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This is Business Live from the BBC, with Ben Thompson
Facebook shares hit record highs after profits at the tech giant
Live from London, that's our top story today,
Facebook profits surge as the number of users soars.
We'll assess the results, that have sent shares soaring 10%
The world's biggest advertising company WPP
But does the chief executive, Sir Martin Sorrell, deserve
to be the best paid boss in Britain?
And as American banks opt not to change policy, we ask what is next
to kick-start sluggish American growth.
And imagine if the lift in your office not only
took you up and down, but sideways as well.
We'll be talking to the elevator company which says it is a viable
And as we question WPP boss Sir Martin Sorrell
about his huge pay packet, today we want to know: is any
company boss worth $100 million dollars a year?
the elevator is, it is straight out the elevator is, it is straight out
of Charlie And The Chocolate Factory.
We start in Silicon Valley - where it's been a challenging week
for tech giants including Apple and Twitter.
The world's biggest social network continues to attract
new friends by the millions - and more importantly -
is managing to convert them into profits.
Facebook saw revenue jump more than 50% in the first three months
of the year to over $5.3bn - that's better than Wall Street
That's largely down to booming sales of advertising
But with smaller screens, smartphones have been difficult
But for Facebook, it's seen 82% of its ad revenue now come
The social network has continued to grow and grow.
As of the end of March, 1.65 billion people were logging
That's 200 million people more than this time last yearShares
jumped in after hours trade and if you look at the past three
years you can see the value has steadily climbed from just over
Sarah Wood, Co-Founder and Co-CEO of video ad tech
There were a lot of naysayers about Facebook, how can they get up these
people, how can they monetise them. It looks like they have cracked it?
They have done a great job jumping on two key trends, one of those is
mobile, a massive jump to Mobot consumption, and one is video.
Mobile advertising in video advertising are two of the largest
sectors, and Facebook have converted those into profit. Others are
struggling to do that, I am talking specifically mobile advertising,
that was the key for Facebook. How are they doing it when Twitter
struggles? What Facebook has is massive scale, 1.6 billion users,
many coming back day after day, but it also has data, it is the ability
to target users very precisely by geography, relationship status, and
that really helps. Lets just have a look at how they managed to do it. I
touched on the fact that, on a small touched on the fact that, on a small
screen, we are more easily annoyed by adverts when you are browsing the
things on small screens, and that has been the real shift, how you can
advertise on something that is getting smaller and smaller, and it
seems again, Facebook is doing that right. Consumers are fed up with
interruptive advertising, it is true on large screens and small screens.
What Facebook houses a suite of products that are non-interruptive,
nonintrusive, when the ads play in the news feed, they are not blaring
out, the auto is off, so that is less intrusive, but it can also be
monetised. But if it is less intrusive, does it work for
advertisers? There is always a balance. The challenge for
advertisers is to create great ads that people want to watch and share,
to create a great content and distributed in noninvasive formats
that don't annoy users. Sarah, thank you as always.
WPP, the world's biggest advertising company has announced healthy
trading for the first three months of this year.
Revenues were up some 10% in the three months to March -
slightly flattered by the weak pound but largely thanks to strong
But the numbers have been overshadowed by ongoing controversy
Ir Martin Sorrell is due for a five-year performance
related share award of more than $90 million.
That would make his pay packet this year $101 million dollars.
Electronics giant Samsung says first-quarter profits rose 12%
That's thanks to strong early sales of its new flagship smartphone.
The South Korean firm made $5.8 billion
The new S7 phones were launched in March, and analysts say its price
and a lack of new products from rivals has helped boost sales.
Lloyds Banking Group has announced what it calls a robust fall in
profits. The bank was rescued by the Government at the height of the
financial crisis. The Government has been reducing its stake and now
holds less than 10%. The mission to Mars, we will talk
about that a little later. Elon Mosque has vowed to get more of us
to Mars -- Elon Musk. We are not pointing any fingers!
Deutsche Bank has announced a fall in profits for the first part of the
year, and it is a typical problem, the investment bank has problems.
The investment analyst says 2016 will be a peak year for our
investments. They try to rein add-in to make the bank a little more
profitable. They are telling us to move on. You can check that out on a
life page. Let's talk about the bank of Japan.
The Bank of Japan surprised markets as it held fire on a fresh
round of widely expected stimulus measures, sparking questions
about whether it had anything left in its arsenal to kick start
This was widely expected, but nothing, absolutely nothing from
them today. That is right, and their options are decreasing all the time.
Over the past three years, the bank of Japan has tried pumping millions
of dollars into the economy. In January it went even further by
introducing negative interest rates, and nothing has had its desired
effect yet of used in the country's sagging economy. The central bank
was widely expected this morning to introduce more monetary easing, and
this was seen as even more likely after data came out saying that the
country had fallen back into it deviation. Aneke actually rose on
this news, with investors confident that the bank would act to curb the
falling prices, but on learning that they wouldn't, Nikkei fell, and the
yen also strengthened, so it is not clear what bankers will do.
Charlotte, thank you. You saw it on the screen, but confirmation that of
what that did to the Nikkei stocks. Japanese stocks gave up early gains
and managed to wipe out much of the previous four day rally
after - as we've just heard - the Bank of Japan disappointed
investors by holding off And remember, the Nikkei closed
tomorrow for a national holiday. In Europe, this is how the numbers
are looking at the open. Inheriting the lead from Asia -
as well as the news that the Federal Reserve left
interest rates on hold. We'll pore over the wording
of what we heard from In a moment, but Mariko Oi has
the details about what else is ahead We will find out how the world's
biggest economy performed in the first three months of the year on
Thursday. Originally the expectation was bad, with many economists
forecasting the slowest growth in a year, but some of Wall Street's top
firms have now raised their forecast on Wednesday, and that is because of
the data showing a trade deficit narrowed sharply in March, rather
unexpectedly. What that means is it poses a smaller drag on overall
business activity, and that economy growth may not have been as weak as
anticipated. Which coincides with the Federal reserves and more
optimistic views on the economy. On Thursday we will hear from the likes
of Ford, LinkedIn, Amazon and MasterCard about their forecast.
Joining us is James Hughes, chief market analyst
for at GKFX, a leading online forex trading broker.
James, good to see you. A familiar face to us all. I guess the
headline, if we look at yesterday and the focus from the markets, it
was America's Central bank, it was bank of Japan, the Fed, and also New
Zealand's central-bank, and the headline, central banks do nothing.
We all focus on the Fed is being the most important thing, but arguably
it was Japan that was the most important yesterday. We expected Y20
trillion increase that this already 80 trillion quantitative easing. And
we got absolutely nothing. So it is no surprise we have seen such a big
move in the yen, it strengthened quite a lot. We always moan about
the Fed and the ECB and the tiny amounts that they change the
wording, and that is what they did yesterday. But the reason they do
that is because there are such huge swings in these markets. And the
worry about the global economy, the wider economic Richard, that is
interesting because that has always been the excuse for not doing
anything, and that has now disappeared? And that means we are
going to see some rate hikes in the coming months, because they have in
saying that this global economic downside which has been affecting
the markets, and January, February, sought huge falls in the markets,
but what is interesting is they are saying they have moved away from
affecting the US economy, because they haven't gone anywhere, China is
still struggling economically. Commodities are up, oil is up, but
not as much as we want, so they are struggling, these economies, still,
but they are not affecting the US as much. But it is interesting, because
if the US is sounding more optimistic, it is strange we are
seeing gold, the safe haven... It is because nobody knows what anybody is
doing, that is why gold is rallying! When all else fails, buy gold! We
will talk to you very shortly. We'll hear from a man whose pay
package is almost as big as Aaron's. It's the boss of advertising giant
WPP, Sir Martin Sorrell. We'll ask him whether he's worth
$100 million. The lift - or elevator -
that goes sideways We'll hear from the company
making it a reality. You're with Business Live from BBC
News. The future of the UK's financial
services industry has become a heated battleground for those
arguing whether we should leave But what will the referendum mean
for financial services? Steph McGovern has been to Chepstow
to find out why the race In total, financial services is
worth around ?190 billion to the UK economy, but it is about 12% of
everything we do. So what will taking a punt on EU membership mean
for the financial sector? Let's say I setup my own financial services
company in the UK. Because we are part of the EU, we can do business
easily with the other countries in it. It is called the passport
system. It is why a lot of international
companies will have But the In campaigners
are worried it is at risk. If we were to leave the single
market, negotiate a trade deal along the lines
of countries like Canada, it would exclude financial services,
at great detriment to the UK. And that would mean that a lot
of jobs would be lost, and indeed it would be harder
for us to retain that significant On the other hand, because my
company is in the EU, I have to comply with their rules and
regulations, which have been getting The Out campaigners
say this is a handicap There is an avalanche
of legislation coming out of Brussels weighing down
on our financial services sector Ranging from capital
requirements for insurance companies to restrictions
on accessing talent It makes the UK financial
centre uncompetitive Both sides argue that
the other is gambling with the future of the financial
services industry, but it's anyone's Let's take a look at the tablet.
Greece is back in the spotlight again, just when we thought it was
safe to look away. This is Donald Tusk, the boss of the European
Council. He is tweeting about the importance of renewed talks. Clearly
a lot of worries ahead of the UK's referendum on Europe, any worries
over Greece will be very closely watched.
top story. Facebook told us last night that the revenue has tripled,
because of mobile advertising, we have talked about it a lot on this
programme, why it is difficult to make money from mobile adverts
although from these figures it would seem that Facebook has cracked it.
Imagine if the lift in your office or apartment building not only
took you up and down - but sideways as well -
whisking you to the far corners of the building.
It's an idea one company is testing and says it is possible.
ThyssenKrupp Elevator has been making lifts
since the 1970s, its HQ is in Germany and has 50-thousand
a year, its projects have included the One World Trade Centre in
Its chief executive is Andreas Schierenbeck -
who also holds a degree in electrical engineering.
Andreas, welcome. The producer will show the images, it is hard for us
to get our heads around it, the technology exists? Yes, you can see
it in our test centre in Spain, we are just building a tower in Germany
to install this project by the end of this year or next spring. Why
hasn't it happened before, we have seen it in films, left that could go
in any direction, something people have wanted for a long time, what is
not made it possible before? Maybe it was possible, just not needed. We
can lift higher and higher although the left cannot follow. We needed
new technology to really rich lifts into a level of 3000 metres and of
course to put more cabins in a shaft. So this was driving the
research. There has to be another way to make it more efficient and
better. Amazing images. In 2016 it is rather archaic to hear about
lifts, still on cables to this day. And that has always been a hindrance
on how high you can go. We keep talking about it, skyscrapers, going
up and up. The cable is a thing that has been working for a long time,
although it has definitely two setbacks, first if you have a cable,
it's only one thing moving, and the other hand the cable cannot be as
long as you wish. It can go up to 600 metres and then becoming too
buried to bear the load. So getting rid of the cable is a key part to
drive the technology, it's an enormous thing to do. So what is the
technology that means that you could do this either higher or go in
different directions? The change was that we would get rid of the cable,
if you put magnets, and linear motor on the wall and of course the linear
motor is propelling the cabin to where ever you want to go. And since
you have multiple cabins they have to go somewhere if they hit the end
of the shaft so we move them sideways and bring them down a
second shaft. This makes me feel a little sick! What users would you
have? We talked about office buildings and sprawling sites, where
would it be used? A lot of interest from buildings which are high and
want to have less elevator shafts because real estate prices are high,
I'm talking to you in London, come on! If you have vertical and
horizontal transportation together, going from a parking place in an
airport, directly to the check-in terminal results, changing lifts,
people flow is the top priority of a lot of industries. As the big boss
of the group... Has building always been in your
blood? I worked in the builders differ ten years and then I changed
to buildings because they are fascinating. You take so much for
granted, you switch on your tap water, how does the tap water come
there? How do you get cooling and fire protection, how do you get
upstairs that an elevator, there is such interesting stuff, normally
engineers like Beck and complexes so I like to do that. Andreas, I said
it would be short and sweet, we really appreciated and we hope this
technology gives your company left! Andreas, danke schon.
WPP is the world's biggest advertising company.
In the last hour or so it has announced healthy trading
for the first three months of this year.
Revenues were up some 10% in the three months to March -
slightly flattered by the weak pound but largely thanks to strong
But the numbers are really overshadowed by ongoing
Sir Martin Sorrell is due for a five year performance related share award
That would make his pay packet this year to 101 million dollars
Earlier I spoke to Sir Martin Sorrell
from New York and I asked him if he was worth that amount?
What I have been doing for over 31 years is investing in the company,
never selling shares, always reinvesting. So what you referred
to, the annual report will be out tomorrow and it will confirm the
numbers you talk about, I have kept investing after tax, all of the
amount. So all of my wealth such as it is, is invested in this company.
It's something that my father encouraged me to do many years ago.
He said that portfolio investment was a mugs game and you should
invest in the company you know best, the one that you are in. Will the
shareholders approve? Approve of your pay packet? That is up to the
shareholders. The incentive plan you referred to, they did approve, many
years ago. It was something like 70% or 80% of them proving that plan.
The answer to the question is, when it was put to shareholders for
approval, and every one of our plans has been put up to shareholders for
approval, they were approved. Shareholders can change their mind
but the answer to your question is, they had the chance to vote on it
and they voted in favour. The performance of the company over the
last five years has gone from a market cap of eight and a half
billion pounds to ?20 billion and we have outperformed all the indices
and all our peers because the plan itself was based on that
outperformance. So I am not embarrassed by the performance of
the company, or apologising for the fact that this company is a world
leader and is based in the UK and we are very proud of the fact that we
started at 31 years ago from nothing and it is where it is now. He is a
good talker. There's a lot of controversy about why he is paid so
much but as he says, she built the company from scratch, 31 years ago,
he's been a long time, seen it through the good and about and who
else would the money? Meijer we always argue about shareholder
activism and how much the chief executive should be paid but it is
his company and he built it from scratch. He's almost changed a
generation of advertising and what the company does. Some people do not
deserve massive pay packets when the company doesn't do well. Clearly the
company is making a big loss, in that case, hugely successful and he
gets paid for it. There is a programme in place. And he is
brilliant on TV! He's a really good talker, we always have fun with him.
You mentioned Greece. This is interesting, it's the same old story
and it just rolls on. You've got the IMF and the EU and the European
Central Bank, who lent money to Greece, they are at loggerheads,
Greece cannot pay back all the money. We said this in 2015 and in
2014 and in 2011 and we continue lending! Will probably say this in
July. Donald Tusk has called a meeting to try to organise this.
Greece bow to .2 euros billion to the European Central Bank in July.
-- they owe this money. We know that the talks will go on and on and we
reach a deadline which will be pushed back. It's just the same
thing again. And a word on the timing just before the UK referendum
on the afford your Mac, that'll be interesting because the suggestion
was that nobody would rock the boat until the referendum was done. This
could throw a spanner in the works, it could raise important questions
about the future of the U before the referendum. It could, and what will
also come from the Leave campaign is, we know that the UK isn't part
of the Eurozone, although it is still money from the UK that goes to
Greece. That will be the big thing, when these figures are highlighted.
Not a lot but sum. We are out of time. Thank you for coming in. Have
a great day, wherever you are, we will see a very soon.