14/06/2016 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

An invitation to connect, but will it pay off? Microsoft will buy

LinkedIn in its largest ever purchase. And, we find out why East

Timor's beautiful beaches are empty. Good morning, glad you could join us

for this edition of Asia Business Report. We start off with technology

giant Microsoft, who have announced they will be buying LinkedIn for a

whopping 26.2 billion US dollars, in its biggest ever acquisition. They

hope to tap into the social network base of 442 million users. But

Microsoft have a mixed record when it comes to buying other companies,

so will this one pay off? Earlier I spoke with Jake Saunders from a

market intelligence research specialist. I think they spent about

8 billion for Skype, and how has that fared? What I thought about it

I think it makes a lot of sense. The Microsoft window from two years ago

has transformed. They still have Windows, and yes they do software,

but they are really talking about productivity. Every morning I turn

on my computer and use Outlook, but in terms of LinkedIn, it is about

doing research as an analyst. When they purchased Nokia in 2013, that

was a bust. Could this be another unsuccessful deal? I think if you

break it down, let's look at what LinkedIn is. There are salespeople

within an organisation who are willing to pay about $100 per month

in terms of access to some of the services from LinkedIn. You can't

call up companies any more, you try to go through a switchboard and they

don't have switchboard. You need to go through LinkedIn. The other side

as relationships. Safer example you go to a meeting and find out there

is someone from a college, that is a kind of connection they are trying

to work out. It is about trying to make connections, Microsoft are

doing something similar, and if you dig into LinkedIn they have a number

of other assets. They have an online educational platform, you can learn

anything about advanced Excel skills, down to things like

photography. What could be the risks going forward? Do you think they

paid too much? It is a lot of money, they need to make sure they get

their hands off. They have stressed they will keep LinkedIn as a

separate unit, they will have their own branding and it will be kept

separate. I think if they do that there is a good chance. The thing is

to evolve, maybe by next year we could see something that could

replace professional networking. Yes, they run on a Java programme,

but this is about connections of people. When it comes to connection

of executives, LinkedIn is the first go to Forum. It might have been the

biggest share sale, but plans for an additional public offering for this

Korean firm has been cancelled. It would have raised billions of

dollars, and there was a raid by prosecutors last week on the group.

Earlier I spoke to an expert. They have collected a wide ranging amount

of evidence from the offices, and they will be drilling down to

examine it carefully. As I said, I don't expect it to involve the hotel

business, or for that matter to any great extent the current chairman.

Instead, it will probably involve people in the duty-free business of

the group, and perhaps those who are in charge of the construction of the

new headquarters tower. The IPO has been stood down for now, and you

still believe it will materialise, but don't you think that investor

excitement will wane as a result of this investigation? That is

certainly entirely possible, but on the other hand we seem to be in a

hesitant moment in the markets right now. A couple of months might result

in a benefit to the company. East Timor is one of the most resource

dependent economies, but it is trying to diversify. But very few

visitors travel to the country, a beaches are empty. On the island of

Arturo, a few hours' boat ride from the capital of Dili, the scenery is

superb. The water is crystal clear and you can have the beach to

yourself, although the local ecotourism resort wouldn't mind

larger crowds or a few more creature comforts. We have 88 people on

staff, so we need more money to pay for them. Sometimes in January and

February we are empty. We don't have water, we only have 12 hours of

electricity, and sometimes only six hours. Sometimes none for months.

Many businesses worry that the trickle of visitors is just too

slow. Some of the tourists like the quiet. It is such a remote country

it has such an interesting history, and it is still developing. We

wanted to go to a more remote country, with natural beauty,

because in Bali it is all around tourists. The government does not

want to turn East Timor into the next Bali, and even if it wanted to

the infrastructure is not therefore that industrial scale tourism.

Instead it is thinking smaller and looking at niche options. The

government thinks visitors might be interested in the quarter century

long struggle for independence against Indonesia. The hideouts of

the fighters are places that are not yet explored. The focus now is to

create the necessary environment for this kind of tourism. If Timor's

history is rich, then it's tourism might be golden. This is the annual

caravan festival, recent research shows that 69% of arrivals hope to

take in a little history or culture like this, but only 11% actually do.

You can look at that as a problem or as an opportunity, that people

actually want to learn about the history of Timor lest, they just

have to be good at presenting that. At the moment there are only 58,000

arrivals in Timor each year. The country is hoping its tourism sector

will become something to celebrate. It ranks among the oldest hotel

brands in the world and its Hong Kong establishment has been featured

in a James Bond film. We are talking about the peninsular Hotel group.

They have projects under way in London, Istanbul and Yangon. Today,

they are reopening in Beijing. Being in Beijing with a very good property

is very important to us. We have been involved with the palace hotel

in Beijing since 1989. This is a very well-known hotel in China, very

strong with a long reputation. Now, it is the peninsular Beijing, and we

felt we should make investment for the longer term future, and given

the importance of the paging market. It is a lot of money to invest it in

the context of the importance of the Beijing market we think that is

justified. You have been a long time hotelier, what changes have you seen

in the past ten years in terms of dealing with luxury guests? I think

the thing to say is that there is a much broader population of luxury

guest around the world. Nowadays you have them coming from many different

markets, obviously many more guests from mainland China, luxury guests

from the Middle East, and from the former Eastern Europe. We are now

serving a much more diversify at portfolio of customers, but guests

have also become much more discerning. Let's have a quick look

at the markets, Asian stocks are retreating once again in early trade

after US equities fell for a third day overnight. Concerns about the UK

remaining in the EU have effect of these. Have a great Tuesday,

goodbye.