28/04/2017 BBC Business Live


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Raking in the billions. Here's the question, can the likes of Google


and Amazon keep on growing. Google finds it way with mobile ads


and Amazon delivers its majestic numbers but are these billion-dollar


companies to big? South Korean shares sink as President Trump says


he will renegotiate the trade deal with career. The markets are holding


steady, watching and waiting for key economic figures and GDP due from


the UK, France and the states. And would you trust


an app to be your doctor? We'll be getting the inside track


on all the big technology stories of the week with our very


own Rory Cellan-Jones who will also steer us


through the world of flying cars. Ebook sales in the UK have


fallen 17% as readers bring back the book -


do you tap or turn? We start in Silicon Valley


where three of the biggest names in technology have been


reporting their numbers We are talking about the Tech Titans


- Google, Amazon and Microsoft. And it seems they are just


getting bigger and bigger. The numbers are jaw


dropping, take a look. But it's still managing


to grow very fast. Google's parent company Alphabet saw


revenues jump by almost Remember this is just


3mths worth of sales. It's one of the world's


biggest retailers - it dominates online shopping -


and still saw sales grow over 22% to almost $36 billion


for the three months to March. Three quarters of a billion


of that was profit. Amazon has been growing sales


in double-digits for 20 years! Microsoft too is


raking in huge sales. Many people wrote it off as a victim


of the decline in PC's and the rise But it's become a leader


in cloud computing. It made revenues of over $23


billion, although they were only up 6% and that was less


than Wall Street was expecting. Cyrus Mewawalla is Managing Director


of the global technology research Always good to see you, thanks for


coming in. You know that question, let's use Google and Amazon as an


example, are they to big, too dominant? They have produced a very


big good product and not a lot of competitors out there, it's not


their fault, is it? Absolutely. There is article in the Financial


Times about anti-trust concerns as well. Microsoft already have that,


they had to take away Microsoft from" Windows. Amazon has two


businesses. The real issue is government tax regulation needs to


be performed because high street retailers pay too much tax and


Amazon, which sells digital goods can avoid tax. On the cloud business


of Amazon, there's no issue because Amazon invented the cloud. It was an


internal product. Sorry to interrupt, Amazon makes most of its


money... From the cloud. We talk about Microsoft and Rachel explained


that we used to think Microsoft has gone now because nobody is buying


PCs but it got into the cloud, why are they making so much money from


cloud and why is cloud important? Why is cloud imported? Everything we


do is software, that is leading the world and software is moving from


the desktop to the cloud. Not only your desktop but the BBC's


computers, they used to be in-house, now they are moving to the cloud.


Every company is doing the same thing, why? It's better for users


because it's cheaper, it is better for app developers, because it is


easier to roll out apps. Once you have a cyber security patch, put it


on the cloud and it is immediately rolled out of the world, you don't


have to download and install. That is why cloud is happening, cost


savings. But why is it important? If you look at Amazon, it is the


leading cloud infrastructure, Microsoft is number two, Google is


number three and IBM is four. The cloud has three levels,


infrastructure as a service, which are the servers in data centres,


platform as a service, which are things like an operating system or


Mac sales force and software as a service. Things like office 365,


Microsoft Word and someone. Infrastructure as a service is the


most important bit of the cloud. That is like the operating system


for the next internet TV, the debt of things, artificial intelligence.


They all sit on cloud infrastructure and Amazon has a 40% market share --


intelligence. It is quite notable intelligence. It is quite notable


that where Amazon made revenues of ?36 billion, only three quarters of


a billion was profit, where is the rest of the money going? If you look


at the top five tech chance, then at the top five tech chance, then


margins, operating margins are about 30% but Amazon's is about 3% at


operating level. That is because Amazon has a completely different


philosophy. It invests in a 10-year cycle. Most listed companies invest


on a three-year quarterly cycle. In a nutshell. Have a great weekend, we


always appreciate your time. Let's take a look at some


of the other stories Barclays Bank says it


doubled it's pre-tax profit in the first three months of this


year as it put some big costs It's also coming towards the end


a of major restructure which means it faces a big one off charge


on it's African business which it intends to sell


in the next two to three years. Chief Executive Jes staley


says he's optimistic Staying with UK banks,


the troubled Royal Bank of Scotland made a profit of $334 million


in the first three months of 2017. It's the first quarterly profit


the bank has made since 2015. RBS is majority-owned by the UK


government after being bailed out It is really the UK taxpayer who


owns them. It said its cost-cutting plan


was ahead of schedule, and that it had already made more


than a third of the $968m worth of savings it's


targeting for this year. Starbucks shares were down some 5%


in late trading after the US based coffee chain cut its full year


profit target after it's sales It's a tough start in the job


for Kevin Johnson, who succeeded The company has pledged


to return to the rapid growth it once enjoyed -


but has been struggling The Kentucky doctor dragged off


a United Airlines flight from Chicago earlier this month has


received a financial Lawyers for Dr David Dao, 69,


say a condition of the payout is that the "amount remain


confidential". Dr Dao was violently removed


by airline law enforcement officers after refusing to give up his seat


to United staff. I want to know... If United is


watching, we really want to know! Everybody around the world is dying


to know, how much that man God, millions, Sean Lee! How much PR


disaster can cost a company -- how much that man got, millions, surely.


President Trump has been telling Reuters news agency he will either


renegotiate or terminate what he called the United States'


"horrible" free trade deal with South Korea.


He also says Seoul should pay for a US anti-missile system


What has the reaction been about potentially renegotiating this trade


deal? In hard numbers, the Korean one is stand-by 0.7% and the markets


are down slightly, stock markets -- the Korean currency is down by.


Politically it isn't playing well, particularly that suggestion that


South Korea should pay for the anti-missile system. But there is a


bit of scepticism here. A Foreign Ministry official told Reuters that


the difference between words and policy is often great. Let's wait to


see how this thing plays out. Look at the change of policy from the


Trump administration on Nafta for example and on China being a


currency manipulator. There's not a feeling in this country that Mr


Trump's are absolutely set in stone. And the deal goes like that. Steve


Evans, thank you for your time. Asian stocks slipping overnight -


investors selling to Loads of economic figures out


today that the markets Keep an eye on the Dow


with first-quarter GDP figures And in Europe we also have first


quarter GDP for the UK and France and Euro-zone inflation


figures for April, Let's go to Samira


Hussain on Wall Street. How much has America's economy grown


in the last three months? We will find out later on Friday when the


commerce Department releases the latest GDP figures. The expectation


is that the in gross domestic product will have dropped almost by


a full percentage, compared to the previous quarter. President Trump


campaigned on a promise to bring growth up to 3% and that the newly


released tax proposal will help spur robust growth. Earnings continue on


Friday. Exxon Mobile will be reporting. Cost-cutting measures


will likely have boosted profits for the world's largest publicly traded


while producer. Finally, the used car company Carvana will start


trading on the New York Stock Exchange. This company allows


customers to pick up cars they buy on the internet from vending machine


like towers. Let's stay with the markets.


Joining us is Tom Stevenson, Investment Director


A familiar face, good too happy with as always. Tomorrow marks the 100th


day of President Trump. Since he has been president of the United States.


There are some stories around the French paper, Le Figaro about his


first 100"chaotic" days. They are talking about the US economy, the


job numbers. But I say credit where credit is due. Business and consumer


confidence in the US is up from Trump and so has the stock market,


it has rallied, isn't that the Trump effect? I think you're right, when


Trump was elected, there was a lot of positive optimism from the


markets about what he might deliver. The evidence for the first hundred


days is a bit mixed. Napoleon said bring me lucky generals and I think


Trump was lucky because a lot of the good news was already baked in. The


improvement in the American economy was already there and he has written


on the coat-tails of that. The two issues for me, really, delivery, can


he get through the measures he wants through Congress? We saw the tax


reforms this week. It's going to be hard. Frankly, they were very


sketchy and how is he going to pay for them? How will he persuade


Congress that is the right thing to do? Secondly, his flip-flopping,


changing his mind. And after this we, the North American Free Trade


Agreement, he was going to renegotiate that, cancel it, now he


is not -- this week. China, currency manipulator, no, they're not. The


verdict is pretty mixed. Monday is the 1st of May. Looking ahead to the


summer, there's an old stock market adage, which you had to tell me,


will sell in May, go away, don't come back until... Saint Leger day,


the horse race in September. The summer is a bad time to be in the


stock market. There is some evidence that that is the case. On average,


the stock market does perform better in the winter months, no one really


knows why. The trouble is, for an adage to be useful to investors it


has got to be predictable. This one is not predictable. We did some


research at this, we looked at the last 20 years and we found ten times


the market rose in the summer, ten times it fell in the summer! It's a


bit of fun but as an investor, does it help you, probably not. We need


to wrap it up. Are we expecting good numbers, the UK and US economy? GDP?


The underlying story is pretty good. You will take us through some of the


paper stories? Yes. And about the books. Do you read or do you tap?


Turn your tap! No laughing at you either!


Our Technology Correspondent, Rory Cellan-Jones, will chart a path


through all the big tech stories of the week.


You're with Business Live from BBC News.


Later this morning, we'll get official figures on how the UK


economy grew in the first three months of the year.


GDP increased by 0.7% in the last three months of 2016.


But Britain's economy is expected to have cooled considerably


in the first three months of this year.


Ben Thompson is at a cash and carry in the Midlands to find out how


the economy is affecting the business and its customers.


We're here at East end foods. It is a cash and carry selling too big and


small firms. It also manufactures and sells some of its products


around the world and imports raw materials as well. It is the perfect


sample of business facing up to uncertainty as far as the economy is


concerned. Google get the latest economic growth figures later this


morning. Let's discuss them. -- we will get. Good morning. Let me start


with you, Jason. We talk about uncertainty. As far as the economy


is concerned, it is very uncertain at the moment. What does that mean


for you? Last years since the referendum vote we have seen the


currency situation affecting the business with devaluation of


sterling. We net imports. We process and manufacture here in the UK.


Those costs are difficult to pass on to our customers and the consumer.


There is a feeling that if you are an importer, you're also an


exporter. One does better and wonders worse. It is not so simple,


is it? Absolutely. It depends on the business in question. If you are an


exporter it is better but as an importer things have got more


expensive. Overall, there is still a lot of positivity around the economy


and many companies predicting gross. And key very much. We will get the


growth figures at 9:30am. Expected to show a .4% growth. A rise in


inflation and a slowdown in wages. The latest retail figures were also


down pretty sharply. Uncertain times ahead for many businesses.


Our top story: big profits surging for the four big tech giants. Big


increases. They just keep getting bigger and bigger those companies.


Some breaking news. Six people have been arrested in connection with the


anti-terrorist operation that happened in Willesden where one


woman was shot and injured by armed police. The Deputy Assistant


Commissioner announced that this morning. This follows an arrest


yesterday of a 27-year-old man who was arrested near the Houses of


Parliament as part of an intelligence led operation. As we


were saying that six people have been arrested. More throughout the


day on the website and the news channels.


Would you like to fly around in your car?


This week, Uber said it plans to test flying cars by 2020.


The rise of artificial intelligence - the latest example is an app that


will be better at medical diagnosis than a human doctor.


At least that's what its developers claim.


Rory is here. I have a feeling about why this is all happening for the


Peter Teal said something a few years back. He said we were promised


flying cars and ended up with 140 characters, ie Twitter. Keywords


making the point we have had these exciting visions and it has all been


mundane. We have not had these gadgets. Lots of people across


silicon Valley suddenly trying to build flying cars. I think it is a


fantasy. It is about investing in self driving cars. There have been a


few hiccups along the way. It is trying to show it is as expansive


and ambitious as Google. It has a plan and is collaborating with


aviation companies. Says they will be there in 2020 in Dubai. It is an


incredibly ambitious place. I am a complete sceptic about this. The


idea that you will have the infrastructure there to have these


take-off and landing electric vehicles which have not been built


yet, by 2020... Can we run the footage of the Kitty Hawk? This is


Larry Page, the founder of Google. He has a separate little business is


doing this. They put out an advert for it this week. Someone rings up


and says, I will pop over in two minutes. That is pretty cool. Of


course it is. The idea that we will all be popping in to work on one of


these flying votes, flying cars, in the next few years. In the next few


years, maybe not. We were promised them in the 50s, maybe not. Let's


talk about artificial intelligence. In a way, it kind of makes sense.


All that information stored in one hub. There is a big report out on


machine learning, a subset of artificial intelligence. Google's


results, they placed huge emphasis on how expert they were at machine


leading. A small health care companies says, all of this depends


on data. All these companies having access to vast amounts of data.


Great programmes. You do not tell the computer what to do, you tell


the computer to learn what to do. In this case, the computer is learning


from previous medical consultations effectively to be a doctor. Very


powerful technology we see popping up in allsorts of places with


instant translation. Every time you talk to your phone and recognise --


it recognises your voice, that is machine learning. A new Wiki? The


founder is trying to launch a new platform which is anti-fake news. It


is basically a crowdfunding operation. It is laudable, it is


great. So far they have funded four journalists. This is not going to


change the world in a hurry. Have you got any plans for the weekend? I


will pop into my flying car. Then go to see the doctor. You do that.


Always a pleasure. And you can hear a lot more


about flying cars with Rory on his Tech Tent programme on BBC


World Service radio at 14:00 GMT And if you miss it you can download


the podcast via the BBC website. A great plug! He has a pod cast. And


this is how you get in touch with us. We will keep you up to date on


the business live page. We want to hear from you. Get involved on the


BBC business live web page. You can find us on Twitter and Facebook.


That is on TV and online whenever you need to know.


Read out some tweets for us. We have had tweets about ebooks. Nancy has


said, ebooks all the way. You cannot pack enough real books for a


holiday. Also tweets saying it is all about the audio book. I have got


an e-reader that I can never remember the name of the book I am


reading. I know it is a really good book. I don't know what it is


called. What do you do? Does not say a lot about you at commissioner only


joking. We spend so much of our lives looking at screens. The thing


about ebooks, you can load so many different books how many books can


you read at one time? One. I do not really see the point in this. I


personally prefer the books as well, especially if it gets wet! The


Aussie supermarket food rescue group. Explain. They have recognised


the fact that the third of all the food in the world goes to waste.


That is a disgraceful figure, when you think about it. Who is to blame


for this? In a large part, restaurants and supermarkets. Why do


restaurants waste -- supermarkets waste so much food question that


they have sell by dates. You take this food and, for a certain number


of hours a day, they are saying, come and get it. I think it is a


fantastic initiative. Have a great weekend. Thank you for coming on.


That is it for today. We'll be back next week.


Good morning. The bank holiday weather forecast is on the way. Just


the chance of some rain. It may well come from this cloud waiting


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