11/08/2017 BBC Business Live

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This is Business Live from BBC News with Susannah Streeter


Snap, crackle and pop - the bubble looks to have


well and truly burst for Snapchat's parent company.


Shares plunge on bigger than expected loss.


Live from London, that's our top story on Friday August 11th.


Snap shares plunge by close to 17% as losses mount.


We'll be discussing what's gone wrong for the company that was once


From one troubled tech firm to another - Uber's ousted boss


Travis Kalanick has been sued for fraud by one of the company's


Also the latest on the European financial markets, cannot see


exactly what is happening at the moment but stocks have opened more


low following losses in Asia and the US as the war of words between


America and North Korea rattles investors. And we will talk about


the Google diversity road, the founder of Uber being sued. And as


tourists in Spain face a backlash from locals protest against tourism


we want to know have you ever faced hostility on your holidays from the


locals? Snapchat is the disappearing


messaging service that just keeps Its parent company Snap has


seen its share price sink like a stone in after-hours trading


as it reported widening losses. Snapchat launched in 2012


as a mobile app that allows users to send photos that


vanish within seconds. It's been a big hit with millennials


but has never made a profit. Perhaps the most keenly-watched


number by investors is the number That rose to 173 million -


up only 4% compared with the first Compare that with Instagram Stories,


a service on the Instagram platform Revenues at Snap almost doubled


for the quarter to $181.7 million, which seems positive but is also


lower than analysts The tech firm lost close to half


a billion dollars in the quarter, and investors will be very aware


that that's just not sustainable. Today's results came out


after the closing bell but the company has had a rough ride


on the markets since it went public in March,


with blockbuster valuation It's not shown on this


graph but in after-hours, trading shares were down by close


to 17%. Simon Collister specialises


in digital communications at the marketing firm Blackbook


London. Which of those numbers should we be


paying attention to, the user numbers, profits, revenues? It


depends who you asked, a lot of the focus has been on daily active


users, the number of people interacting with the platform on a


daily basis and whilst there has been growth, it's clearly not good


enough. But if you asked the founder and CEO of the platform he is keen


to point investors away from that, saying there is too much focus on


that and we should look at the engagement rates. And what are they


doing? They are looking quite impressive. What are they? How


people spend on the platform on a daily basis? It is a beacon of light


in terms of the results. Numbers of up to 40 minutes per day. That is


important to him because the longer they spend on it the more they pay


attention to advertising which means it's more attractive to advertisers.


That is a key point he is making, Facebook have an average time of


engagement of 20 minutes a day so this is double. And it's a much


younger demographic. They have always believed they can grow


revenue from the existing user base. But investors want a faster return


given the huge valuation. Yeah, that's where they are going to find


themselves in a difficult situation. They have been reluctant to


entertain ideas of quick growth, growth hacking as it is known in


marketing circles. Allowing users to add their own network, and they have


been against and that as they think it would compromise integrity. One


good idea seems to be fantastic then it runs out of steam and other


people copy it as well, look at Instagram. Yes and that's going to


be a challenge. The opening valuation was always based on the


idea they could out innovate Facebook, but Facebook were very


quick at copying what they had done. It's about how they can innovate


which will keep them ahead. And if they do not will they get snapped


up? CHUCKLES That is the big question, there were


rumours Google was interest last year and it seemed like an ice pick,


Google has always struggled to build its own mobile social network. Thank


you so much Simon. Europe's egg safety scare has led


the European Union Commissioner in charge of food safety to call


an urgent meeting of ministers Vytenis Andriukaitis has also called


on Belgium and the Netherlands to stop blaming each other


for the problems. Millions of eggs have been pulled


from European supermarket shelves over fears they contain


a banned insecticide. Google's parent company Alphabet has


cancelled a company-wide meeting to discuss a controversial memo


on gender diversity. The firm said there were concerns


some staff might be attacked Earlier this week the male software


engineer who wrote the memo was sacked for arguing the lack


of women in top tech jobs was due to biological differences


between men and women. Australia's financial regulator says


it's opened its own inquiry into accusations of money laundering


against Commonwealth The regulator's chairman said


the country expected better The bank has said a computer coding


error was behind more than 50,000 alleged breaches which could cost it


billions in fines. Let's go to China where


the country's largest social media platforms -


Weibo, WeChat and Baidu Tieba - are under investigation for alleged


violations of cyber security laws. Our correspondent John Sudworth


is in Beijing and he's been What are the accused of doing? These


are amongst the most powerful social media platforms in the world, each


of them used by hundreds of millions of people here in China and beyond


and the cyberspace administration of China has issued this directive


today saying they are now under investigation and the concern seems


to be the idea that some of the content, some of the charts and


messages and material being shared in danger as national security and


the cyberspace Administration points to things like spreading false


rumours, issues related to terrorism, concern about the content


there as well as pornography and a general sense that these platforms


are harmful to China's maintenance of political stability and order.


They are already very, very heavily monitored and censored but I think


this sends a message particularly at this moment in time just a few


months away from an important Communist Party congress, we have


seen a tightening of Internet controls in other areas and I think


a lot of people are reading this as sending a strong message that they


need to get the houses in order and get much better at policing


themselves. The signal is much more censorship and control to come.


Thanks very much. We'll keep an eye on that.


The standoff between the US and North Korea has been


Appetite for risky assets is low - instead investors are piling


into perceived safe haven assets like gold - the swiss


franc and the yen and that's put a bit of pressure


up reasonably well - but other indices in asia also felt


stocks suffered their biggest losses in nearly three months -


with around $30 billion wiped off the value of US blue chip


One firm that's hoping to be on wall street in the not too


distant future is Ride sharing giant Uber.


In June its co-founder, Travis Kalanick, was ousted as chief


executive after a series of scandals hit the company.


He is now being sued for fraud by one of their biggest investors.


Dave Lee is in San Francisco with the details.


When Travis Kalanick was forced out as Chief Executive of Uber he kept a


seat on the company 's board and a 10% stake in the farm but since then


it has alleged he has been concocting a plan to get his title


back. He reportedly told close allies he was Steve Jobs it, a


reference to the Apple founder who was forced out of the farm only to


triumphantly return more than a decade later, this alleges Travis


Kalanick fraudulently expanded the board to fill out with allies to


make such a return possible. Benchmark capital said it would not


have agreed to more board seats if it had known Travis Kalanick's


plans. If successful this legal action could see Travis Kalanick


kicked out of the company he helped build.


Simon Derrick, Chief Markets Strategist at the Bank


Have to talk about a country we do not normally talk about, North


Korea. The influence the geopolitical tensions have on the


markets, it's been rather slow in coming, nobody really paid attention


to this until about three days ago. And that is the interesting thing,


the markets not been that sensitive, I think monetary policy joined


everything out but over the course of last 18 months we have had no


consensus events happening, things like the election in the US, the


Brexit vote here, market suddenly becoming rather more sensitive and I


think this will prove to be another one of those and at the moment the


market is waking up to the fact that perhaps this is a rather different


kind of red like -- rhetoric. It is hard to read directorate coming from


the Trump administration, the Defence Secretary saying one thing


and President Trump seeing a much more hardline stance. And that is


the thing, this is taking place in August which is traditionally thin,


it can be more volatile, some of the larger moves taking place in August.


The risk is the market, with that uncertainty starts to take an


increasingly risk averse tone and I think that's going to be an issue


going into next week. Briefly on one company, some results from News


Corp, it showed a fall in their print advertising income. Yeah, that


move away, remember of course, one of the key newspapers within UK was


the content for Facebook,


our Technology Correspondent Rory Cellan-Jones will chart a path


through all the big tech stories You're with Business


Live from BBC News. A flight delay is one


of the worst possible Well, according to new BBC research,


air passengers using Gatwick Airport and flying on EasyJet have suffered


the longest average delays Kevin Peachey is in our


business newsroom. you have been looking at these


figures, what more do they tell us? You could have been unlucky and got


a flight from London to New York on a particular airline with average


delays of an hour and a half but overall it is Gatwick that you


mentioned with the worst average delays, 27 minutes on average and


for the airlines it is easyJet, 24 minutes average delay. There are


others, British Airways, Thomson, they also have delays of more than


15 minutes. These are figures from the last two Summers and past


performance does not necessarily mean it will be the same, but if you


look at the calculator on the BBC News website over past delays if it


has a record it might be worth packing an extra book or downloading


some cartoons for the kids. Is this way can gauge which airports and


airline to use? Yes, past performance is only a guide of


course but airlines and airports will say there are things beyond


their control, strikes and congestion in the skies and there is


a broader point over airport capacity and our demand for cheaper


flights and clearly there needs to be a quick turnaround for these


flights to keep the costs down and that leaves them more prone to


delays. Thank you Kevin. A story from The Today Programme


which interviewed the former aide to the Brexit Secretary David Davis. He


said on that programme the voters had been, quote, sold a pack of


lies. Mr Chapman added, my view is that the Conservative Party brand


has now been damaged to such an extent that it will never again get


a majority. He said the hard Brexit plan will


make Black Wednesday look like a picnic. There is lots more you can


read about on the BBC News website about the impact of Brexit. Or the


perceived impact of Brexit. He has had lots of coverage over


last couple of days, done several interviews saying the same thing.


You can read that on the BBC website, as we say.


You're watching Business Live - our top story:


There's been another sharp fall in the value of shares in the social


At one stage they slumped nearly 17 percent, after Snap reported


more than $400 million in quarterly losses.


The former Uber chief executive has been making headlines.


Google's been embroiled in a big row about gender


Meanwhile Facebook is launching a new video service and Netflix


and Disney have parted company over access to videos.


Lots to talk about. So much going on.


Our Technology Correspondent is Rory Cellan-Jones.


I would like to ask you for your take on Uber, the latest twist and


turn Uber story. What an extraordinary story. I can think of


a previous occasion where a venture capital backer of a major company


has got into a mud fight with that company, or at least its founder,


while still being a major backer. Benchmark Capital, one of the big


names in Silicon Valley, basically accusing Travis Kalanick of all


sorts of misdeeds, unhappy with the culture he has created at the


company, unhappy with the idea that he will still have influence. What


have they been doing the last few years?! Have they suddenly woken up


to what is going on?! Arianna Huffington has been brought onto


board. There has been a huge weight of money coming behind this company,


an extraordinary amount of backing, $8 billion or so, and you would have


thought that people putting that money bind the company would have


asked a few questions a bit earlier. Moving onto Facebook, Disney pulling


out of Netflix, starting its own streaming. Is this part of a general


trend? Another fascinating week in the ongoing battle between new and


old media, in a way. We know about Netflix making huge strides, we know


about Amazon Prime video signing up lots of people for OnDemand video.


Facebooked, there is already a lot of video out there, making a


determined pitch that they will be a place for original content.


Facebooked, funnily enough, the company said we are not a media


company, we don't need to be regulated like a media company, now


they are saying they will have original content which they will


commission. Treading on Netflix's toes? Yes, taking on YouTube, they


will reward people in the same way that you tubers get rewarded, they


will give them a share of advertising. A big battle going on.


The other development this week is Disney, you could count that as an


old media company, waking up to the fact it has been giving away its


contents, or at least rewarding a new platform with its content,


Netflix, saying we will take that off and do it ourselves. About how


will they do that? They said they would set their own platform? There


are already various Disney Digital platforms which have not made a huge


splash, this is the dilemma for a lot of old media companies. We are


all putting our content is old media companies on Facebook, including the


BBC. A great way to access new audiences. But we are watching as


they take the profits under control. Is there a problem for Netflix, the


fact it will not be working with Disney any more, all is Netflix too


big for that? I think Netflix is already past that stage. It has been


an incredibly bold company. When they first said they would spend


hundreds of millions of dollars, billions of dollars, on making their


own content as well as buying it in, everybody thought it was a bit


bonkers, it has turned out to be a pretty wise move. Google, there was


a big meeting to be held about gender diversity but it seems like


it has been cancelled. What is the update? Extraordinary upheaval over


this week. It is a mark of how big a crisis it has been for Google that


when this memo we merged questioning their diversity policy, the chief


executive broke off his holiday, came back and said we would have a


big meeting on Friday, he has cancelled bats because there has


been a huge backlash, which is quite scary to people inside Google, with


pictures and details of people published online on Conservative


websites. There is a mood of extreme disquiet within Google that they


will be caught up in a sort of culture war and people are feeling


pretty vulnerable. I gather he was so keen to make the point that


immediately after the meeting was cancelled he went to a coding course


and was talking to girls, a coding course specifically for girls and


saying we need you to come into the industry. I think it is part of this


attempt to undo this image that Silicon Valley has of being sexist?


Talking about it Uber has had all sorts of issues with its treatment


of female staff. Google has wanted to get ahead of that, knows it has


an issue, has put in all these diversity programmes, that is what


this engineer who was sacked was objecting to, the extent of the


diversity programmes. And I think the Chief Executive was good --


doubling down and saying we will carry on. While still trying to say


we have free speech in the company, a tricky balance.


Thank you, Rory, as usual. And you can hear more


about the latest from the tech world with Rory on his Tech Tent programme


on BBC World Service radio at 14:00 GMT today


which is 15:00 here in the UK. And if you miss it you can download


the podcast via the BBC website. In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. The Business Live Pages Where You


Can Stay Ahead With The Breaking Business News we will have insight


and analysis from the BBC editors right around the world.


We want to hear from you, get involved on the BBC Businesslike web


page, on Twitter or Facebook. Business Live on TV and online,


whenever you need to know. What other business


stories has the media been Simon Derrick, Chief Markets


Strategist, Bank of New York Mellon Let's talk about holidays, it is


holiday time. There is a story on want a cheap holiday, to be saying


Spain is too expensive, go to Bulgaria. What is interesting is


there has been a rise of protests taking place in Spain are people


essentially saying tourists seem to be taking over our cities, it should


be rather more balanced, not just in Spain, Venice has a very similar


movement taking place. On one hand you could look at this as being


simply about the sheer success of these cities as tourist


destinations, there is another side, which is there has been a recovery


in Europe but it is perhaps a recovery that is only benefited...


Surely it is also Tui trying to expand its market to Bulgaria? It is


a great marketing move, nobody would argue that. Maybe we should do more


of that in the UK. But I think it is a major thing that we are getting


movements like this in place. It is part driven by how we have driven


the recovery in Europe. This story has been picked by Bloomberg. They


have statistics showing the managers are making the most of the recovery,


it seems as if the recovery is not benefiting those workers and those


people trying to find houses in Barcelona and some of the big


Spanish cities, they are fed up with being squeezed out and not making


the money? It is really a mark of how this recovery is different to


ones we have seen in previous decades. Feels as though there has


been a real split between the relatively well-off who seem to have


come back relatively well and relatively quickly, and those


further down... Why is that? I think it is to do with what has been used


to drive the recovery. A lot of that was due to the ultra-easy monetary


policy, quantitative easing. That is great if you owned a house, shares,


assets of any kind. Yes we have had one of the longest ones for a long


time, it has been driven by easy monetary policy. If you had a


pension or own day house he did very well, if you did not own those


things you left stomach felt left behind. People trying to rent in big


European cities in seeing tourists coming into Airbnb properties feel


disgruntled? That is what you see behind these movements. In fairness,


you suspect it will continue. The people who own the houses are making


the money? That's it. Thank you. Thank you for joining us.


There will be more business news throughout the day on the BBC Live


web page and on World Business Report.