04/05/2017 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


Facebook closes in on two billion users and is making bigger profits


but are there growing threats to its reputation?


Live from London, that's our top story on Thursday 4th May.


Facebook's profits jumped to just over $3 billion


in the first quarter - that's up 76% rise on last year -


but can it crackdown on extremist videos and inappropriate content?


It's a different picture at banking giant HSBC.


Profits slump by $5 billion - but the boss calls it a "good set


And ahead of key service sector data across Europe -


we'll look at how the numbers are shaping up.


And harnessing the power of 3D printing in health care.


We meet the firm that's revolutionising the way


artificial limbs are made - making them cheaper and easier


Like it or loath it - Facebook is bigger -


more profitable - and more controversial than ever.


What do you think about that? Has it got too much influence?


We start with Facebook - because despite the ongoing


controversy over everything from fake news to extremist


and violent content - the social network just keeps


Facebook has been warning for some time it can't keep


growing at this rate - but the latest results show no


Facebook made profits of just over $3 billion in the first


That's a jump of more than 76% on the same period last year -


and more than investors were expecting.


And it is creeping ever closer to two billion users -


1.94 billion people are now actively on the social media


platform every month, up 17% on this time last year.


It's added 80 million new users over the past three months alone.


Businesses want to reach that audience so badly that last year


they spent almost $27 billion advertising on Facebook.


That's more than was spent on adverts with any company


And the figure is expected to be well over 30 billion this year.


It's not just advertisers that love Facebook - so do investors.


This week Facebook shares hit yet another all-time high,


this is how they've done over the last five years,


giving the company a stock market value of about $440 billion.


But amid growing criticism over content including fake news,


as well as extremist and violent material, the company says it


will hire 3,000 people to monitor and remove such posts.


Raoul Lumb is a technology lawyer with the law firm


Good morning. Good to see you again. We have talked through the detail.


The situation at the moment, at least for now, seems to be Facebook


is going better and further than analysts expect, and yet it is


always warning us that in the next quarter, or even maybe in the next


quarter things will slow down. Classic managing investor


expectations, any business with those results in this quarter would


have been delighted and it would have been a success story for


Facebook. All they ever say is will we sustain its next year? If you dig


deeper, near to 2 billion active users, it all sounds very strong,


what is behind the figure? The growth in Facebook users has been


markets outside the EU, Canada and US, they are established markets, it


has been Asia Pacific and what Facebook describes as rest of world.


Those are users under the age of 25 and that is the sector people say


Facebook is beginning to lose. Is that the users they want? The under


25-year-olds? They are most likely to be moved by advertising on


Facebook? Is that the thinking? Perhaps, the problem Facebook has is


if it continually it acquires older users its user base drops away and


Facebook's advertising business is predicated on getting the most


eyeballs in front of adverts as possible. If your user base declines


than its revenues go down. What about the news it is hiring 3000


more people to try and help police the social media site? I found it


interesting that they need humans to do that and have not yet got the


technology to do that for them. They will reluctantly hire 3000


moderators in the face of a number of outcries about content on


Facebook this year and have described it as a significant cost


on business that will put the squeeze on revenues. But you are


right, there are moves in Facebook to get that job done, it's an


enormous investor in the field of artificial intelligence and that is


something investors think might help it grow in the future. Artificial


intelligence and the latest biggest event talked a lot about artificial


intelligence and there is a lot of concern about the sheer volume of


data they have on all of their users and what they might do with that.


Quite right, there has been real concern that the sheer amount of


data Facebook has about Facebook users across the various Facebook


channels that exist means they might be able to target adverts based on


things like one's emotional state, if you are angry or sad. What


Facebook will need to do is increase the price people pay for an


individual advert server becomes attention for Facebook whether it is


willing to allow that kind of targeting to businesses. At the


moment Facebook users are just handing over this information about


ourselves absolutely for nothing really. And yet they are building


huge value on all that data they hold. Will we get to a point where


we can monetise our own data? Highly unlikely, if a service is free then


you are the product, as they say and that's the case with Facebook. There


are moves in the European Union to give people greater control of their


personal data but there is nothing in that raft of legislation that


will undermine the business model of Facebook significantly. Raoul Lumb,


good to talk to you, thank you for your analysis. Let's bring you


up-to-date with the other business news.


There's been a huge rise in profits at one of the world's biggest


Analysts had been expecting a strong quarter thanks to higher oil prices.


Chief executive Ben van Beurden says there were notable improvements


in its extraction business and chemicals processing


divisions as well as better market conditions.


The Australian government has warned that mining giant BHP Biliton


could face criminal charges if it tries to move out of the country,


arguing it would be against the national interest.


The activist investor Elliott Management wants


BHP to be listed only on the London Stock Exchange instead


of the current structure also involving Sydney.


Elliott says the change would allow the company to give more


The sportswear firm Adidas has reported bigger than expected


profits for the first three months of this year.


It made about $495 million thanks to strong growth in online sales


and in North America where it's battling Nike for market share.


The demand for products were strong across the world with the exception


of Russia. North America did particularly well for the firm.


Let's talk in more detail about HSBC.


Europe's biggest bank is listed in Hong Kong as well as in London. It


has big operations in Asia and Europe, it reported a 90% fall in


profits for the first three months of this year. But here is the rub.


The chief Executive Stuart Gulliver called the figure is a good set of


results. Why is that? Therefore in profits but they are a good set of


results, explain that for us, Sarah Toms. As you said he is a happy man


but it is good news of sorts, although it may not sound like it.


Although as you said first-quarter profits fell to around 19%, that is


just under $5 billion for the first three months of the year. This is


much better than analysts expected and HSBC itself says the fall was


mostly down to accounting changes and also the fact that last year's


results including earnings from its business sold in July last year.


Also, its pre-tax profits have actually gone up 12% in the first


quarter to nearly 6 billion US dollars. These results gave HSBC's


share price in Hong Kong a bit of a boost today, shares rose about 2%


after the announcement, and finally the company seems to be moving from


restructuring to growth. But shareholders must not get too


excited as they are not likely to see any extra payments. HSBC says it


will hold its dividend steady for now.


Sarah, good to see you, thank you for explaining that. Ignore the


Nikkei logo you saw on the screen because it's closed for the second


day of a holiday so those figures are from early on the week. I have


put Brent on there because of Shell, oil prices above $50 part of the


reason why Shell have done better, $3.4 billion. Analysts expected the


figures to be pretty good after oil prices started rising. Down 1% on


the day. I want to show you what happened in the United States, the


Dow Jones pretty flat after the US Fed held interest rates unchanged,


investors wading through a whole raft of other earnings. This is what


Europe is doing at the moment, remember, we get an update on the


services sector, the latest PMI data. In the UK forecasts for two


54.7 from the previous reading of 55, it still accounts for three


quarters of the UK economy so it's pretty important. We will also get


figures from elsewhere across Europe, all of this after a bounce


back in manufacturing in construction. We will get the PMI


for Spain, Italy and France and Germany, so those are ones to watch


closely. As promised, let's head to the United States and Samira Hussein


has the details about the day ahead on Wall Street.


There has been much talk by President Trump about the country's


On Thursday the US Commerce Department will likely


report new numbers that show that America's trade deficit actually


Now, that is surely going to get some attention from the


In earnings news the world's largest brewer Anheuser-Busch InBev will


And the focus will be on Brazil were volumes have been


They will also be a focus on its largest


market, the United States, which could have also had a bit


And finally, if you've played Farmville all Words


With Friends, well then you are probably


part of the reason why the


company that created those two games, Zynga,


Investors are going to be looking at the new games


James Quinn, Group business editor of Telegraph Media Group .


We were chatting about so many results out this morning. First,


Shell. Goodies, the oil prices up 55% in the first quarter so that has


been a factor -- good news. The BG Group? The acquisition in the third


quarter last year, they have taken costs out of that so it is good news


and good numbers for Shell. Overall BP and Shell, all good news


relatively speaking. Relatively good, all eyes to see when it will


list and all eyes to the market and who will be in charge. We have


talked about HSBC. I want your take on it. We talked about Sarah in New


York but it's been tough for the big banks, we have had all of this


change in regulation, investment banking isn't as big as it was.


These numbers don't look as good as this time last year. The numbers


this time last year included the sale of their Brazilian arm so they


were a little inflated as it were. It is hard for a backlight HSBC but


it has such a massive reach all around the world and has a good mix


of retail and investment banking. Is it hard? Yes but if you're doing it


right you can make it work. Tesla's results were out yesterday. They are


selling more cars. It is not making a profit, as you say, but it says it


will meet the deadline of July to get the mass-market model out there.


That's right. As you say, the magic of Musk. If you are an electric car


geek you want him to succeed and want to see those products


mass-market, clearly to date they have been expensive and only for the


privileged few. Now you can get the mass-market out there, that's the


big question. Can he get products out on time and will they work? What


I find phenomenal about his company, he keeps seemingly breaking records,


the fact it has a market value bigger than Ford now. It is a lot of


hope over reality. There was a point whereby this is a good buy to the


old car makers and hello to the likes of Tessalit and others, or is


it just the magic of Musk? -- Tesla. We will delve more deeply into that


later and talk about Facebook again because we are asking whether it has


too much power, all these new users being signed up, record ad revenue.


Dev says I've never signed up to Facebook, nor do I use it? Does it


have too much influence? Yes. Clearly not on your life. I used to


wake up with the paper and now I wake up with Twitter and Facebook in


bed. Keep your comments coming in. Still to come, harnessing the power


of 3D printing. We are going to meet the firm revolutionising the way


prosthetic limbs are made, using that to make them cheaper and easier


for the people that need them. You're with Business Live from BBC


News. Pelle another set of disappointing


trading figures for the housing giant, Next in the UK. Like-for-like


sales fell by 3%. It has forced Next to lower its expectations. Theo


Leggett is in our newsroom. How bad is it? Just look at the reaction


from investors. Next's share price has been down around 6.5%. Although


the markets were braced for pretty disappointing results from Next,


they reported full year earnings down to the first time in eight


years back in March and they said there were problems, this was worse


than expected, and particularly bad in its high-street business. Sales


in its high-street business were down 8%. So the overall figure was


only bumped up by the fact its catalogue and online division, next


directory, is actually doing rather well and saw a 3.3% boost to its


sales. Overall the picture is high-street sales sharply down,


profits this year expected to be down, guidance for the next quarter


not great. Next is doing something wrong. The chief executive has


already given an indication of what it has been doing wrong. He said


earlier this year things had been getting a bit too racy. It had been


investing too much in new and trendy and exciting fight rinds and


neglecting the stable items like blouses and shirt is that people


have been coming in to get the years so that is what the problem is.


Interesting. Next among the many companies, but not all bad from


retail. Morrisons, the live page there on the Business Live page. All


of the business data that has come through, Morrisons reporting its


sixth consecutive quarter of sales growth. With a rise that came in


more than double what analysts were forecasting, particularly prominent


in the North of England, we should say, it is my local when I am at


home. It has now got its deal to sell groceries through Amazon which


could be a big boost. Next we have mentioned it is not doing well at


all. The oh talk about that. Punch taverns also coming up with


disappointing news. Rangel doing very well but Punch taverns


suffering a slowdown with a fall of 1.2% in the first quarter. Adidas


soaring and Shell doing well. You're watching Business Live -


our top story: Facebook nears two billion users and profits have


jumped to just over $3bn in the first quarter -


that's up 76% rise on last year. A quick look at how


markets are faring... In Europe, Facebook shares went down


in after-hours trade on Wall Street. Those figures as good as they are


worth not enough to counter fears that Facebook could be losing


momentum in the future. These are the European markets. I have to say,


the good news outweighing the bad. We have mentioned some of the


winners and losers already. Shell shares are up some 3%, as our HSBC


shares. We will touch on that later. Now the something entirely


different. 3D printing is a technology


that is in many ways By building different objects one


layer at a time from a range of materials it allows very complex


and intricate designs to be made quickly but accurately


And it is already changing lives Open Bionics is a company


which hopes to use 3D printing technology to reduce the cost


of prosthetic limbs. The business provides open


source code which can be This allows amputees


to construct their own bionic Open Bionics has teamed up


with movie companies and other content providers to provide a range


of themed prosthetics. The company's bionic limbs


feature designs from film titles such as Frozen,


The Avengers and even Star Wars. Samantha Payne is the founder


of Open Bionics. Semantic, nice to see you, thanks


for coming in. It is a fascinating concept, not least the 3-D printing


application but what you have put it with. Talk us through how it works


first of all. The entire device is completely 3-D and had. We would


meet up with a young amputee, or they would go to a clinic, we would


take a 3-D scan of their limb and 3-D print them a completely custom


design and have it with them less than a week. At the moment


prosthetics take at least three months to make so that is a big


reduction in time. They pop the end of their limb inside the socket and


there are sensors in the arm that allow them to control the device


they can move their fingers individually. This type of limb is


not available currently the children because they are just too expensive.


And of course children are growing fast or they need new limbs very


often. That's right. Advanced bionic hands, multi grip bionic limbs don't


exist at all because Noppie makes them small enough. We have made


these for ten-year-olds, as you saw previously, and we will go down to


children as young as eight. That is a really exciting improvement in the


industry. Tell us what this will cost. We are hoping to have it out


for less than ?5,000. At the moment, bionic limbs were the same


functionality you are paying at least ?25,000 and it can cost you up


to ?60,000, so 3-D printing has revolutionised that. To state that


clearly, this would cost around ?5,000, currently an equivalent is


?25,000 to ?60,000, so for a big buyer like the National Health


Service, that would have a significant impact. Yes, and they


want to give the best of their patients and they are really


enthusiastic about this technology. We have a product development


contract with them and we are embarking on our


trial with them this month, so they trial with them this month, so they


will be giving ten of their patients these hands this month. I just want


to explain a little bit for people who are ready sure about the 3-D


printing element. You can sort of get an idea here, all of this looks


grey and polished on the outside and then it is built up of layer after


layer after layer, so you can download the designs throughout


online, this open source software and then go away and print yourself


and that is what is so important here. I suppose it begs the question


how do you make money if you are giving it away for free? We are open


source, so anyone can take our code and programme their own hands or


take a basic code and printed out at home. But our financial value comes


in the terms of the aesthetic designs. We have partnered with lots


of creative companies, TSX and Disney have kindly got behind the


project and given us royalty free licenses to use them as loved


characters. So young children who need to use one of these don't feel


different or strange going to school perhaps with a prostatic limb,


because they have got a pretty cool one from one of their favourite


characters? That's the idea, yes, they feel really powered and just as


good as their favourite superhero. You are a technology generalist, you


had nothing to do at all, really, you just met someone who had the


idea? Yes, my co-founder, Joel, was working on a very early stage


robotic and three years ago, and he needed some help. It wasn't anywhere


near where it is now, and we worked together to get some funding in and


build the company, and now we are a fast-growing team of 12, in Bristol.


It is a really exciting time for us to stop we are hiring and growing


really quickly. It has been brilliant to meet you this morning,


Samantha. Incredible technology and the things you can do with it now.


The reason why she is here today is partly because it is made for. May


the 4th be with you. Star Wars day, lots of Star Wars fans around the


world getting excited. The Business Live page is where you


can stay ahead of all the day was backbreaking business news. We will


keep you up-to-date with all the latest details with insight and


analysis from the BBC's team of editors right around the world. We


want to hear from you too. Get involved on the BBC Business Live


web page. You can find us on Facebook. Business Live on TV and


online whenever you need to know. As promised, James has returned to talk


about some of the stories in the papers. This one in the Independent.


Actually this one about the property market in the Guardian, buying a


home you get a free car. Offers galore, as London estate agents


struggle to sell. Quite an eye-catching story, based on the


fact that property prices, prime property prices in central London,


over 1.5 million, not selling quickly as they were this time last


year. A good example, one developer in Muswell Hill, at one point ?9


million -- ?1.9 million flat, you get an ?18,000 car. It probably


wouldn't sway you that much was that if it was a Tesla, maybe. You are


obsessed with Tesla! Or Elon Musk. OK, let's move on. Could this be the


new sub-prime crisis? May become and some analysts are picking that, 90%


of cars in the UK are bought on finance. It is looking at whether


people are overextending themselves over these lifetime plans, whereby


you buy a car, change it every three years, never really own it. If


interest rates went up to five or 10%, what would that do to the value


of the loan and how much you would have to repay? And that is the


reason we have seen such great car sales of late. Nice to see you, good


stuff. That is it from us on the show, same time, same place tomorrow


we will see you. A lot of Fairweather around at the


moment but not in the sense of evenhanded. High-pressure dominant


but look at the range of


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