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QUEST MEANS BUSINESS
Twitter IPO; Twitter's High Fliers; The Twitter Investment; Google Barge Secret Revealed; New Record for US Markets; Blockbuster Closing Its Doors; Greece Austerity Strike; Greek Stock Comeback; Greek Tourism Boom; European Markets Up; BAE Systems Cutting 1800 Jobs; Global Economic Outlook; Soccerex Convention Canceled; Google Ordered to Hide Images
Aired November 6, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: It is the closing bell on Wall Street. Tomorrow, the eagerly-awaited IPO of Twitter. It is Wednesday the 6th of November.
Twitter feathers its nest. We're waiting to hear the price range for tomorrow's flotation.
An outpouring of anger on austerity as well. Workers hold a general strike in Greece.
And so much for getting away from it all. Technology is now an important part of travel.
I'm Max Foster, this is QUEST MEANS BUSINESS.
Hello to you. It is the beginning of a new era in technology. At any moment now, Twitter will set the price for its Initial Public Offering. It's the final hurdle before the Twitter bird takes flight as a public company.
On the even of this highly-anticipated IPO, the head of the SEC warned that popularity doesn't always equal profitability. Earlier this week, Twitter raised its non-binding price range to between $23 and $25 a share. If shares land at $25, Twitter will be worth $13.6 billion.
This time tomorrow, Twitter's CEO, Dick Costolo, will be the head of his very own public company. Costolo flew up the ranks of chief executive in 2010 after migrating to Twitter a year earlier. Richard takes a look at Costolo's previous acts as the curtain rises on Twitter's IPO.
DICK COSTOLO, CEO, TWITTER: I love you, too.
COSTOLO: You know I have to start with -- by tweeting this, so just give me one second.
RICHARD QUEST, CNN INTERNATIONAL (voice-over): Act one in the life of Dick Costolo began here, at the University of Michigan. Returning earlier this year to deliver the commencement address, the former computer science major lost no opportunity to get a laugh.
COSTOLO: When I was your age, we didn't have the internet in our pants.
QUEST: Telling jokes is no mere hobby for Costolo. After college, he turned down job offers at tech companies to learn improvisation and tread the boards at Chicago's renowned Annoyance Theater.
COSTOLO: The beauty of improvisation is you're experiencing it in the moment.
QUEST: In act two, Costolo will get a chance to choose the people onstage with him.
STEVE OLECHOWSKI, CEO, BLINKFIRE ANALYTICS: I think Dick's biggest strength is that he knows what he doesn't know and he knows how to surround himself with people who can really complement his own skills.
QUEST: Steve Olechowski was one of those people. In 2004, he and Costolo were among the founders of Feed Burner. It's a management tool for bloggers.
OLECHOWSKI: Working in any tech company you go through ups and downs, and there are definitely tough times. He's always able to kind of lighten the situation with his humor.
QUEST: Luckily, times weren't always tough. When Google bought Feed Burner in 2007, Costolo went with it. And two years later, this happened.
Actually, as chief operating officer, task number one: making Twitter profitable, something the company still has not achieved.
COSTOLO: We've got plenty of time to take this model and grow it. We're not worried about having a certain number of advertisers or a certain amount of revenue by the end of this year. We're focused much more on the user experience.
There's an incredible leveling of the playing field.
QUEST: This is act three, running Twitter and selling it to public investors.
COSTOLO: The possibilities and the opportunities afforded by the platform are limitless.
QUEST: His costars in the tech world are charismatic, equally ready to perform, and very, very difficult to upstage. The good news is, Dick Costolo is always ready for improv.
COSTOLO: Don't always worry about what your next line is supposed to be, what you're supposed to do next. There's no script. Live your life.
QUEST: Richard Quest, CNN, New York.
FOSTER: Dick Costolo's life is about to get a whole lot more comfortable as well. He's just one of Twitter's high fliers who is set to make some serious cash when the company goes public tomorrow.
If Twitter prices at the top of its current range of $25 per share, that means $192 million for the CEO. Costolo is number four on Twitter's individual stakeholder list at 1.6 percent.
Now for Twitter's co-founders. Topping the list, Ev Williams, he's likely to make $1.4 billion and be Twitter's sole billionaire. Williams is the company's largest individual shareholder with a 12 percent stake.
Jack Dorsey could get $586 million. Twitter's co-founder owns 4.9 percent of the company and is its current chairman.
A big shrug, though, for Biz Stone. He was also Twitter's co-founder but was conspicuously absent from the largest shareholder list, even though Stone was Twitter's most visible leader in its early days, you might remember.
Now, Twitter may be making money for its founders. Whether Twitter can make money for its investors is another story. Joining me now from New York is Rick Heitzmann. He is -- he has investments in media and mobile start-ups and is founder and managing director of FirstMark Capital. Thank you so much for joining us.
People get Twitter, don't they? There's a fascination with it, the world knows Twitter. Are people getting confused with knowing Twitter and actually seeing it as a good investment?
RICK HEITZMANN, FOUNDER AND MANAGING DIRECTORY, FIRSTMARK CAPITAL: I think in a lot of consumer IPOs, people like to buy something they see every day. Every magazine or catalog you get has the Twitter bird on it, and I think that obviously builds momentum as people want to be individual investors in those types of stocks.
But I also think that that momentum is good. Twitter is a widely- recognized brand, which you don't see in a lot of IPOs.
FOSTER: But it's not making money, and yet, it's valued at such a huge amount. Is this back to the days of the dot-com boom which famously bust when people were just looking at possible future prospects and basing their investments on that rather than really what's there?
HEITZMANN: I was an investor back in those times as well, and this is very, very different. I think in those times, there was indiscriminate valuations being thrown around to both good and bad companies.
I think if you look at Twitter, if you look at Facebook, these are companies that are growing incredibly quickly, have huge, tens of millions daily users all over the world and are building a tremendous network effect. I think it would be almost impossible to replicate Twitter today, and therefore, it's a premium company at a premium price. And I think that it's going to grow into -- the financial metrics will grow into that valuation.
FOSTER: So, where's the value? What is the profit going to be in future? What are people actually investing in?
HEITZMANN: I think you look at it and say, Twitter doesn't pay for its content. It has a network of content of its contributors, and -- so therefore, they're building a tremendous realtime content network that can be used as -- by individuals, can be used by people like CNN, and can also be used by marketers.
So, this is the realtime information loop for all of those constituents. So you have to believe the company will continue to grow and probably even double revenue from its current $600 million estimated year this year and then eventually be able to make significant margins of -- call it 20 percent cash flow margins, and therefore be able to put a very healthy revenue multiple on the business.
FOSTER: OK. Well, we'll see. We're getting that figure in very soon. Rick, thank you very much, indeed. It'll be an exciting day tomorrow --
HEITZMANN: Thanks, Max.
FOSTER: -- to see how the markets move on that. Not to be outdone, Google has finally revealed what's going on with the giant barge that's floating off the coast of San Francisco. According to a Google statement, it's going to be an interactive space where people can learn about new technology.
Rumors that it would be a party boat or floating data center have been proven unfounded. At least two other similar barges have been spotted, including one off the east coast of Maine.
US stocks just closed for the day at a record high. Zain Asher's at the New York Stock Exchange. So, apart from Twitter, what are people talking about, Zain?
ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Max. Well, yes, the Dow closed up by about 128 points, just checking now. Part of the reason for that is that there is this expectation that the Fed is going to keep pumping more and more stimulus into the economy.
We are awaiting two key reports this week. One of them, of course, on Friday being the all-important jobs report. That's expected to come in at 120,000. We're also expecting tomorrow to get third quarter GDP, that's expected to come in at 2 percent.
So, given the disappointing state of the jobs report and also third quarter GDP, the expectation is that the Fed is going to continue pumping more and more stimulus into the economy.
I do also want to mention quickly that Tesla was a big talker today. It was a bit of a drag on the NASDAQ. Tesla ended down by 14.5 percent, partly because of disappointing third quarter earnings. Max?
FOSTER: OK, Zain, thank you very much, indeed. Now, it's the end of an era for one -- a onetime blockbuster company. The movie rental chain, Blockbuster, has announced that it will shut down its retail and mail order services by January.
Blockbuster was bought by Dish network three years ago after it went bankrupt. It's struggled in recent years to compete with Redbox and Netflix, which offer DVD streaming and mail order rentals. Blockbuster's own streaming service will, though, remain intact.
A ray of sunshine in Greece's gloomy economic outlook: the tourism industry has had a record year in the country. We speak to the CEO of a luxury hotel firm about how the holiday sector is helping Greece's recovery.
FOSTER: Workers in Greece have walked off the job and onto the streets today. The country's biggest union is staging a 24-hour general strike in protest against austerity measures, but the measures are a condition of the Greek bailout.
International lenders are in Athens this week to make sure Greece is holding up its end of the bargain. Now, union bosses say the government cutbacks are forcing Greek workers into poverty.
(BEGIN VIDEO CLIP)
VANGELIS MOUTAFIS, GENERAL CONFEDERATION OF LABOR SECRETARY (through translator): As long as these unfair, unequal, and above all, unproductive policies continue, there is only one road for workers: to changing, to overthrow these policies. We cannot stop unless they change their policy mix.
(END VIDEO CLIP)
FOSTER: Now, despite the pain on the streets, the stock market is booming in Greece. Greek shares are among the best-performing in the world right now. The Athens composite closed the session higher today, but take a look at its performance in the last year. It's up more than 40 percent.
I just returned from Greece, where I spoke to the deputy CEO of the National Bank of Greece. He told me investors have been buying up big since the summer.
(BEGIN VIDEO CLIP)
PETROS CHRISTODOULOU, DEPUTY CEO, NATIONAL BANK OF GREECE: Since the recapitalization back in June, we have had some very big returns. I think the Greek equity market is the best-performing market in the world. We have had the banks that were recapitalized, they have returned anywhere between 30 percent to 300 percent.
This is the most promising, if you like, observation regarding economic growth, regarding employment, regarding Greece turning around.
(END VIDEO CLIP)
FOSTER: Deputy CEO of the National Bank of Greece, there. See that interview in full tomorrow night on "Marketplace Europe" at the new time of 1:45 Eastern, 6:45 in London, 7:45 in Berlin.
Earlier this week, Greece's tourism minister told CNN that 2013 was a record year for the industry there. My next guest knows all about that. Panos Paleologos is the CEO of HotelBrain, a Greek luxury hotel firm. Thank you very much, indeed, for joining us.
PANOS PALEOLOGOS, CEO, HOTELBRAIN: Thank you.
FOSTER: How much did tourism suffer during that very tough period in Greece?
PALEOLOGOS: It suffered, but it proved to everybody that it has a very strong impact. Under all this austerity, we found out that tourism is the right vehicle all of us can invest on. And although we had the difficult problems, tourism, especially this year, did very well. We had a record year of 17.5 million arrivals.
FOSTER: But why the record year? Where are these new arrivals coming from?
PALEOLOGOS: Yes. I believe, first of all, all Greek hoteliers, I have to speak for the Greek hoteliers, we understood that we must make our products even better. We have to give a world quality. And we all try to make Greece look even more attractive.
At the same time, I feel that we have proved that we're a safe country, still in the eurozone, we -- this is very important -- and we are a safe country with a steady government. And this, I think, made a lot of tourists find that Greece is attractive.
FOSTER: It's amazing to think that the tourism industry has been ticking on nicely. You had a record year.
FOSTER: You've got a stock market absolutely booming.
FOSTER: People have made huge amounts of money from the bond market as well. So, actually, whilst we're all distracted by a few demonstrations and problems the government's got with raising enough money for itself, actually, things on the ground are ticking on quite nicely.
PALEOLOGOS: Well, there are demonstrations, not so often. The general message is that we all, as Greeks, we have to fight and return back to success on the economy. And we all feel this way. But still, we work very hard, but we have already proved some results. And especially for tourism, we are very ambitious and enthusiastic.
FOSTER: I've met some young people who were struggling to get work. The work -- but they were getting work, it was just often manual labor, when they had degrees. The hotel industry, presumably, has been employing a lot of young people who are just waiting, actually, to get jobs in management if they could possibly move that way.
PALEOLOGOS: Yes. We can find -- listen, I believe nowadays, Greeks are very good in hospitality. They're more educated, they speak many languages, they are trained. And the --
FOSTER: That's the advantage of the current situation, though, isn't it?
PALEOLOGOS: Of course.
FOSTER: Because you've got much-better qualified people than you would normally get.
PALEOLOGOS: Yes. And one important thing: we offer hospitality with our soul, and it doesn't matter if it is old people or young people, we are all very dedicated to tourism increase.
FOSTER: OK, Panos Paleologos, thank you very much, indeed, for joining us.
PALEOLOGOS: Thank you
FOSTER: European stock markets mostly rose on Wednesday on hopes that the ECB will cut interest rates. Tomorrow, the Bank of England will announce its interest rate decision tomorrow. Most expect no change.
And BAE Systems here will -- announced it will cut nearly 1800 jobs over the next three years. It's going to close a shipyard in Portsmouth. BAE shares gained slightly on that news, it was the big talking point here.
On top of the speculation over ECB rate cuts, we'll also get a first reading of third quarter GDP in the United States. Let's discuss this with Nathan Sheets, head of global economics at Citi. He joins us from New York. What are the big themes in New York right now?
NATHAN SHEETS, HEAD OF GLOBAL ECONOMICS, CITI: Well, I would say that people are thinking hard about what the Federal Reserve is likely to do next. And that really depends on the incoming data, including the payrolls data that we're going to get on Friday. So, it's about the Fed, it's about the economy, and where is the stronger recovery here we've been waiting for?
FOSTER: In terms of payrolls, what are you thinking?
SHEETS: Well, for October, it's going to be a little bit weaker, given the shutdown, less hiring. Maybe something in the 130 range. If it comes in around there, that's not too bad, given what we've been through.
But I'm also going to be looking really hard at the revisions to August and September. And there's a pattern that these data for September and August tend to get revised upward. So, I'm looking for some significant upward revisions there as well. So, it's a question of where has the labor market been over the last three months?
FOSTER: And ahead of that, we've got GDP, of course. More focus on payroll, perhaps, but --
FOSTER: -- if there is a shock of the GDP figures, what are you looking out for?
SHEETS: Well, what's happened to us on those GDP estimates over the last, say, six weeks or so is that they have just steadily crept upwards. So, depending on who you talk to, people are now expecting something in the 2.25 to 2.5 range or so. So, a little bit better than what we printed in the past.
And frankly, I think that the risk to that are fairly balanced. If we got a better number, I think that that would be very good news in terms of the momentum that the economy had going into the government shutdown, and that would be one in the plus column.
On the other hand, if we're surprised on the downside, I think that will reaffirm some of the pessimism that people are feeling and lead people to believe that the Fed's likely to be on hold for a while longer.
FOSTER: And away from your shores, the European Central Bank, lots of discussion about interest rates moving there, but do you think they'll really respond to that expectation?
SHEETS: Well, the lay of the land has shifted a little bit for them in that their latest inflation report showed inflation dropping fairly significantly. So, they had headline inflation down to 0.7 percent, which is substantially below their 2 percent target. And I think this does shift the debate at the ECB.
It may not be that we actually get the rate cut at the November meeting, but it wouldn't surprise me at all if Draghi indicated that if they don't see an improvement in the price data over the next month or so that a cut to their benchmark rate in December is very, very much on the table.
FOSTER: OK. Thank you very much, indeed, for joining us. Nathan Sheets from Citi. So, lots to look forward to in terms of economic news for the week. And a meeting of the most influential people in football, meanwhile, scheduled for the eve of the World Cup draw has been canceled. My conversation with the CEO of Soccerex after the break. He's not happy.
FOSTER: A major football conference in Rio has been canceled. The Soccerex Convention was scheduled to take place at Marikana Stadium ahead of the 2014 World Cup draw in December. Soccerex says Rio's state government withdrew support because of fears of civil unrest. Brazilian World Cup winner Ronaldo admitted this is a time of flux in Brazilian society.
(BEGIN VIDEO CLIP)
RONALDO, BRAZIL 2014 WORLD CUP AMBASSADOR (through translator): Brazil is going through a special moment. It is a moment of change, and people are really tire. They're demanding change in our country.
(END VIDEO CLIP)
FOSTER: I spoke with Soccerex CEO Duncan Revie earlier and I asked him what happened when he found out the convention was off.
DUNCAN REVIE, CEO, SOCCEREX: We were e-mailed, and then we flew out to try and resort to other tactics to try and retrieve the situation, and it was impossible. Very simply, it was both shocking and to be summarily canceled at four weeks' notice was ridiculous.
FOSTER: What reason did they give?
REVIE: They gave a very simple reason, which was that because of the civil disruption on the streets, governor's house being camped upon, and the demonstrations and marches, they couldn't be seen to be spending public money on something like Soccerex or, indeed, other several events.
FOSTER: They put the onus on you, didn't they, saying that you need to resource this properly because of a change in circumstances, as they would argue?
REVIE: No, that's not what they said. What they said was they would try and resource them some money themselves, and that didn't occur. And we've been doing it for three years with their backing, quite successfully, I have to say. And all that changed was that the civil disruption caused them to make a political decision to cancel.
FOSTER: What about the accusations from the footballing side that -- or the associations, the local officials, or even the World Cup officials who would argue that you should be paying for it, not the local government?
REVIE: Well, that wasn't the model we started off on, and it wasn't the model that has happened for the last three years. And it's not a question of us paying for it with four weeks to go, because that is clearly a ludicrous suggestion in terms of finances. It's just -- couldn't possibly be reached.
FOSTER: Local officials in Rio are giving a very different explanation to why the convention was canceled. Shasta Darlington reports now from Sao Paulo.
SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: There's been a lot of finger-pointing over why this event was canceled, but Rio de Janeiro state officials insist that civil unrest had nothing to do with it. In fact, they say financial considerations played a much bigger role.
There have been massive protests across Brazil since June. They've diminished in recent months, but again, the Rio government insists they're prepared to handle the security of all of these major events, from Carnival to the World Cup.
Now, they wouldn't go into detail, but they said that they told Soccerex that they could not use public money to finance the event, and they suggested they look for financing elsewhere. Of course, the background to this is that the event was going to be held at Marikana Stadium, once controlled by the government, now it's owned by a private consortium that wanted to charge for its use.
In the end, however, this will reflect badly on Rio de Janeiro and its ability to organize major events, and it comes just months before the World Cup kicks off.
Shasta Darlington, CNN, Sao Paulo.
FOSTER: Coming up, Google says a recent court decision in France could impact the entire internet industry. We'll explain when we come back.
FOSTER: Welcome back, I'm Max Foster. Here are the top headlines this hour. An explosion in a central Damascus square killed several civilians on Wednesday. Syrian state media said it was a terrorist bomb placed at the entrance of a Syrian railway headquarters. Eight people were reportedly killed and dozens more were wounded.
Palestinian leader Yasser Arafat may have been poisoned to death in 2004 with radioactive polonium, according to a new report published on Al Jazeera's website. The report presents the findings of Swiss scientists analyzing samples from Arafat's body.
Police in China's northern Shanxi province are investigating a series of explosions outside Communist Party offices. One person was killed. The blast follows last week's deadly attack in Tienanmen Square and comes just days before a Communist Party meeting in Beijing.
Fifteen former cocoa officials in Ivory Coast have been sentenced to 20 years in prison. The cocoa barons, as they're called, were found guilty of corruption. The verdict comes on the heels of Ivory Coast's biggest probe into the cocoa industry. The nation is the world's top cocoa producer.
The artistic director of the Bolshoi Ballet says he forgives no one for the acid attack that nearly blinded him. Sergei Filin took the stand to testify against dancer Pavel Dmitrichenko today in Moscow. The dancer is accused of orchestrating the attack against his boss with two accomplices. Filin plans to file a $110,000 civil lawsuit against Dmitrichenko.
A French court has ordered Google to remove pictures of the former F1 president Max Mosely at an orgy. Google will remove individual images when users make requests, but Mr. Mosely wanted the pictures to be filtered automatically.
The case addresses the issues of freedom of expression as well as privacy on the web and has been watched very closely, indeed. Google's top lawyers say the decision goes too far. "This decision should worry those who champion the cause of freedom of expression on the internet." Back in September, Google warned that this case would affect the entire industry.
Now, Max Mosely has filed a similar lawsuit against Google in Germany. It all began back in 2008. Mosely won a breach of privacy lawsuit against "News of the World," which published the images that were filmed secretly. Mosely's lawyers insist this case is about making Google comply with the previous lawsuit, not about censoring internet content.
Now, Google's chairman, Eric Schmidt, faces questions about the line between internet privacy and freedom of expression on a daily basis. He addressed the topic earlier this week in an interview with CNN's Kristie Lu Stout.
ERIC SCHMIDT, EXECUTIVE CHAIRMAN, GOOGLE: We feel very strongly that a free and open internet is part of the right of citizens worldwide, and it's really where the world is going.
KRISTIE LU STOUT, ANCHOR/CORRESPONDENT FOR CNN INTERNATIONAL: It's already happening today, I mean look at what's happening in China for instance is creating its own internet regime, its own set of internet rules. Is this going to continue on and on 'til the world becomes a set of internets? We'll see the (vulcanization) of the internet.
SCHMIDT: There are 40 or so countries that restrict content on the internet. China is only the worst. And China is doing it deliberately. They're actively censoring content on the internet and they have gateways called firewalls that prevent that. We think that's bad. We think ultimately that hurts the citizens of the country. If the China model succeeds, the internet could be broken, and this incredible facility of interchange, whether it's business and ideas and culture, might get stopped right at the border, like it is today in other areas.
FOSTER: After weighing in on guns and the debt ceiling, the CEO of Starbucks is pushing another cause. This time he's looking to hire U.S. army veterans. Poppy Harlow joins me now live from New York. Poppy, you've been speaking to him.
POPPY HARLOW, JOURNALIST FOR CNN: We have, we sat down -- hi there, Max, with Howard Schultz, the CEO of Starbuck, also along with former U.S. defense secretary Robert Gates who sits on the Starbucks board -- why? Well because they are just the latest company to jump on board in this big push to hire veterans. We have so many veterans returning to this country, especially now from Afghanistan that need jobs. So, Starbucks says in the next five years they're going to hire 10,000 veterans and also spouses of active duty members -- people currently serving in the military. We wanted to know from them why Starbucks is doing this now, because, frankly, over the past two years or so, we've seen huge companies -- like Walmart, JPMorgan Chase, UPS make really large pledges to also hire veterans. So why is this company jumping into this now? Listen.
HOWARD SCHULTZ, CEO OF STARBUCKS: Not only are we going to hire 10,000 people as you just mentioned, we're also going to build or relocate five stores in or around bases so that the profits of those stores can go back to the veterans. I mean, this is a time in America where we have an obligation and a responsibility to do the right thing, but in addition to that, these are young people who have significant value to add to the workplace and to companies. Great values, leadership skills and an opportunity I think to really make a different.
HARLOW: Secretary Gates, you have said that our veterans are one of the most underutilized talent pools in this country. You sit on the Starbucks board, so I'm interested to know what advice did you give as the company was forming this initiative, especially when it comes to taking all the talent that our veterans gain by being in the armed services into the private sector. It's sometimes hard to translate on a resume, but it really pays off in the workplace.
ROBERT GATES, FORMER U.S. SECRETARY OF DEFENSE: Well that's a very good point, and over the next five years another million men and women will come out of the military and into civilian life. And they bring with them extraordinary skills. They first bring great technical skills from logistics to supply chain management, advanced electronics and countless others. But they all also have in common unique leadership skills -- the ability to lead small teams, to lead people who are mission-oriented, to operate under tight deadlines and so on. But I'll tell you one other thing. These young men and women, mostly young men and women, don't want sympathy. And they sure as heck don't want charity. What they're looking for are meaningful careers, fulfilling careers, where they can make a decent living and continue to contribute as they have been contributing.
HARLOW: You know, they may start at an entry-level job but have you made sure that if the veteran or the active-duty member's spouse wants that job, they can turn it into a career. They can go further than entry level with your company.
SCHULTZ: Well, I think it goes to the responsibility and the burden on the company. These are people who have real talent and value to add. We have to identify them, retain them and then create career opportunities for them.
HARLOW: So, Starbucks is doing this as I mentioned, another -- many other big companies -- Walmart for example, has pledged to hire 100,000 veterans, UPS, JPMorgan Chase, many others. But I do want to say this, I think, Max, the big challenge here is going to be lasting careers. It's one thing to get a job as a barista or at Walmart, etc., but how do you turn that into a career? Because this is really a life change coming back from being in the armed services, you know, for some for many years, to having to move to this. And one thing we talked about, especially Secretary Gates, is the issue of employers having to learn and understand the environment where these veterans are coming from, and then figure out how to utilize their skills best in the private sector to really help them succeed. Because if they don't succeed, that is not only going to be very difficult for them and their families but also for this entire country. So, always good to see another company jumping in here. And Starbucks is coming after a number of other big companies, but I think that's the challenge ahead.
FOSTER: That's interesting because whenever you speak to him, Poppy, he seems to be speaking about something wider than his business.
FOSTER: This sort of role of Starbucks in society.
HARLOW: That's a great point, I mean, you know, when's the last time we talked about coffee in the coffee business? They just came out with earnings last week that were really strong and I think you bring up this point, right, hiring veterans is not a controversial thing to do and they're certainly not the first company to do it, but he came out earlier this year asking people not to bring guns into Starbucks stores. That was a very controversial move. He came out publicly, vocally in support of gay marriage last year. Again, really touching on all of these controversial topics. Why does he do it? Well, one thing, their earnings are so strong and the company is doing so well right now, it's not hurting their business. He's also told me, Max, that he thinks that he needs to use this role -- this public role -- as a platform for messages that he believes and the company stands for. But I did talk to a branding expert about this, and I said you know, is it worth the risk? And he noted that frankly any CEO of a public company coming out and speaking on controversial topics certainly poses the risk of alienating some of their customers, but frankly, it can also win them customers if people agree with them. So that's the role, that's the position that he is taking, and hiring veterans is an innocuous thing to talk about. Everyone agrees with it, but it's interesting to hear him -- he's always talking about something often other than coffee.
FOSTER: And there'll be more, I'm sure. Poppy, thank you very much indeed for bringing us that.
FOSTER: Now, tourism and technology collide at the World Travel Market. We look at how operators are increasingly turning to social media to reach holiday-makers.
FOSTER: Now bragging about your holiday on social media may be fun for you, but it's now a serious marketing tool for tourism operators. That was the focus of the Travel Technology Show at the World Travel Market in London today. Jim Boulden went along to see what was trending.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Travel should be fun, adventurous, hopefully relaxing. But gone are the days we leave tech behind to unwind, starting with social media when it comes time to decide.
JEFFREY MAY, CHETU: Anywhere from 75 to 80 percent of people have admitted that their decision to book or not book a particular property will come based upon a review that they read online. BOULDEN: Social media is driving the travel industry, and generating huge amounts of data on hotels, beaches, airlines. Sarah Kennedy Ellis is now trying to airlines and hotels to use the mass amount of data to give us a better experience.
SARAH KENNEDY ELLIS, SABRE HOLDINGS: On Twitter one of the things we see most frequently is in real time people are complaining about customer service. So, how can airlines start to identify opportunities around -- this specific flight actually has better overall ratings, so this crew has a better overall rating than even, you know, all the other crews on our planes.
BOULDEN: TripAdvisor uses Facebook so we can easily see where our friends have been and what they liked or didn't. While Instagram and Pinterest let us decide using photos. The challenge now with so much data, matching our travel profile with our social profile.
ELLIS: I do think having this universal view as a traveler and having a profile that can connect social profiles to traveler profiles -- that's hard. It's really hard to do. And so it's something that -- it is a problem we're solving. Because once we do, we can meet needs way better than we've ever been able to do before.
BOULDEN: And the data's there.
ELLIS: And the data's there.
BOULDEN: Beyond social media, there is the simple need of using credit cards, for business or leisure travel. The head of the U.N. Travel Arm was recently in Myanmar, Cambodia and Vietnam and said it was easier to use his credit card than he expected.
TALEB RAFAI, WORLD TOURISM ORGANIZATION, SECRETARY-GENERAL: Even the vendors in the streets were able to give me the very basic credit card machine and punch it in on the line and do it. I think the technology gap is still there but it's closing very quickly.
BOULDEN: And hotels and airlines are making it ever easier for us to book our travel on our mobile devices, with mobile check in and check out coming, if not already available. Jim Boulden, CNN, London.
FOSTER: And no doubt, if you travel a lot, you have a weather app, it's very important, isn't it, Jenny Harrison? Or you could just have Jenny Harrison.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Well, I was going to say it probably is a good idea, Max, but you know what? You also want to get it just from the -- I'm going to (inaudible), I'm going to regret it, but the horse's mouth, Max, you need it from the horse's mouth from time to time.
FOSTER: No comment.
HARRISON: Now I need to talk to you about -- I know, I shouldn't have used that word for myself, I don't know why I did. I need to talk to you about this because I (inaudible) told you about the super typhoon Hyan in the Philippines really is expecting the worst from this particular storm. The preparations are in order, some evacuations are certainly taking place, and this is why. It is super typhoon Hyan -- this -- look at this incredible image of this storm. Just look at the size of this. It is now official, it is the strongest storm on this earth in 2013. We've got sustained winds of 280 kilometers an hour, we've got some gusts well over 300 kilometers an hour, and the tropical storm force winds actually extending as far as 230 kilometers from the center, and in fact the eye is really very, very small in comparison with the size of the storm. It's about 14 and a 1/2 kilometers across or nine miles across. Now, this particular storm, it's moving pretty swiftly. Moving to the west at 33 kilometers an hour, and you can see just how large it is. It's about 800 kilometers across right now, but the outer bounds already having an impact across the Philippines. It is a large storm. It is heading towards the Philippines. And this is the track it is going to take. All of this in local time.
So Thursday evening we're already down to feeder bands really having an impact. Friday is going to be the worst day by far across the Philippines. It's heading across central regions. It is expected to maintain its super typhoon strength as it heads across, so this is what we're going to see. We're going to see some torrential rains, very very dangerous and damaging storm surge of course. Flooding is likely to be widespread, and of course, the real danger is landslides and mudslides which is why so many people have actually been evacuated. But there's a huge population that actually lives in this portion of the Philippines. And when you see the rain in the next 48 hours, this isn't the worst of the rain. Look at that -- 359 millimeters in Surigao, so this is a storm we are going to be following very, very closely. Literally hour by hour as it actually heads in and obviously makes landfall. That is going to maintain its strength and head onwards into the South China Sea.
Meanwhile in Europe, it's a very unsettled picture. Nothing like that of course across in the Western Pacific. The rain has been coming in. Still some fairly blustery winds as well. The temperature is on the low side because the system is very windy and cool across the north, and accessing coming in with more of those showers. And you can see the temperatures right now just in single digits across the north and also central areas. But of course, it is the time of the week when we want to get away and head to find somewhere for the weekend, and I've got a couple of nice spots for you. Malaga, Spain 23 on Saturday, 21 on Sunday. Not bad in the overnight hours. That's actually beach location but actually somewhere warmer than that, and of course this is an inland location, so if you (prefer to) see a city destination, look at this -- Marrakech in Morocco, 27 on Saturday 28 on Sunday. Very nice indeed. That way we might pick for you to head this weekend. Max.
FOSTER: That's a very good suggestion. Jenny, thank you very much indeed. Now, the United Nations warns greenhouse gas levels have hit record highs. Its top weather body says devastating consequences could be ahead if urgent action isn't taken. That story's just ahead.
FOSTER: The world faces potentially devastating weather consequences if it carries on with business as usual. That's the warning from the U.N.'s World Meteorological Organization. It says greenhouse gasses are at an all-time high. The head of the WMO says extreme weather could follow.
MICHEL JARRAUD, SECRETARY-GENERAL, WHO: We are worried not only about the impact on temperature, which is important. But also the impact on the water cycle. More droughts, more floods in other parts of the world. We are worried about the impact on the number of extreme weather (inaudible). We are worried about the impact on the sea -- on the sea level.
FOSTER: And meanwhile the United Nations has released a short list of businesses that epitomize a sustainable future. U.N.'s Climate Change secretary (Inaudible) called them "Lighthouse" activities, and they include an initiative that builds bamboo bikes in Ghana. A community-based project in India has also been praised. The microclimate resilience firm is building flood-resilient homes there. The launch of a national climate fund in China also was mentioned. It's supporting clean development projects. Now earlier I spoke to the head of the United Nations Framework Convention on Climate Change. Christiana Figueres told me why the shortlist was so important. She joined be from Bonn in Germany by Skype.
CHRISTIANA FIGUERES, UNFCCC EXECUTIVE SECRETARY: Yes, the list of Lighthouse activities that the Secretary released today are 17 examples of very concrete action on the ground that is already taking place and that has the characteristics that they benefit the people of the communities or in the cities in which they are actually occurring and they also benefit the climate. So it is this win-win opportunity that we are trying to highlight so that we can begin to understand that addressing climate is actually an opportunity. It is not just a burden, it is an opportunity.
FOSTER: And it's at a low level. It's at the community level, so bamboo bikes, for example, is something that individuals can identify with and feel as if they're making a personal difference.
FIGUERES: Well, it actually is all -- it spans the whole spectrum. So in transportation which is what you are referring to now, we have -- this year we happen to have these bamboo bikes in Ghana, but it goes up all the way to much larger investments in transportation such as bus rapid transportation systems in India and in China. So, the investment opportunity is here whether they be in transportation, whether it be in renewable energy generation, but all the way from small scale investments all the way to large-scale investments.
FOSTER; The problem you've got of course is that some governments promised to invest a certain amount into carbon reduction, and they've got other priorities right now, and they're not putting the money into the system that they promised. So, are you looking for individuals and companies to fill that gap?
FIGUERES: No, the governments have committed to mobilizing up to $100 billion, by 2020, and they're in the process of clarifying how that mobilization is going to take place. What is very clear, however, is that public funding is never going to reach the levels that we need to actually transform the economies in the speed and the scale that needs to occur. So, the public funding needs to be intelligently used to leverage much, much grander flows of private investment. Because as we know the International Energy Agency has already told us that what we're going to be needing is $1 trillion a year to be invested from now until 2030/2040 into the energy infrastructure and half of that is going to be into energy generation.
FOSTER: Tom's revolutionized retail by making giving part of its business model. It donates a pair of shoes for every pair it sells. Now Tom's is bringing it's do-good spirit to the internet. The company just launched a virtual showroom of products made by smaller brands that are pushing for social change. Blake Mycoskie is the founder of Tom's and its chief shoe giver. He joins me now live from New York. Thank you so much for joining us. First of all, just for people who aren't clear on your business model -- don't buy through you. Just explain your philosophy and how you've made it work actually.
BLAKE MYCOSKIE, FOUNDER AND CEO, TOM'S STORES: Sure, Max, seven years ago I met some children in Argentina who did not have the proper shoes they needed to go to school. And I wanted to help them but I didn't want to just start another charity that was dependent on donations. So, I started a for-profit business, a shoe company, where every time we sell a pair of shoes, we would give a pair to a child in need. One for one. Since starting that, we've given over 10 million children a new pair of shoes and we'll give another 10 million pairs away in the next year. Also we've launched an eyewear company where every time we sell sunglasses, we now help give someone their sight. Truly pioneering this one for one model.
FOSTER: And in terms of your latest initiative, how is that going to develop a bit further? Is it purely that it -- some more sort of a democratic system, because it's online right?
MYCOSKIE: Sure, well it's that and it's also encouraging all these other social entrepreneurs to come together. So what we started realizing is that there were other companies that were applying this idea of creating products to give back. You know, so where these are bags that help fund people's education or scarves and jewelry that are giving women jobs in Uganda that wouldn't have them, we found that there are many companies around the world that were doing this. So, we put them all together on the toms.com marketplace. And what that is, is 30 social entrepreneurs all with products that have a giving component so there's over 200 products on the toms.com marketplace, and there you can shop many different ways, but every purchase has a give back component.
FOSTER: OK, Blake Mycoskie, thank you very much. Thank you for joining us. And good luck with the (inaudible). We'll be back with more "Quest Means Business" after the break.
FOSTER: Now on the eve of Twitter's IPO, we're waiting to see if its executives will turn out for the ring -- to the ring rather on the opening bell on Thursday. If you want to check their location, just read their Tweets though. The web site Quartz has traced Dick Costolo's movements since the IPO road trip began by geo-tracking his Tweets. He started in San Francisco, he then went on to New York City where he apparently stayed at the Four Seasons and paid a visit to the Goldman Sachs office. He then moved on to Baltimore before heading north to Watertown just outside Boston. After that it was back to San Francisco, stopping off in Chicago on the way. Scary detail. His last Tweet was on Tuesday from Centennial Airport in Colorado. Who knows where he'll be heading next, but you now know how to follow him.
Just so you know, the Dow ended the day at a record high after a gain of more than 128 points. The S&P 500 closed just below its record high. Investors cheered solid corporate earnings -- mainly health insurer Humana reported better than expected earnings. CNN's parent company Time Warner beat earnings forecast. Shares of retailer Abercrombie & Fitch tumbled though more than 10 percent. The company warned of weak sales and revealed it was closing its lingerie chain. European stock markets mostly rose on Wednesday on hopes that the ECB will cut interest rates tomorrow. The Bank of England will announce its interest rate decision tomorrow as well. Most expect no change there. BAE Systems announced here that it will cut nearly 1,800 jobs over the next three years and close a shipyard in Portsmouth in southern England. BAE shares gained slightly on that news. That is "Quest Means Business." Thank you for watching. I'm Max Foster in London. Do join us again tomorrow.