tv BBC Business Live BBC News April 28, 2017 8:30am-9:01am BST
this is business live. raking in the billions. here's the question, can the likes of google and amazon keep on growing. google finds it way with mobile ads and amazon delivers its majestic numbers but are these billion—dollar companies to big? south korean shares sink as president trump says he will renegotiate the trade deal with career. the markets are holding steady, watching and waiting for key economic figures and gdp due from the uk, france and the states. and would you trust an app to be your doctor? we'll be getting the inside track on all the big technology stories of the week with our very
own rory cellan—jones who will also steer us through the world of flying cars. flying pigs, more like it. and how do you like to read? ebook sales in the uk have fallen 17% as readers bring back the book — do you tap or turn? and why? let us know... just use the hashtag bbcbizlive. welcome to the programme. we start in silicon valley where three of the biggest names in technology have been reporting their numbers for the last three months. we are talking about the tech titans — google, amazon and microsoft. and it seems they are just getting bigger and bigger. the numbers are jaw dropping, take a look. dominates online advertising. but it's still managing to grow very fast. google‘s parent company alphabet saw
revenues jump by almost a quarter on last year. up 22 % to $24.8 billion. remember this isjust 3mths worth of sales. $5.5 billion of that was profit. it's the same story with amazon. it's one of the world's biggest retailers — it dominates online shopping — and still saw sales grow over 22% to almost $36 billion for the three months to march. three quarters of a billion of that was profit. amazon has been growing sales in double—digits for 20 years! microsoft too is raking in huge sales. many people wrote it off as a victim of the decline in pc‘s and the rise of tablets and smartphones. but it's become a leader in cloud computing. it made revenues of over $23 billion, although they were only up 6% and that was less than wall street was expecting. cyrus mewawalla is managing director
of the global technology research company cm research. always good to see you, thanks for coming in. you know that question, let's use google and amazon as an example, are they to big, too dominant? they have produced a very big good product and not a lot of competitors out there, it's not theirfault, is it? competitors out there, it's not their fault, is it? absolutely. there is article in the financial times about anti—trust concerns as well. microsoft already have that, they had to take away microsoft from" windows. amazon has two businesses. the real issue is government tax regulation needs to be performed because high street retailers pay too much tax and amazon, which sells digital goods can avoid tax. on the cloud business
of amazon, there's no issue because amazon invented the cloud. it was an internal product. sorry to interrupt, amazon makes most of its money... from the cloud. we talk about microsoft and rachel explained that we used to think microsoft has gone now because nobody is buying pcs but it got into the cloud, why are they making so much money from cloud and why is cloud important? why is cloud imported? everything we do is software, that is leading the world and software is moving from the desktop to the cloud. not only your desktop but the bbc‘s computers, they used to be in—house, now they are moving to the cloud. every company is doing the same thing, why? it's betterfor users because it's cheaper, it is better for app developers, because it is easier to roll out apps. once you have a cyber security patch, put it on the cloud and it is immediately rolled out of the world, you don't have to download and install. that is why cloud is happening, cost
savings. but why is it important? if you look at amazon, it is the leading cloud infrastructure, microsoft is number two, google is number three and ibm is four. the cloud has three levels, infrastructure as a service, which are the servers in data centres, platform as a service, which are things like an operating system or mac sales force and software as a service. things like office 365, microsoft word and someone. infrastructure as a service is the most important bit of the cloud. that is like the operating system for the next internet tv, the debt of things, artificial intelligence. they all sit on cloud infrastructure and amazon has a 40% market share —— the internet of things, artificial intelligence. it is quite notable that where amazon made revenues of £36 billion, only three quarters of a billion was profit, where is the rest of the money going? if you look
at the top five tech chance, then margins, operating margins are about 30% but amazon's is about 3% at operating level. that is because amazon has a completely different philosophy. it invests in a 10—year cycle. most listed companies invest ona cycle. most listed companies invest on a three—year quarterly cycle. cycle. most listed companies invest on a three-year quarterly cycle. in a nutshell. have a great weekend, we a lwa ys a nutshell. have a great weekend, we always appreciate your time. let's take a look at some of the other stories making the news... barclays bank says it doubled it's pre—tax profit to about $2.17 billion in the first three months of this year as it put some big costs of recent years behind it. it's also coming towards the end a of major restructure which means it faces a big one off charge on it's african business which it intends to sell in the next two to three years. chief executive jes staley says he's optimistic about the british banks prospects. staying with uk banks, the troubled royal bank of scotland made a profit of $331; million in the first three months of 2017. it's the first quarterly profit the bank has made since 2015. rbs is majority—owned by the uk government after being bailed out during the financial crisis.
it is really the uk taxpayer who owns them. it said its cost—cutting plan was ahead of schedule, and that it had already made more than a third of the $968m worth of savings it's targeting for this year. starbucks shares were down some 5% in late trading after the us based coffee chain cut its full year profit target after it's sales growth failed to meet a 5% target. profits were just over $650m. it's a tough start in the job for kevinjohnson, who succeeded howard schultz as ceo this month. the company has pledged to return to the rapid growth it once enjoyed — but has been struggling to boost its core us business. the kentucky doctor dragged off a united airlines flight from chicago earlier this month has received a financial settlement from the airline. you know this picture. lawyers for dr david dao, 69, say a condition of the payout is that the "amount remain confidential".
dr dao was violently removed by airline law enforcement officers after refusing to give up his seat to united staff. i want to know... if united is watching, we really want to know! everybody around the world is dying to know, how much that man god, millions, sean lee! how much pr disaster can cost a company —— how much that man got, millions, surely. president trump has been telling reuters news agency he will either renegotiate or terminate what he called the united states' "horrible" free trade deal with south korea. he also says seoul should pay for a us anti—missile system that he priced at $1 billion. steve evans is in seoul. what has the reaction been about potentially renegotiating this trade deal? in hard numbers, the korean
one is stand—by 0.7% and the markets are down slightly, stock markets —— the korean currency is down by. politically it isn't playing well, particularly that suggestion that south korea should pay for the anti—missile system. but there is a bit of scepticism here. a foreign ministry official told reuters that the difference between words and policy is often great. let's wait to see how this thing plays out. look at the change of policy from the trump administration on nafta for example and on china being a currency manipulator. there's not a feeling in this country that mr trump's are absolutely set in stone. and the deal goes like that. steve eva ns, and the deal goes like that. steve evans, thank you for your time. asian stocks slipping overnight — investors selling to take a bit of profit.
loads of economic figures out today that the markets will be watching for. keep an eye on the dow with first—quarter gdp figures for the united states due out today. and in europe we also have first quarter gdp for the uk and france and euro—zone inflation figures for april, while the markets wait for those. let's go to samira hussain on wall street. how much has america's economy grown in the last three months? we will find out later on friday when the commerce department releases the latest gdp figures. the expectation is that the in gross domestic product will have dropped almost by a full percentage, compared to the previous quarter. president trump campaigned ona previous quarter. president trump campaigned on a promise to bring growth up to 3% and that the newly released tax proposal will help spur robust growth. earnings continue on friday. exxon mobile will be
reporting. cost—cutting measures will likely have boosted profits for the world's largest publicly traded while producer. finally, the used car company ca rva na while producer. finally, the used car company carvana will while producer. finally, the used car company ca rva na will start trading on the new york stock exchange. this company allows customers to pick up cars they buy on the internet from vending machine like towers. let's stay with the markets. joining us is tom stevenson, investment director at fidelity international. afamiliar a familiarface, a familiar face, good too a familiarface, good too happy a familiar face, good too happy with as always. tomorrow marks the 100th day of president trump. since he has been president of the united states. there are some stories around the french paper, le figaro about his first 100"chaotic" days. they are talking about the us economy, the job numbers. but i say credit where credit is due. business and consumer confidence in the us is up from trump and so has the stock market,
it has rallied, isn't that the trump effect? i think you're right, when trump was elected, there was a lot of positive optimism from the markets about what he might deliver. the evidence for the first hundred daysis the evidence for the first hundred days is a bit mixed. napoleon said bring me lucky generals and i think trump was lucky because a lot of the good news was already baked in. the improvement in the american economy was already there and he has written on the coat—tails of that. the two issues for me, really, delivery, can he get through the measures he wants through congress? we saw the tax reforms this week. it's going to be hard. frankly, they were very sketchy and how is he going to pay for them? how will he persuade congress that is the right thing to do? secondly, his flip—flopping, changing his mind. and after this we, the north american free trade agreement, he was going to renegotiate that, cancel it, now he is not —— this week. china, currency manipulator, no, they‘ re is not —— this week. china, currency manipulator, no, they're not. the
verdict is pretty mixed. monday is the 1st of may. looking ahead to the summer, there's an old stock market adage, which you had to tell me, will sell in may, go away, don't come back until... saint leger day, the horse race in september. the summer the horse race in september. the summer isa the horse race in september. the summer is a bad time to be in the stock market. there is some evidence that that is the case. on average, the stock market does perform better in the winter months, no one really knows why. the trouble is, for an adage to be useful to investors it has got to be predictable. this one is not predictable. we did some research at this, we looked at the last 20 years and we found ten times the market rose in the summer, ten times it fell in the summer! it's a bit of fun but as an investor, does it help you, probably not. we need to wrap it up. are we expecting good numbers, the uk and us economy? gdp? the underlying story is pretty good.
you will take us through some of the paper stories? yes. and about the books. do you read or do you tap? turn yourtap! no books. do you read or do you tap? turn your tap! no laughing at you either! still to come... this week's tech takeaway. flying cars and fake news. our technology correspondent, rory cellan—jones, will chart a path through all the big tech stories of the week. he is waiting in the wings. you're with business live from bbc news. later this morning, we'll get officialfigures on how the uk economy grew in the first three months of the year. gdp increased by 0.7% in the last three months of 2016. but britain's economy is expected to have cooled considerably in the first three months of this year. ben thompson is at a cash and carry in the midlands to find out how the economy is affecting the business and its customers. we're here at east end foods. it is
a cash and carry selling too big and small firms. it also manufactures and sells some of its products around the world and imports raw materials as well. it is the perfect sample of business facing up to uncertainty as far as the economy is concerned. google get the latest economic growth figures later this morning. let's discuss them. —— we will get. good morning. let me start with you, jason. we talk about uncertainty. as far as the economy is concerned, it is very uncertain at the moment. what does that mean for you? last years since the referendum vote we have seen the currency referendum vote we have seen the currency situation affecting the business with devaluation of sterling. we net imports. we process and manufacture here in the uk.
those costs are difficult to pass on to our customers and the consumer. there is a feeling that if you are an importer, you're also an exporter. one does better and wonders worse. it is not so simple, is it? absolutely. it depends on the business in question. if you are an exporter it is better but as an importer things have got more expensive. overall, there is still a lot of positivity around the economy and many companies predicting gross. and key very much. we will get the growth figures at 9:30am. expected to show a .4% growth. a rise in inflation and a slowdown in wages. the latest retail figures were also down pretty sharply. uncertain times
ahead for many businesses. our top story: big profits surging for the four big tech giants. big increases. they just for the four big tech giants. big increases. theyjust keep getting bigger and bigger those companies. some breaking news. six people have been arrested in connection with the anti—terrorist operation that happened in willesden where one woman was shot and injured by armed police. the deputy assistant commissioner announced that this morning. this follows an arrest yesterday of a 27—year—old man who was arrested near the houses of parliament as part of an intelligence led operation. as we we re intelligence led operation. as we were saying that six people have
been arrested. more throughout the day on the website and the news channels. and now let's get the inside track. would you like to fly around in yourcar? this week, uber said it plans to test flying cars by 2020. the rise of artificial intelligence — the latest example is an app that will be better at medical diagnosis than a human doctor. at least that's what its developers claim. rory is here. i have a feeling about why this is all happening for the peter teal said something a few yea rs peter teal said something a few years back. he said we were promised flying cars and ended up with 140 characters, ie twitter. keywords making the point we have had these
exciting visions and it has all been mundane. we have not had these gadgets. lots of people across silicon valley suddenly trying to build flying cars. i think it is a fa ntasy. build flying cars. i think it is a fantasy. it is about investing in self driving cars. there have been a few hiccups along the way. it is trying to show it is as expansive and ambitious as google. it has a plan and is collaborating with aviation companies. says they will be there in 2020 in dubai. it is an incredibly ambitious place. i am a com plete incredibly ambitious place. i am a complete sceptic about this. the idea that you will have the infrastructure there to have these take—off and landing electric vehicles which have not been built yet, by 2020... can we run
vehicles which have not been built yet, by 2020. .. can we run the footage of the kitty hawk? this is larry page, the founder of google. he has a separate little business is doing this. they put out an advert for it this week. someone rings up and says, i will pop over in two minutes. that is pretty cool. of course it is. the idea that we will all be popping in to work on one of these flying votes, flying cars, in these flying votes, flying cars, in the next few years. in the next few yea rs, the next few years. in the next few years, maybe not. we were promised them in the 50s, maybe not. let's talk about artificial intelligence. ina way, talk about artificial intelligence. in a way, it kind of makes sense. all that information stored in one hub. there is a big report out on
machine learning, a subset of artificial intelligence. google's results, they placed huge emphasis on how expert they were at machine leading. a small health care companies says, all of this depends on data. all these companies having access to vast amounts of data. great programmes. you do not tell the computer what to do, you tell the computer what to do, you tell the computer what to do, you tell the computer to learn what to do. in this case, the computer is learning from previous medical consultations effectively to be a doctor. very powerful technology we see popping up powerful technology we see popping up in allsorts of places with insta nt up in allsorts of places with instant translation. every time you talk to your phone and recognise —— it recognises your voice, that is machine learning. a new wiki? the founder is trying to launch a new
platform which is anti—fake news. it is basically a crowdfunding operation. it is laudable, it is great. so far they have funded four journalists. this is not going to change the world in a hurry. have you got any plans for the weekend?” will pop into my flying car. then go to see the doctor. you do that. always a pleasure. and you can hear a lot more about flying cars 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. a great plug! he has a pod cast. and this is how you get in touch with us. this is how you get in touch with us. we will keep you up to date on
the business live page. we want to hear from you. the business live page. we want to hearfrom you. get the business live page. we want to hear from you. get involved on the bbc business live web page. you can find us on twitter and facebook. that is on tv and online whenever you need to know. read out some tweets for us. we have had tweets about ebooks. nancy has said, ebooks all the way. you cannot pack enough real books for a holiday. also tweets saying it is all about the audio book. i have got an e—reader that i can never
remember the name of the book i am reading. i know it is a really good book. i don't know what it is called. what do you do? does not say a lot about you at commissioner only joking. we spend so much of our lives looking at screens. the thing about ebooks, you can load so many different books how many books can you read at one time? one. i do not really see the point in this.” personally prefer the books as well, especially if it gets wet! the aussie supermarket food rescue
group. explain. they have recognised the fact that the third of all the food in the world goes to waste. that is a disgraceful figure, food in the world goes to waste. that is a disgracefulfigure, when you think about it. who is to blame for this? in you think about it. who is to blame forthis? ina you think about it. who is to blame for this? in a large part, restau ra nts a nd for this? in a large part, restaurants and supermarkets. why do restau ra nts restaurants and supermarkets. why do restaurants waste restaurants and supermarkets. why do restau ra nts waste — — restaurants and supermarkets. why do restaurants waste —— supermarkets waste so much food question that they have sell by dates. you take this food and, for a certain number of hours a day, they are saying, come and get it. i think it is a fantastic initiative. have a great weekend. thank you for coming on. that is it for today. we'll be back next week. good morning. the bank holiday
weather forecast is on the way. just the chance of some rain. it may well come from this cloud waiting out in the atlantic. that takes quite some time to get here. most places will still be drive. the only sunshine across eastern scotland and eastern england will see more clout. in the west the cloud will break up a little more still with a few showers dotted about. the highest temperatures across southern england. it would be a touch cooler for the stage one of the tour de yorkshire. probably going to be dry. the showers we have got along the coast moving offshore in the afternoon. some sunshine with a few light showers loitering in the west country. for many eastern parts of england, the afternoon should be dry with sunshine. a bit more of cloud around. sunshine developing in northern ireland and the showers moving away. one or two macro showers developing in scotland. not a bad day on the whole. we will see
a lot of the showers fading away in the evening and overnight. the thicker cloud tending to push its way into the used in parts of the uk. nota way into the used in parts of the uk. not a particularly cold night. five, six, typically. we will see the wind is picking up for a while. it will draw in some warmer air. there is the chance of some rain. probably not amounting to matt and certainly it will not be a wash—out this weekend. saturday looks like a decent day. for the most part it will be dry with spells of sunshine. the winds tending to turn southerly. they will start to pick up overnight and into sunday. ahead of this weather front, we saw the band of cloud earlier on. there will be some rain in the south—west. most of the rain in the south—west. most of the rain on sunday will be in the south—west of the uk. the rain will move into england. it may be warm in
the sunshine. a keen wins, touching gale force. the rain will peter out as it runs northwards and eastwards. they'll be one or two showers into the afternoon but also some warm sunshine. goodbye. hello it's friday, it's 9am, i'm joanna gosling, welcome to the programme. our top story: a woman is under police guard in hospital, after being shot during an anti—terror operation on a residential street in north—west london. she is in a serious condition. metropolitan police deputy assistant commissioner neil basu says six people have now been arrested. i wanted to reassure the public that this of terrorist activities are being matched by our action, the police and security services across the country and we are making arrests on a nearly daily basis. you saw some of that, yesterday. this is the scene live at new
scotla nd this is the scene live at new scotland yard where the met police say they are hopeful they have contained the threat. also today: a huge waste of money. the billion pound cancer drugs fund that was set up to give patients expensive treatments not available on the nhs could even have caused