02/02/2017 BBC Business Live

This is Business Live from BBC News with Aaron Heslehurst

Shareholders don't just like, they love the latest

The world's biggest social network and now one of the biggest

advertising businesses on the planet.

Live from London, that's our top story

Well on the way to two billion friends.

Facebook gets more popular, more profitable and more

Also in the programme: What does President Trump make of this news?

China and Mexico teaming up to make cars south of the wall.

Mexican billionaire Carlos Slim is the wheeler and dealer.

And as always, we'll tell you what's driving the markets.

At the moment it's a case of Trump on, Trump off.

And there's been a lot of change at Formula One recently.

And a little later in the programme we'll be speaking live to the boss

of one of the big teams in the sport - McClaren.

Zach Brown also has lots of other roles.

So today we want to know, what would you like to ask him?

OK, everybody is going, what does Trump on, Trump of mean? I would

explain why we get to the markets! We start with Facebook,

because despite predictions of a slowdown, the world's biggest

social network keeps getting more popular,

more profitable and more powerful. Late on Wednesday it reported

quarterly numbers that were much They round off another year of rapid

growth that has seen it become one of the biggest advertising

businesses on the planet. Its massive reach has also raised

concerns about the amount of influence it can have,

and the reliability of information So we put a little something

together for you. By the end of last year over

1.86 billion people around the world were logging on at least once

a month - so-called 1.25 billion of those log on every

single day, and the vast Last year they spent almost $29

billion placing ads on Facebook - That made Facebook profits

of well over $10 billion, Can't wait to talk to Rory about it!

These are staggering numbers. However, Facebook is warning it's

reaching saturation point for the amount of advertising it can

show people on their newsfeeds. Reports suggest it's looking

into video ads, as seen on YouTube. With me is our Technology

Correspondent Rory Cellan Jones. The numbers do seem witty

staggering, yet they keep trying to warn us that it won't be as

staggering next time. What is the outlook? The interesting thing about

Facebook is it is becoming more and more like Google and Apple. Like

Google it has one huge very successful product, which is

advertising, and in particular mobile advertising. The vast

majority of the profits are coming from advertising on your mobile

which didn't exist a few years ago. And when Facebook floated, it said

it was a worry, and it has dealt with that and is becoming a dominant

force. If you want to advertise to mobile users, which is where most

people are, Facebook or Google are the only places to go. And it is

becoming like Apple in that it is managing expectations from the

market very cleverly. For years, Apple used to say, things are not

going to be quite so good next quarter, and then it would

outperform. Last time, Facebook said, things could be more difficult

ahead, then it outperforms the market and investors are impressed.

The other bit of news that came out was this decision by a jury about

its Oculus Rift part of the business, company bought a few years

ago, the virtual reality business, and there are questions about who

owns the technology, and it would seem Facebook is the bad guy,

according to this jury. It lost that case, an important intellectual

property case, and it was ordered to pay $500 million. Facebook can

afford to shrug that off, and we forget, it is basically huge

advertising business, but it is sticking lots of money into other

areas, artificial intelligence, virtual reality, things that may not

pay off for many years, and it is like Google betting on things like

driverless cars, all of those new technologies, Facebook betting on

virtual reality. Mark Zuckerberg admitted last night it may be many

years before that pays off, but it has got the weight behind it to be

able to waste money in some areas. And you and I have been around, we

are older, I remember sitting here many years ago with you... Speaks

yourself! We would talk about the critics saying Facebook has got to

learn how to monetise adverts on mobile armour and they have done it,

they have cracked it and moved on. This is a company that defies the

critics and is here to stay. Mark Zuckerberg right from the early

years has defied people who said you should get in a responsible adult to

run the company, he shouldn't take it down that route, he should go to

advertising faster. He went advertising when he wanted to do it,

and has managed it very well. Everyday I see people on Facebook

saying, I have never clicked on an ad, I don't know how it works, but

that is the secret. The secret sources they give advertisers clever

ways to reach people without people being aware of it. You are back

tomorrow, apparently. You're not! I am here, and you are and we will

talk about everything! Apple, you name it.

The viewers love it. Rory, we will see you tomorrow. I will join you in

my living room! You won't be awake at that time!

I am loyal like that. Let's talk about some of the other news out

there. The chief executive of Germany's

leading stock exchange is being investigated by prosecutors

over the purchase of shares in the company -

just weeks before it began merger talks with the London

Stock Exchange. Deutsche Boerse says

Carsten Kengeter's shares were part of an incentive scheme

and they are cooperating The share price rose

significantly shortly Germany's biggest lender

Deutsche Bank has posted It's an improvement from the year

before but reflects the high cost of legal cases and fines the bank

has incurred including the $7.2bn penalty it paid in the US over

mis-selling linked to the 2008 The bank has more money set

aside for such costs and has also recdued it's operating

costs. The bank's boss said it showed

resilience in a particularly tough year.

Look at this, this is a story up your alley. It is about airports.

Heathrow's third runway will mean more domestic airport legs, but

when? 2030? It will take forever! That is more on Heathrow expanded

sometime, not soon. They have been hammered. And profit outlook, the

Ghostbusters movie didn't do it for Sony, there was a billion-dollar

write down. But is a problem for them.

OK. I love this story. A Chinese car company has announced

a deal with a Mexican car plant to build up to 10,000 SUVs

in the country. It's almost like Tom what you get

when you put a Chinese car company with a Mexican car company, you get

two fingers up at Trump! That has a lot of uncertainty over the future

of trade between Mexico and the US, and the question is, could ageing

reap the rewards? JAC motors certainly hope so, and the Chinese

manufacturer and ex-ago's Giant Motors are investing millions of

dollars at the Mexican central state of Hidalgo. The first cars will roll

off the assembly lines later this year. Up to 10,000 vehicles could be

produced at the plant within four years, and the deal is expected to

create more than 5000 jobs, and the cars will be sold in Mexico, Central

America and South America. Very ago! Talk to you soon.

Let's stay with Asia and show you some of the numbers.

Shares in the region touched a four month high.

The dollar sagged a bit after the US Fed Reserve stuck to its mildly

upbeat economic view but here's the thing - the bank gave no hint

Europe is expected to open slightly lower today.

In a nutshell, what's going on with the markets at the moment -

is that they've gone from hooray for those Trump economic policies,

They've gone from that to - we're not to sure about some

Think of it like this - Trump on, Trump off.

Let's go and find out what'll be making the news over there.

The Federal Reserve decided not to raise interest rates at the end

since President Donald Trump took office.

Policymakers kept interest rates unchanged.

In making this decision, America's central bank said

that the US job market is getting stronger and inflation

is gradually rising, but it said it wants more time

This is pretty much what everyone expected.

The Fed has just increased interest rates in December, and crucially,

the Trump administration's economic plans still

The Fed needs to have a real, clear idea of what the fiscal policy

of this government will be in order to effectively steer

Joining us is Alix Stewart, Fixed Income Fund Manager at Schroders.

Samir was talking about Janet Yellen, no decision as the case may

be, but it was all completely expected. What is going to happen

next, and when will they make the next, and when will they make the

next move? That is whatever but it was looking for, trying to get a

change in thinking with Trump coming in, but we got none of that, really.

So it is still, let's wait and see. No big market reaction either way,

no disappointment or spike or anything, it was like a nonevent. It

was a bit, which is unusual from the central bank! The event will be when

we hear something from Trump about Janet Yellen, because there will be

a concern if these two Boghead is. Yes, we could get a big change in

the head of the Fed going forward, which could be a big change in

policy. Talking of central bank action, today is Super Thursday in

the UK, Mark Carney will be in focus at the Bank of England. Dust explain

what Super Thursday is about, because several things go on at

once. We get updated growth and inflation forecasts, and the economy

has been stronger. Stronger than everybody thought. Stronger than

anybody thought, all of the pessimists have been wrong. The Bank

of England took pre-emptive action immediately after the vote, so

everybody will be looking to see what are they going to do now. After

the referendum, you are talking about? Yes, so the question is now

when things are stronger and inflation is picking up stronger

than expected, what are they going to do? They have cut interest rates,

they have been buying bonds, so what will they do? Normally interest rate

is the tool for the central bank, but Mark Carney, the Canadian bloke,

the big boss of the Bank of England, he has said they could ride

inflation even above the target of 2% for a little bit before

triggering any interest rate rise. Given that inflation is driven

predominantly by the drop in the pound, then yes, he has said they

will look through it to some extent, but he has also said there is a

limit to how much they will look through it, so everybody will be

looking to see, are they caught in a difficult position with prices

picking up? In the meantime, this is extremely busy, because you have the

central banks but also so many earning stories coming in, and we

will hear from the Shall boss later, AstraZeneca, Facebook, there are

many, but what has caught your attention? Deutsche Bank, the loss

wasn't quite as bad as perhaps it has been previously, and everybody

has been focusing on the fines and everything they have had, they are

trying to draw a line under that. The question now is how the banks

will make money in this low interest rate environment going forward.

Alix, thank you for coming on. Was that your first time? That was

painless! Even with this man in the chair! It

wasn't that bad, was it? Still to come, we will be talking to the big

cars of Formula 1, McLaren. Keep your questions coming for what is

happening in that arena. You are with Business Live from BBC News.

Mobile giant Vodafone have released their trading update -

and it shows a fall in group revenues of nearly 4%.

The UK business was badly hit - down nearly 4%.

Theo Leggett has been going through the figures.

What are they looking like? They are not looking too bad. Yes, in the

third quarter, group revenues were down by about 4%, ?13.7 billion. But

their outlook for the year as a whole is pretty much unchanged.

Vodafone says pre-tax earnings at the end of the year will come in at

the lower end of its earnings guidance which was for growth of

between 3% and 6%. So it's not as bad as it looks on the surface. If

you delve into the figures, throughout Europe, which is a big

market for Vodafone, it's actually doing well. Growth in Italy, Spain

and Germany, but there is the problem in the UK, due to a lot of

competition here. It is also down to lower revenues from roaming because

of increased EU regulation. And it is also not selling as much air time

to so-called virtual operators. So that is one potential problem for

the company. But there is another issue, which is death it has

suffered from currency effects. This is a huge company operating in a lot

of currencies, and that has taken its toll on the bottom line as well.

Earlier this week, we had the news from them which is saying they are

kind of pulling out of India. They are having problems in India. They

have a huge market that, more than 200 million subscribers, but there

is a new entrant into the market, 'S reliance, and they have stirred

things up because they have offered heavily discounted deals,

and that is having a big effect on Vodafone's revenues. So now they are

talking about a merger with another Indian provider, Indian cellular, to

take on the new threat, but these things take time to get into action.

At the moment, Reliance has really shaken things up and that has hurt

Vodafone. Thanks, Theo. Another one we have mentioned this shell. --

Shell. We are going to hear from their boss. He is saying with the

pound dropping because of the Brexit vote, our petrol prices are going

up. The big boss of McLaren and Shell will be here shortly.

Facebook's latest results are better than expected,

making it one of the biggest advertising businesses

A quick look at how markets are faring.

They have been on edge a bit since the Trump travel ban. They have been

using the same expression Trump on, Trump off.

Fourth quarter earnings for Shell fell 44% to $1bn -

full year earnings were 8% down on 2015.

The chief executive Ben Van Buerdon spoke to Ben Thompson

a lot of their North Sea Oil assets.

There are a number of levers we have to pull in an environment like this,

and selling is an important aspect as well.

It helps us, but it's not the only lever.

Indeed, we have been about $5 billion behind

We announced over the last few days another $5 billion of divestments,

and we are close to announcing another $5 billion.

So that is $15 billion of progress of what we said would be

Another big geopolitical issue is the presidency of Donald Trump.

He has confirmed his commitment to fossil fuels,

That is great news for you, is it not?

It's a bit early to see how that will play out.

I think President Trump, being the businessman he is,

is going to have a lot of focus on a business-friendly agenda.

I think President Trump has also said he believes that every aspect

of the energy system has a role to play, oil and gas

being part of it as well as renewables, I would imagine.

And I think that is a welcome development.

Of course, we believe that the energy transition that we

We want to be part of that energy transition.

We want to have a portfolio that is resilient in the world

with hopefully less than 2 degrees C in terms of warming up.

And we think we can thrive in that world as well.

They slide into each other, petrol and cars.

The most high profile event is Formula 1 and just last

week, its $8bn takeover by America's Liberty

But there are many other events with different types of cars

and bikes being raced all over the world.

Our next guest runs the biggest digital media group in the world

Motorsport Network connects hundreds of millions of people

around the world who love motorsport and cars.

It operates in 60 markets around the world and has been expanding

And of course, languages are important in doing that,

which is why it provides its various media in 17 different languages.

Those services include TV and digital content, live events,

merchandising and of course social networking.

Zak Brown is Chair of Motorsport Network and Executive Director

of McLaren Technology Group - and joins me now.

Great to have you on the programme. I want to start with the big story

of last week. It's like the changing landscape of Formula 1. Bernie

Ecclestone, who pretty much created the whole thing, run it all by

himself for a long time. He has kind of been pushed. Liberty Media has

come in. How is it going to change things? I think we have great times

ahead of us. Bernie obviously did a great job getting Formula 1 to where

it is today. I can't think of another sport where an individual

had such an impact. He was a second car salesman. Exactly, and he loves

Formula 1. That said, we are in a new era. Things are happening that

are different from the past. I think Liberty Media and the whole team are

going to drive Formula 1 forward. Such a great sport, so much

technology, so many different ways to engage with the fan. That is

where we have fallen behind and where we need to catch up. To give

our viewers a sense of where you fit in, you took over this whole

organisation only in December. But you are a racer. You said that was

70 lbs ago. You were talking about white! But let's talk about the

issue of change in the industry. You say you are excited, but Christian

Horner, the boss of Red Bull, told us that he believes the thrills are

out. The audiences are falling. It is not about man and machine any

more in the same way it used to be years ago, when it was really

thrilling. It is now all about technology and the cars and how well

they perform. The individual in the car is not so important. Well, the

drivers are the heroes. The cars have become too much of the heroes

and it is technology warfare, and Formula 1 has always been about

technology. But it has lost its va-va-voom. Absolutely, so we need

our heroes fighting again on the track. We have got some great

racing. We also need to do a better job of telling the story. That is

where the Motorsport Networks of the world, with the digital applications

and the way we engage with fans, the product is great, but I don't think

we have done a great job of showcasing the product and

communicating with the fans. Talking of the Motorsport Network, which you

are the chairman of, formula E. I am fascinated by this. I have done some

stories on it. When you bring up the sound... Just expend what formula E

is? It is electric car racing. If you look at where the auto industry

is going, they have timed it perfectly. The technologies they are

using, McLaren is now providing the batteries in season five. So right

now, you have to change cars in the middle of the race because battery

technology will not take you all the way through. McLaren have developed

a new battery wear in season five, you will be able to use a single

car. That shows the rapid progress of battery technology. So I think

Formula E has a great place in motorsports. There are a lot of

great different racing series. It is not to compete with Formula 1.

Liberty happens to own them both. We should get some viewer questions on

that. Particle seeker says, when are we going to see a full-size electric

McLaren? I don't know. Can you give us a time frame? It is kind of like

mobile phones. Remember when they were like a brick, and and now they

are on your watch? So I think he was the battery technology progress at

that type of pace. Ian says, how close are McLaren to securing that

much awaited title sponsor? We have a ways to go. I only started 45 days

ago and I appreciate that everyone thinks I have a magic wand. Come on,

deliver! We have to wrap this up, but when you came in and with what

we are seeing with President Trump, you said surrounding yourself with

the right people was important. We are in the people business. We

develop technology and we need the right people in the right places

with the right resources. Such a pleasure to have you on the show,

Zak. We have a much windier spell of

weather than we have seen recently. Some pretty unsettled conditions on

the cards over the next few days. Brisk winds