>> the truce is tested. ukraine's parliaments have been evacuated as more people are kiev. in fresh clashes in what's up? what's out? facebook splurges 19 billion on this mobile messaging app. good morning, everybody. welcome. you're watching pulse pulse live from bloomberg's european

headquarters in london. france seen off today. what else have we got coming up for you today? political powerhouse will join us this hour for a conversation. and bowie, does he become the olders winner of the brits? p.m.i. data breaking for the euro-zone as we speak. 62.7. later hour we'll dig into these numbers with an economist for deutsche bank. we're going to get his take on why the french data this morning is so disappointing. let's begin with our top story this morning. theave breaking news out of ukraine capital this morning. >> first off, the truce that the

ukrainian president announced last night appears to be crumbling. lashes have resumed at incidence square. a group has taken policeman hostage. they have captured them. pictures show a priest leading police who have been captured. they have been brought to medical attention. troops came under fire from what it says was a sniper position on a nearby rooftop. the ukrainian interior industry saying 20 of its police have been injured. also we have gotten reports that the government headquarters has been closed and the parliament has been closed and from poland's envoy in the ukraine, he is in ukraine together with the french and german foreign ministers set to meet with the

president. officials in kiev are panicky. they can see black smoke from detonations and gunfire. when it comes to gunfire, the presidential palace, when it comes to the sound of gunfire, isn't too far from incidence square. -- independence square. the meeting has been moved to a new location. he is not saying what that is. clearly an awful lot going on. >> the truce didn't take long to break down. it didn't take long for the situation to deteriorate once again on the ground. walk us through what is expected to happen. both in kiev and also these ministers meet in europe. >> first off, the ukrainian president is supposed to meet

with the foreign ministers of germany, france and poland and then they are supposed to meet with the opposition leaders. they have three leaders though it is unclear to what extent they are in control of the event s that arenow taking place in kiev. then the opposition is supposed to sit down for direct talks with the president and then go to a meeting on the cry sniss -- crisis in ukraine. diplomacy was supposed to take the forefront today. we had this truce announced by the ukrainian president late yesterday. he said he is committed to talks to find a way to end the blood shed but the truce has been tested and appears to be crumb bling. i guess there is a link between our top stories this morning.

if you want to see it. e ukrainian founder of whats app. is it worth the staggering price tag? well, look around the industry. let's find out. us. nichols joins what does zuckerberg see in this? >> growth. they put a million new users every day. what is having the the user engagement. 70% of use goers there every day. compare that with facebook. it is just 61%. 12 billion in shares. $4 billion in crash. $3 billion in restricted stock.

only 55 employees. it has more users than twitter's 240 million users. when you break down what it costs per user, it is at $42 per user. instagram is $5. 2013 was valued at $120 per user. that really drives this home for you. zuckerberg talked about getting to a billion users. he said he is not going to try to put advertising on it. he wants to let it grow organically and do it its own thing. >> one of the things that stood out to me is the investment. what did they put, $60 million into this company? >> and their evaluation probably around $3.5 billion. sequoia has the golden touch. whatsapp things that

did, 55 employees. no press officer. no p.r. this is an engineer-driven company. guy? >> you know things are serious when there is no p.r.. hans, thank you very much indeed. hans nichols joining us from berlin. let's get to our top corporate story. b.a.e.'s shares will fall by as much as 10% this year. let's put it all together, the last 48 hours. i looked through the numbers this morning and thought you know what? we need to tie yesterday into today. there is a gap here because they are not posting the revenue that we talked about yesterday with this new deal with saudi arabia. am i missing something? >> i think saudi arabia may have less to do with the selldown

than we initially thought. i think what we're seeing is the long-term guidance is a bit disappointing for folks. i think it was an expectation that maybe 2013 was kind of the bottom on defense in the more traditional markets. now they are guiding to 5%, 10% down. so i think the stock was -- people were thinking it was going to rerate and it hasn't quite yet. i think people are a bit disappointed. >> do you think we'll see more clarity? >> i think we may get more clarity on what the numbers exactly mean. because of the u.s. budget situation, it has been so involved with sequestration, new budget agreement, how does the defense company book those deals and what does it really mean? it has been very complicated, but the fact of the as a matter folks were expecting more flat

guidance taking saudi into account. i think that is disappointing folks. >> saudi a big part of the story going forward. hanks very much. david tweed is in berlin with more. 2014 looking better? >> well, the share price has turned around in the last hour or so. 2014 is looking a bit better. they have a forecast for sales between h 4.5 and 5. 5, which wasn't as bad as some people were expecting at least according to the french brokers. they still have head winds, though, and they will be sluggish consumer markets in

europe. they are going to have difficulty because they have got milk price inflation. milk prices nearly at records. we saw a 10% gain last year. also market volatility. you know how they were talking about the difficulties they had with the botulism scare. what is interesting is how they are fighting back. they just increased the double dip stake in a company in china costing 5.5 million euros. they aring on increased sales of yogurt there. >> let's talk about m&a. there is a story. they have this medical nutrition unit. any thoughts or ideas what they are going to do with that? >> they have declined to comment. we have spoke on the a person who says yes, they are considering selling off the

nutritional business. i suppose the argument is that it doesn't exactly fit with their core business of pure dairy products because the nutrition business is aimed at the medical. that is something we need to watch. they didn't talk about it today. i want to leave you with something. i'm just fascinated by the old and the new. this is a company which is valued at $44 billion. t has 102,000 employees. half the evaluation, 19 billion but 55, i'm just stunned by this old versus new. >> the world is changing pretty fast. can institutions keep up with the rate of change? thank you very much indeed. what else is on our radar this hursday morning. the world's second biggest

reinsurer announced its chief ill be the new c.f.o.. the electric car company is facing setbacks in releasing its model x s.u.v. the c.e.o. told bloomberg why. >> i'm sort of a perfectionist when it comes to product design. i take the blame for some of that delay. not being completely happy with the product. >> and the fed has backed away from its commitment to considering raising rates when nemployment falls to 6.5%. with joblessness falling faster than expected, it may soon be appropriate the revise interest rates. guy? >> still to come on pulse pulse, we're going to test out $10,000 expensive for oo

top downhill racers. ♪

>> 15 minutes past the hour. welcome back. you are watching pulse pulse. let's talk about our corporate story. facebook's $19 billion purchase of whatsapp. it is the biggest acquisition since instagram. it dwaffers instagram.

you remember 2001, right? is it a smart buy? joining us to discuss this, the of research.ve in a world dominated by structured valingses, to my mind this doesn't look out of kilter. you look the evaluation of twitter. fewer users than whatsapp and less integration of those users as well. it doesn't seem as bonk ers when you look at the numbers. it is 1.2 of users, billion users.

>> it makes sense. look. clearly this conversation has been going on for quite sometime. clearly facebook understands that it needs to grow. mark zuckerberg cannot just stay with facebook. he is going to have to carry on doing this. >> if you think about facebook, facebook is controlled by mark uckerberg. follow up and try to -- such a big variation. >> an advantage? >> if you believe it is the right move and i think it makes sense as a move, it can be an

advantage. it can move really fast. >> how does -- how does mark zuckerberg make the most of this business? >> if you look at facebook, it is mostly around photo sharing as well as messaging. that is how it was built. acquisition, it makes sense. you have a photo share b app on obile. you know messaging. so there is a real strategy to be aggressive. >> is this a better -- this is a much bigger acquisition.

but is it a better acquisition than -- > it is difficult to tell. four, five years versus snap hat. certainly in the past 12-15 months have gone very fast in value in india and mexico. happen is chat is nowhere there. whatsapp is really an older player with a much bigger user base. snap chat is mostly teenagers. whatsapp is a wider range of -- >> feels like another dark day for european technology companies. > yeah, it is a tough one.

i would say there is some hope -- but it is on a different scale. >> one last question. can you really monetize this stuff quickly enough? >> it is a stock acquisition. if you believe in the facebook story and i think it is a good people were asking would it be able to monetize. they demonstrated that they are very well in mobile. it is a very good platform for me companies to get --

facebook -- if you think about what whatsapp, 55 people, it is impossible to monetize -- certainly at some point it will -- it is very interesting what sfook putting in place. -- facebook is putting in place. keep working together. step by step, the facebook machine. >> yes, makes sense. thank you very much indeed. >> thank you, guy. >> it will be interesting to see quoyia e i.r.r. on the se acquisition is. let's talk about some of the other company news you need to know about. air france is under its new c.e.o. starting to pick up speed.

b.h.p. billiton is said to be planning a sale of assets in pakistan. the move effectively joins other companies including shell and -- said to be in talks can chinese retailer. they are planning a u.s. i.p.o. that would be the biggest buy a chinese company to date. coming up, a new spin on skateboarding. we hit the streets with an inventer who is betting that one wheel is the way forward. check this out. ♪

>> welcome back. let's get you up to speed with today's lim hot shots. wins his ed ligety second lim gold. u.s. men's ice hockey teams are riding high, undefeated on the ice. russia is out. and the women's finals, norway put in a dominant performance led by one of the legends of the sport.

from the olympics to the markets, jon ferro. >> thanks very much. i think the color of the european map tells the story. a move lower. if you ever wanted a recipe for the -- session in europe, on autopilot. then you have china. china, china, china, hsbc, manufacturing data shows a contraction. seven-year low. france, pathetic, in contraction. one question is being asked. what is the b.c. going to do? if they do -- the e.b.c. going to do? if they do anything, what shape is that policy going to take? >> that story is going to develop. we'll talk more about the p.m.i. numbers shortly. what else have we got coming up

for you? one of the biggest -- players in the world got the start by turning a brick road yellow. tech color is the company. ♪

>> good morning. welcome back. you're watching pulse pulse live from bloomberg's european headquarters here in london. i'm guy johnson. my colleague, francine lacqua off today. let's talk about the bloomberg top headlines. chinese manufacturing fell to its lowest level in seven months. worse than economists were expecting. asian markets experienced declines. facebook is buying whatsapp for $19 billion the biggest internet acquisition in more than a decade.

they have more than 50 million members with -- 450 million users with one million users being added daily. several people were injured by sniper fire in the ukraine. the president, viktor yanukovych declared a temporary truce yesterday. that has very much broken down. let's get the latest from kiev. ryan, what do we need to know? >> the headlines are the truce is crumb g, the clashes that -- crumbling. he clashes have resumed. the german foreign minister is sitting down and we go into the ukrainian president as we speak. presumably he is alongside the french and polish foreign ministers who are also there. the polish foreign minister

tweeted that he was about to meet with panicky ukrainian counterparts. he could see black smoke. he tweeted that the meeting was going to move. that meeting is now underway. the ukrainian president meeting with three e.u. foreign ministers. they met with the opposition earlier in the day. now just within the last hour, also, we have learned that the government headquarters has been evacuated. the parliament has been evacuated and we are getting new casualty figures from the police. the plig police saying that one of their policeman has been killed this morning and at least 21 wounded. earlier today they said policeman had come under fire from a sniper on a nearby rooftop and that 20 of their policeman had been shot. fatality figures rising as well from various sources going as

high as 11 according to the ukrainian channel number five. a very fluid situation on the ground at independence square. some of it obviously you can see in that live picture. most of the people clearly protesters. guy? >> ryan, as you say, things are changing every five minutes in independence square in the country and ryan will continue to monitor events. any further developments we'll be back to ryan. now our next guest is in charge of a company that has more patents than google, apple, eriksson. it is not a company you nrblely think of the company is technicolor. they invented the process for making movies color. "the wizard of oz" stands out in

its notable history. ood morning to you, frederick. let me throw you little bit of a curveball, first of all. you are a technology company, essentially. the world of technology is moving at such a pace at the moment that it is hard to keep up with what is going on. when you read in the papers this morning or online more accurately that facebook is spending $19 billion on a company that has 55 employees, what is your reaction? >> i feel like we're back in the year 2000. valingses are going everywhere. -- evaluations are going verywhere. not too long ago we thought instagram was a great price. we saw snap chat turning down over $3 billion and now we see $19 billion. there is no economic model that

justifies it. what justifies it is a thirst for new customers, particularly for the youth. the younger generations that are probably not using facebook today that are probably in different countries. it really is a play on getting market share. is it worth $19 billion? i don't know. i also know that most of it is in paper. the shareholders are paying for it. it does remind me of 1999-2000. >> does that make you nervous? >> yes, it does. it does, because i think at the end of the day, everything has to come back to fundamentals. in order to justify your share price, you need to have some economic rationale. you need to generate some revenue. facebook has been absolutely brilliant at doing this. however, you have to wonder with these evaluations, are they sustainable? i think if you look at it from an economic standpoint, they are not sustainable. the only way they can be justified is just the need to

gain market share. >> when you look at your own business, as i say, you in the technology sector, and if you look at facebook here as a company that is desperate to make its business model mobile. to what extent does that apply to what you do at technicolor as well? >> well, what we do at technicolor is try to invent the technologies that you're going to find in all of your devices in five-10 years from now. let me give you a simple example. video. five years ago, 10 years ago, we all watched video on the television. we then moved to the computer screen and then the tablet and now smart phones. one of the key requirements to be able to do this is to be able to put the band width through. to be able you need compress the data.

we have a very good future driven by the growth in mobile devices. >> how hard is it, you clearly have to invest an awful lot of money in r & d. how hard is it to recruit the engineers and the people that are going to make this happen for you? on, t we are focused connectivity, color, things like high dynamic range, technical interprets which are important for the future. we are one of the leading companies in the world and particularly in europe, we're probably the only european company remaining. we are able to attract highly talented individuals who love the fact when they come work at technicolor, they are working on some fundamental scientific problems. we expose them to the ntertainment side.

what is more fun than meeting people? you this interesting mix of the world that we bring together which attracts a lot of very highly talented engineers. >> you are a company that is european. that is leading in its space. there are not many technology companies out there in europe that can say that right now. what do we need to do over here to compete with silicon valley? >> i think in every european country, the answer is slightly different, but i would say the number one issue we need stability from a fiscal standpoint so we can plan for the future, and we also need to not be ashamed that some people will make a lot of money. we should not be ashamed of that we should let them make fun. at the end of the day, you only have a snap chat or a whatsapp. people need to dream. the reality is we see a lot of

ople leaving continental europe first moving to london and then moving to the united states. why? because they are working very hard and they would like if they hit the jackpot, they would like to keep some of that money. the second thing is i think we need to move away from this culture in europe, which is we're going to -- the top down, we're going to tell people what they should be investing in. we have this big program led by the european union. the reality is no bureaucrat in brussels is going to come up with anything imaginative as to which direction we need to go into. we need to encourage companies rather than say we have the following -- and we're going to spend a zillion dollars in pounds or euros. >> talk to me about, finally, about what can we expect?

when i look at my device five years down the road that i'm watching on the train or the bus, what can i expect? what are you guys working on now that is going to be really exciting? is it are apple? is it with samsung? walk me through what the next few years are going to look like. >> i'll just give you a simple example. when you walk into your home today, how many remote controls do you have? you have remote controls for almost every device in the home. the next step is what? a universal remote? actually no. i think the next step is no physical remote at all. moving into technology basically using your hand, just a small part of your hand to control all of your devices and you can talk to everything at the same time. so getting rid of the hardware and just leaving you the screen or minimizing the number of devices you play with. that is one thing. the other thing is that you can look forward to is that when you

buy a new device in the shop or get delivered by mail,an as soon as you connect it, it connects into your network without you having to do anything. it finds its place. you have to do nothing specific. when we talk about the internet, the connectivity of all of these devices, 10 years down the road, it is going to create an amazing amount of opportunities. >> great speaking with you. it is a shame we don't have more time. thank you very much indeed. the c.e.o. of technicolor. ok. let's get you up to speed with the business of going downhill very, very quickly. for the discerning skier, only the best skis will do. hans nichols is on that list. he reports on one company using materials that even the top racers can't afford. >> made by hand. or a special kind of customer.

they employee unusual methods. even more unusual materials. breaking from mass production aterials like aluminum and fiberglass, they use rubbers dwranite from the nearby mountain. materials too expensive even for top level racing. >> we want to work with the best available materials. as we started, we knew there would bonl a -- niche. >> high prices indeed. these special edition skis cost $10,000. down the line, the collection is just a little less expensive, but they are targeting a discerning skier. someone who can afford the high pricing and also appreciate their kind of craftsmanship. one look into the locker room

shows where their passions lie. they think it gives them a cutting edge. take this press. one of only six in the whole world. it was especially designed so that each individual ski can be adjusted to within .001 of a mill meter. the founder talked of precision and quality driving his design. according to him, mass produced skis can lose their tension in a month resulting in poor performance. >> less than 10%. it came to us and said -- is because they last so long. >> for the -- so the world's most expensive skis could turn out to be a pretty good investment. >> you to ski a lot to make them

a good investment, i suspect. did you go downhill fast? >> had i put on these skis. they didn't let me out of there with them. i would not have been able to tell the difference. we're running out of ways to spend money. maybe tomorrow we'll show you to helicopter we bought. i don't know if we're going to get through through expensions. -- expenses. i'll pick you up a pair for christmas next year. guy? >> ok. we can use them on our skiing holiday that i'm sure we can also become through expenses. as we head into break, you're looking at live pictures coming to you from the ukraine. we have breaking news. we'll bring you all angles when we come back after the break. ♪

>> welcome back. the first february p.m.i. reading for the euro-zone has come in below economist estimates. joining us is the co-chief european economist at deutsche bank. join the dots for me this morning between what's happening with this survey of the private economy here in europe,

happening in terms of policy and the g.d.p. numbers that we're going to see. >> we have an improvement in the services readings by and large in those countries. the latest data, probably driven by the fact that fiscal austerity is not as hard now as it was two years ago. demand is normal and that should be reflected in the services data. on the manufacturing side of things, it is independent on the kind of traction we're getting from the outside. you could be tempted to read the dip in the german manufacturing p.m.i. as a reflection of what is going on in china. you have to be very prudent. the relationship usually doesn't work that nicely. it is a possibility. the problem we have right now in terms of -- is not just about europe, when you look at data from the u.s., you don't know whether it is the weather or a genuine slowdown of what is

taking part there. the euro requester, you don't know whether -- euro area, you don't know whether it is focused on germany. it is a very wishy washy flow. >> talk to me about about how the governing council are going to be reading this at the e.c.b. p.m.i.a small dip in the which could be read as the sign that maybe the speed of the ecovery is kind of plateaued which would not be enough to plug quickly enough the gap to get us out of the deflationry pressure or you can say it is the continuation of the recovery and that we should gradually see a little bit more pricing power in the economy. so the deflation story is not that big. this wishy washy data flow i think is an issue for the e.c.b.

because we could feel last month how hard it was to make any decision. the data flow is not -- >> at some point you're going to have to make a decision on this. how much influence do you think christine lagarde has? you to take some action annoy. now. >> it is really the m.i.f. which started the revision on fiscal austerity in europe two years ago. without the i.m.f., it would a military art -- policy, they have been saying those things for quite sometime. i think it adds to the debate. we have this pressure from the i.m.f. i agree the i.m.f. that the

e.c.b. should actually do more in the sense that you cannot just sit and wait for debt flow to tell you what you need to do. you need to make a judgment call and the judgment call they could make is that yes, it is absolutely obvious but the speed of the recovery remains slow. downside risks are massive and you still need to provide a little more insurance. again, the governing council is a heavy beast to move and sometimes the belly seems to be moved by just a few data points and this is probably what is missing now. you don't have a smokinggun. >> thank you very much. we're going to take a break. back in a few minutes. ♪

>> welcome back. you're watching pulse pulse. the u.k.'s water supply could be key to reducing flooding and creating energy schemes. a new series of canals. first of all, at a time when the -- somersets and vast other parts of the country are underwater, talking of water shortages will strike many as

something we don't have to worry about. >> that is short-term thinking. that is one of the biggest problems we have had. we need to be thinking in terms f decades, like 100 years. scientists are warning us there is a great danger of drought in the future as much as there are floods. a report came out from newcastel and oxford university saying that water shortages could lead to -- they need it for turbines and -- >> talk to me about what you're proposing. we're talking about huge canals bringing water from areas of plenty. >> the largest reservoir in britain and it was built initially -- they have water to sell. and the water is partly for water companies facing problems

from the combination of population rise, lots of water from abstraction licenses and climate change. so they have that problem. plus there is unmet water demand for farming. for agriculture they need lots of sources of all of these things are growing. >> you bring this to market by a series of canals which would cost what? >> we think in the region of $20 billion. >> any kind of traction on this? any kind of government interest? would they take this seriously? >> they have been quite upportive. they can see the advantages not just for water but this canal

could be used as a corridor to transmit energy. it would be particularly efficient. >> we're going to have to leave it there. thank you very much indeed. we're taking a break. we'll see you in a moment. ♪

is tested. ukraine's parliament a evacuated as more people are killed. what is up? , facebook splurges $19 billion on this app. bae takes a beating, shares slide after a profit warning. good morning to our viewers in europe, good evening to those in asia, and a very warm welcome to those just waking up in the u.s. i am guy johnson.

francine lacqua is off today. this is "the pulse," live from london. a busy hour ahead. let's talk about music. lowest -- thethe oldest winner of a british award. business.eak down the clashes in ukraine are worsening. let's bring in ryan chilcote. diplomacy beginning to start, talk about what is happening in kiev. s in and clashe around independence square, reporting fatalities in the double digits. reports of bodies piled up in hotels, reports of dozens more window. police reporting one killed this morning, 29 window. 20 policemen were shot after they came under sniper fire, we witnessed protesters capturing

police and earlier in the day and leading down from independence square. some reports say they were being brought for medical attention, we have heard from the ukrainian president, he said the police are not using guns. this is from president yanukovych, the protesters are using sniper rifles, he is accusing the opposition of using that truce announced last night for gain to launch a new attack. the clashes continue, difficult to see how the talks are going to go. situation is deteriorating within the country, talk to me about whether or not this is providing -- escalating and accelerating the diplomacy. >> this would be a good time for diplomacy. the german foreign ministry said that the german foreign minister, alongside the french and polish foreign ministers, they were supposed to meet with

yanukovych, the german foreign confirmed that meeting had begun, we don't know if that is still underway. before it began, the polish foreign minister tweeted that there was black smoke and thatsions and gunfire and his ukrainian counterparts were nervous and had moved the venue for the meeting. we do know that the government headquarters in kiev has been evacuated, as well as the parliament. both of those buildings are said to be closed for the next two days. the eualks between foreign ministers and the ukrainian president have begun as far as we know. they also met with the ukraine opposition. we are hoping at some point the ukrainian president will sit down with the three leaders of the opposition for direct talks. while the foreign minister's head back to brussels for a crisis session on ukraine.

>> let's bring in our reporter , hellmuthund, tromm. a lot of confusing elements. we don't understand exactly what the situation is, bring us up to speed. situation on the ground is very confusing. it seems like sometime this morning around 8:00 local time, the demonstrators went on the attack again. and we took some of the positions they had lost in the previous 48 hours. advancing towards parliament. we suspect this is where the deadly clashes appeared this morning. as ryan said, the official death 11 deaths of demonstrators and one policeman this morning, many wounded.

we are trying to get these numbers confirm. as ryan also said, then meeting of the foreign ministers here with yanukovych seems to be underway. they may have a brief press thenment later in the day, they are headed back to brussels. isdoes seem that kiev slipping back into chaos after some stability overnight. >> are more people arriving? is this a stable situation in terms of the number of people involved, or is the scale of what we are seeing in kiev growing? yesterday, people were flooding back onto the square. i went near the square this morning where the first barricades are and there were burn onloading tires to

the barricades, people were from their cars into canisters to be transported onto the front line. people are very active, trying to hold the lines and support the frontline. there is no sign of the opposition or the demonstrators, rather, backing down. looking at pictures taken earlier of some policeman by protesters. do we understand what the fate of those men is? >> from what we could see, those seem to be policemen that were captured as the demonstrators advanced and these were policeman that are wounded and were led to ambulances. we don't have any reports they are being kept anywhere.

>> hellmuth tromm, bloomberg's editor for eastern europe. thank you very much indeed. we will be back a little bit later with more on that story, developing very quickly. we will bring you up to speed with everything we know. a tangential link to our next story, jan koum, ukrainian now ar of whatsapp, is billionaire. facebook agreed to by his million, app for $19 the biggest internet acquisition in over a decade. it is whatsapp it? hans nichols is here. what does mark zuckerberg get for the money he is investing? users,ets growth, more 450 million users, growth of one million users a day. those users, 70% of them, go to whatsapp every day.

compared to 61% for facebook. here are the numbers, $12 million in shares, $4 billion in cash, $3 billion in restricted stock. a cofounder, tweeted he was rejected for a job at facebook. ill will.o harbor no here is the important thing on the number of users. when you look at twitter, 240 million users, $42 per user, that is what facebook is paying for whatsapp. instagram as about $5.50. twitter is valued at $120 per user. big acquisition was instagram, $1 billion. works zuckerberg likes their ability to get to one billion users. here's what he said, whatsapp is on a path to connect one billion

people. the services that reach that are incredibly valuable. company, 55 and the employees. employee,ee, -- per millions of dollars. it is a remarkable story. thislot of rich guys at company. the number that really gets me this morning is the sequoia investment. the firm that invested in this company. the irr on this deal must be eye watering. >> $60 million investment, they now have a $3 billion state, that is incredible. workme investments really out. thank you very much, hans nichols from berlin. more on this story from tech later. we will continue analyzing the numbers and what it means for

the rest of the industry. shares sliding this morning, europe's largest defense company says profit will fall as much as 10% this year. after the firm secured a last-minute deal with saudi arabia on typhoon jet prices. bloomberg news defense reporter rob wall joins us now. confusing picture over the last way for hours for bae. great news out of saudi arabia. today is more symptomatically what is happening in the wider industry with defense budgets being cut. >> saudi arabia is good news and important for bae in the long term. relationship is critical. good news for them. essentially, what investors were looking for was good news and state, they are getting good news and another decline. i think folks were hoping maybe

the decline from the western spending, retrenchment in the u.s., looks like 2014 will be the bottom. >> throughout this period, the u.s. contractors have done incredibly well, the market has taken a benign view. is this an indicator of an area -- maybe we are going to see a revision and a new look at this sector. >> one thing i think companies including bae have done, they have been aggressive on cost cutting. defense deals are long-term, you know if the budget is cut now, the money does not disappear for years. 2 years or 3 lockheed martin, bae, they have all announced site closures, consolidation. that's would ha -- that is what has been driving the

earnings, cost management not topline growth. >> rob wall joining us. let's find out what else is on our radar. company posted fourth-quarter profits that topped estimates. also announced david cole will become its new ceo. tesla reported earnings that beat estimates as the company plans to increase production of the model s by more than 50%. they are facing setbacks releasing the model x suv, elon musk told bloomberg why. i am a perfectionist when it comes to product design. i take the blame for some of that delay. due to me personally not being happy with the product. away from itsking commitment to consider raising interest rates when unemployment falls below 6.5%, minutes from

the january meeting said that with the jobless rate falling, it might be appropriate to revise rates. things flexible, sounds like we will continue on the course we are pursuing at the moment. still ahead, the $19 million bet in tech. more on facebook's acquisition, find out where whatsapp is the most popular and how it could help this social media giant in the future. see you in a moment. ♪

>> welcome back, you're watching "the pulse." a quick look at euro-dollar this morning, pour pmi numbers out from the eurozone raising questions about when the ecb takes action to deal with the disinflation. 1.37 even. our topt back to corporate stories, facebook nation billion dollar -- facebook's $19 billion deal to acquire whatsapp. will it deliver? jason joins us now. the worldonducts largest study on digital consumer trends. the trend is to push into mobile, this fits that. is this the right deal for zuckerberg? >> it is smart, an area where

growth is coming from. we were not necessarily expecting this, it makes absolute sense. mobile messaging is where growth is coming from, especially among younger demographics. >> what is facebook meet at? >> it wants to keep growing, there is a natural limit to how it can grow in its existing framework, it needs to keep acquiring services. the market in which whatsapp is doing well are areas it will take on new users. what -- what is whatsapp me needook-- does whatsapp facebook? >> they are richer. >> whatsapp is one of the wetest-growing social apps try, the expertise of facebook will bring will help. >> they will keep it at an arms

length. what does that tell us about how facebook perceives this asset? >> it tells us that facebook is aware that it is not the coolest network on the block anymore. you will see with recent purchases, instagram included, they are being kept separate so they don't become too associated with facebook. we have seen teens moving away from facebook and towards a newer platforms. facebook is being careful to not bring them to tightly inside the same name for that reason. >> this all happens out of the glare of the public eye. does that tell us about the fact that zuckerberg on the with the control he has over the company, he hasn't vanished -- he has an advantage, he can do things fast. >> after the attempt on snapchat is not surprising that there has been another name in the space approached. it is interesting that so few people saw this news coming. >> thank you very much, jason,

head of trends at the research house global web index. live, how-d images to a holographic heart can be a godsend to doctors. details on this incredible technology after this break. ♪

>> welcome back, you are watching "the pulse." here is a question -- if we offered you the chance to see someone's internal organs floating in front of you, you would probably decline. see it a different way. holographic technology could be a serious godsend to them. they got can has more. elliottgotkine -- gotkine has more. >> every now and then, i see a start up and israel that makes my job job. i have the cofounder here. tell us what your system does. a we are developing holographic display for medical applications, taking 3-d data that is acquired and presenting

in touchinghologram distance. >> the doctor can hold the patient's heart in his hand and fiddle around with it and manipulate it. ifthe system is real-time, you have a real-time acquisition of the heart, this is what we did in clinical trials, we have the heart floating in front of you as a hologram, not confined to a screen, just in midair with no glasses. >> how do you do it, what is the secret? >> we take existing 3-d information from medical imaging, or ultrasound or a cat scan. we can take this information and join points of light in midair, building a picture in the air. it allows clear visualization.

it allows interaction. you can go into the image space, mark a point, draw a path, define a plan, take an actual and put it inside the heart to see if it fits. it is a new way of working with information. >> your first target is cardiologists and heart procedures. father of a young child, it might be weird to see a 3-d image of an unborn child. to see a fetus floating in air, that is quite something. >> we have fetal images in our lab, our key application today is cardiology. inhave gone into a cath lab collaboration with schneider children's medical center in israel. this was the first time to see a heart floating in the air. seeing a fetus is just as exciting. >> nonmedical applications?

>> even though we are photos as a company on medical applications, there are nonmedical applications, computer design applications, and further down the road gaming and other patients. -- other applications. >> you have got to go through fda approval to get this into hospitals. how long before doctors will have this in their hands? >> after first trials, we are focused on getting the commercial product to the market. that is for the end of 2015. raising a financial round to support these activities. we are happy to have such opportunities. >> aviad kaufman of realview. i was hoping to be able to have in a 3-d image so you

could see them. time -- next time. >> i am glad about that. there are things i could live without seeing. the inside of elliott gotkine is right up there. thank you very much. amazing technology. still to come, the $19 billion question, is whatsapp worth that price type? we will break down what mark zuckerberg seas and the start of. first, let's talk about the pulse number. dudes,rumping young oldest winner of a brit award. the music of the briti -- the business of the music injury. 2.17 million tweets during the event. the event asked people to tweet votes for a category, that is

more than any other uni.k. television show has generated on twitter. see you in a couple minutes. ♪

>> welcome back, you are watching "the pulse," live from london. i am guy johnson. francine lacqua is off today. top headlines -- one policeman has been killed and 29 wounded to the according ukrainian ministry. parliament is accurate after victor yanukovych declared a temporary truce yesterday. we will bring you up to speed shortly. the ecb has room for action to spur growth and could weaken the currency, that is according to

new york university professor nouriel roubini. >> you need to have some degree of monetary easing and private easing, possibly negative deposit rates to weaken the euro and ease financial conditions. to jumpstart credit growth and sustained monetary policy to have stronger economic growth. lagarde saying similar things at the imf. facebook by mobile messaging startup whatsapp for $19 million, the biggest internet acquisition since time warner merged with aol in 2001. more details on the deal, facebook's biggest acquisition since instagram. let's go to hans nichols to find out how this can together. it is a remarkable, the two sides started talking in early 2012. january 9 is the date we have,

that is when jan koum and zuckerberg started to formalize their conversation about expanding internet access. on valentine's day, koum has dinner at zuckerberg's house, he comes over with strawberries, they settle on a price and we get it overnight in europe, yesterday in the state. walk me through the numbers, pretty eye watering, $19 billion. when you put it against other metrics, it makes sense in a weird way. >> only if you compare it to twitter. $12 billion stock, $4 billion in stock, $3 billion in preferred stock. million users, zuckerberg things they can get to $1 billion, 40 $2 billion per user. $120 perays -- has

user. instagram was about $5.50 per user. on twitter, brian acton, one of the cofounders, apparently applies for a job at facebook. here's what he tweeted overnight. "facebook turned me down, it was a great opportunity. looking for to life's next adventure." here is what zuckerberg said in a call last night. is on a path to connect one billion people, incredibly valuable. we are still in a race for users ." it is not about revenue, they charge one dollar hurt user, not having any ads, growth is the name of the game. facebook is either defensive or aggressive, they have it now at a pretty penny. indeed, you very much

hans nichols joining us out of berlin. story, let'sr next turn to the brit awards. the arctic monkeys took 2 top prizes, david belli stole the stole theavid bowie show. how should we think about the brits from a social media point of view? let's discuss all this with former boy band manager and current manager blair. >> whatsapp is worth $19 billion, what is social media worth to music? >> you need social media for everything. low, socialare so media is the pinnacle point for things like touring and doing gigs and sales. >> we will see more of what we saw last night, then saying tweet in, we will have a new

category, those tweets will determine who wins. >> one direction went on to win, they have 20 million followers on twitter, the most used social media and the world. essentially, it was, everybody already knew who was going to win. >> do you have a social media strategy, how do you make it work? from ave things different aspect. i believe hitting it on a constant level is important. social media has to be constantly, you have to constantly give them content. e artist to promote another artist. constantly you are plugging each other. >> people are saying facebook is becoming uncool, that is why they are buying whatsapp. what is trending? facebook ishink

uncool, i think the demographic is different. the visual aspect of facebook is so important. kids want to look at pictures, they don't want to rate -- to r ead text. twitter is all about the text. >> scenario is important. >> young people are into facebook. >> things always change quickly. is that rate of change now accelerating? when you look at the business you started and to where you are now, give me a sense of what is going on. withoutin the day, social media, you had to go up and down the country and promote your records. now, it is a click of a button. if you release a record, you can we are doing, i am taking on a new artist unknown to the public eye, we are using

things like twitter and facebook to launch him. he will do a cover of someone else's song on facebook, the kids on facebook share it, the hits go higher and it makes awareness of who he is. so when you put out the record, that social media -- they will move towards this record. >> do the big powerful parts of the business have an advantage? or is this something that undermines that? >> i think that major labels, if you turn around and say i am signed by the mickey mouse club records as opposed to someone incredibly powerful like universal, kids are not stupid and they have a awareness of who the labels are. are diehard, they are into the act, they buy the merchandise and posters. it is a big deal to know you are under a bracket like universal.

>> any big surprises last night? bowie's got to be one of them. >> i understand the concept of of itbowie, he is part as. but pop music is about today, i think other people deserved the awards. >> nice to see you. manager of union j. 20 minutes to go until "surveillance." tom, what have you got? >> a lot going on, the events continue, the riots, protests, deaths in kiev. we will talk to richard falkenrath, front and center on any sanctions by the european union and by the u.s.. nrath joining us on ukraine. we will talk on facebook and whatsapp, the transaction.

i have seen a lot of different opinions, very david kirkpatrick will join us. 10% acquisition price for facebook, about 10% of the value of facebook. >> we have been around the block a few times, does this fairly 2000? >> there is a major difference from 2000, there is much more of a sobriety about needing to generate a revenue stream, a cash flow stream, even an earnings stream. focus on -- why you see zuckerberg take out whatsapp -- a concentration of this time around. there will be fewer players, bigger players. looking forward to it, thank you very much. tom keene joining us from new york. is next.ance" let's find out how european markets are trading. markets are definitely

under pressure from a lot of different directions. you have the slowdown in china, political unrest coming from the east, what happens next? it is a big question. the china slowdown is playing through, the imf warning more disruption within emerging markets could stymie the nascent recovery. dollar sterling down. in the u k, 1.6650. mortgage lending is rising, it has risen by over $15.5 billion, up 33% year on year. but month on month, it is slowing down will stop that is interesting in terms of fraud in the housing market. when it comes to the aussie dollar, down again, very much the china story. the purchasing managers index coming in lower, they are

squeezing the money market and china. aussie dollar, .8979, hard and soft landings. >> coming up, the eu puts pressure on ukraine's leadership. france's foreign minister says he will press the president to call for early and free elections. will that be enough? we will discuss when we come back. ♪

the hour, youpast are "the pulse," live from london. let's return to the developing situation in the ukraine, the truce between resident yanukovych and opposition leaders crumbling, more people have been killed. the ukrainian ministry also saying at least one policeman and 20 protesters have been killed. many more wounded. the european commission has said eurroso ministers are discussing sanctions. joining us now, someone who has worked on the national security council and for the u.s. office of homeland security. joining us from chatham house. how would you analyze the situation? >> there is a positive and a

negative. on the one hand, we did have a truce overnight, that truce is clearly broken. things have escalated, there is violence on the ground, the numbers we are hearing, 28 dead and many injured, those are going to go up. hours ago.a few you had europeans sending in delegations to ukraine to talk to yanukovych. that, nowow been told been canceled. you have the europeans sitting down to talk about sanctions, the americans talking about sanctions. you have russia's putin saying let's -- you need to put more pressure on the opposition. on the one hand, you have a truce that lasted for a brief period. you continue to have violence, things look like they are deteriorating. >> the fact that we had a truce is good news, but the sides feel far apart. >> they are far apart.

yanukovych wants to retain power he was elected democratically but kind of an authoritarian presence. the opposition want him out. they do not think he can provide what they want, they are leaning towards the less. you have the west and russia being perceived to be on opposite sides. it is a real struggle between two forces that want to take ukraine in different directions. the question is is there any overlap? could be. there are clearly people on both trucewho want to find a or agreement. it is going to be very hard to reach that given where they stand. >> my sense is that the europeans don't want to get involved or pick up the bill if it were to transpire that yanukovych goes and russian

money is no longer available. and no. the europeans have put forward and it put forward some months ago and economic position to the ukrainians. saying but you have to take these steps if we, the imf, the -- >> there will be a horrible default if the russians pulled money out. >> a horrible default. but, europeans have barely havely -- but, europeans clearly taken a position that ukraine needs to figure out what they want to do in a peaceful and collaborative manner. it would not be surprising if you saw sanctions and or visa restrictions come down on yanukovych and other ukrainians. the question is how deep will they go, will they have visa restrictions on some of the reporters to yanukovych or not. >> is this yugoslavia? could this generate a split?

country, thee population feels it has a greater affinity to moscow. the west has a greater affinity to brussels. ati don't think so, ukraine the same time since the fall of the soviet union has stayed fairly stable. we have never seen violence like this despite that we have seen it elsewhere. >> now they have to pick sides. is do theyquestion have to? the way the narrative is framed, you go east or west. that is theue that choice that has to be made. europeans are not asking ukraine to turn away from russia and to not engage. they are not asking for trade to stop between russia and ukraine. neither are the russians. is there overlap? yes, absolutely. the case, if not the pivotal point has not been reached, why are we seeing what we are seeing on the strains? are framing itle

is very much you go one way or the other way. the reality -- policymaking is far more messy. it is not black and white, russia or europe. they could be a compromise between the two. it is incredibly important that they get financial resources and support. that is what really led to the all or nothing approach. it does not have to be that way. >> doesn't get worse before it gets better? >> it looks like it gets worse. >> over what time frame? >> anybody's game. there was a truce overnight, that truce has not survived the morning. one of the problem is is there is not a leader on the opposition side, will will -- there are multiple factions. there are people who do want to come to a feasible solution to this. whether they can get the upper hand very much depends on what the international community does. much.nk you very

let's move on, back in a couple minutes to discuss more about this story. we will wrap up what you need to know for the rest of the day. see you after the break. ♪

welcome back, a new twist to the old skateboard. it comes with a $1500 price tag. is it worth it? check out future motion's one we'll -- one wheel.

>> i am kyle, the inventor of one wheel. is the world's first electric skateboard, a creates the feeling of snowboarding or skating getting around town. you lean towards your first foot to accelerate, your back foot to slow down. to your heel to make turns. the technology is similar to a our market is different. the ability to take this with you is something you cannot do with segway. the key to writing is relaxing. our goal on kickstarter was to

raise $100,000, and three weeks, we raised $630,000, we are making tens of thousands of one wheels. to see we are going sidewalks looking different five years from now, we will see people zipping around on really cool light electric vehicles. looks like a lot of fun. a quick look at the currency markets. the euro under pressure, mixed pmi data out, that was the story earlier, down by around .3%, let's talk about what you need to know for the rest of the day. hans nichols and ryan chilcote are back. the ukraine. oni will have my eyes independence square, the protesters cannot stay there forever, the police have said they will not switch sides and are telling people to stay home. also watching brussels, the eu will have talks on ukraine. >> corporate stores as well, what should we watch?

>> earnings from walmart will give us an indication of what the fourth-quarter sales were at walmart. interesting from walmart, they are considering weighing in on the minimum wage debate in the states, thinking they might wouldit, more people spend more money. hp after the bell. >> talk to me about hp, what are we watching for nhp? a turnaround plan there as well, looking at earnings per share in the usual stuff. is the turnaround plan their, they have sold a lot of assets to consolidate, are they hitting their mark after they have announced what they want to do? >> we will continue to analyze the impact that we are seeing from this whatsapp deal, a big story. an, it is ry surprising how quickly the situation is deteriorating and ukraine.

>> to avoid the urge to be sensationalist even with the chaos, it is possible for a deal . we have three foreign ministers therefore talks. from france, germany, poland. they are meeting with the ukrainian president, the ukrainian president is supposed to sit down with the opposition. if everybody wants, they could bring a stop to the bloodshed, we see examples of that in history. this could be pulled back from the brink. clearly, everything we have seen so far today, suggests things are spinning out of control. chko: for lawmakers to meet for a 3:00 p.m. session,, a desire to get things out. theverybody is telling opposition to join the government, join arms with president yanukovych, it is the only way out. that could stop the violence,

maybe. it is the only hope. >> thank you very much, that is it for "the pulse." bloomberg continues, liveeillance" is next, from new york. see you tomorrow. ♪ . .

>> this is "bloomberg surveillance." >> fighting a rep to getting kiev's independence square. in a pending civil war in ukraine. -- an impending civil war in

ukraine. and facebook excel for big money whatsapp. trading stocks commission free. good morning, everyone. this is "bloomberg surveillance." we're live from our world headquarters in new york. it is thursday come up every 20th will stop i am tom keene. adam johnson and alix steel as survived arlet fu helicopter dropped in eight feet of powder two days ago. time for a morning brief. extraordinarily busy day. china manufacturing fell to the lowest level in seven months. china's central bank also draining cash from the financial system for the second time this week because the rate the bank charged one each other for overnight loans sent to the lowest level in 10 months. finally, japan's trade deficit record to -- widened to a record january. it weighs on prime minister shinzo abe's co