04/05/2017 BBC Business Live

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