:00:00. > :00:08.This is Business Live from BBC News with Ben Bland and Rachel Horne.
:00:09. > :00:10.Hit by the EU - profits fall at Google's parent company,
:00:11. > :00:14.Alphabet, after a huge fine levied by the European Union Live
:00:15. > :00:34.from London, that's our top story on Tuesday, 25th of July.
:00:35. > :00:38.Shares fall for the owner of Google, as revenues surge by 21%
:00:39. > :00:48.but are hit by the EU's multi-billion dollar fine.
:00:49. > :00:51.US retailer Michael Kors snaps up the luxury
:00:52. > :01:01.Here is how the European markets for $1.2 billion.
:01:02. > :01:06.Here is how the European markets look at the open. All in positive
:01:07. > :01:09.territory. Really interesting moves on the Indian markets, not one we
:01:10. > :01:11.talk about much, I will tell you about that later.
:01:12. > :01:14.And mobile adverts targeting you based on where you are -
:01:15. > :01:18.we'll be talking to a firm giving away free WiFi but with a catch.
:01:19. > :01:27.Three years after it started in Sweden, a company becomes the first
:01:28. > :01:28.in the US to microchip its employees. We want to know, would
:01:29. > :01:42.you sign up for it? The micro-chipping, convenient
:01:43. > :01:47.maybe, but lots of privacy issues. We will get into that later.
:01:48. > :01:50.Three of the world's most valuable internet firms
:01:51. > :01:52.release their latest numbers this week.
:01:53. > :01:54.The biggest by far is Google's parent, Alphabet.
:01:55. > :01:56.It has just reported a 21% jump in revenues.
:01:57. > :01:58.That was better than expected, but there was less cheer
:01:59. > :02:09.Net profit fell 27.7% to $3.5 billion.
:02:10. > :02:12.Hitting the bottom line was a $2.7 billion fine
:02:13. > :02:19.by the European Commission which ruled the firm
:02:20. > :02:21.abused its power by promoting its own shopping comparison service
:02:22. > :02:27.Nevertheless, Alphabet's share price fell 3% in after-hours trading.
:02:28. > :02:32.But take a look at this - over the past nine years,
:02:33. > :02:37.the firm's share price has rocketed as it has dominated the internet
:02:38. > :02:45.From $140 a share, to just under $1,000 a share.
:02:46. > :02:52.It's now worth more than two-thirds of a trillion dollars.
:02:53. > :02:56.Amit Pau is managing director at Ariadne Capital.
:02:57. > :03:03.Thank you very much for joining us this morning. What is your reaction
:03:04. > :03:08.to the figures? Should Google be pleased or is more going on
:03:09. > :03:14.underneath the surface? At a business level, the results are
:03:15. > :03:18.stunning. Generating 21 billion, to grow 21%, it is phenomenal. They
:03:19. > :03:24.make it look so simple, it is impressive. The key concerns are
:03:25. > :03:26.operationally, the cost of driving traffic to Google sites has
:03:27. > :03:33.increased far greater than the revenue. That is one. The second is,
:03:34. > :03:38.90% of Google's revenue still comes from digital search. Where will
:03:39. > :03:43.future revenue streams come from? Cloud has made good progress. At a
:03:44. > :03:46.business level, encouraging signs on how Google grows beyond being a
:03:47. > :03:52.search company but the elephant in the room is the EU fines. A
:03:53. > :03:57.record-breaking $2.7 billion. Is that something that is now done and
:03:58. > :04:01.dusted? Is there more to come? I suspect there will be a lot more to
:04:02. > :04:07.come. This was one of only three anti-trust rules that you are
:04:08. > :04:12.looking into. The others are on android, if the fine comes in, it
:04:13. > :04:15.could be 9 billion, and another could be significantly more. That is
:04:16. > :04:19.why there is a significant risk overhanging the share price. The
:04:20. > :04:23.other thing we were talking about, going hand in hand with the fine,
:04:24. > :04:28.the changes that Google has to make as a result of that ruling, looking
:04:29. > :04:33.ahead, that could have potentially a bigger impact than the fine itself.
:04:34. > :04:38.Firstly, Google will have to change the way it operates. Not just in the
:04:39. > :04:46.shopping cart, but all other areas. That will be great for the consumer,
:04:47. > :04:53.and the second thing, where will consumer ownership of data reside?
:04:54. > :04:57.Alphabet not the only big tech company reporting this week,
:04:58. > :05:02.Facebook and Amazon are due. Do you think they will be the same?
:05:03. > :05:04.Absolutely. Netflix last week, they delivered sterling results. Watch
:05:05. > :05:08.out for some very strong results from the tech giants. Thank you very
:05:09. > :05:11.much for your time. Let's take a look at some of
:05:12. > :05:14.the other stories making the news. Luxury shoemaker Jimmy Choo
:05:15. > :05:16.has just been bought by design house Michael Kors
:05:17. > :05:19.for nearly $1.2 billion. Jimmy Choo, which is famous
:05:20. > :05:22.for its stilettos worn by celebrities, announced
:05:23. > :05:27.it was putting itself up Michael Kors, which has been
:05:28. > :05:30.struggling recently amid slowing sales, will buy Choo
:05:31. > :05:33.for 230p per share. The UK's Serious Fraud Office has
:05:34. > :05:35.opened an investigation into British-Australian mining giant
:05:36. > :05:39.Rio Tinto Group. The SFO says the probe
:05:40. > :05:41.is into suspected corruption in the conduct of business
:05:42. > :05:46.in the Republic of Guinea by the Rio Tinto Group,
:05:47. > :05:49.its employees and others It's asking anyone with relevant
:05:50. > :05:52.information to get in touch. Rio Tinto says it will fully
:05:53. > :05:57.co-operate with the investigation. Dutch firm AkzoNobel,
:05:58. > :05:59.the owner of Dulux paint, Akzo has been fighting off
:06:00. > :06:07.a takeover approach from US rival PPG Industries and promised to grow
:06:08. > :06:09.profits as part of its The company says second-quarter
:06:10. > :06:16.profit fell 6% to $537 million due to weak demand in some markets
:06:17. > :06:32.and higher raw material costs. It is the school summer holidays in
:06:33. > :06:36.the UK, lots of people heading off, weak one, heading abroad to the
:06:37. > :06:41.continent for holidays. Eurotunnel, it may well be an option many people
:06:42. > :06:48.are taking, quicker than the ferry sometimes! You speak from
:06:49. > :06:54.experience! Eurotunnel are upbeat, about prospects, despite Brexit.
:06:55. > :06:58.When the EU referendum happened last year, Eurotunnel lost a third of its
:06:59. > :07:04.value in a huge shares plunge. They are saying now it has had little
:07:05. > :07:06.impact on its financials. Lots of other business stories on the web
:07:07. > :07:09.page as well. South Korea's SK Hynix has reached
:07:10. > :07:11.a new earnings high. They reported this morning that
:07:12. > :07:29.profits rose a whopping 574% That is a pretty impressive set of
:07:30. > :07:33.results, how did they do it? Indeed. It might not be exactly a household
:07:34. > :07:39.name outside of South Korea, but it is the second biggest chip maker in
:07:40. > :07:43.the world after some sun and its products are used in all of our
:07:44. > :07:49.smartphones and made by the likes of Apple and the chip-makers and what
:07:50. > :07:54.analysts calling ash super cycle where huge demand is causing a
:07:55. > :08:00.supply shortage and the super is expected to last at least 2018. In
:08:01. > :08:05.the quarter the company just reported, it is seeing a huge
:08:06. > :08:13.increase in shipments, up 20%, and the company made nearly $3 billion
:08:14. > :08:17.in those three months. Quite an impressive figure, as you say. But
:08:18. > :08:25.as shares were falling down 3.5% because investors were expecting
:08:26. > :08:30.those strong results. Thank you. Let us take a look at the markets. Asian
:08:31. > :08:34.markets, barely moved, while investors await for the next US
:08:35. > :08:38.Federal Reserve meeting happening later this week. I want to mention
:08:39. > :08:40.the Indian stock markets. India's stock markets hit
:08:41. > :08:42.record highs on Tuesday with the National Stock Exchange's
:08:43. > :08:44.much-watched Nifty index breaking the psychological 10,000 point mark
:08:45. > :08:47.for the first time as traders take The Nifty consists of 50 of India's
:08:48. > :08:51.top companies across more Bombay Stock Exchange's Sensex index
:08:52. > :08:58.also hit an all-time high. The two markets have
:08:59. > :09:00.piled on 20% this year, outperforming most other global
:09:01. > :09:03.markets, including in Japan and the United States as confidence
:09:04. > :09:13.is boosted by reforms Let us have a look at how the
:09:14. > :09:14.European markets begin the trading day, all in the green, some only
:09:15. > :09:16.just. In commodities, oil prices
:09:17. > :09:20.extended their recovery on a pledge by leading OPEC producer
:09:21. > :09:23.Saudi Arabia to cut exports in August to help reduce
:09:24. > :09:25.the excess global supply Haliburton's executive
:09:26. > :09:33.chairman also said the US shale drilling boom would
:09:34. > :09:36.probably ease next year. Brent Crude and US Crude prices both
:09:37. > :09:39.rose on those developments. And Samira Hussain has
:09:40. > :09:48.the details about what's ahead The Federal Reserve, America boss
:09:49. > :09:52.for central bank, will begin their two day meeting on Tuesday. Many
:09:53. > :09:55.analysts and investors are not expecting another rate rise at this
:09:56. > :10:00.meeting, but they will be looking for more guidance on when they will
:10:01. > :10:04.start reducing the bond portfolio. American car-maker General Motors
:10:05. > :10:07.will be reporting earnings and it comes at a time when investors are
:10:08. > :10:13.worrying about the declining demand for cars in the US. Another company
:10:14. > :10:20.has already said they are seeing higher than expected costs related
:10:21. > :10:25.to the sale of Opal. Also reporting earnings, Caterpillar. Improving
:10:26. > :10:30.demand in the construction and energy industries will likely see
:10:31. > :10:34.the company's profits go up for the quarter. Investors are looking for
:10:35. > :10:35.an update on full-year financial forecasts which the company raised
:10:36. > :10:40.in April. Joining us is Alix Stewart, a fixed
:10:41. > :10:50.income Fund Manager at Schroders. Let us start with Opec. It looks
:10:51. > :10:55.like there is relief for the oil price. Explain what is happening.
:10:56. > :10:58.Hopes they will extend or even increase production cuts they have
:10:59. > :11:02.been trying to implement previously which obviously would be very
:11:03. > :11:06.beneficial for the oil price. It is just a question of whether they can
:11:07. > :11:11.get everybody on board and to play by the rules. Saudi Arabia have said
:11:12. > :11:16.they will try to bring down production. Nigeria, in the original
:11:17. > :11:21.agreement to curb production in November, Nigeria and Libya were not
:11:22. > :11:25.held to any agreements. Nigeria now say they will. They need everybody
:11:26. > :11:30.else to come on-board. The Saudi Arabians and the Russians are two of
:11:31. > :11:34.the bigger ones. If everybody else ignores the rules or has exemptions,
:11:35. > :11:38.it is quite hard to keep the cap in place. Quite often the problem with
:11:39. > :11:44.oil is when Opec get together and bring down production and the price
:11:45. > :11:48.the US shale production kicks in, once it gets over a certain amount.
:11:49. > :11:53.Is that a danger? That is what we have seen. Halliburton and others
:11:54. > :11:58.have talked about cutting back a bit in shale, with the oil price is
:11:59. > :12:09.around 40- $50 a barrel, at the crunch point for these guys.
:12:10. > :12:21.Changing tack slightly, big move for Jimmy Choo. Slab divans include -- a
:12:22. > :12:27.big buyout. There is value still seen in luxury brands. Over $1
:12:28. > :12:33.billion for shoes. Have we still got the money to pay for these items?
:12:34. > :12:37.Clearly some people do! Not me. Alex, have you got any? I have,
:12:38. > :12:45.actually. Thank you very much. Mobile adverts that
:12:46. > :12:49.target you because of where you are. We'll be talking to the firm behind
:12:50. > :12:51."proximity marketing". You're with Business
:12:52. > :12:59.Live from BBC News. "Unfair charges" levied on buyers
:13:00. > :13:05.of new-build houses could be banned in England under
:13:06. > :13:07.a proposed crackdown. Leaseholds on new-build
:13:08. > :13:09.houses would be outlawed, while ground rents could be
:13:10. > :13:12.dramatically reduced, under government plans subject
:13:13. > :13:17.to public consultation. Andrew Walker is the BBC's
:13:18. > :13:28.economics correspondent. Why do we need this crackdown? This
:13:29. > :13:30.is something the communities and Local Government Secretary, Sajid
:13:31. > :13:35.Javid, calls a great scandal of the housing market, whereby people
:13:36. > :13:39.buying new homes may buy them on a leasehold basis and have the
:13:40. > :13:45.playground rent which can in some cases escalate dramatically. -- pay
:13:46. > :13:50.ground rent. He has written in colourful terms in the day's Times.
:13:51. > :13:53.He says if you go to the butcher and buy sausages, you do not get an
:13:54. > :13:57.invoice for the following 100 years. If you buy a bucket and spade, you
:13:58. > :14:05.do not get change of ownership fees when you pass it on. He talks about
:14:06. > :14:09.some examples and one case of 3000% increases in the ground rent to a
:14:10. > :14:13.total of something approaching ?10,000. He thinks there is
:14:14. > :14:16.certainly, although there are cases where leasehold arrangements are
:14:17. > :14:21.justified, they are commonly used in flats, he is concerned that in some
:14:22. > :14:25.cases they are being used in an unfair and financially abusive way.
:14:26. > :14:29.Aside from making comparisons with sausages and buckets and spades,
:14:30. > :14:42.what is the Government proposing to do? We have a consultation paper and
:14:43. > :14:45.one of the things Sajid Javid says is that if house-builders are not
:14:46. > :14:48.prepared to step off the gravy train, he is prepared to derail it.
:14:49. > :14:50.He wants to look at banning unfair and unjustifiable use of leasehold
:14:51. > :14:53.arrangements and also to ensure that where there is a case, that the
:14:54. > :14:56.ground rent should be paid at the permanent peppercorn rent, is the
:14:57. > :15:02.phrase he uses. It is consultation at this stage, but I am sure he will
:15:03. > :15:03.get some very vigorous responses to his request for views. Andrew, thank
:15:04. > :15:13.you. We have got some interesting stories
:15:14. > :15:16.on the Business Live. A rise in personal loans, dangerous Bank of
:15:17. > :15:20.England officials say. We have got interesting figures. Credit card
:15:21. > :15:24.balance transfers and personal loans and outstanding car loans have
:15:25. > :15:28.increased by 10% over the past yearment however, household incomes
:15:29. > :15:33.have increased by 1.5%. So that's quite a chunk of money to find to
:15:34. > :15:35.bridge the gap. We'll keep an eye on that story. Check it out on our live
:15:36. > :15:39.page. You're watching Business Live.
:15:40. > :15:42.Our top story: The parent company
:15:43. > :15:46.of Google says it saw strong growth in the three months to the end
:15:47. > :15:49.of June with revenues up 21%, but profits have been hit
:15:50. > :15:51.by a record fine imposed by the European
:15:52. > :15:55.Commission last month. A quick look at how
:15:56. > :16:06.markets are faring. This is how they look at the start
:16:07. > :16:10.of the traying day. All of them in positive territory. The FTSE 100 in
:16:11. > :16:14.London just about outperforming Frankfurt and Paris.
:16:15. > :16:18.Now let's get the Inside Track on a software which helps you stay
:16:19. > :16:24.Despite the falling cost of mobile data plans,
:16:25. > :16:27.many people rely on the 300 million public wi-fi hotspots
:16:28. > :16:32.Devicescape is a piece of software which enables smartphone users
:16:33. > :16:45.to connect to multiple wifi networks without going through the login
:16:46. > :16:49.This means that users can stay connected to public wi-fi
:16:50. > :16:52.In return, Devicescape allows brands to send smartphone
:16:53. > :16:55.Devicescape is embedded in other popular apps -
:16:56. > :16:57.this enables companies to send promotions to consumers
:16:58. > :17:07.Wrer joined by the vice president of Devicescape. Thank you very much for
:17:08. > :17:12.coming in. I think we've explained how it works and what proxity
:17:13. > :17:15.marketing is. The idea is you target somebody based on where they are. A
:17:16. > :17:20.company can come to you and say, "We want to target people as they walk
:17:21. > :17:24.into a supermarket or enter a bus or underground and you can do that."
:17:25. > :17:28.Yes, absolutely. I guess why that's important as more and more money
:17:29. > :17:31.flows from traditional advertising into mobile, advertisers want to
:17:32. > :17:36.know that they are getting good return on that and the adverts are
:17:37. > :17:41.relevant. Like wise as consumers use their mobiles more and more as a way
:17:42. > :17:44.to consume information, thet want to know the stuff getting them is
:17:45. > :17:51.relevant. This ensures the messages that gets to the consumers is
:17:52. > :17:56.targeted at the right time and the right place. The adverts pop up on
:17:57. > :18:01.the lock screen. There will be people who don't want to have the
:18:02. > :18:05.adverts. Can people opt-out? Lock screen notifications are well
:18:06. > :18:08.understood by consumers. It's something they use every day for
:18:09. > :18:15.their e-mails, but if it is something they don't want to see,
:18:16. > :18:18.they can disable that this is a transparent opt-in service that they
:18:19. > :18:22.can remove if they don't want to. Are you targeting business users? Is
:18:23. > :18:28.it everyone? Is it more people who are using it for leisure and sending
:18:29. > :18:34.whatsapp messages and so on? I guess at this point we are very much
:18:35. > :18:39.targeting consumers. We work within the entertainment industry. We tend
:18:40. > :18:44.to target people in public locations like supermarkets or coffee shops
:18:45. > :18:49.and cinemas for example. Your success rate is 13% for the click
:18:50. > :18:55.through rate. So for every 100 messages that are sent, 13 people
:18:56. > :18:59.will, well, so let me count, 87 people will delete. 13 people will
:19:00. > :19:02.click on it and will go through. How does that compare with the success
:19:03. > :19:09.rates of other types of advertising? It is very, very high actually. If
:19:10. > :19:15.you look at the industry average for in app geotargeted advertising. This
:19:16. > :19:19.is when you open up an app that's relevant to your general locality,
:19:20. > :19:22.we are 18 times higher than the industry average which shows that
:19:23. > :19:29.consumers like this format and this form of advertising. I suppose the
:19:30. > :19:35.danger is that for example 4G and 5G coverage gets so good that we stop
:19:36. > :19:38.using wi-fi hotspots as much. What's your insulation against that to
:19:39. > :19:43.safeguard the future of what you're doing? So we have moved our service
:19:44. > :19:47.so the consumers don't have to connect to the wi-fi. Our software
:19:48. > :19:51.sits there and it looks for the networks and just by its presence
:19:52. > :19:55.and by us knowing that they are in the location they can serve that
:19:56. > :20:00.particular advert to the consumer. What about rural areas? If you
:20:01. > :20:04.haven't got the wi-fi hotspots then you are not going to be able to
:20:05. > :20:09.target the consumers? Well, over the last ten years, we have crowd
:20:10. > :20:12.sourced 300 million locations. So we have got broad coverage. Pretty much
:20:13. > :20:16.anywhere that's a public location has some form of wi-fi today and I
:20:17. > :20:21.don't think that's going away any time soon. So we can target anywhere
:20:22. > :20:25.that's a public location today. I suppose what do you see as the
:20:26. > :20:31.long-term ambition for the company? What would you like to see it doing
:20:32. > :20:34.in five or ten years? We are trying to improve the effectiveness of
:20:35. > :20:37.mobile marketing. So trying to give advertisers much better return rates
:20:38. > :20:42.on their money and a lot of visibility. So it is much the
:20:43. > :20:48.antidote to programmic advertising. That is specific and very relevant
:20:49. > :20:51.to the consumer. We would like consumers to get less stuff, but the
:20:52. > :20:55.stuff that they get is more interesting to them. We look forward
:20:56. > :21:02.to hearing how it goes. Owen, thank you very much. Owen Geddes there.
:21:03. > :21:05.A Wisconsin company is to become the first in the US to implant
:21:06. > :21:09.So far more than half its employees have volunteered to have a chip
:21:10. > :21:13.Patrick McMullan, the director of the company, Three Square Market,
:21:14. > :21:15.told the BBC it's an exciting development.
:21:16. > :21:18.We're a technology company and they're excited about it
:21:19. > :21:26.The thing to understand is this is not a job performance tracker.
:21:27. > :21:36.What it has is different things that helps you to identify who you are,
:21:37. > :21:41.what our business is and to use it as a form of payment and by no means
:21:42. > :21:43.is it something that we use to track what they're doing,
:21:44. > :21:49.This takes the level of security to a whole new level.
:21:50. > :21:53.One of the things that we're very much ensuring that it's responsible
:21:54. > :21:55.innovation and ensuring that it's used correctly and used
:21:56. > :21:58.for the purpose that it is intended, not for something that nobody
:21:59. > :22:19.Alix Stewart from Schroders is joining us again to discuss.
:22:20. > :22:28.A really interesting development that. How do you feel Alix, would
:22:29. > :22:32.you get microchipped? You can see how we are moving from scanning
:22:33. > :22:36.cards to using your phones for whatever and I guess the logical
:22:37. > :22:39.next step in some ways is to just have a chip. You don't have to
:22:40. > :22:44.bother remembering anything. The one thing to note about the chips, they
:22:45. > :22:48.haven't got GPS. So your boss can't tell if you're in the office. It is
:22:49. > :22:53.for logging on to computers, paying for food. Getting in and out of
:22:54. > :22:57.buildings. It would stop that problem when you get to the doors at
:22:58. > :23:01.reception and someone can't find their pass and they are blocking the
:23:02. > :23:07.way. It happens here. We have got a lot of tweets. Beth says yes, I'd do
:23:08. > :23:15.it, but I'd microchip my children first. Another viewer says no way.
:23:16. > :23:20.Julie says, "If your employees are not responsible to keep track of
:23:21. > :23:27.their badge, I would question the competence of any job?" What's the
:23:28. > :23:34.fun of bionic when your own super power is being able to open doors
:23:35. > :23:40.and pay for stuff! We were talking a while ago about whether Brexit is
:23:41. > :23:45.causing slink flation. Things like chocolate bars getting smaller, but
:23:46. > :23:49.the price saying the same. The Financial Times says it is not down
:23:50. > :23:52.to Brexit and the weak pound, but it has been going on for sometime? It
:23:53. > :23:56.seems to have been going on for the last five years, not just the last
:23:57. > :23:59.year. I think we have all been aware of it that some of our favourite
:24:00. > :24:05.chocolate bars don't seem to be as big as they used to be. Brexit must
:24:06. > :24:11.play a part. Part of it would be import costs which have gone up? As
:24:12. > :24:15.the consumers have been more constrained we have had austerity
:24:16. > :24:22.and so on and people want to see the prices rise, this is the way that
:24:23. > :24:35.manufacturers have got around it by shrinking. Would you rather pay an
:24:36. > :24:44.extra amount to get the same sized Toblerone? Some of the other things
:24:45. > :24:50.mentioned are toilet roll. 240 sheets down to 221 and fewer
:24:51. > :25:02.biscuits in a packet and less chocolate bars. We notice that. We
:25:03. > :25:10.know you have Jimmy Choo shoes! The reason we are talking about, there
:25:11. > :25:15.is a quote on US immigration officials checking out on the
:25:16. > :25:20.importation of fake designer chairs. It is incredible. The number of
:25:21. > :25:23.them. It is really nice to think that they are training people to
:25:24. > :25:26.spot the difference between fakes and real chairs to clamp down on
:25:27. > :25:31.this and they have been quite successful. Last year they seized
:25:32. > :25:38.over $4 million of fake chairs. That's an extraordinary amount. Alix
:25:39. > :25:42.For joining us. That's it from Business Live today. There will be
:25:43. > :25:46.more business news throughout the day. We will be back in these
:25:47. > :25:47.chairs, not designer ones, the Business Live chairs tomorrow. See
:25:48. > :26:09.you then. Hi there. Good morning. Yesterday we
:26:10. > :26:14.had quite a bit of cloud across eastern parts of the UK. Some damp
:26:15. > :26:17.and drizzly weather. Today I'm hopeful it should be brighter the
:26:18. > :26:19.for all of us during the afternoon we are looking at sunny spells and
:26:20. > :26:20.it