:00:07. > :00:11.This is Business Live from BBC News with Aaron Heslehurst
:00:12. > :00:14.Shareholders don't just like, they love the latest
:00:15. > :00:18.The world's biggest social network and now one of the biggest
:00:19. > :00:20.advertising businesses on the planet.
:00:21. > :00:22.Live from London, that's our top story
:00:23. > :00:42.Well on the way to two billion friends.
:00:43. > :00:44.Facebook gets more popular, more profitable and more
:00:45. > :00:52.Also in the programme: What does President Trump make of this news?
:00:53. > :00:56.China and Mexico teaming up to make cars south of the wall.
:00:57. > :00:59.Mexican billionaire Carlos Slim is the wheeler and dealer.
:01:00. > :01:05.And as always, we'll tell you what's driving the markets.
:01:06. > :01:10.At the moment it's a case of Trump on, Trump off.
:01:11. > :01:14.And there's been a lot of change at Formula One recently.
:01:15. > :01:17.And a little later in the programme we'll be speaking live to the boss
:01:18. > :01:21.of one of the big teams in the sport - McClaren.
:01:22. > :01:27.Zach Brown also has lots of other roles.
:01:28. > :01:30.So today we want to know, what would you like to ask him?
:01:31. > :01:44.OK, everybody is going, what does Trump on, Trump of mean? I would
:01:45. > :01:48.explain why we get to the markets! We start with Facebook,
:01:49. > :01:51.because despite predictions of a slowdown, the world's biggest
:01:52. > :01:53.social network keeps getting more popular,
:01:54. > :01:55.more profitable and more powerful. Late on Wednesday it reported
:01:56. > :01:57.quarterly numbers that were much They round off another year of rapid
:01:58. > :02:06.growth that has seen it become one of the biggest advertising
:02:07. > :02:08.businesses on the planet. Its massive reach has also raised
:02:09. > :02:10.concerns about the amount of influence it can have,
:02:11. > :02:12.and the reliability of information So we put a little something
:02:13. > :02:26.together for you. By the end of last year over
:02:27. > :02:31.1.86 billion people around the world were logging on at least once
:02:32. > :02:33.a month - so-called 1.25 billion of those log on every
:02:34. > :02:39.single day, and the vast Last year they spent almost $29
:02:40. > :02:50.billion placing ads on Facebook - That made Facebook profits
:02:51. > :03:00.of well over $10 billion, Can't wait to talk to Rory about it!
:03:01. > :03:15.These are staggering numbers. However, Facebook is warning it's
:03:16. > :03:17.reaching saturation point for the amount of advertising it can
:03:18. > :03:20.show people on their newsfeeds. Reports suggest it's looking
:03:21. > :03:23.into video ads, as seen on YouTube. With me is our Technology
:03:24. > :03:35.Correspondent Rory Cellan Jones. The numbers do seem witty
:03:36. > :03:38.staggering, yet they keep trying to warn us that it won't be as
:03:39. > :03:42.staggering next time. What is the outlook? The interesting thing about
:03:43. > :03:49.Facebook is it is becoming more and more like Google and Apple. Like
:03:50. > :03:52.Google it has one huge very successful product, which is
:03:53. > :03:57.advertising, and in particular mobile advertising. The vast
:03:58. > :04:01.majority of the profits are coming from advertising on your mobile
:04:02. > :04:04.which didn't exist a few years ago. And when Facebook floated, it said
:04:05. > :04:10.it was a worry, and it has dealt with that and is becoming a dominant
:04:11. > :04:13.force. If you want to advertise to mobile users, which is where most
:04:14. > :04:19.people are, Facebook or Google are the only places to go. And it is
:04:20. > :04:22.becoming like Apple in that it is managing expectations from the
:04:23. > :04:26.market very cleverly. For years, Apple used to say, things are not
:04:27. > :04:30.going to be quite so good next quarter, and then it would
:04:31. > :04:34.outperform. Last time, Facebook said, things could be more difficult
:04:35. > :04:39.ahead, then it outperforms the market and investors are impressed.
:04:40. > :04:46.The other bit of news that came out was this decision by a jury about
:04:47. > :04:50.its Oculus Rift part of the business, company bought a few years
:04:51. > :04:53.ago, the virtual reality business, and there are questions about who
:04:54. > :04:57.owns the technology, and it would seem Facebook is the bad guy,
:04:58. > :05:03.according to this jury. It lost that case, an important intellectual
:05:04. > :05:09.property case, and it was ordered to pay $500 million. Facebook can
:05:10. > :05:13.afford to shrug that off, and we forget, it is basically huge
:05:14. > :05:20.advertising business, but it is sticking lots of money into other
:05:21. > :05:24.areas, artificial intelligence, virtual reality, things that may not
:05:25. > :05:27.pay off for many years, and it is like Google betting on things like
:05:28. > :05:32.driverless cars, all of those new technologies, Facebook betting on
:05:33. > :05:35.virtual reality. Mark Zuckerberg admitted last night it may be many
:05:36. > :05:42.years before that pays off, but it has got the weight behind it to be
:05:43. > :05:46.able to waste money in some areas. And you and I have been around, we
:05:47. > :05:51.are older, I remember sitting here many years ago with you... Speaks
:05:52. > :05:56.yourself! We would talk about the critics saying Facebook has got to
:05:57. > :06:00.learn how to monetise adverts on mobile armour and they have done it,
:06:01. > :06:06.they have cracked it and moved on. This is a company that defies the
:06:07. > :06:11.critics and is here to stay. Mark Zuckerberg right from the early
:06:12. > :06:14.years has defied people who said you should get in a responsible adult to
:06:15. > :06:18.run the company, he shouldn't take it down that route, he should go to
:06:19. > :06:23.advertising faster. He went advertising when he wanted to do it,
:06:24. > :06:26.and has managed it very well. Everyday I see people on Facebook
:06:27. > :06:31.saying, I have never clicked on an ad, I don't know how it works, but
:06:32. > :06:34.that is the secret. The secret sources they give advertisers clever
:06:35. > :06:42.ways to reach people without people being aware of it. You are back
:06:43. > :06:46.tomorrow, apparently. You're not! I am here, and you are and we will
:06:47. > :06:49.talk about everything! Apple, you name it.
:06:50. > :06:54.The viewers love it. Rory, we will see you tomorrow. I will join you in
:06:55. > :06:59.my living room! You won't be awake at that time!
:07:00. > :07:03.I am loyal like that. Let's talk about some of the other news out
:07:04. > :07:06.there. The chief executive of Germany's
:07:07. > :07:07.leading stock exchange is being investigated by prosecutors
:07:08. > :07:10.over the purchase of shares in the company -
:07:11. > :07:12.just weeks before it began merger talks with the London
:07:13. > :07:14.Stock Exchange. Deutsche Boerse says
:07:15. > :07:15.Carsten Kengeter's shares were part of an incentive scheme
:07:16. > :07:18.and they are cooperating The share price rose
:07:19. > :07:22.significantly shortly Germany's biggest lender
:07:23. > :07:30.Deutsche Bank has posted It's an improvement from the year
:07:31. > :07:41.before but reflects the high cost of legal cases and fines the bank
:07:42. > :07:46.has incurred including the $7.2bn penalty it paid in the US over
:07:47. > :07:51.mis-selling linked to the 2008 The bank has more money set
:07:52. > :07:54.aside for such costs and has also recdued it's operating
:07:55. > :07:59.costs. The bank's boss said it showed
:08:00. > :08:03.resilience in a particularly tough year.
:08:04. > :08:08.Look at this, this is a story up your alley. It is about airports.
:08:09. > :08:15.Heathrow's third runway will mean more domestic airport legs, but
:08:16. > :08:19.when? 2030? It will take forever! That is more on Heathrow expanded
:08:20. > :08:27.sometime, not soon. They have been hammered. And profit outlook, the
:08:28. > :08:32.Ghostbusters movie didn't do it for Sony, there was a billion-dollar
:08:33. > :08:33.write down. But is a problem for them.
:08:34. > :08:39.OK. I love this story. A Chinese car company has announced
:08:40. > :08:42.a deal with a Mexican car plant to build up to 10,000 SUVs
:08:43. > :08:52.in the country. It's almost like Tom what you get
:08:53. > :08:57.when you put a Chinese car company with a Mexican car company, you get
:08:58. > :09:00.two fingers up at Trump! That has a lot of uncertainty over the future
:09:01. > :09:06.of trade between Mexico and the US, and the question is, could ageing
:09:07. > :09:15.reap the rewards? JAC motors certainly hope so, and the Chinese
:09:16. > :09:24.manufacturer and ex-ago's Giant Motors are investing millions of
:09:25. > :09:27.dollars at the Mexican central state of Hidalgo. The first cars will roll
:09:28. > :09:33.off the assembly lines later this year. Up to 10,000 vehicles could be
:09:34. > :09:37.produced at the plant within four years, and the deal is expected to
:09:38. > :09:42.create more than 5000 jobs, and the cars will be sold in Mexico, Central
:09:43. > :09:45.America and South America. Very ago! Talk to you soon.
:09:46. > :09:51.Let's stay with Asia and show you some of the numbers.
:09:52. > :09:54.Shares in the region touched a four month high.
:09:55. > :09:57.The dollar sagged a bit after the US Fed Reserve stuck to its mildly
:09:58. > :10:00.upbeat economic view but here's the thing - the bank gave no hint
:10:01. > :10:12.Europe is expected to open slightly lower today.
:10:13. > :10:16.In a nutshell, what's going on with the markets at the moment -
:10:17. > :10:20.is that they've gone from hooray for those Trump economic policies,
:10:21. > :10:25.They've gone from that to - we're not to sure about some
:10:26. > :10:35.Think of it like this - Trump on, Trump off.
:10:36. > :10:38.Let's go and find out what'll be making the news over there.
:10:39. > :10:44.The Federal Reserve decided not to raise interest rates at the end
:10:45. > :10:47.since President Donald Trump took office.
:10:48. > :10:49.Policymakers kept interest rates unchanged.
:10:50. > :10:55.In making this decision, America's central bank said
:10:56. > :10:57.that the US job market is getting stronger and inflation
:10:58. > :11:00.is gradually rising, but it said it wants more time
:11:01. > :11:06.This is pretty much what everyone expected.
:11:07. > :11:08.The Fed has just increased interest rates in December, and crucially,
:11:09. > :11:10.the Trump administration's economic plans still
:11:11. > :11:18.The Fed needs to have a real, clear idea of what the fiscal policy
:11:19. > :11:20.of this government will be in order to effectively steer
:11:21. > :11:36.Joining us is Alix Stewart, Fixed Income Fund Manager at Schroders.
:11:37. > :11:42.Samir was talking about Janet Yellen, no decision as the case may
:11:43. > :11:45.be, but it was all completely expected. What is going to happen
:11:46. > :11:49.next, and when will they make the next, and when will they make the
:11:50. > :11:53.next move? That is whatever but it was looking for, trying to get a
:11:54. > :11:59.change in thinking with Trump coming in, but we got none of that, really.
:12:00. > :12:03.So it is still, let's wait and see. No big market reaction either way,
:12:04. > :12:08.no disappointment or spike or anything, it was like a nonevent. It
:12:09. > :12:12.was a bit, which is unusual from the central bank! The event will be when
:12:13. > :12:17.we hear something from Trump about Janet Yellen, because there will be
:12:18. > :12:21.a concern if these two Boghead is. Yes, we could get a big change in
:12:22. > :12:26.the head of the Fed going forward, which could be a big change in
:12:27. > :12:29.policy. Talking of central bank action, today is Super Thursday in
:12:30. > :12:34.the UK, Mark Carney will be in focus at the Bank of England. Dust explain
:12:35. > :12:39.what Super Thursday is about, because several things go on at
:12:40. > :12:43.once. We get updated growth and inflation forecasts, and the economy
:12:44. > :12:46.has been stronger. Stronger than everybody thought. Stronger than
:12:47. > :12:51.anybody thought, all of the pessimists have been wrong. The Bank
:12:52. > :12:54.of England took pre-emptive action immediately after the vote, so
:12:55. > :12:58.everybody will be looking to see what are they going to do now. After
:12:59. > :13:02.the referendum, you are talking about? Yes, so the question is now
:13:03. > :13:05.when things are stronger and inflation is picking up stronger
:13:06. > :13:10.than expected, what are they going to do? They have cut interest rates,
:13:11. > :13:16.they have been buying bonds, so what will they do? Normally interest rate
:13:17. > :13:20.is the tool for the central bank, but Mark Carney, the Canadian bloke,
:13:21. > :13:26.the big boss of the Bank of England, he has said they could ride
:13:27. > :13:29.inflation even above the target of 2% for a little bit before
:13:30. > :13:33.triggering any interest rate rise. Given that inflation is driven
:13:34. > :13:40.predominantly by the drop in the pound, then yes, he has said they
:13:41. > :13:43.will look through it to some extent, but he has also said there is a
:13:44. > :13:45.limit to how much they will look through it, so everybody will be
:13:46. > :13:53.looking to see, are they caught in a difficult position with prices
:13:54. > :13:56.picking up? In the meantime, this is extremely busy, because you have the
:13:57. > :14:03.central banks but also so many earning stories coming in, and we
:14:04. > :14:06.will hear from the Shall boss later, AstraZeneca, Facebook, there are
:14:07. > :14:13.many, but what has caught your attention? Deutsche Bank, the loss
:14:14. > :14:16.wasn't quite as bad as perhaps it has been previously, and everybody
:14:17. > :14:20.has been focusing on the fines and everything they have had, they are
:14:21. > :14:24.trying to draw a line under that. The question now is how the banks
:14:25. > :14:29.will make money in this low interest rate environment going forward.
:14:30. > :14:35.Alix, thank you for coming on. Was that your first time? That was
:14:36. > :14:41.painless! Even with this man in the chair! It
:14:42. > :14:46.wasn't that bad, was it? Still to come, we will be talking to the big
:14:47. > :14:50.cars of Formula 1, McLaren. Keep your questions coming for what is
:14:51. > :15:01.happening in that arena. You are with Business Live from BBC News.
:15:02. > :15:03.Mobile giant Vodafone have released their trading update -
:15:04. > :15:06.and it shows a fall in group revenues of nearly 4%.
:15:07. > :15:08.The UK business was badly hit - down nearly 4%.
:15:09. > :15:14.Theo Leggett has been going through the figures.
:15:15. > :15:23.What are they looking like? They are not looking too bad. Yes, in the
:15:24. > :15:28.third quarter, group revenues were down by about 4%, ?13.7 billion. But
:15:29. > :15:32.their outlook for the year as a whole is pretty much unchanged.
:15:33. > :15:35.Vodafone says pre-tax earnings at the end of the year will come in at
:15:36. > :15:39.the lower end of its earnings guidance which was for growth of
:15:40. > :15:42.between 3% and 6%. So it's not as bad as it looks on the surface. If
:15:43. > :15:46.you delve into the figures, throughout Europe, which is a big
:15:47. > :15:52.market for Vodafone, it's actually doing well. Growth in Italy, Spain
:15:53. > :15:56.and Germany, but there is the problem in the UK, due to a lot of
:15:57. > :16:00.competition here. It is also down to lower revenues from roaming because
:16:01. > :16:05.of increased EU regulation. And it is also not selling as much air time
:16:06. > :16:08.to so-called virtual operators. So that is one potential problem for
:16:09. > :16:14.the company. But there is another issue, which is death it has
:16:15. > :16:17.suffered from currency effects. This is a huge company operating in a lot
:16:18. > :16:21.of currencies, and that has taken its toll on the bottom line as well.
:16:22. > :16:25.Earlier this week, we had the news from them which is saying they are
:16:26. > :16:30.kind of pulling out of India. They are having problems in India. They
:16:31. > :16:34.have a huge market that, more than 200 million subscribers, but there
:16:35. > :16:35.is a new entrant into the market, 'S reliance, and they have stirred
:16:36. > :16:55.things up because they have offered heavily discounted deals,
:16:56. > :16:58.and that is having a big effect on Vodafone's revenues. So now they are
:16:59. > :17:00.talking about a merger with another Indian provider, Indian cellular, to
:17:01. > :17:03.take on the new threat, but these things take time to get into action.
:17:04. > :17:05.At the moment, Reliance has really shaken things up and that has hurt
:17:06. > :17:10.Vodafone. Thanks, Theo. Another one we have mentioned this shell. --
:17:11. > :17:17.Shell. We are going to hear from their boss. He is saying with the
:17:18. > :17:27.pound dropping because of the Brexit vote, our petrol prices are going
:17:28. > :17:30.up. The big boss of McLaren and Shell will be here shortly.
:17:31. > :17:34.Facebook's latest results are better than expected,
:17:35. > :17:36.making it one of the biggest advertising businesses
:17:37. > :17:57.A quick look at how markets are faring.
:17:58. > :18:11.They have been on edge a bit since the Trump travel ban. They have been
:18:12. > :18:15.using the same expression Trump on, Trump off.
:18:16. > :18:19.Fourth quarter earnings for Shell fell 44% to $1bn -
:18:20. > :18:23.full year earnings were 8% down on 2015.
:18:24. > :18:25.The chief executive Ben Van Buerdon spoke to Ben Thompson
:18:26. > :18:32.a lot of their North Sea Oil assets.
:18:33. > :18:37.There are a number of levers we have to pull in an environment like this,
:18:38. > :18:40.and selling is an important aspect as well.
:18:41. > :18:42.It helps us, but it's not the only lever.
:18:43. > :18:44.Indeed, we have been about $5 billion behind
:18:45. > :18:58.We announced over the last few days another $5 billion of divestments,
:18:59. > :19:00.and we are close to announcing another $5 billion.
:19:01. > :19:03.So that is $15 billion of progress of what we said would be
:19:04. > :19:07.Another big geopolitical issue is the presidency of Donald Trump.
:19:08. > :19:09.He has confirmed his commitment to fossil fuels,
:19:10. > :19:15.That is great news for you, is it not?
:19:16. > :19:18.It's a bit early to see how that will play out.
:19:19. > :19:20.I think President Trump, being the businessman he is,
:19:21. > :19:24.is going to have a lot of focus on a business-friendly agenda.
:19:25. > :19:28.I think President Trump has also said he believes that every aspect
:19:29. > :19:35.of the energy system has a role to play, oil and gas
:19:36. > :19:37.being part of it as well as renewables, I would imagine.
:19:38. > :19:41.And I think that is a welcome development.
:19:42. > :19:44.Of course, we believe that the energy transition that we
:19:45. > :19:47.We want to be part of that energy transition.
:19:48. > :19:52.We want to have a portfolio that is resilient in the world
:19:53. > :20:00.with hopefully less than 2 degrees C in terms of warming up.
:20:01. > :20:06.And we think we can thrive in that world as well.
:20:07. > :20:15.They slide into each other, petrol and cars.
:20:16. > :20:17.The most high profile event is Formula 1 and just last
:20:18. > :20:19.week, its $8bn takeover by America's Liberty
:20:20. > :20:23.But there are many other events with different types of cars
:20:24. > :20:28.and bikes being raced all over the world.
:20:29. > :20:31.Our next guest runs the biggest digital media group in the world
:20:32. > :20:38.Motorsport Network connects hundreds of millions of people
:20:39. > :20:43.around the world who love motorsport and cars.
:20:44. > :20:46.It operates in 60 markets around the world and has been expanding
:20:47. > :20:58.And of course, languages are important in doing that,
:20:59. > :21:01.which is why it provides its various media in 17 different languages.
:21:02. > :21:03.Those services include TV and digital content, live events,
:21:04. > :21:06.merchandising and of course social networking.
:21:07. > :21:08.Zak Brown is Chair of Motorsport Network and Executive Director
:21:09. > :21:17.of McLaren Technology Group - and joins me now.
:21:18. > :21:24.Great to have you on the programme. I want to start with the big story
:21:25. > :21:27.of last week. It's like the changing landscape of Formula 1. Bernie
:21:28. > :21:35.Ecclestone, who pretty much created the whole thing, run it all by
:21:36. > :21:39.himself for a long time. He has kind of been pushed. Liberty Media has
:21:40. > :21:43.come in. How is it going to change things? I think we have great times
:21:44. > :21:47.ahead of us. Bernie obviously did a great job getting Formula 1 to where
:21:48. > :21:53.it is today. I can't think of another sport where an individual
:21:54. > :21:57.had such an impact. He was a second car salesman. Exactly, and he loves
:21:58. > :22:04.Formula 1. That said, we are in a new era. Things are happening that
:22:05. > :22:07.are different from the past. I think Liberty Media and the whole team are
:22:08. > :22:10.going to drive Formula 1 forward. Such a great sport, so much
:22:11. > :22:14.technology, so many different ways to engage with the fan. That is
:22:15. > :22:19.where we have fallen behind and where we need to catch up. To give
:22:20. > :22:26.our viewers a sense of where you fit in, you took over this whole
:22:27. > :22:34.organisation only in December. But you are a racer. You said that was
:22:35. > :22:41.70 lbs ago. You were talking about white! But let's talk about the
:22:42. > :22:44.issue of change in the industry. You say you are excited, but Christian
:22:45. > :22:48.Horner, the boss of Red Bull, told us that he believes the thrills are
:22:49. > :22:53.out. The audiences are falling. It is not about man and machine any
:22:54. > :22:57.more in the same way it used to be years ago, when it was really
:22:58. > :23:01.thrilling. It is now all about technology and the cars and how well
:23:02. > :23:05.they perform. The individual in the car is not so important. Well, the
:23:06. > :23:12.drivers are the heroes. The cars have become too much of the heroes
:23:13. > :23:18.and it is technology warfare, and Formula 1 has always been about
:23:19. > :23:21.technology. But it has lost its va-va-voom. Absolutely, so we need
:23:22. > :23:28.our heroes fighting again on the track. We have got some great
:23:29. > :23:33.racing. We also need to do a better job of telling the story. That is
:23:34. > :23:38.where the Motorsport Networks of the world, with the digital applications
:23:39. > :23:41.and the way we engage with fans, the product is great, but I don't think
:23:42. > :23:46.we have done a great job of showcasing the product and
:23:47. > :23:53.communicating with the fans. Talking of the Motorsport Network, which you
:23:54. > :24:01.are the chairman of, formula E. I am fascinated by this. I have done some
:24:02. > :24:07.stories on it. When you bring up the sound... Just expend what formula E
:24:08. > :24:10.is? It is electric car racing. If you look at where the auto industry
:24:11. > :24:17.is going, they have timed it perfectly. The technologies they are
:24:18. > :24:20.using, McLaren is now providing the batteries in season five. So right
:24:21. > :24:24.now, you have to change cars in the middle of the race because battery
:24:25. > :24:28.technology will not take you all the way through. McLaren have developed
:24:29. > :24:32.a new battery wear in season five, you will be able to use a single
:24:33. > :24:39.car. That shows the rapid progress of battery technology. So I think
:24:40. > :24:44.Formula E has a great place in motorsports. There are a lot of
:24:45. > :24:53.great different racing series. It is not to compete with Formula 1.
:24:54. > :24:57.Liberty happens to own them both. We should get some viewer questions on
:24:58. > :25:04.that. Particle seeker says, when are we going to see a full-size electric
:25:05. > :25:08.McLaren? I don't know. Can you give us a time frame? It is kind of like
:25:09. > :25:13.mobile phones. Remember when they were like a brick, and and now they
:25:14. > :25:17.are on your watch? So I think he was the battery technology progress at
:25:18. > :25:22.that type of pace. Ian says, how close are McLaren to securing that
:25:23. > :25:27.much awaited title sponsor? We have a ways to go. I only started 45 days
:25:28. > :25:35.ago and I appreciate that everyone thinks I have a magic wand. Come on,
:25:36. > :25:41.deliver! We have to wrap this up, but when you came in and with what
:25:42. > :25:45.we are seeing with President Trump, you said surrounding yourself with
:25:46. > :25:48.the right people was important. We are in the people business. We
:25:49. > :25:51.develop technology and we need the right people in the right places
:25:52. > :25:55.with the right resources. Such a pleasure to have you on the show,
:25:56. > :26:12.Zak. We have a much windier spell of
:26:13. > :26:15.weather than we have seen recently. Some pretty unsettled conditions on
:26:16. > :26:16.the cards over the next few days. Brisk winds