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This is Business Live from BBC News
with Ben Bland and Sally Bundock.
More cash - and more controversy.
Facebook's profits rise again
despite growing concerns over it's
role in last year's US election.
Live from London, that's our top
story on Thursday 2nd November.
The social network made more
than $4.5bn in just three months
but says its going to
spend more on security
and policing the service.
Also in the programme....
It could be a boost for global trade
- China cuts import tariffs
on consumer products just days
before the US president
arrives to talk business.
As always, we keep an eye on the
markets, a softer open across the
main markets in Europe, all eyes are
on the Bank of England later for its
decision on interest rates.
And we'll be getting
the inside track from one
of the world's biggest computer
software companies on how it keeps
everything from banks to transport
systems and the internet running
despite offering it's
products for free.
Today, we will be speaking to the
boss of one of the world's biggest
software companies. We want to know
if you are willing to pay extra for
technical support, or even for the
knowledge that you are secure? Get
in touch, use the hashtag.
Hello and welcome to Business Live.
Welcome to the programme.
We start with the world's
biggest social network -
it keeps getting bigger,
And more controversial.
Facebook has announced record
profits and another big jump
in the number of people using it.
That will only fuel the debate
about the power of the network
and the content that appears on it.
Mark Zuckerberg's company made
a profit of $4.71bn in the three
months to September -
that's up 80% same time last year -
as advertisers spend ever more cash.
They're doing that because well over
two billion people log on now
at least once a month -
more than a quarter
of the world's population.
It's up 16% over the past year.
With this vast reach of course
comes growing scrutiny -
for example over its role
in the US election.
Earlier in the day Facebook admitted
to a Congressional hearing that
political content originating
from Russia was seen
by 126 million people -
a huge chunk of the electorate.
With me is Tarek Nseir,
a Founding Partner at the digital
agency, TH-NK - who help
big companies including
Nandos and Warner Brothers
to grow their online presence.
Thank you for coming in. Give us
your take on these earnings. It
would seem that Facebook is going
from strength to strength in terms
of its core business but this extra
added new scrutiny is quite a big
headache for it?
It must be. Putting
scrutineers side for a second, this
is a great quarter. Two years ago,
they invested heavily in Mobile,
they were behind the curve but now
80% of their revenue has come from
mobile advertising. Advertisers love
the platform and the degree of
targeting that you can get. The data
Facebook olds is incredible but
advertisers are beginning to
question the responsibility Facebook
It is a tricky one, if we
talk about it in more detail,
looking at the last two days of
lawyers confessing to Congress about
what was going on at Facebook
before, during and after the US
election, which Mark Zuckerberg
himself said weeks or months ago,
this is crazy talk. It isn't crazy
talk, it is the reality.
It is, the
mixed news of this earnings release
this morning is that next quarter
will be a softer quarter because
Mark's moving the team, there are
10,000 people at Facebook who look
after the community and are trying
to stop these things from happening.
He is upgrading it to 20,000 people.
Considering there are 20,000 people
there already, it's a big move.
Considering the platform size, it's
a tiny number.
It's a big and
expensive move, over 2 billion
people are logging in monthly, many
would argue that this is impossible,
Pretty much, it's about
having smarter and smarter
technology and is definitely about
applying more and more human capital
to the problem. Facebook haven't
been doing enough fast enough.
will happen, will they be regulated
in future and what impact does it
have on Facebook, Google and
Twitter, some of its rivals?
question, for it to be regulated it
would need pressure from many
corners and many nations for it to
be the case. That is probably quite
unlikely but I do think that
Facebook will continue to take their
responsibility more seriously. I'm
interested to see how this upgrading
of their resources go.
And in terms
of the core business and growth,
talking of great month on month, how
will it continue? When we think
about the younger people who aren't
really on Facebook at all?
plenty of fuel left in their tanks.
WhatsApp and Facebook Messenger are
not really monetised but the leading
social network in China, you can get
taxes on it, you can buy clothes on
it, Facebook is taking those moves.
There are over 1 billion users on
these two platforms which is a great
opportunity for Facebook.
talk about it again and again.
It will not be off my agenda. Thank
Let's take a look at some
of the other stories
making the news.
The leading electric car-maker Tesla
has said it's car production
is behind schedule again.
The company has been struggling
to incease the number of Model 3's
that are rolling off
the production line.
It now aims to make 5,000 a week
by early next year off.
The vehicle is key to its ambition
because it is more afforable
than others at just $35,000.
Tesla also announced it's
biggest ever quarterly
loss of more than $600m.
The Anglo-Dutch oil giant Shell has
announced a big rise in profits
for the three months to September.
It made just over $4bn and was well
ahead of expectations.
It reflects growing optomism
in the oil business
as well as the impact
of cost cutting measures.
The chief executive said
it was evidence their turnaround
strategy was working.
A new study claims women around
the globe may have to wait more
than a century to achieve equality
in the workplace.
According to the poll
by the World Economic Forum,
the global gender gap has widened
in the past decade and will take
100 years to close.
The research ranked 144 countries
on the gap between women
and men based on economic,
health, education and
If you watch the show regularly,
it's a big day for you today...
There's a widespread expectation
that the Bank of England,
one of the world's most important
will raise interest rates
in a few hours' time.
If they do that...
It would be the first
rise for ten years,
in which time the UK as been
recovering from the global
Simon Gompertz reports.
This could be a shock for people
in millions of homes
which are saddled with
a variable-rate mortgage,
homes like this one in Oldham.
The owner, Lynn, has struggled
financially ever since a car
accident stopped her working.
I am literally living -
I wouldn't say on the bread line,
but very, very close,
and any hike in interest
or supermarket bills
affects me instantly.
The Bank of England has to decide
whether, with the economy growing,
there is a case for keeping
interest rates low.
The Governor, Mark Carney,
has already given hints that a rise
is on the way.
The bank's base rate was cut to 0.5%
in the midst of a financial crisis,
then to 0.25% after the EU
referendum last year.
The speculation is that it will be
put back up to 0.5% again.
I think, whether you are a saver
or a borrower, I don't think
the increase will be
that significant now.
But the likelihood is we'll get
a series of increases,
maybe two more over the next two
to three years, so it will start
to have a more material impact
on our everyday lives.
In the financial world,
they are so convinced that a rate
rise is on the cards
that the pound has gone up,
in the hope the money kept in the UK
will give higher returns.
So, if that doesn't happen,
the markets will be caught
on the hop.
You will be all over that later,
Yes, I will be in the
city to gauge the reaction is to
that, and how it will affect the
pound and people's pockets.
China is taking steps to boost
foreign imports ahead
of President Trump's
visit next week.
The trade relationship
between the two heavyweights
is expected to be a major
topic of discussion.
The US president has been strongly
critical of China's massive trade
surplus with America,
blaming unfair trade practices
including heavy tariffs.
Our Beijing Correspondent,
John Sudworth, joins us.
Talk us through what China has
announced ahead of Donald Trump's
visit? These reports are coming from
the Chinese Ministry of commerce.
Basically saying that they are going
to cut tariffs on a range of
consumer products and boost bank
lending for imports. The reason that
the commerce ministry suggests is
nothing to do with concern about
what China's huge trade surplus is
doing to other markets but there is
concern about what the trade surplus
means for its own consumers. There
is a knock-on impact here, and an
impact on inflation and they say
that they are acting in the
interests of allowing Chinese
consumers to share a greater portion
of national wealth.
Asian shares inched higher.
A relatively weak yen, a positive
factor for Japanese exporters,
helped lift the Nikkei.
Sony shares added another 2.8%
as the firm raised profit
forecasts and announced plans
to revive its robot pet dog.
Chinese internet giant Alibaba
was due to release its third quarter
earnings after Asian markets closed,
with investors watching
closely to see if heavy
investment has yielded further
rapid revenue growth.
Meanwhile, investors are braced
for what many of them expect will be
the Bank of England's first interest
hike in more than ten years.
On equities - oil giant Shell has
reported a large rise
in third-quarter profits
after the energy giant was boosted
by higher oil prices
and increased production.
It comes as the price of crude rose
above 60 per barrel this week,
its highest price for five months.
Tesla's share price fell after it
admitted production of its new Model
3 car is months behind schedule.
In the US the Fed, as expected,
kept interest rates unchanged.
But all eyes will be
on the confirmation of the next
Fed Reserve chair widely expected
to be Jerome Powell.
Tech giant Apple will be reporting
earnings on Thursday. We could hear
more details about pre-orders for
the new iPhone X that begins
shipping on Friday. Investors will
want to know about the company's
outlook for the upcoming holiday
season. Coffee giant Starbucks will
be reporting their earnings, they
face stiff competition from low
priced food chains like McDonald's
and more upscale food chains like
Bluebottle. They are grappling with
calling growth in the dominant
market here in the USA. Finally,
Canada's Aerospace pacemaker
Bombardier will be reporting
earnings, analysts are looking at
more details for the decision to
give a majority stake to your's
Airbus, the news came after US
officials slapped Bombardier with a
300% tax for any C series plane
coming into the USA.
It is such a
busy day today, I cannot stress that
Joining us is Jessica Ground, UK
Equities Fund Manager at Schroders.
I say that because we have the
central bank news, John Rovman
Powell as a possible nominee and
aunts today and all of the earnings,
apple to come later. What are you
watching? What are you most
interested in today?
expectations are key on all of these
things, the expectation is that we
have a 25 point bass rise from the
Bank of England but people are not
expecting interest rates to rise
significantly after that. The key is
we have the minutes and we
understand better what people are
thinking about in the future. John
Rovman Powell is expected to be
announced to leave the Fed... --
Jerome Powell. He has been there for
a while and as we have learned with
Donald Trump, until something is
signed, sealed delivered...
be watching his Twitter feed!
the interest rates, I was reading a
take, because it is widely expected
that they will raise those rates, a
lot of it been priced in. If they
don't, that is where we could see a
bigger move in response?
would be surprised. On one hand it
is a doubling of rates to half a
percent but the 25 base points were
taken towards the end of last year
in response to Brexit and the bank
wanting to support the economy into
that. As you say, it is a sign of
strength when the bank feels that
they can return rates to a more
normal rate but if they feel like it
is weak, that will be a negative
Shall's share prices have
barely moved this morning inspired
birth strong results -- Shell.
key thing is not only their oil
price but they are digesting their
acquisition of British Gas. BT. That
will change your as is quite
significantly. It's great that it
seems to be going well. There are
quite a lot of investors that would
go well and it is quite in line with
Thank you. Jessica
will join us later on other stories
like Tesla, we will talk about that
Still to come:
We get the inside track on one of
the biggest software companies in
the world. How it keeps banks and
transport systems running, despite
offering software solutions for
BT Group reports a 14% drop
in second-quarter adjusted earnings
BT Group reports a 4% drop
in second-quarter adjusted earnings
to £1.81 billion for the three
months to end of September.
But the company's earnings
still came in ahead of target,
despite struggles to turn
around its Global Services unit.
Our business correspondent,
Theo Leggett, is in our
Business Newsroom with more.
Talk us through it.
It is a mixed
bag but generally disappointing
results from BT. A key problem is in
its global services unit, the unit
that provides outsourced network IT
infrastructure for companies and it
seems the trend away from
outsourcing is affecting that the
mission. It has been weighing on
BT's results for a while. In this
quarter profits were down 40% and
sales down 10%, so that is the weak
area. Some concerns over BT's TV
business despite the fact it has
invested in sports rights, Premier
League sports rights. It only added
7000 new subscribers during the
quarter, compared to 63,000 added
last year. There is a bit of concern
there. But on the other hand the EEE
mobile division has been doing well
and that has offset business in
other parts of the company.
this morning about BT considering
what to do with its pension scheme.
There were some people expecting BT
to announce the closure of its
pension scheme. That has not
happened, it says it is still in
discussion with its unions. But it
still has a deficit that is a
problem. What we are likely to see
is some form of closure of its
existing scheme, or restrictions to
it, and a new scheme coming in. At
the moment those talks are still
Thank you very much indeed.
There is so much news coming out all
the time and it is on the business
live page. Also Morrisons is
stepping up its competitiveness and
it has just released its
like-for-like sales for the 13 weeks
to the end of October. Its
like-for-like sales represent 2.5%,
but it is talking about the impact
of a lower sterling on its profits,
making its margins really squeezed.
It is tough out there for retailers
on the high street, especially
Our top story, Facebook's profits
soared in the three months to
September, it brought in $10 billion
from advertising. It says it will
spend more on security over scrutiny
over how big was exploited during
last year's US election.
over how big was exploited
during last year's US election.
A quick look at how
markets are faring.
Not giving as much direction, but
those are the numbers. They are
treading water ahead of that
decision from the Bank of England in
decision from the Bank
of England in London.
Now, we're going to be talking
about open source technology.
Put very simply, this is software
which is free for anyone to use.
Red Hat provides products based
around the world's most popular open
source platform Linux.
It offers bespoke software such
as operating systems,
cloud computing platforms
and software development.
And if this sounds like the sort
of thing for small or startup
companies, you may be surprised
to learn that Red Hat helps more
than 90% of Fortune 500 companies.
Jim Whitehouse is CEO
and President of Red Hat.
Good morning, welcome. We have
explained in a very simple way what
you do, could you elaborate on that?
We take software that is often
developed by Google and Facebook,
things like Alexa and hey, Google,
that those companies allowed to be
open so the source code is freely
available and we take that and apply
that to a bank because the same
technology can do fraud detection.
We take this open source software
and make it secure and reliable for
large enterprises to use.
are saying our big organisations and
some of them are old and traditional
and some are not so. You say, yet is
this software, we will make sure it
works for you, it is secure and it
does what it needs to do and it
makes you better and does not harm
Exactly. When these web
companies write the software it is
not built for enterprises in mind
and we take the software and make
sure there are no security issues,
we offer tech support and we
life-cycle it. We take this
information and make it consumable
And these clients
pay for that service and that is how
you make money.
We were asking for tweets about open
source tech and tech support and
people are happy to pay for this
premium model where you get
something for free and pay extra for
a premium service. Linda says, why
would I pay somebody to tell me to
switch it on and off again? Maybe it
must be the software. Someone else
says, I know how to Google, I do not
need tech support.
But one person said, I will not pay
to have a person tell me how to make
your product work. Explain why to
your clients this is critical.
have free versions of all of our
software that any consumer can
download and use. But if you are a
stock exchange or you are running a
nuclear submarine, some of the most
mission-critical applications out
there, you are not plugging it out
and in again, so we have to make
sure it works 100% of the time. We
are paid for production applications
like trading platforms and billing
systems which you cannot take down.
You have been running the company
for ten years and prior to that you
were with D, you were the chief
operating officer there when it was
going bankrupt and you were there
for some time. This is such a
different job. Your skill set moving
from that to this, talk us through
that, it was a big change.
It was a
different type of situation because
you are trying to drive efficiency
across a big global business. Legacy
airlines, big issues. Indeed, but
Read Hack is all about innovation.
But leadership and building a team,
building a culture and driving
direction, those across enterprises.
In technology are a lot of companies
rely so much on a founder's vision
that they have trouble scaling and
one of the things I think
leadership, not necessarily me, it
can be helpful in some of these
newer tech companies to help them
build their culture as they go
Do you think companies so
much in the news right now like
Facebook, in some ways some of those
companies are lacking that? They are
growing extremely quickly
exponentially globally, and yet they
have not got that skill set say
somebody who has worked in other
areas of business elsewhere, that
they may bring.
I do not want to
speak about specific companies, but
people who run small companies and
founders are great at getting
companies to a certain size. It is a
different skill set to run a 50,000
company than a 5000 present company.
A person running a 5000 company
would fail running a 50,000 company.
Bill Gates recognised that and
brought in a team as Microsoft
groove. Great companies learn and
their founders learned at some point
that it is time to recognise what
you are good at and bring in others
to augment it. Some companies have
been successful and done that and in
others the founder stays too long.
Your name is Jim Whitehurst, not Jim
Whitehouse, you were too polite to
tell us. Thank you for coming in.
Thank you for coming in.
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.
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Facebook. Business live on TV and
online whenever you need to know. We
are running out of time.
We are running out of time.
Let's see what other
stories are being talked
about on social media.
Let's kick off with Tesla, Jessica.
Concerned about production levels
and about how much the company is
spending. What is interesting is the
shares are off and the debt as well.
People are thinking about leveraged
and it is hard to build a car maker
And delay on the model
three-car, there is so much
anticipation, everybody wants this
car, yet it cannot seem to deliver
Scaling up the production
was always going to be complex and
issues around the batteries as well
are causing delays.
I was fascinated
by Tesla because Elon Musk is
raising money over and over again
and yet this is a company that has
still got a lot of questions hanging
It is significant that the
bond is traded off and people are
doubting whether profitability will
be. Tesla can still be a success,
but there are questions over the
It has been good to have you