>> what's up with whatsapp? facebook splurges $19 billion on the mobile messaging app. japan post a record. explodesanufacturing to a seven-month low and putting pressure on policymakers to support expansion. and stimulus cuts will likely continue. and they truth in ukraine as obama says to end the violence or face the consequences.

hello. welcome to "countdown." anna is off today. bloomberg reporters are standing by across the world and ready to deliver the stories that will drive your day. hans nichols is in berlin with the details on facebook's's biggest purchase ever. i we will take a look at the manufacturing report from china. ryan chilcote is tracking the evolving situation in ukraine as a temporary truce stops violent clashes for now. for these exclusive interviews on the move. we will look at the impact of the u.k. flights with one of the biggest insurance companies in europe. and a company that invented color tv, it the color -- technicolor ceo, frederick rose,

joins us later. a $19 facebook with billion deal to buy a service that costs $1. hans, what did mark zuckerberg see in whatsapp? >> when his eye was user growth and user engagement. when million users per day. is the engagement. 70% of the users use it everyday. for the deal. stock, $4 billion in cash, $3 billion in restricted stock. this company was founded five years ago. only 55 employees. it had more users than twitter's

240 million. take a look at what this book is using -- paying for each user. they boughtm -- instagram and viper. acquisition was instagram. take a look at this. microsoft's acquisition of skype was $8.5 billion. compare that to $19 billion. zuckerberg says he does not want to this.s when he sees is a potential for growth. it will go worldwide in the next two years. it could reach billions of people. that is valuable. our focus will remain on connecting more people and increasing engagement. over the long term, we look forward to seeing what the team

can do to build a really great business. >> only 32 engineers at the company. marketing. pr or at 300e dollars for each million users and facebook is paying as much as $42. , $19 an amazing price billion. who is making money out of this? i'm guessing a few billionaires will be made out of this deal. co-founderse came to the u.s. in ukraine when he was 16. each employee is worth $340 million. they made out like bandits. the investment is now worth close to $3 billion. nichols inhans berlin.

we had key economic data overnight on two of the biggest economies in asia. japan came out with trade data. engles is in hong kong. >> good morning. that is right. , it wasn'tshort really trade deficit for japan. doubled theut number compared to december. we have seen record deficit after record deficit. there are two parts to the equation. at the same time, it is also because of the week urgency. it is a bit counterintuitive. it makes a lot of these energy or expensive,an especially now that it is winter. that beats into that inflation that japan does not need.

wagest that together with . dixon in less than a few months. to try to over look and overcome. china, theabout flash pmi manufacturing number, number of contraction. what is the take away? >> 48.3 is much lower than the previous one. 49.5. it is an initial number. official numbers come out in about a weeks time. you do have one week of the chinese new year at the start of the month. a lot of economists are worried about this one. it is too low below the threshold of 50. inthank you, david engles hong kong. review.nterest rate in

jonathan ferro is here with more on those items. .> we had a unanimous decision i read the minutes. nothing unanimous about the conversations going on. $10 billion at tapering every single month. is noe been told there preset course, but several people want to make it a clear perception that it will be $10 billion a month. they say economic recovery would lead a substantial deviation to change path. q you said, there is a very interesting conversation on interest rates. side, there is a very interesting conversation on interest rates. we know that individuals at the fed would like rates to rise at the end of the year. definitely want to talk about forward guidance.

do they go down the qualitative avenue? right now they are on the quantitive avenue. do they moveure, away from tying it to a bigger one? what is that debate? >> the take away is that there's concern about the inflation. there is a lot of concern about the slack in the labor markets. all down to is janet. she was head of the committee on communication. she rushed forward forward guidance. it is on her. it should be consensus is difficult. >> it is. thank you. in ukraine, president yanukovych declared a truce with the opposition leaders. ryan chilcote is here with us. let's begin with what will happen next. eu finance ministers meet today. what measures could come out of that meeting? >> we have the foreign ministers

going. the truce means the government plans to assault independent square and take it back has been shelved and the talks will begin. they were all going to sit down and president yanukovych separately there will sit down with opposition before they go back to brussels for a crisis meeting. in the afternoon, we will have president yanukovych meeting with the leaders of the opposition. the talks are very much underway. happened in the last 24 hours. us. briefly, sum up for a right totary has search, detain, and shoot ukrainians. the security services said that weapons and ammunition was being stolen from stockpiles around the country. they're going to put a stop to it.

whether that is true or not, we do not know. allegation that is happening is in itself rather alarming. the president has replaced his defense minister with the head of the navy. instability is spreading throughout the country, particularly in the region west of the country. one region declared itself autonomous. in another, the protesters took the regional governor hostage. he wouldn't disavow his allegiance. he was handcuffed. >> ukrainian assets continue to slide. >> the biggest selloff ever in the country's 25 year history. when billion-dollar of notes do this year. billion dollar of notes due this year. >> thank you. we will focus on japan and china and kick up with the latest report on trade and manufacturing. ♪

>> "countdown." welcome back to "countdown."

to "countdown." i am mark barton. a company has just announced it has a new chief executive officer. his name is david cole. he was the chief risk officer at swiss re before this announcement. the company announcing profitability for the fourth quarter. $1.2 billion. has been the big news. david cole has been named as the new group chief financial officer. meanwhile, it europe's biggest airline says it's news plan is picking up speed. jobss cut more than 7000 since 2011. says he isxecutive

committed to increasing profits this year, as well as reducing debt. he is the man in charge. he is the man who is been given the opportunity to turn around this big airline. caroline spoke to the chief executive officer in paris. france has been more severely impacted by that economic environment and by slightly more difficult revenues . france, we launched in september adjusted plan to restructure the network and to target the recovery for this network in the coming years. debt byhave to use our

$4.5 billion euroes. -- euros. already in 2013, our cash consequences and improved. posted a record trade deficit. china says manufacturing slowed. let's get more on these reports from lena. thank you for joining us. china is trying to juggle a lot of balls, isn't it? it is trying to reduce the capacity and cut pollution. it is trying to prevent a surge into a from spiraling financial crisis. how is it doing with juggling? >> it is a draconian task. what we have seen from the andres is the indication

the bloodline of the investment lowest -- thehe slowest pace in 10 years. they have succeeded from moving and the public decoration that has field the growth in recent years. at the same time, balancing that against the needs to create -- assisting enough of the economy so you can push through with reforms that could improve sustainability. it is actually difficult. >> it is. it comes at a time when the world ready is suffering from low inflation. how is that when the play out? >> precisely. not only is up public-sector down, but this is driving

concerns about the inability of debt in the local government, but also the corporate spear. -- sphere. it is driving the slowdown and creating concern about whether chana can manage in an orderly way. in the best case scenario come step change down in chinese growth and in the middle of the week inflation environment will increase the concerns. it is ahead of the g20. >> it is taking place in ostrow you. in japan -- it is taking place in australia. japan, the surging costs, willie d rail plans to have sustainable economic recovery in japan? plans to haveail

sustainable economic recovery in japan? >> it was difficult for the bank of japan to pursue further quantitative easing unless there was some merit coming from a .tronger mistake demand until we see that, the concern is that the artificial inflation to push through the weakness will probably undermine the credibility. >> why has it been so slow? japaneselot of exporters move their production overseas. has it been slower than maybe you thought it would? >> that is a good point. much of those functions are happening outside the borders of japan. there's a weak exchange rate. key wordrobably the

here is that it is not the problem for japan. it is a problem for emerging markets as we have seen in recent weeks. what you do have still is a global race of competitive evaluation. it is not really functioning when global demand is weak. it is not a substitute. >> there you go. lena komileva, a chief economist. and whathe fed minutes they had to tell us about the future of forward guidance in the u.s. ♪

>> welcome back to "countdown." i am mark barton. my guest is lena komileva. the fed has spoken. it looks like they are looking to truck forward guidance. think about the approach where you tie into a figure based on unemployment or do you go the more quality of -- qu alitative route? what do you think? >> absolutely.

the question is wide open. the fed isar is that preparing to draw away the rules of the fed and throw away the rulebook. it.s confidence about rule that istaylor still very instructive. it indicates the level of the momentum and the strength the u.s. economy. when it is still too high for them to sustain nominal rates of borrowing costs, it is not a surprise that the fed is managing.towards we talked about deflationary worries. there are a number of comments that were aired within the

minutes. they talked about too low inflation. is it time within the fed statements to formalize it saying that it would keep rates low if inflation persistently stayed well below our two percent target as we know it? half of its target? around one percent, isn't it? >> that is right. it is moving towards a more balanced approach. the focus is on the inflation outlook. there appears to be asymmetric approach that would link the guidance for the outlook for -- at the same time, asset purchases soon to be linked to general thinking about the capacity and the economy.

that is the other key point that we were looking for and how the fed is going to transition on forward guidance. 6.5 for the unemployment rate, but also how the fed is going to be for potential to have some of the recent weakness in the u.s. labor and housing data. >> you will be staying with us. a chiefileva, economist. she will be with us and the next section. has it been able to overcome its troubles in asia? do more with the company's latest earnings report. ♪

>> i am mark barton. these are the bloomberg top headlines. ukrainian president yanukovych has declared a truce with opposition leaders. governmentsays the will try to stop the bloodshed. the federal reserve has backed away from his commitment to consider raising interest rates for unemployment falling below a percentage. they said the joblessness is falling faster than expected here it might soon be

appropriate to revise interest rate guidance. the ecb is looking for action to spur growth and it could weaken the currency. that is according to new york university rabin he -- roubini. >> you need to have some credibility of easing. there could be stronger economic growth. >> welcome back to "countdown." i am mark barton. the time in london is 6:31. anna is off today. danone is the biggest yogurt maker. it is returning its earnings. it has declined in more than a decade. it hurt baby food sales in age a.

the shares falling to 2.78 euros. that compares with the average. they missed analyst estimates. profits decline for the first time in more than a decade. it expects this year will be marked by a sluggish consumer demand. volatilityange rate in emerging markets. it is baby food business in which 2012 a kgb did a percentage of its sales. it did turn out to be a false alarm. down with its -- it was fined for fixing prices of infant formulas. big news from danone, the world's biggest yogurt maker.

let's get the take away. we go to david tweed. in has been quite a year, hasn't it? what happened and what is danone doing to mitigate the effects? think it is interesting to watch what is happening. his is a company that is really fighting back. you have recap what has happened. they put out a statement saying that they talk -- thought some -- there wasucts an asian wide recall. they found out that this was a complete false alarm. at the moment, danone is suing. what it is doing to fight back is trying to rebuild its position in some of those asian markets and in particular, china

. it has does old -- double its stake in a company. euros to raise its stake to 10%. what they have got with the chinese company is a joint venture to make yogurt and distribute they yogurt to a fast-growing market in china. it is interesting to see what this empathy, danone -- company, danone is doing. medical unit -- what would be the reasoning behind such a move? >> i thought we might get some announcement about that today. it is a medical unit that they 2002 412 billion euros. the speculation is that they might sell it. there is a german medical

happening. the reason they might sell the unit is that they can refocus everything onto the core business. the core business is the straight gary products. products like yogurt that we have been talking about. we will see if they will go ahead and sell this unit. the unit makes a nutritional supplement and perhaps it doesn't need to focus on that area. iswant to find out what going to happen. we should hear something maybe a little bit later. tweed.k you, david we'll get more news. tokyo with us from the details. is this going to hold back our economics? the trade deficit was much

more than we had expected. at $27 billion that is about the size of a [indiscernible] economy. there are lot of factors and influences. the chinese new year, for example here at the japanese raising their sales tax. people are importing a lot more luxury cars. is energyory here imports. japan still has not gotten any of the nuclear power plants online. there's no real timeline for them to start again. if that continues as it looks willit is going to, these continue. eventually that will create serious problems for the government if they cannot see to decreased japan's dependency. over time, this is definitely going to provide concern that it

would not be succeeding. >> thank you. making sense of that. we have got to move on. lena is still here. want to talk about the record for 2013. lena komileva is here. data out of the eurozone. it should show a slight improvement. your message is quite clear that it is still a contractionary recovery. >> it is indeed. absolutely. is that thee recovery is underway, but the reality is that there is this a growing gap. here is that

although the eurozone is managing this wrong this recovery since the crisis began back in 2011, it is not sufficient enough to compensate for the structural issues that are still depressing on the ground and is seen across a variety of indicators. records are being seen. finances and the rising debt across the periphery, none of that has disappeared. the momentum is not strong enough to inflate the eurozone economists. >> we need more action from the ecb next month? >> absolutely. more.b has got to do of course they have got to do more. .hat is the chorus

they have been saying that you have got to do more. why are they continually holding off further action? >> there is perhaps some sentiment. toe gotten times underhand consider the appropriate timing and format of action whether it will be rates or some quantitative easing. what i think is quite obvious that the ecb cannot really move away from the need of easing. strength suggest that the eurozone is winning the global deflationary war. though your economy is most at markets.ss the merging structurally, the u.s. exporting less of its growth to the rest of the world.

in financial terms -- there is as is themismatch now falling yields and the rising tide. it is juxtaposed against real improvement in these economies on the ground. >> 30 seconds on the bank of england. one paragraph. one full paragraph on the forward guidance. daysoke to david if you ago. he suggested more of the debate was taking place. is he telling us everything? one paragraph. are they hiding stuff? shouldn't the mitts include all the debates? -- the minutes include all the debates? >> it doesn't have to be as transparent and clear as we would like it to be. >> do you agree with that?

shouldn't it be more open and transparent? forget we have too much of that? -- or did we have too much of that? >> the trend is still positive. probably does need more power. control is not a bad thing. >> will you be downloading the whatsapp? >> good god, i have no idea what that is. [laughter] >> thank you to lena komileva. what about the skis? with a priceone tag of 10,000 dollars. yes, $10,000 for a pair of skis. ♪

>> time for today's company news. they are picking up speed. they reiterated their plan to increase profits this year and further reduce debt. they posted a loss for 2013. economypect because the

will be doing slightly better and the recession is probably behind us that the economy -- economical the moment will be more -- environment will be more bullish. has announcede that david cole will be the new chief financial officer. beatesla earnings estimates. they plan to raise car production by 56% this year. yesterday, the stock rose to a record in the speculation of elon musk do have the having mergers and acquisition. he confirmed talks with apple, but declined to discuss the details. >> i think that is very unlikely. when you stay focused on

marketng a compelling for that electric car, i would be very concerned and acquisition scenario of whoever it is that we have become distracted from that task which is always been me, the driving goal of tesla. >> welcome back to "countdown." i am mark barton. you have got the jacket and the goggles. what about the planks on your feet? for the discerning skier, only the best will do. we have a special series. isss nichols reports from sw manufacture. specialby hand for a customer. this was maker applies an unusual method. ris.

breaking from mass production matures like aluminum and fiberglass, zai use fibers, rubber, and even granite from the nearby mountain. for your to expensive even top level racing. >> it is the best available materials. it is a niche. >> high prices indeed. the special a decent -- special edition skis cost $10,000. down the line, the question is a little less expensive, but zai are targeting the discerning skiers. someone who can afford the high prices and appreciate their time of craftsmanship. -- team are made made up of designers. zais this know-how that thinks gives them a cutting-edge.

take this price. one of only six in the whole world. it was especially designed for zai so each individual ski can be adjusted to within 100 of a millimeter. the founder talks of precision and quality driving the design. can loseuced skis their attention and result in poor performance. some of the clients came to us. world's moste expensive skis could turn out to be a pretty good investment. >> we had to berlin. material company uses that even racers cannot afford. >> these are expensive skis.

i know when you go to switzerland, but these are skis for the discerning skier. he said used to be able to tell the difference on the tennis ball of whether it was painted with red or black. i'm not so sure i could tell the difference on these skis. $10,000 is a lot of money for skis. scene is not cheap, but that is a lot of money for skis. skis or00 for a pair of $19 billion for whatsapp. [laughter] you can text your buddies while you're on the skis of how much they cost. [laughter] i will go with $19 billion for whatsapp. that is a high figure. we have never seen anything like that for some time. >> you will stay with us for the newspapers. wins his first award

as a briton. he was not even there to receive it. ♪

>> welcome back. i am mark barton. this is "countdown." is in berlin.

ryan is with me on set. hans, take it away. >> i do not know if brian will talk about this, but i want to talk about russia being out and losing to finland. more importantly, i will go inside. we have their victory. who is your loyalty to? do you root for the germans or the arsenals? >> good question. i will not answer it. two games involving manchester and arsenal. both teams lost two nil. in both games, a player got sent off. aren't you a fan? >> i'm not going to reveal my loyalties. ream me if i ever flirt with another team. loss, ae russia

travesty, isn't it? >> do not argue with your spouse. new evidence, scientific research says that kids who watch their kids argue gives a higher risk of mental illness. an interesting story about how part of the brain responsible for ordination and balance and learning is impaired by even small arguments. >> which is why your three children are very bright. >> absolutely. we never argue. we water the plant every day. >> a plan is like a relationship. plant is like a relationship. bowie, the name on everyone's lips. best male. but he did win.

it is a marvelous comeback. he released an album last year. kate moss -- it was an odd statement. scots vote no. he won scotland and england. bowie.ne, sir, to david the last time you 130 years ago -- he won 30 years ago -- culture club? >> no. breakfast club. >> where have you been? >> in russia. ch-ch-changes. >> ellie goulding. you know her? mars, best international

male. lord, best international female. best international group was daft punk. --e you ever heard of >> what? >> me and the floor manager are in shock. what is wrong with you? how about using "changes"? >> no. [laughter] continues.own" gon here is ryan singing "changes." [laughter] ♪

with the biggest internet deal in the decade? facebook has spent millions of dollars on the messaging application. chinese manufacturing slows to a seven month low. stocks indicate that stimulus cuts will continue. a truce in the ukraine. obama says to end the violence or face the consequences.

hello. welcome to countdown. stay with bloomberg for the big exclusive interviews. we will have an impact. the polls talked to the company. frederick rose joins us later. he has the latest earnings report and that is an interview you will not want to miss today. let's get to our top story. facebook made its biggest acquisition of $19 billion. hans nichols is in berlin. dollars.n i saw that and i did a double take. surely they meant 19 million. i am surprised. many other analysts are.

it is an incredible amount of money. >> it is an incredible amount of money. -- here'sat marker what mark zuckerberg sees. he sees 450 million users in emerging markets where the growth is. also, how active the users are. the users log in every day and they hear the outlines of the deal. that engagement, compare that to 61% of everyone logging on. it only has 55 employees. when you compare the users to twitter, they are at 230 million users. look at what facebook is paying per user. $42. five four instagram. twitter at $120 user.

-- not quitequite as overvalued. what mark zuckerberg sees his potential for growth and here is what he said. path tothey are on a connect one billion people and the services that reach that milestone are all incredibly valuable. fun figures inny this. there is no one in pr or marketing. who is going to return your call when you book an interview? they are too green. they are too green. >> the first year is free. a dollar.ntially that is one billion that they will make with one billion users. that is 19 times the estimated sales. any metric, people shrug

their heads. talk to me. >> the ukrainian born founder will make quite a bit of money. another cofounder came from yahoo!. one of the first initial investments came from sequoia. that has been translated into $3 billion in stake right now. how much each employee is worth million per employee. it is a remarkable story and it is a story of growth. can they continue to grow? zuckerberg says that he wants to keep its subscription-based. waynel see how much free -- rain he gives to us. >> well put. hans nichols visit our

international correspondent in berlin. last night, policymakers edged and from their commitment unemployment hit a 6.5% threshold. we have more on the fed minutes. >> bernanke's farewell. not quite. no consensus here. in some conversations i have been looking at, there are initial things. investors are on autopilot. a couple of officials who want to formalize that and make it a clear presumption that it will be 10 billion every month. is, doesf the moment the bad data change the game? >> of course, this was the meeting at the end of january. we had three weeks of data that missed since that meeting.

>> we have had a press conference. >> yeah. >> the data is nuanced and it is not just about the weather. there is more about these numbers than just weather. it is a big change in direction for the u.s. economy and that is march. there is a discussion on rates. >> i mean, do we know -- we can guess. get these every quarter and we had to officials looking for a rate hike in 2014. look at the next projections to come out in march and they will give an indication of how many officials wants change. i will not name any names. >> that is the one. for them. >> forward guidance ties to the unemployment rate. we can waive that goodbye. is what they do next that matters.

they will think about raising see it come will down to two things. slack in thet of labor market and that is the view of the majority at the federal reserve. it is like the bank of england stop it is how forward guidance takes shape. they are talking about refining thresholds and making another commitment like the bank of england has done. there is a split there and this comes down to janet yellen. she was in charge of the committee and she is in charge of forward guidance and communication. she has to show consensus as to how this guidance will take shape. given that these minutes to not show consensus on the views of the fed right now, she has her work cut out. >> of course it did. >> 14. than december. >> the talked about it. i know they talked about it. everybody knows it.

they're concerned about it and they would change the direction of the policy. the word is no. >> out of the g 20 in australia this weekend thomas iq. weekend. thank you. the ukrainian president has called for a truce from clashes that have left 26 people dead. what can we expect? >> the truce means that the storming of independent square that we were anticipating has been put off. that is with the opposition leader says. now, the talks begin. the german and french foreign ministers were joined yesterday for talks and they met with the president this morning. separately, they meet with the opposition and they are like a third-party mediator. in a way. that is the capacity in which they are operating. the opposition leader is going

to meet the president while the eu foreign ministers go to brussels for a crisis meeting. a flurry of diplomacy today. >> it has been a massive 24 hours and the biggest development has been the implementation of these anti-terrorism laws that are ordering -- or, marshall laws. servicescurity announced a nation-wide antiterrorism operation. the right to search, detained, and shoot ukrainian. the pretext that was given was that there were stockpiles of weapons and ammunition have been rated. stolen and have been rounds of ammunition. wether this is true or not, do not know. the allegation is alarming, and

even what it is the pretext for. given what it is the pretext for. the prime minister wants to involve the military and was concerned that the previous defense minister was not her to step in. the defense minister said yesterday, earlier in the day, that they would not step in. meanwhile, the instability continues to roll. we have one region in the west declaring autonomy and protesters in another region going so far as to take the federal governor hostage and chain him to a stage in front of a group of people because he refused to disavow the allegiance to the president. we saw the biggest selloff in ukrainian bonds. they have a billion dollars of notes due in june.

>> june 2014. >> that is correct. thatdid not remember during the events of greece. this is extraordinary. there are contrary is out there who are, as of the end of last year, buying ukrainian bonds. billion and they have increased their holdings by a quarter billion in the fourth quarter to give them a $6 billion worth in ukrainian debt. they are the single biggest holder of ukrainian bonds. >> is fascinating. >> yeah. the fund manager has averaged 8.2% over the last 10 years. -- bloomberg businessweek said that he was the best performing fund manager. >> fascinating. we'll see later for more on what is happening in ukraine.

notnext guest says it is policy updates, but the impact leibovitz joins us after this.

>> is time for company news. in as muchuld bring as $500 million for the biggest mining company. divesting assets as oil prices decline. introducing the fourth supercar. the debut at the geneva auto show next month. is looking to compete with the for ari and the lamborghini. shares jumped nine percent. the oil resale unit. it could raise more than $20 billion. welcome back to countdown.

i am mark martin. anna is off today. this is according to our next guest from jpmorgan. david leibovitz. thank you for joining us today. of how a rough overview it has been so far in europe. on, wek at what is going .ee companies beating estimates things are getting better in europe and certain things need to materialize in order for things to take off. analysis andsome we have seen that gdp growth means that if we see earnings growth, we have to see is revenue growth. we have to see nominal gdp growth. if we see more quarters of gdp growth in europe, we expect revenue growth follow suit and

companies are still operating with good margins. intowill translate stronger earnings. >> the strongest growth has been in technology and financial. how do you expect that to play out on an industry basis? >> i think we expect the trend to continue and when i think about the earnings season and developed economies in general, i think about the impact on the consumer and we need to see the consumer come back and returned to the high streets. that would translate into earnings for financials and energy. i expect the current trend to continue. expects its? forward guidance is changing as we speak. there is the release of last night's minutes.

>> you are starting to realize that this intervention might not be needed anymore. forgotten what it means to be in a more normal world. we have good growth in europe. i think that central banks need to take their foot off the gas because they have lower interest rates. this helps people who are wealthy and the wealthy people tend to hold the most equity. >> exactly. to reality is that they need target the lower individual, as opposed to the higher individual. divergence.t that >> it will take some time. areink that central banks becoming more and more aware of things they need to address.

they understand that they need to get people into jobs and they cannot just leave the numbers. they need to understand what is driving the numbers. are they thinking? >> right now, i tend to like the newer issues and i think interest rates are going up. if you can buy a new issue at a higher yield, that means you have a lower duration. i like credit over sovereign and i think that investors really need to be cognizant of not reaching too far down and credit quality in an effort to grab additional yield. >> we cannot mention sovereigns ing what istion happening in the periphery. they are coming down, despite the fundamentals and the record unemployment. that is what economics was worrying about. it tells the story of the periphery.

for companies in the court and the periphery, if you look at the small businesses and the is mrs. that are really driving growth, they're forced to borrow at levels of five percent. what the ecb's to think about is making sure that the low policy rate translates into the periphery. it will drive growth and the core between the periphery will continue to close. but thank you for joining us. the global markets strategist. we will go inside facebook's biggest purchase ever and find out why our next guest says telecom companies everywhere will be shaking in their boots.

>> welcome back. this is countdown. the sign -- the time is 7:23. moving away from forward guidance. six point five percent and jon ferro, what caught you by surprise? was it the discussion of higher rates? it is not going to happen. it is part of the discussion and

someone the higher rates. >> we saw the summary and this is when the federal reserve talked various dates at times. the conversation is more interesting and it is happening. and let's look at the hawkish side of the federal reserve and the dovish side. you have not heard many voices talking about weight. they're talking about 2014 being the time to do it. the chances are happening. it has been discussed. >> fed policy makers want more policy -- attention paid to inflation. it goes well below the two percent target. stays persistently below the target, -- something like that.

>> put it there and make it hard. i'm looking at federal reserve meetings and they are talking about inflation and the lack of inflation. that is that -- that is exactly what they have. there are little baby steps. what you're getting is pure guidance and norm or communications. -- normal communications. at the end of the day, this is how central banks work. what's people were complaining about the bank of england minutes. the were dedicated to rejit formal guidance -- forward guidance. but anybody who gets really bored has to read the bank of england minutes. it is the obvious surprise.

there are a ranging discussions that we have had. the have not done that "couple of years. i'm not actually that surprised right there. they did not have the votes on the forward guidance. they had the discussion and it is clear that the fed side of things really interests me right now. data.o not care about the it does not feel it they do. we have a whole stream of that data. i have not heard from the fed officials say that they are concerned. is not ane that it outlier. what they want to see is a substantial change in direction and the economic data. but thank you a lot. 7:26 in london. look.take a big -- take a

the transition into digital in the music industry.

>> in london, these are the bloomberg top headlines. declared akovych has truce with opposition leaders. yanukovych says that the government and the opposition will continue talks. in the center of kiev is called off. interest rates when unemployment falls below 6.5%. the joblessness is falling faster than expected and it may

be appropriate to revise interest rate guidance. the ecb is ready for action. they could weaken the currency. >> you need to have monetary and credit easing. andill weaken the euro sustained monetary policy. >> welcome back. i am mark arden. david boley took home top artist. we took home top art

wie to come top artist. thank you for joining us. it is the first time that two bartons have been on the set. transition to digital seems to be taking place and it is playing out this week. the stats show that digital accounts for half of the >> this revenue and transition has been going on for a long time and has been occurring in the context of some pretty tomorrow to is declined and spending. ant we have seen recently is .ra of downloads we are now seeing an era of seeingng and we're spending creeping up.

it is gaining some sort of parity in the u.k.. >> digital music sales are up and streaming. pandora has no profit. >> doesn't have legs or not. legs or not, has how many people are going to use it. if you are going to stream other music, those people want to get paid. how much they want to get paid is an issue here. you are looking at at least half of the revenues. >> that is a big chunk. >> exactly. they would say, without us, what would you listen to. you want to listen to david boley and this is not a substitute.

>> the argument is that spotify would say that once they have , then everyone wins. that is the hope, if they attain critical mass. it is a skill business and it is difficult to determine whether they are spending ted quid a month. 10 we have seen an increase on your to your business. how much of the audience that penetrates as we go forward is grabs.p for but google can substitute. >> yes. >> you have google and youtube.

these companies can subsidize. >> you make a valuable point. apple is a hardware business and not a digital media business. they are happy to put up with negative margin sales if it helps to sell hardware. >> for a lot of people in asia and other emerging markets, they do not want to spend money. >> well, exactly. >> they do not want to spend money on their music. howdy music companies get around that? >> ok. you are right to point to the large segment in the market and the emerging markets and the younger demographics. they have no intrinsic value to digital music. what do you see when you look at how performers make money in china? there is a much higher level of sponsorship. richt to the model of a

sponsor enabling performers to pursue their career and there is a lot more live performance. artists in those particular countries rely on those revenue streams. >> will all the money go to the big names on itunes? is the bulk of the money going to be paid on the very few? >> absolutely. jay-z,ry to donna and you will have dozens of backs that do not make it at all. and whatsapp. everybody is getting their head around it. for a man who is in social media, to make sense to mark >> i think that the topline price can be looked at in terms of $19 billion or in terms of 10% of

market capitalization of facebook. it is $30 per monthly active user on whatsapp. the key thing is that they are going into a messaging market and a number of demographic groups that are poorly penetrated. groupsicular, younger that are poorly penetrated. facebook and it will be interesting to see. they want to pull the messaging within the application framework, if you like. ?ill they screwed the pooch whatsapp is now facebook and i no longer want to use that. strategy analytics and facebook analytics for

telecoms. that is what our next guest thinks. he says whatsapp could threaten telecom revenue. not make joins us. thank you for joining us. >> good morning. i was speaking to edward barton. he is clever and he says that the young teens could be going away from facebook and using whatsapp. a tie them up nicely and it is how they integrate the whatsapp into the facebook world that is going to be interesting. how do you think that will work? >> it is another $1 billion for facebook. with the profit point. there will be crossover between

whatsapp users and facebook users. taxle get on whatsapp and desk asked -- text. most people will be. -- i do not way think whatsapp users need to worry about that. >> $19 billion. is this money well spent or not? >> i have not looked at it. it seems that it is absolutely crazy on multiple basis. you would think he was off the charts. the point is that there is growth and they are buying a company that they think is going to be one billion users strong and a couple of years.

that is the competition at the moment. everybody wants to get on the company and it is incredible to see giants like yahoo! and twitter being left behind. happy topanies are have the capacity of one billion users. >> you say interesting point and you think that there are telecom companies that will be linking in their foods. >> i think this is a really terrifying mover a telecom company. you see the money that they make from text messaging and that is an incredibly high margin. it does not take much for text messaging to be facilitated. here comes whatsapp. there is now more messaging going through whatsapp every day than text messaging in the

world. and is because of whatsapp the other messaging applications out there. are beingm companies cut off at the knees here and they have lost a high a profit. you will see moves by telecom companies to control the market. >> trends continue. what is next for facebook when it comes to acquisitions? they bought instagram and they tried to buy snap trap -- staff chat. chat.p it comes to spending. -- ithink that those abatingee spending whatsoever.

they have a clear strategy and are swallowing up users. the technology has exceptional potential and it could hit one billion. twitter is an acquisition target. and that isgoogle would you have to look out for. >> great to talk to you and we will speak to you soon. but not make sheep executive speaking to us on the phone from london on the big deal today. the biggest internet deal of the last 10 years. the ukraine parliament is being evacuated, a courting to -- we will have the details.

>> welcome back this is countdown. we have live pictures of what is happening in seattle right now. we have breaking news. our limits in the ukraine is being -- the parliaments in the ukraine is being evacuated. >> we have two dramatic developments. the interior ministry says that 25 policemen have been shot at by a sniper.

this happened this morning and thesecond issue is that parliament and the members are being evacuated. they were set to meet later today. this is not good news. >> the truths that was brokered overnight between the authorities and the opposition went black this speaks to the fragility of the truth -- truths. and theministers opposition and the president getting together. and if youdifficult put yourself in the position of the ukrainian president, if he has his forces outside of the fire andhey have held they are getting shot at by snipers. compelled to feels

do something. it is not clear if that is happening. certainly, the interior ministry has not said that that is happening. this puts him in a difficult position with the truths -- truths. ce.tru >> we had one region that has set that they are autonomous and we have other regions where they have attacked police stations. they took the, governor hostage and handcuffed into the stage yesterday. he would not disavow his allegiance to yanukovych. we are not there yet. the antiterrorist operation and allowws that were enacted him to use 182,000 soldiers in the army to bring peace to the

ukraine and squash this rebellion. however, there is a danger that if he uses the military for an internal dispute, we could have situations where they fight against this. that? would they replace >> there is no official reason and there is a thought that the military should be used. the former head of the military was unprepared to get involved. thatefense ministry said they would not get involved in the conflict yesterday morning. >> if they get involved, it will be on the side of the road testers. but that is what the protesters say. there is a regional divide within the ukraine and ethnic divide in the ukraine.

there are other layers to this conflict. simply an uprising against an unpopular government. is anybody's guess what the military will do if they are involved. >> yesterday, we saw the biggest andoff in the bond market the stock market fell by four percent. it was the worst performing stock market. things have taken a turn for the worse. >> thank you. we have lots to chat about and we are joined to talk about the european equity markets. stay with us.

>> welcome back. this is countdown. let's start with a look at facebook and whatsapp. hi. we talked during the break and you made a good point about the $19 billion deal. >> it is a huge number. if we drill into the number, the rest is in stock. the stock price will get hits. that number and it seems to be a good deal. >> an interesting point.

it has been a busy day and we have not talked about earnings. earnings are beating estimates. what is the takeaway. >> stock should be up a little warningit is a slight that the emerging markets are uncertain. we see huge swings in currencies and that may had earnings in the next quarter. be up today. there could be turbulence ahead. ratearn about exchange volatility in emerging markets and a botulism scare. the first timeor in a decade. >> yes. that is a nasty take away from

pressures continued of the stairs and china will china because they do not trust the local. . that will carry on. >> the system news was interesting. pricingoon combat jet affects last year earnings because of the last-minute deal. a few ways. that >> the stock will be down on the open and they will continue budgetary cuts in the united states to prove pressure on earnings. there is guidance and it will be

a rough ride in this market. you think of china and the pmi data. steady as sheg goes. >> people are clinging onto the hope that a bad set of data will slow down the tapering. whether extreme set of that will cause this and we do not want to progress of economic growth that we are seeing. there is that tapering i will pull back. >> thank you a lot. tomorrow, do not miss our best design of the year. from architecture, fashion, apps, we will preview the top companies and the editor of

digital arts will give us his notes. monitor thenuing to developing situations. i will see you nice and early. have a good day.

>> welcome to on the move. i am manus cranny. moments ago, before the start of day.rading we have ryan chilcote, jonathan ferro, hans nichols is standing by in berlin. let's go to you. $19 billion. is it worth it? 345 million dollars per

employee. how the dealabout comes together and where facebook sees the value. it is explosive growth in the emerging markets. >> ok. we will see how exclusive that valuation is. let's get to you, ryan. situatione ukrainian in the capital. >> that is right. the president declared a cruise -- a truce. that the interior ministry said that 20 of their policemen have been shot by a sniper and the suggestion is that that is happening as we speak. we have heard that the parliament is being evacuated. that.are closely watching let's go to breaking news