Return to Transcripts main page

Quest Means Business

Google Buys Motorola Mobility; Interview With CEO of Estee Lauder

Aired August 15, 2011 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS: Google says, hello, Moto; and ups the ante against Apple and the iPhone.

We have problems, but they are manageable. President Obama intends to limit debt and deficit worries.

And the chief executive of Estee Lauder says, lots of promise in the make-up business.

A new week, I'm Richard Quest. I mean business.

Good evening.

Google is turning the mobile phone world upside down, effectively making old Android partners its new rival. It is buying Motorola Mobility for $12.5 billion. Not only does Google make the world's most popular smart phone software, now it will be able to make its own hardware to run it on, too.

Join me in the library and we will go into some detail, exactly how this deal comes together. For Google it is the biggest acquisition of the company to date. Now the second biggest for Google was Double Click for 3.1 billion in 2007. The Motorola deal is subject, of course, to regulatory approval. But at $12.5 billion for Motorola, the Mobility deal is sizeable. The price it is paying, it is a 63 percent share price for Mobility.

Now, talking about Motorola Mobility, Motorola split into two last year. Motorola phones, tablets set top boxes, and Motorola, of course, the Solutions Networking. The company couldn't maintain the impetus of its popular phones. Now, many of you will recognize this one. This was the old time port, the first tri-band phone, for trans-Atlantic users. And then, of course, you had the Razor phones, in its various, different guises. Well, Motorola had real constructive gains and leads with these models, which they, frankly, didn't manage to quantify.

So, Android came along. Motorola is to be a separate unit. The Droid, according to Larry Page, now he says, the `Droid will be run within Motorola, as a separate division of Google Open Platform. We'll run Motorola as a separate business. But it won't be that simple, as you can see from here.

Because at the moment you have Motorola and you have Google. Now, this is the hardware. That is the software. Put them together, and you end up, supposedly, with something that will be bigger and better. But similar deals are being done elsewhere. For instance, this is Nokia with Microsoft. This is what the Nokia phones look like running the Windows 7. You have Nokia, you have Windows, and again, you have the two coming together, software, and hardware. Similarly, to an extent, HP; HP bought WebOS, the old PALM. It is running the two things, hardware and software. Move along to Blackberry and you really do wonder, what is Blackberry going to do with its own solutions. It's hardware and the software, but frankly that is being somewhat left behind. The daddy of them all, is the Apple iPhone, which everybody aims to beat.

But these are the chaps and the chapesses (sic), who perhaps have got some real problems. Sony Ericsson, LG, Samsung, HTC. Where do they fit into this whole problem, and this whole equation?

Let's join and talk more about this. Richard Windsor is the global technology marketing analyst at Nomura Securities. Richard joins me from Dubai.

What are Google playing at? They are effectively getting into bed with one of the manufacturers to the detriment of the others.

RICHARD WINDSOR, NOMURA SECURITIES: That is exactly what it looks like on the surface. What we suspect is actually going on here is that the rest of the manufacturers in the Android community actually need a lot of patent protection. And actually this deal is most likely to be about the patents that Motorola has. And in fact, what we suspect will happen in maybe six to months to one year's time, is Google will probably divest the hardware business, the handset business and the set top box business, because frankly, it is not core to what we think its core strategy is.

QUEST: Whoa! Whoa! What you are saying is, cherry picking. They've gone after the patents and the software, basically keeping the software. And they really don't care who makes the boxes?

WINDSOR: That would seem to be it. The issue, really, is here is that Motorola has 17,000 patents that it has filed all the way through the creation of wireless standards. And the problem is, is that the Android community at the moment is largely made up of the Asian players, HTC, ZTE and Samsung. And these guys really need patent protection because what you have seen is that the likes of Microsoft and Apple are going after the Android community by suing them for infringement of their patents to try and limit their success of the Android community.

QUEST: But if you-but, Richard, if we look, you have Motorola and Google. And you have got Nokia with Windows 7. This coming together of software and hardware, at the same time as you have these Asiatic companies, is this a deliberate blurring of the lines?

WINDSOR: Well, the thing is, what is actually happening is, is that arguably it is better for hardware and software to be fully vertically integrated. That is what Apple has actually shown. But the problem you've got here is that if Google persists in that strategy and really puts all of its weight behind Motorola and kind of, in a way, cuts HTC, cuts Samsung, cut ZTE, they cut them loose. You actually run the risk of collapsing the entire Android community, because right now, it is the HTC, Samsung, and ZTE phones that are really selling in volumes.

QUEST: All right.

Can we learn from all of this-and I've got in my hand, as you might be able to see, the Time Port and the Razor, two phones of which I'm sure you are familiar. But don't we really learn from all of this, that just because you are popular today, as with Nokia, as with PALM, as with Blackberry, it doesn't meant to say that you stand a hope in hell's chance of still being popular this time in two years.

WINDSOR: I think that is absolutely correct. The real question at the moment is, is at the moment it is all about cool applications. It is all about a great looking user interface, touch screens. The answer is, you know, what happens in two year's time, is that what users actually want from a mobile device may change significantly. And it is quite possible that whatever that change is, Apple might miss it. And the balance of power may shift yet again. That is entirely possible.

QUEST: Fascinating stuff. Richard, thank you very much coming in late, in Dubai, we appreciate your time. Richard Windsor joining me from Nomura, in Dubai.

After the break, Barack Obama is packing up his economic troubles. He's on the road, we will hear what the president has to say as he tours the American Midwest. QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: While leaders are trying to put last week's market convulsions firmly behind them, and prove that they have the remedy for the global economies chronic pains. Barack Obama is on a tour of the American Midwest, crucial electoral heartland in all of this. The president says it is a listening tour and he's not due to make any big economic announcements. When the president spoke a short time ago in Minnesota he appealed for an end of the political gridlock, again, which took America to the brink of default.

(DESK BELL CHIMES)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There is nothing that we're facing that we can't solve with some spirit of America first; a willingness to say we're going to choose party-we're going to choose country over party, we're going to choose the next generation over the next election.

(APPLAUSE)

If we are willing to do that, then I have absolutely no doubt that we can get this economy going again. That we can get people working back again, small businesses can start growing again.

(END VIDEO CLIP)

QUEST: Barack Obama, in the Midwest, where he is on the bus (ph).

(DESK BELL CHIMES)

The French President Nicolas Sarkozy is on travels of his own. He meets with the German Chancellor Angela Merkel on Tuesday, a summit. They will be talking about how better to govern the Eurozone. Apparently they will not be talking about a euro bond. On Thursday we will hear how French ministers plan to save more money. Mr. Sarkozy has given them a week to come up with fresh ideas to cut the French deficit. He wants to stop rumors that France could loose its AAA credit rating.

(DESK BELL CHIMES)

Nina Dos Santos is in Paris, joins me tonight.

So, if they are not talking about the euro bond, and they are probably not talking about anything that might actually accentuate a rift between them, what would be the core of their discussions?

NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Well, that is the $64,000 question now really, Richard, isn't it, here in Paris. What we do know is that whatever they say is crucial to this, the euro, the common currency, 17 nations share this currency. It is their money in the European Union region, some 320 million people. And really, this is being bill, at the moment, Richard, as the make or break summit for the euro, as yet, it is unclear exactly what they are going to be discussing.

What we could see, some economists here have been telling me, is that we could see some kind of agreement for Eurozone leaders to come together more often and to speak more often and coordinate their economic policy. Of course, that is one of the reasons why the bond market have been giving Eurozone leaders such a tough time over the last 18 months. Is because we have a monetary union, but we don't have a fiscal one.

QUEST: All right. All right.

July 21, European summit, Eurozone summit, that sets out the regulations for an expanded and strengthened stability facility. Are they likely to either, reaffirm or enhance that, or is it also possible they will move forward, really give the idea of fiscal union a push?

DOS SANTOS: Well, it seems, if you read some of the literature on this matter, but obviously, you know, it does change depending on who you speak to, as well. And it is changing rapidly, this picture as well. As of course, the bond market starts to price in some kind of fiscal union it seems as though Angela Merkel may, according to some German newspapers, be softening in her stance of a kind of fiscal union.

You mention euro bonds. Now, the markets are saying, increasingly, talk among you politicians is cheap. We want to see action.

QUEST: Right.

DOS SANTOS: What they want to see is euro bonds issued and backed by 17 nations and they say that that will calm the debt markets. But the Germans are saying, we will not give that unless we have fiscal union as well. And that could be further down the road.

QUEST: Finally, how significant is it that they have chosen to have this meeting in the middle of-or the back end of August, when frankly, anybody who is anybody in France would normally be on the Riviera.

DOS SANTOS: I can tell you that most people behind me, on the Champs- Elysees, in fact are probably on the Riviera. Paris is absolutely deserted at the moment. It is a public holiday today, across much of continental Europe.

And that is one of the reasons why it is so significant. France, we have got to remember, we knew on Friday, flat lined in terms of its growth. France became the latest Eurozone country to incur the wrath of the bond market. Who already started, Richard, pricing in a downgrade for its debt. Now, what this means, is if France were to get a downgrade-and we must stress that all of the ratings agencies have said for the moment they confident with their outlook on French debt, they're not earmarking it for a downgrade. But if France were to get a downgrade that would mean that the onus of putting more money into that European stability fund, the ESFS, would come onto, for instance, Germany and some of the other countries that were AAA if France were to loose its AAA rating. That is why it is so significant. That is why it is happening tomorrow.

QUEST: Nina Dos Santos who is in Paris, and with all those empty streets will be able to get a decent table for dinner. Nina Dos Santos, from Paris.

Barack Obama is heading to Iowa for his second town hall meeting of the day. Part of a three-day tour of the Midwest that we were hearing about earlier. Brianna Keilar is traveling with the president and sent this dispatch.

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT (On camera): Here in Cannon Falls, Minnesota, the first of five stops the president will make in the Midwest over the next three days. The president was very quick to skewer the political climate in Washington, that delivered the bruising debt deal. He didn't call out Republicans by name, but it was very clear who he was criticizing. While the White House is insistent that this is not a series of campaign stops, the president took aim at almost everyone in the Republican presidential field.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You know the debate the other party candidates were having the other day, when they were asked, to reduce our deficit, reduce our debt, would you be willing to take a deal where it was $5 of spending cuts for every $1 of increased revenues. Who would take it? Everybody said, no. They said how about $10 to $1; $10 in cuts for every $1 increase in revenue.

Are you saying that none of you would take it? And everybody raised their hand. None of them would take it. Think about that. I mean that is just not common sense.

KEILAR: The president has faced a lot of criticism from Republicans for this bus tour. Some calling it a no-jobs tour, other saying it is a campaign stunt. But the White House says it is very important for President Obama to come out, listen to Americans, listen to their concerns, get some ideas. And we didn't hear any new specific jobs proposals. Just ones that he has been touting recently, extending unemployment benefits, extending the payroll tax cut, an infrastructure bank to increase infrastructure spending. But White House officials say the president will be rolling out some new jobs proposals in the coming weeks. Brianna Keilar, CNN, Cannon Falls, Minnesota.

(END VIDEOTAPE)

QUEST: After the extraordinary events of last week, I'm sure you are as exhausted as the rest of us are, the way the market seesawed. Do you know we had seven days, which is the first time in history, apparently, where you had an up, down, up, down, session over the last week, and a bit. And then, of course, we had the four days of 400-point moves. You will be perhaps a little bit relieved, chance to take a breath.

(DESK BELL CHIMES)

QUEST: The Dow is up 162 points. We are comfortably over 11,000- well, I say, comfortably, but you know as well as I do, that what is comfortable one day can be most uncomfortable the next. Up 1.5 percent, at 11,432. Let's make sure it stays that way for the rest of the hour.

In a moment, "Future Cities" and there are difficult choices in Lebanon's capital city.

(BEGIN VIDEOTAPE)

QUEST (On camera): Building the Beirut of the future and deciding which buildings to keep, after the break.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

QUEST: This month on "Future Cities" we are in Beirut. It used to be called Paris of the Middle East. Now, five years after the war with Israel ended, there were still home-grown troubles which are threatening the stability of the country. For instance, just last Thursday two men were killed in a Beiruti suburb, when a bomb exploded. It is ongoing incidences like this that make it much more difficult for Lebanon to attract much needed investment. Even so, perhaps, despite of this, construction in the capital steams ahead. And as construction continues, there are concerns that historic buildings, that define the country, won't be a part of the city's future.

(BEGIN VIDEOTAPE)

MONA HALLAK, ARCHITECT, PRESERVATIONIST: I can paint this famous building because it really right in the center of the history of Beirut. Architecturally it is a pioneering example avant-garde architecture. Historically it summarizes the beauty of living in Beirut before the war. And it summarizes the fight to preserve Beirut's heritage.

QUEST (voice over): The yellow house is at the heart of the debate over Beirut's future. Modernize and change, or preserve and restore. This particular building was a sniper's nest during Lebanon's civil war. The imposing bullet ridden facades stand as a monument to both the beautiful and the blood turns of Beirut's history.

HALLAK: In 1975 life stopped, abruptly. The war came. The war just abused every single place in the city. And this was abused equally. This became a killing machine.

From this room three different snipers, you can see the traces of the bullets right here. For me this is a monument to the civil war. This is real. I think this is what we need in the city.

QUEST: Ever since the civil war ended real estate in Beirut has been booming. Along with many damaged buildings developers wanted to tear down the yellow house and replace it with a tower. Saving this building has taken the architect Mona Hallak 13 years. This is just one of hundreds of heritage buildings in Beirut.

Elsewhere in the city, construction frenzy continues upwards undeterred.

(On camera): I can see at least 10 cranes from this balcony. A testament to the amount of building taking place in the Lebanese capital, the problem and the fear is many of the traditional buildings are being knocked down and replaced by tall look alike, me-too buildings.

NABIL GHOLAM, ARCHITECT AND URBAN PLANNER: I think it is a mixed blame. I think we have to take some of the blame, as architects, the public, in general, who doesn't stand for what they believe in, and a government that represents the public, which hasn't been able, in the last 20 years, since the war is over, pretty much, to set up proper protection system and we are loosing whatever is left very fast.

HALLAK: Five years ago this was an intact heritage cluster. There was an old building there, now it is a tower under construction. Simply this is not a cluster anymore. The city of Beirut will look like Dubai in six year's time if we continue like this.

QUEST (on camera): As you walk around the city you soon discover that some of the older beautiful buildings are now dwarfed by much larger tower blocks that are seemingly out of proportion to the local neighborhood.

(Voice over): One area that does have proper planning is Beirut's downtown. Destroyed by the war, it was rebuild by the developer Solidere, a company especially established for the purpose. Solidere has restored several of the city's traditional buildings.

UNIDENTIFIED MALE: It is a neo-Arabesque. This is the real thing. It is not some kind of pastiche. These are real buildings. They have been restored. And it is one of the main central streets of the historic core.

QUEST: The city's mayor points out, elsewhere in Beirut, beyond the confines of Solidere's land, even less has survived.

MAYOR BILAL HAMAD, BEIRUT: This is one of the reasons why I wanted to come to this office, and to this chair. What we are doing now, anybody who wants a permit to bring down, to destroy and old building, before coming to (UNINTELLIGIBLE), they go to the Ministry Of Culture. If they think that building should be classified, they won't give the permit. So this way we can, a little bit, control the destruction of heritage buildings all around Beirut.

QUEST (voice over): Activists like Hallak are not waiting for new laws to save old buildings. Accustomed to long periods of political turmoil, she says in today's Beirut, it is down to individuals, and not governments to fight for the survival of the city's identity.

HALLAK: It is going to become the museum of memory of the City of Beirut. This will be a place where people learn about the city, and maybe learn to respect it more, love it more, and protect it more.

QUEST: For now, this is one building that has found new life in Beirut's future.

(END VIDEOTAPE)

QUEST: And we will be in Beirut for the rest of August, everyone there, of course, as "Future Cities" continues.

After the break, America threw billions of dollars at its economy. And still, this summertime, making a living is far from easy. We'll be talking to the former U.S. Labor Secretary Robert Reich, whether the U.S. stimulus can deliver jobs, and whether more is needed.

(DESK BELL CHIMES)

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN. And on this network, the news always comes first.

Regional pressure is increasing for Syria to end its crackdown on dissent. Pictures like these emerged described online as Syrian gunships shelling one of their own cities. Turkey has repeated demands that Syrian President Bashar al-Assad stop the violence immediate and that the Syrian people's democratic demands be met.

Mixed reaction to a judge's decision to ban TV cameras from the trial of the former Egyptian leader, Hosni Mubarak. Some say it will help maintain objectivity. Others worry about transparency. The trial has been adjourned until September the 5th, while officials consider evidence.

After a string of deadly attacks across Iraqi cities, the prime minister, Nouri al-Maliki, is asking security forces not to let the killers catch their breath and to pursue until they're finished. At least 75 people lost their lives on Monday half of them in a double bombing in Kut.

Barack Obama has embarked on a three day bus tour through the American Midwest. The White House says he'll be talking about job growth in rural communities. Some Republicans are mocking the tour as a thinly disguised campaign trip. One called it a magical mystery tour.

Now, with markets fluctuating and fears of a double dip recession, questions are being asked about whether the original American stimulus package actually worked, whether more now needs to be done and just how damaged is Barack Obama as his approval rating slips below 40 percent. At this sort of level, is he not in serious trouble?

Joining me now is the former U.S. Labor secretary and the public policy professor, Robert Reich.

He joins me from the University of California at Berkeley.

Dr. Reich is also the author of "Aftershock," the book, which is now available in paperback.

We start with the politics, Mr. Reich, and then we'll go to -- to economics, because politics, at the moment, seems sexier than economics, although that's maybe not always the case after last week.

But let's just start. How -- how worried should Barack Obama be that his -- his approval rating is now under 40 percent?

ROBERT REICH, UNIVERSITY OF CALIFORNIA, FORMER U.S. LABOR SECRETARY: Richard, any president should be very, very concerned, going into an election year, whose approval rating is under 40 percent. This does not spell, necessarily, a victory, although the odds that a sitting president will be reelected are quite good, if you look at American history.

But the odds get much, much lower if the economy is very bad and people are pessimistic.

QUEST: Right.

REICH: Consumer confidence right now is at a low, almost a record low.

QUEST: So to the extent that, and particularly if we look at the Republican contenders, who do seem to be very much right-wing, very much conservative, and, to some extent, if it plays out as it seems -- and I understand, sir, we're a long way. But there will be a very stark, divisive choice.

REICH: Yes, there will be. I mean Republicans have really, in the last 90 years, if you go back in American history, have basically promoted one fundamental idea and that is that government is bad, government needs to get out of the way, everything would be better with less government. Ronald Reagan was the major progenitor of this view, but it really predated him. It goes back to Herbert Hoover, Calvin Coolidge.

And that is exactly what today's Republicans are saying -- all of our problems, all of our anxieties, the bad economy is all due to government. This is very different from the Democratic and very difficult from the Obama administration's view.

QUEST: Except -- OK, so we're in this scenario. We've got growth numbers in France non-existent, growth numbers in Britain verging on recession, growth numbers in the United States stagnant, unemployment high.

Are you in favor, Professor, of a straightforward another bout of fiscal stimulus and QE3 monetary stimulus?

REICH: Well, as John Maynard Keynes, John Maynard Keynes, the great British economist, told us and instructed us and actually we followed for about 40 years, when the private sector cannot do it...

QUEST: Right.

REICH: -- that is, when consumers cannot buy, when businesses will not hire because consumers are not out there, then government has got to be the purchaser of last resort. And that means, yes, rather than a politics of austerity, we need now expansion and expansive fiscal and monetary policies, not only in the United States, but in Europe. In fact, historians will look back right now on what Europe is doing and what the United States is doing in terms of contractionary policies and say they were crazy.

QUEST: Is what's happening, the austerity measures, do you see any similarities between what happens now and what happened in the 1920s and 30s, where they did make very similar contractory -- contraction efforts instead of expanding the economies, which ultimately led to the Great Depression?

Are there similarities or am I barking up the wrong tree?

REICH: Well, the biggest similarity is 1936-1937, when, in the United States, Franklin D. Roosevelt, who actually, his expansionary fiscal and monetary policies was -- were beginning to lead us out of the trough of the recession, which hit its bottom in 1933. Then he pulled back in 1936 and 1937. His advisers said, no, we cannot, we have to balance the budget, we've got to cut spending. Also, the Federal Reserve Board, our monetary authority...

QUEST: Right.

REICH: -- pulled back on the monetary -- the money supply.

And then in 1937, what happened?

The United States economy sunk way back into depression once again.

QUEST: All right...

REICH: And that is the danger right now.

QUEST: To those who would say, watching this program tonight, who would say, Robert Reich is a Democrat who's never seen a government program and a government spending program that he didn't like or wanted to spend more money on, what would you say?

REICH: Well, I'd say two things. Number one, when I was part of the Clinton administration, we actually did cut spending. I took a -- my own department, I went from 20,000 employees down to 16,000 employees. But that was a particular point in time in which the government and the economy -- the economy was expanding. So government could pull back.

When the economy is contracting, you won't -- you need government to expand. And again, anybody watching this program who doubts this has only to look at history. The stimulus program that the Obama administration embarked on was not nearly large enough given that state and local governments in the United States were cutting like mad, pulling back, at the same time, almost negating the stimulus, and given, also, that the falloff...

QUEST: So -- so...

REICH: -- in demand was much larger than anybody had assumed.

QUEST: All right. So if debt to GDP in the U.S. is already heading to 100 percent, 92 percent or whatever it is by some measures, what pre -- what number are you prepared to let it rise to as you continue to fund a stimulus package?

REICH: Well, Richard, remember -- and you said it very well just now -- the debt to GDP is the critical point. So if we grow the GDP, if we get growth back...

QUEST: Oh...

REICH: -- that debt/GDP ratio actually starts declining. So we need to stimulate the economy in order to get growth back. If the private sector cannot do it, remember, consumers here and consumers, indeed, in Europe, also, are burdened with debt, are scared about the future, their jobs are declining, their wages are declining. In these circumstances, government has got to stimulate growth so that the debt/GDP ratio, three or four or five years from now, actually comes down. Otherwise, we're in very, very serious trouble.

QUEST: We're now -- but it comes to the final question, because we're back to politics, really. The choice -- and I come back to this idea that, I mean, perhaps not since the last the election or (INAUDIBLE), the choice the American people are going to have next year will be one of the starkest that perhaps either of us can remember, between those on the left and those on the right, particularly if we end up with a -- a more right-wing Republican nominee like Perry or Michelle Bachmann.

REICH: Well, yes. It looks like it's going to be a very stark choice. But what -- what irks a little bit, I have to be completely frank with you, Richard, is that in the American media and in the world media, the assumption is that the truth lies about halfway between what is correct and what is incorrect. I mean I the economics profession, among economic policy people, among people who have expertise in government and politics, there is almost no doubt that we need, right now...

QUEST: All right...

REICH: -- to have more stimulus. This is not something that is a fringe idea. Keynesianism was the backbone of American policy.

QUEST: All right.

REICH: And over the last eight recessions, indeed, if you look at...

QUEST: All right...

REICH: -- the Great Depression, it worked.

QUEST: We'll have to leave it there before the satellite finishes. You and I could talk much more and hopefully we will, in the future.

Mr. Robert Reich joining us from California.

The markets -- how are they trading?

After last week, anything, a bit of -- I don't know whether I actually want a robust upwards session or just a bit of peace and quiet this week.

Alison Kosik is in New York.

As we come toward the end of the summertime in the -- for New Yorkers, what do you prefer, a quiet session or a robust, rapacious session?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: I -- I think I'll go for quiet after what happened last week. And -- and, you know, we are having a nice quiet session to the up side, as you can see. You know, the Dow holding onto its gains, up 161 points. And what's interesting is that Wall Street is shrugging off a really downbeat manufacturing report. It was the Empire State Manufacturing Index. It missed by a long shot. The survey showed that -- that manufacturing fell deeper into negative territory in August, mentioning manufacturing activity in the New York area contracted for a third straight month.

But investors are looking past it today, Richard. They're looking at some deal news, especially after companies have been hoarding cash, with -- with such uncertainty in this economic climate, that the fact that they're putting their cash to work is that they public opinion -- is a big positive. For one, Google has signed Motorola Mobility for $12.5 billion. Shares of MMI are surging 55 percent.

Also, Bank of America is selling its Canadian credit card business. That's giving a boost to BOA's searches, up more than 8 percent. In fact, BOA is leading the Dow.

Also, an accusation by offshore driller, Transocean, that's boosting the gains, as well. But as you know this, Richard, three days of gains do not make a trend. So we will see how the day ends...

QUEST: Yes.

KOSIK: -- and tomorrow is also a new day for (INAUDIBLE)...

QUEST: I...

KOSIK: -- (INAUDIBLE).

QUEST: I disagree with you, Miss. Kosik. After last week, two hours...

KOSIK: With what?

QUEST: -- two hours of the Dow going in one direction is a trend after what we saw last week. You're right, we've got to have a few more days before (INAUDIBLE).

KOSIK: We do.

QUEST: Alison Kosik is in New York tonight.

After the break, the managing director of the World Bank, the assistant manager is leaving her post. I'll have an interview with Ngozi after the break. And we'll find out why she thinks of the world's poor are better off than they used to be.

(COMMERCIAL BREAK)

QUEST: Ngozi Okonjo-Iweala is the managing director at the World Bank. That is, until tomorrow -- well, pretty much tonight.

She's about to return to her former role as Nigeria's finance minister.

On her last day at the World Bank, she joined me from Washington -- always good to have Ngozi on the program -- to discuss major issues of development aid.

And with all the policies that have been put in place on her watch, the core question, whether the world's poorest are now in a more secure place?

(BEGIN VIDEOTAPE)

NGOZI OKONJO-IWEALA, MANAGING DIRECTOR, WORLD BANK: The world global environment is now so full of uncertainties that we cannot be totally complacent, that the 44 million people who were thrown into poverty with the food crisis are now in a better place.

I think we have to continue to be vigilant because we've got the food crisis, we've got the global financial crisis that you referred to. And we -- we -- all of them serve to make it very important that the global community continues to look at the situation of the poor people around the globe.

QUEST: Do you leave your job with a feeling that you have made a difference or that you have merely made a dent?

OKONJO-IWEALA: That's a very tough question. You know, I think it's easier for other people to judge whether one has made a difference or not.

But let me say this. I've had a wonderful time at the World Bank. I've been very privileged to be able to do that job, as I'm very privileged to be asked to go back to my own home to help. And let me tell you, there are a few things I think, you know, I'm proud of, that where the World Bank has made a difference with -- and where I think I've contributed.

The first is that during the 2008-2009 food crisis, we were able to put together a fund of $1.2 billion that, you know, helped the poorest -- the 79 poorest countries in the world to weather the food crisis. And financial crisis, the World Bank has been very active. I also contributed to that, in helping countries with policies and financing to make their way through the crisis.

QUEST: Time for you to get angry, though.

Are you angry at the way in which the world is still geared and the policies of G-20, G-7, are still geared to developed world and skewed toward the rich?

OKONJO-IWEALA: Of course I'm angry that in today's world -- or I'm -- I'm upset that we still have a billion people who go to bed hungry and that we still have a situation like famine in the Horn of Africa, when we have a world that is perfectly capable of dealing with these problems.

So, yes, I -- I would feel better if the world would have the political will to deal with the security situation in the Horn of Africa so that we can help them with long-term solutions to food and food security. I would feel better if the G-20 could also focus on the problems of low income countries.

But let me tell you, the world is becoming more and more multi-polar. It is the emerging market countries that are contributing a lot more to global growth now. And some of the low income countries like the countries on the African continent, are not doing badly. They are growing at better than 5 percent.

QUEST: Right.

OKONJO-IWEALA: So we should also look on them as contributors to global growth.

QUEST: Now, Ngozi is returning to Nigeria, where she will take up the post of finance minister and coordinating minister for the economy.

And we'll hear from her tomorrow on exactly what she hopes to do in a job that she previously already held.

Does she think there is still differences that she can make back home?

When we come back after the break, some pretty profits were unveiled today, it was the cosmetics from Estee Lauder. An exclusive interview with the chief executive, Fabrizio Freda, coming up.

QUEST MEANS BUSINESS.

Good evening.

(COMMERCIAL BREAK)

QUEST: Maybe not the reversal session, but it wasn't a bad one, either.

Shares in the cosmetics giant, Estee Lauder, fell 7 percent on Monday after it made a conservative forecast for its 2012 fiscal year.

Now, it's been a successful year so far this one. The company announced fourth quarter earnings of $41 million. That was up 72 percent.

That's rather good, that 72.

In a television exclusive, Estee Lauder's chief exec Fabrizio Freda told our very own Felicia Taylor how new products and new markets are giving sales a boost.

(BEGIN VIDEOTAPE)

FELICIA TAYLOR, CNN CORRESPONDENT: Here we are at Estee Lauder headquarters in New York on Fifth Avenue with the CEO, Fabrizio Freda, after having just reported record sales for the company.

One of the leading products is Advanced Night Repair.

Tell me why this is so special and where the growth is.

FABRIZIO FREDA, CEO, ESTEE LAUDER: It is so special because, first of all, it's a great technology and it's a base product -- the core product for the routine of every woman around the world, but particularly in China. A lot of Chinese women are really liking this product. They call it the brown bottle.

TAYLOR: And it is.

But what about growth in China?

I mean, clearly, that's an important region for you going forward.

What are your expectations down the road?

FREDA: We will continue to invest in China and grow this market. This making is one of the fastest growing markets in the globe. It has a lot of potential for the long-term. Also, Chinese consumers are traveling the world and they consume a lot of the products which are winning in mainland China, also during their travel experiences.

So winning in China actually has a positive effect on the entire business globally.

TAYLOR: Tell me about the travel arena. I know that's also an important growth area for you, literally, people in duty-free arenas buying product, right?

FREDA: Yes, absolutely. Travel retail is a channel which is growing, and very successfully, around the world. People travel more. They spend more time in airports. And importantly, the shopping experience in airports is improving. And so there is more and more people buying in travel retail.

TAYLOR: What about Latin America?

Where is your greatest growth there?

FREDA: Our greater growth in Latin America at the moment is on Macau, actually, in the area of Mekab (ph). And more to come, particularly in Brazil.

TAYLOR: What have you done in department stores to help attract customers back to the makeup counter that might be different than what we saw in 2008 and 2009?

FREDA: What we have done is, first of all, we are counting, as I said, a big innovation -- products which are so important to consumers that are attracting new users to the store. We support this unique innovation with more aggressive advertising, be it in magazines, be it in digital or be it in television.

So the consumer comes to the store and they find a -- an amazing service quality. And thanks to this quality, we can customize the product to their needs and they discover the rest of the line and the brand.

TAYLOR: Looking forward, though, you have changed your range in terms of the growth outlook.

Tell me what that is and where -- why you made that change -- the decision.

FREDA: We -- we have basic -- we assume to continue growing much more than the market. So our assumption for the next years is to continue consistently to build market share.

We are (INAUDIBLE) however, are giving a range to the market out there today, because at the top of the range is our continuous growth, as planned. In the bottom of the range, there is the hypothesis that the current turmoil in the financial markets will create some softening in consumption.

I don't know and I'm sure you can guess for me.

(LAUGHTER)

TAYLOR: I'm not playing that guessing game for any -- for any amount of money.

(END VIDEO TAPE)

QUEST: Felicia Taylor in New York with Estee Lauder.

I hope they made sure that all the makeup was still there when she left. Well, we know Felicia.

The weather forecast now.

Jenny Harrison is at the World Weather Center -- Jenny, there are some rather nasty systems out there at the moment.

JENNY HARRISON, CNN METEOROLOGIST: There are, indeed. Yes. In fact, some heavy rain across portions of Europe. I'll come back to that.

But I think you're probably referring to Tropical Storm Gert. It's a fairly powerful one. But so far, not really producing any problem for any areas of land.

Now this is it. You can see how (INAUDIBLE) there. It's about 155 kilometers to the east right now. Winds are strong, about 90, 93 kilometers an hour. But most of the rain with this storm system is the north and the east of the actual formation of the storm.

So that means right now Bermuda. Unbelievably, maybe, if you're there, it's about 27 Celsius and clear, sunny skies. So this system hopefully will pass by with no problems.

But you can see that it's expected to continue its journey across into the Northern Atlantic. So we'll keep an eye on it just to see where it actually comes out to and, if, in fact, it pushes across into any areas of Europe, which Europe, which, often, of course, can happen.

Now, I also want to point out to you this system in the south. This is being given, once again, it's changed, actually. It was -- it was originally highlighted there just like that by the National Hurricane Center. Then they dropped the box for a day.

We were still talking about it and sure enough, we are watching it once again.

But there's certainly plenty of rain across this region of the Caribbean. And that system, whether it develops or not, will produce some heavy showers through the Lesser Antilles, as you can see, and then head toward more central areas of the Caribbean.

Now, as I say, across in Europe, we'll keep an eye on the remnants of Gert, which is what it will be by the time it reaches this part of the world. But there's been some very heavy rain and thunderstorms again in the last few hours.

Thunderstorms have been cropping up across Eastern Europe. And this line of cloud is all moving along with a frontal system. But some very heavy rain in particular has been pushing into Ireland, actually, in the last few hours. And some fairly persistent rain around those thunderstorms. I'm afraid that could lead to a little bit more flooding across into Scotland, certainly.

But this is the front I just showed you on the satellite. And that will spread that way eastward. One or two warnings in terms of maybe the potential for one or two stronger thunderstorms. You could have some strong winds and maybe, as well, some hail in the forecast. You can see all that coming in over the next couple of days.

Staying fine and dry in the Med. That's where the heat is, particularly into Central and Southern Spain. Thirty-eight in Madrid, which, as you know, Richard, is 100 degrees Fahrenheit.

So lucky you're in London, 21, 70 degrees Fahrenheit. So, not bad.

QUEST: A quick question. I know -- what -- we're out of time, but a quick question.

What does hurricane season start?

HARRISON: Well, we've started. In fact, if Gert...

QUEST: All right.

HARRISON: -- doesn't become a hurricane, it will be the seventh tropical storm of the season not to develop into a hurricane. And that will be a record. So it started already and it's going to continue through November. But it's been a fairly quiet time so far.

QUEST: Thank you very much.

I knew you would know the answer.

You know the old line, I don't know the answer, but I know a woman who does.

Jenny Harrison.

A Profitable Moment next.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment.

We've seen a new chapter in the ever changing Smartphone ecosystems following the marriages of Nokia and Windows, Google and Motorola celebrating their own union of hardware and software.

Google's purchase may be a protective mood. It's sure to sour relations with existing Android buddies. Overnight, from partners to competitors.

It's a major shift and there's good reason to be wary. It's hard to see how Motorola won't get preferential treatment and first dibs on software. Now it's going to be in a circle.

How will Samsung, HTC, Sony react to being second in the line?

Of course, unlike Motorola, those rivals are free to jump ship to another operating system if they wish.

And that is QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Whatever you're up to in the hours ahead, I hope it's profitable.

"PIERS MORGAN TONIGHT" is after the headlines.

END