04:15.:04:16.

Well Dave Lee our North America technology reporter is there

:04:17.:04:28.

and a little earlier he caught up with the head of

:04:29.:04:31.

What big announcements have we seen from Sony? Well, their press

:04:32.:04:44.

conference has just finished, and their big announcement is that their

:04:45.:04:49.

virtual reality headset will be out this year, in October. The idea is

:04:50.:04:56.

that it brings games into a new world so we can experience them in

:04:57.:05:01.

different ways. This is a big deal for Sony, because it means they will

:05:02.:05:04.

beat the competition to what many people are describing as the future

:05:05.:05:09.

of gaming. They always have the benefit of going second and they

:05:10.:05:20.

tend to make the most of that. Tell us about Microsoft announcing two

:05:21.:05:23.

new consoles, how is that going down? That was a surprise to

:05:24.:05:29.

everyone, really. The first console they announced this morning is a

:05:30.:05:34.

slimmer version of the Xbox. That will be out later this year, but

:05:35.:05:38.

more interesting than that, they said in 2017 they would bring out a

:05:39.:05:42.

whole new console that is capable of flying these high end games. Many

:05:43.:05:55.

parents will think, I only bought an Xbox three years ago, which was when

:05:56.:05:59.

the most recent one came out. I put that question to Phil Spencer, about

:06:00.:06:04.

whether parents should be worried about having to shell out again. No

:06:05.:06:10.

one gets left behind. Staying with your Xbox and continuing to play the

:06:11.:06:15.

games you know and love, we can we think that is great. This is a

:06:16.:06:20.

choice you have is a game. You don't have to move forward, the games are

:06:21.:06:23.

moving out, they will be playable on the Xbox that you bought a few years

:06:24.:06:29.

ago from us, and on the new one. So, the big gamble is that Sony have

:06:30.:06:36.

gone straight into virtual reality, with some that may not be as good as

:06:37.:06:41.

Microsoft's next year. Microsoft that's decided to wait and bide its

:06:42.:06:45.

time. Whether the games will gravitate towards Sony and get used

:06:46.:06:52.

to that, we will find out. If it is not as good as Microsoft, then Apple

:06:53.:06:55.

back via. Two different strategies, both hoping to claim the ground. It

:06:56.:07:01.

will be interesting to see who has made the right call. Thank you very

:07:02.:07:05.

much. While many of the headlines relating

:07:06.:07:07.

to the UK's EU referendum have been generated by the views of big firms,

:07:08.:07:11.

there are in fact more people working in small and medium

:07:12.:07:16.

sized businesses or SME's who will have a chance

:07:17.:07:18.

to vote on the issue. According to the UK government

:07:19.:07:21.

15.6 million people are employed by SMEs,

:07:22.:07:24.

that's 60% of all private sector The combined annual turnover

:07:25.:07:27.

of those business is around $2.6 trillion, that's 47% of all private

:07:28.:07:33.

sector turnover in the UK. Today BBC Business begins

:07:34.:07:36.

its series of films focusing on what this important part

:07:37.:07:38.

of the UK's economy thinks I am and salt, and I'm managing

:07:39.:08:06.

director of a dairy, we have been supplying goats milk to the market

:08:07.:08:11.

and speciality dairy products to the UK and overseas markets. Personally

:08:12.:08:16.

I want to stay in the EU. The farms that suppliers are all farmers that

:08:17.:08:24.

benefit from subsidies. There is a lot of red tape around Europe, and

:08:25.:08:27.

I'm sure there are times when it will be criticised for the amount of

:08:28.:08:32.

paperwork and how awkward it can be to deal with and be part of the EU.

:08:33.:08:37.

From a farming point of view, the subsidies the farms get benefit from

:08:38.:08:45.

that income, and if that were to be taken away, the only thing is that

:08:46.:08:51.

food prices would increase or we would have two absorb costs, which

:08:52.:08:54.

in the current climate is not possible.

:08:55.:09:03.

And you can get more on what information businesses think

:09:04.:09:08.

of the Uk's EU referendum as well as what both sides say

:09:09.:09:11.

on a whole range of issues as the BBC' referendum webpage

:09:12.:09:14.

Unions in France have urged members to provide a show of strength

:09:15.:09:20.

in Paris today as a general strike gets underway in protest

:09:21.:09:22.

against the government's labour reforms.

:09:23.:09:24.

The reforms make it easier for companies to lay off workers,

:09:25.:09:26.

reduce pay and introduce flexible working hours.

:09:27.:09:28.

The government hopes it will help to lower the country's

:09:29.:09:31.

high unemployment rate by encouraging companies to take

:09:32.:09:33.

IPhone and iPad users will soon be able to send Whatsapp messages

:09:34.:09:38.

or book Uber cars via voice commands.

:09:39.:09:41.

The announcement was made by apple at their Worldwide Developers

:09:42.:09:44.

The company also said it would be bringing its digital assistant Siri

:09:45.:09:48.

to the next laptop and PC operating system, bringing it in line

:09:49.:09:51.

markets remain nervous ahead of the events take place this week and

:09:52.:10:11.

beyond. The UK referendum is coming up. Quite volatile, and you can see

:10:12.:10:21.

the figures here. Almost 100 years after she sank,

:10:22.:10:38.

divers are attempting to discover more about the fate of the Titanic's

:10:39.:10:40.

sister ship, the Britannic. Despite also being billed

:10:41.:10:44.

as an unsinkable vessel,

:10:45.:10:47.

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