doesn't know how to create jobs, i answer with one word, facebook. thank you for suze orman, to my audience, and thank you at home. fascinating show. hello. here are the headlines this hour. a ferry believed to be carrying about 350 people has sunk off of papua new guinea. so far, officials say 238 people have been rescued. an update on another top story we're following on cnn. egypt is launching an inquiry into a football riot that left 78 people dead and more than 1,000 wounded wednesday. some politicians accused

security forces of not doing enough while victims were trampled and beaten. the country's military government has declared three days of national mourning. leon panetta announced plans on wednesday to pull all nato combat troops from afghanistan by the end of 2013. that's a full year earlier than previously planned. nato's training and support troops are expected to stay in afghanistan beyond the 2013 pullout date. those are the headlines. from cnn, i'm juanita raj paul. cnn world business today starts right now. hello. welcome to "world business today." i'm nina dos santos in london. >> the top stories this thursday, february 2nd. sony forecasts another eye-watering loss, as the one-time electronics leader struggles to get back into the

black. we take you inside facebook's moneymaking machine, as the social networking phenomenon now prepares for its stock market listing. and shares of the australian miner linus jumped almost 20% after the company scores a big rare earths deal in malaysia. but not everyone's celebrating. while sony looked to the future on wednesday by naming a new ceo. but the electronics giant can't escape its troubled recent past. now, today, the company more than doubled the net loss it had forecast for the current fiscal year to $2.9 billion. natural disasters in japan and thailand hurt the productivity in 2011. the strong yen for the damaging exports. and the hacking scandal that affected the playstation network only added salt to the wounds.

when he comes in, he will find this waiting for him. the company's stock has plummeted 51.0% over the last 12 months alone. for more on their troubles, we go to the japanese capital. how much did the natural disasters in japan and also in thailand account for the big losses? >> it's hard to exactly say what is outside forces and what's internal forces. what i can tell you is when you thumb through the third-quarter earnings results today and look forward to the forecast it makes for some depressing reading, especially if you're a sony shareholder. this company has significant problems. not only the outside forces you talked about. but internally, they have a lot of restructuring to do. the tv business is now looking at, again, an eight-year loss.

so, it is going to be very tough. we did see for the very first time since the announcement at the press conference that did wrap up just a short time ago, howard stringer officially shaking hands with kazou hirai, saying this is the boss that will take over on april 1st. he has a huge to-do list. he is arguably stepping into one of the toughest jobs in corporate japan. he did say he will not pull out of the tv business. it's an important link between sony and the consumer. he also said he will pursue actively restructuring. he's going to look at asset writing. and he's going to make sure to make the tough choices. try to bust through the silos that are widely criticized that sony has. that they have to be a unified company working together. they must do that in order to cree it a future for sony. he is aware that there's a big

to-do list. his in-box is going to be quite full. he is, at the age of 51, one of the younger ceos here in corporate japan. he's going to need that youthful energy from day one, andrew. >> and did howard stringer say anything in his farewell as the ceo? he's going to stay on as chairman of the board. but stepping down as ceo, what did he have to say? >> it actually sounded much more like a retirement speech. he wasn't just stepping back from the position. he was stepping almost into full retirement. he did seem quite a bit upbeat. but he did specifically say, if there were not these natural disasters. what happened in thailand. if they didn't have the pressure from the yen, they'd be looking at a year in the black. not a year in the red. he is saying, this year, these three quarters, this entire pressure economically, is really quite a bit due to the outside forces.

not as much the internal forces. that's something i found quite notable. he also did say it was certainly just time. time for a generation switch at sony. >> absolutely. it's interesting. those external forces, certainly the yen, not just a sony problem. we have numbers that you've seen, looking at the other big electronicsmakers, just how hard they've been hit. good to talk to you. nina? >> we're going to be staying with the japanese theme here because a computer glitch disrupted trading in the shares of some of japan's biggest companies listed on the tokyo stock exchange just earlier today. the stock of some 241 firms was affected by the outage, including that of sony, as we were just discussing. also, hit taachi was one of the firms that was affected. trading did resume for the afternoon session.

>> what do the numbers look like? certainly, a bad day for one company. sharp corporation, down nearly 16%. it was actually down as far as it goes. it has a daily limit. it can't fall anywhere more than 100 yen per day. and it hit that level today. why? it forecast an annual loss of $3.8 billion after a slump in tv sales. we just heard about weak tv sales at sony. very much the same story at sharp, if not more so. it had forecast an overall profit, going to a $3.8 billion loss. gives you an idea just how hard these big japanese electronic companies are doing it at the moment. the yen, certainly not helping. but also the tsunami. this is a unique year, looking forward for the companies in japan. hopefully they'll be looking at something a little more settled in 2012. that was the numbers. the nikkei, disspite that sharp

number to eke out a 0.75% gain. news coming out there would be more support for small to medium companies in china. that gave a boost to shanghai. and hong kong road that story, as well. in australia, the s&p up by 1%. one miner, this is lynas. malaisian authorities granting the company to operate in rare earth refinery. that's a big pop for lynus. >> yeah. also something we've been talking about throughout the course of this week, let's hone in on the markets here. it's another big day for europe, with french and spanish debt sales on the cards today. it seems it really is the corporate earnings we're getting out of some of the companies that's dominating the agenda for once. let's hone in on this particular market. you can see the ftse 100 is the

one that's falling the most. there's a large reason for this slump. it's a big heavywieght here on the markets. it's shell, the net income down from 6.8 billion this year before. these figures did miss estimates. it's largely due to disruptions of gas and oil supplies. we've had the arab spring disrupting. and nigeria. we know how that's gone. nigeria's been plagued by stakes over fuel subsidies and the removal of fuel subsidies over the last month or so. here on the frankfurt debt, that number is down 0.03%. we had a disappointing statement coming out of deutsche bank. this company, with a surprised pretext lost $462 million in the last quarter. it shows how companies like this are being affected by the

situation in europe. and the hair cut that could be imposed for private sector investors in greek debt. here on the ftse again, just to point out, we had astrazeneca, one of the largest drug companies in britain, announcing it will be having thousands of job cuts. this market will be choppy for the rest of today. after two months of gains, we're back in the red again. >> okay, nina. let's turn, now, to the company that everyone is talking about. for a social network, it's been conspicuously private until now. a facebook share has involved a photo or a newspaper article. but that's all changing. now, the world's most talked-about website has asked for a thumbs up for a $5 billion ipo. founder mark zuckerberg is very much in charge. he expects to make a mint. expected on a valuation of $18

million, he could have a value of $22 billion. just as important for zuckerberg, though, he retains 57% voting control of the company. why buy the shares? well, in 2011, facebook took $1 billion of profits with revenues of $3.8 billion. that's up 65% on its 2010 earnings. pretty robust numbers there. 85% of the site's revenue comes from advertising. 12% comes from the games company zynga. interesting mark zuckerberg maintaining tight control on the company. it's not usual for companies to do this. in this case, it will be quite well received because he's such the visionary. he's the founder. and he's make nothing bones about the fact that he intends to continue to drive the company

very much in the way he thinks it needs to grow. >> yes. some people have said he could be the next steve jobs of the world of social networking. of course, we know more about facebook than ever before. and at first glance, those figures look pretty promising, don't they? but recent history has told us that big tech ipos sometimes give way to big disappointments. should investors buy or shy away from facebook shares? what's to like and what's not to like? >> reporter: call it mark zuckerbergs most important status update ever. his 8-year-old company is looking to friend wall street with the largest ipo on record. but will wall street like what it sees? facebook claims to have 800 million users. they're on it at homes. they'ren it at coffee shops like this one in new york city. it's that popularity that has so many people excited about facebook's ipo. >> this is a company that is

smart enough to figure out in the long run how to really turn their scale into a lot of profit. >> reporter: nate westheimer is a social networking entrepreneur based in new york. he says the facebook growth story is still in its early days. >> what's exciting about facebook is they haven't really pushed the gas on driving revenue. they're doing pretty traditional ads right now. they know they can try new things. and they can really try to push it harder. and they're not yet. >> reporter: even so, skeptics say facebook's stock is just not worth the risk. >> there's going to be a lot of advertisers that are already there. and more advertisers that are going to come. but the question is, of course, whether that can grow sufficiently to justify paying 50-times next year's earnings. >> reporter: what do you think? >> i think it's too much. it's the law of large numbers. the 800 million people on the 7 billion person globe here, that really like facebook, are already there. facebook would come back and

tell you they've got all sorts of potential for data mining. there's more than advertising that can be done. you learn about all these users. that can be sold to all sorts of companies. that can raise privacy concerns. >> reporter: privacy remains a huge concern for some on facebook. they fear the company might try to sell their information to boost profits, despite facebook's insistence that users have control over how their information is shared. >> it is difficult to tell what they're doing with our information. it makes me a bit uneasy. but there's not really an alternative social networking space. >> reporter: some die-hard fans say they'll think twice before buying a share of facebook. >> i'd like to see what happens with it. see what the reaction is initially first. >> reporter: skeptical. a little skeptical. the debate rages on. is the facebook ipo going to be the next dot-bomb.

or will it make more money than god? >> judging on the interest, there has been so far on facebook, i might go for the latter on that one. but we have plenty more on that story later in the show, including the philosophies of mark zuckerberg. he wrote an interesting letter to his shareholders about his philosophies. still ahead here on "world business today" -- >> no one from the outside could do this. it's a fallacy to think of it. but it's also, not only fallacy. but it creates a risk that in the end, this is pain imposed on us to punish us, not to help us. >> you'll recognize that face. the former greek prime minister, a pretty blunt message for outsiders trying to dabble in his country's affairs, just ahead.

welcome back. the german chancellor, angela merkel is taking a break from meeting with european leaders about europe's debt crisis. instead, she is in china. but again, europe's debt crisis is high on the agenda. >> we feel that china and germany can work together to strengthen supervision in the financial market. we have more harmonization. in imf, we can play an important role. we can see that china is having more and more power in imf, because china is growing power, economically speaking. at the global level, china plays a more and more important roll. and at the same time, assume more and more important functions. >> mrs. merkel spoke to the chinese president and premiere about sanctions on iran.

i'm sure that the word greece, can't been too far from discussions up in beijing today. >> remember the film? grease is the word. certainly is today in the markets. as you were saying, andrew, one of mrs. merkel's biggest headaches has been the situation in greece. she met with the former prime minister george papandreou before he announced his resignation. on wednesday, mr. papandreou sat down with israel's channel 2 television station. and he shared his views on where greece is going now. >> the name of your country, greece, has become recently a synonym for economic crisis. the economic crisis for state bankruptcy. how did you come to this point? >> we're not a poor country. we're a badly managed country. and when i was elected, i

inherited a ballooning deficit, which had reached 16.5%. but also, almost a doubling of debt in the last -- the previous 5 1/2 years of the previous government, from $480 billion to $320 billion in those years. >> and you were unlucky enough that it all happened in your watch? >> unlucky is one word. but i also say i was lucky enough to be prime minister at the time of the greatest need of my country. the crisis, of course, in greece, was exacerbated by another crisis, which is the incomplete architecture of the euro zone. >> how long will be greek people be willing to receive instructions, not to say orderers, from brussels, not to say angela merkel from berlin? >> no one from the outside can do this. and it's a fallacy to even think

about that. not only fallacy, but it creates a sense in greece, that this is pain imposed on us to punish us. not to help us. and i think it's wrong. >> do you think angela merkel should take a step back and be less involved? >> well, we are all involved now in europe. there's obviously different mentalities and different ways. i feel the more this is something seen as imposed, the less effective it will be. and in the end, this, of course, is going to be good for greece. but we have to all decide to take on responsibilities. if we decide that the pain is too much, let's say stop and go on our own. >> will the euro zone survive? >> i like to be optimistic. >> but you're not? >> i am. but it's something that i cannot not only in my hands, it's in

the collective. if we have the collective will in europe, that's fine. if you ask any of the european leaders right now, they will say we have to keep the euro alive. and we have to strengthen it. and we have to take the necessary measures. >> that's george papandreou, the former greek prime minister. well, papandreou was in israel to speak at the 12th hertz leuen summit. and it is held in israel. that's one of the reasons why he was there for that interview. andrew? >> all right. now, just ahead, the ax falls on 13,000 jobs at american airlines. we'll hear what the unions are saying. don't go away.shif in what passes for common sense. used to be we socked money away and expected it to grow. then the world changed... and the common sense of retirement planning became anything but common. fortunately, td ameritrade's investment consultants can help you build a plan that fits your life.

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american airlines plans to slash some 13,000 jobs in a major drive to cut costs. right now, america's number three airline is under bankruptcy protection. it also says that it means to reduce its costs by some 20% just to survive. and that represents a saving of about $1.25 billion annually. american airlines reportedly lost more than $900 million during the month of december alone. the word came down in a company-wide letter to employees. but, andrew, so far, there's no word as to when those layoffs will start to be implemented. >> yeah. the american airlines boss,

thomas horton says that crucial changes are needs to avoid, in his words, tens of thousands, multiple job workers. but the transport workers international union in america, says he worries about how the airline's restructuring will affect the quality of service. >> one of the biggest things i have with the cutting of jobs is the safety aspects of it. we do a large number. we do 90% of our aircraft maintenance in-house. i'm not sure how that's going to shake out and to what degree that's going to impact the workforce. and also, the areas where we have large groups of people. it's going to affect the community, as well. it's not just our members that's impacted. >> now, aside from the job cuts, american airlines is also hoping to save money by changing its pension plan, restructuring debt, grounding older planes and

switching supplies. well, speaking of flying, for all of you business travelers out there, frigid temperatures will be greeting you across many parts of northern asia and also europe. now, before we get to that forecast of freezing snow and temperatures, somebody tells me it's your birthday today. >> oh, my goodness. it got out. >> happy birthday. a heartfelt happy birthday. >> it happens every year. incredible, time flies by here. if you are flying in the northern hemisphere, pack accordingly. it's unbelievably frigid. we're past cold here at this point. 23 degrees below zero. that's the reading yesterday morning in bucharest. we have been seeing low 20s below zero in many areas as this bombastic high pressure system that's been dominating our high

pattern here. unprecedented here across western russia. continues to just dive into the south. it is going to begin to slowly moderate. but that's not going to happen until the latter part of this week. for now, we are in the chill. it has also come with areas of low pressure along the mediterranean. that's spun in some moisture here. so, we've been snowing. let's take you to ukraine and show you the conditions there. not only have they been dealing with the snow. but also, the frigid temperatures. the kind of cold that turns snow into rock. it's been difficult for crews to clear the frigid snow off the ground. it's just incredible scene there. not only in europe here, but showing you scenes in asia in a second. i want to show you the forecast map behind me. we're not done. it's still going to snow. we have another low moving in from the balkans here. look at some of the tallies here. 15, 25, and some areas, higher

elevation, up to 50 centimeters not out of the question. here's berlin. temperatures below zero. you'll notice by the time we get into saturday, we're going in the right direction. things are beginning -- we can't say warming up. but less cold, right? 20 below in kiev. i want to take you to japan. sea-effect snow continues here. look at the scene from japan. new pictures on cnn from what is now, well, meters of snow. that's how much snow they're trying to get rid of there, as another sea-effect snow has been piling up on japan. an unbelievable winter for europe and asia. andrew and nina will be back with you here as "world business today" continues.

welcome back to "world business today" on cnn. i'm nina dos santos in london. >> i'm andrew stevens in hong kong. >> let's update you on a story we're watching closely on cnn. a ferry believed to be carrying about 350 people has sunk off the coast of papua new guinea. several ships and helicopters are on the scene looking for survivors. some 238 people in total have been rescued. we can now talk to the cnn of one of the companies involved in that rescue effort. he joins us now on the telephone from papa new guinea. thank you very much for your time. first off, describe the scene. and what we're seeing at the moment there.

>> it was 11:00 we arrived on the scene. when we arrived, one ship was plucking survivors from the water. a second carrier was on site. we then went further to the southeast, look further west. we found another ten life rafts with approximately ten people onboard. by 10:00, there were another 100 survivors in the water to be picked up. >> how many survivors would you estimate you've seen so far? and how many more could be still there in the water waiting to be picked up? >> we think we have seen about 100 at 11:00. we flew back to a few. and went out again at 2:20 under

the direction of the rescue coalition. and we were flying then a search for further survivors. and in the afternoon, we only saw debris in the water. there were a total of five ships in attendance, trying to get survivors from the water. and by 5:00 in the afternoon, we were unable to see anymore survivors in the water. >> if you can, describe to me perhaps why this ship may have sunk. were there particular weather conditions or conditions on the scene, that could have made it difficult for this ship to sail? this time of the year, we have strong wind coming through. we had 42 or 45 naughts.

the weather conditions were a contributing factor to the accident. >> many thanks joining us from lao city. at the moment, they don't see survivors on boats. but last time they flew over, they saw about 100 in boats. so far, officials in papua new guinea were on the scene. let's tend to our business news here on "world business today." it was an answer of when and not if. and facebook has announced that now is the time to update its status from private to public. they have a $5 billion listing here. it's set to be the biggest in internet ipo history. even at the moment, the facebook valuation scale could net mr. zuckerberg more than $22 billion. andrew, it's interesting to

think that some analysts would be listing itself at a value of about $10 billion. it's come in at $5 billion. it's hard to know if that's disappointing or not. >> i know. what i've been reading and there's been so much written so far, there's been a huge amount of interest. but there is a lot of vested interest in all of this. so, maybe that $5 billion could go a little bit higher than the $5 billion number we're hearing at the moment. there's been so much written about this. one of the interesting things i saw and you probably saw it, as well, was the actual letter written by mark zuckerberg, the company of the ipo. it's outlining why they're doing the ipo. and it's insight into zuckerberg's thinking. it's equal part al truism and

pragmatism. he sate it was built to establish a social mission, to make the world more open and connected. he wrote the first version of facebook because, simply, it was something i wanted to exist. there's really an all truistic line there. he talked about how information is received. it's time for a bottom-up approach. but there is that pragmatism in there. talking about why he's going for the ipo. this is what he says. we don't build services to make money. he's saying this is all about just making money. we are making money -- we're not making money for money's sake. we don't build services to build money. we make money to build better services. this is what he's trying to get across. people turn to companies who believe in something a little bit more than just maximizing profits. certainly seeing the philosophy of mark zuckerberg. if you have time, check that

out. it's a long piece. but it gives you good insight into what mark zuckerberg is thinking and how things function at facebook. it's not just facebook shareholders, either, who are set to profit from the impending ipo. it's also facebook's social network competitors. >> facebook may changing its status from private to public. but that doesn't mean everyone in the world will have access to its services. look at this visualization of the connections that facebook's 800 million members have. and you can see the glow from facebook users in the u.s., in europe and southeast asia. but the world's most populist country is missing. and that's china. that's because beijing continues to censor social networking

websites. in their place are services similar to them, with chinese characteristics. for example, in place of youtube, the video-sharing site, there's youku. and instead of twitter, we have sina. there's no facebook. but there's renren, which means everyone in chinese. now, even without facebook in china, the social network's impending ipo is having a halo effect on the country's tech stocks. it's boosting their share prices. for example, since last thursday's close in the u.s., renren, listed on the new york stock exchange, jumped 51% through the early part of this week. and sina, listed on the nasdaq stock exchange, its shares are up about 18.5% through today. now, the belief here, a rising tide floats all boats. and with expectations of a successful facebook ipo, there's

more speculation on other industry players even halfway around the world. >> fascinating, isn't it? sort of has a bit of bubble written all over it when you get the halo effect coming through. let's get back to renren, the facebook of china. how does it stack up? if you put it side-by-side with facebook? >> doing a face-to-face comparison of the companies. it's clear that renren has a lot of growing to do to compete with facebook. first off, looking at revenue. as of the third-quarter of 2011, facebook's revenue came in at this. $2.6 billion. but renren's came in at just the millions. that's $86 million. measuring cash on hand in the similar timeframe, facebook had nearly $4 billion. while renren had one-third of that, coming in at $1.25 billion there. as for user numbers, facebook

has 800 million registered users. renren had less than a quarter of that. it came in just about 137 million users. looking at all that stuff, revenue, cash on hand, and users, renren has expansion to get on with. in the short run, these tech companies in china may be happy to ride the flotation. >> if they continue to monopolize the china market, that's great there. thanks very much. >> after the break, we're going to talk about one of his favorite topics. lynus gets the green light to start refiring rare earth in malaysia. you think you take off all your make-up before bed. but do you really? [ female announcer ] neutrogena® makeup remover erases 99% of your most stubborn makeup with one towelette. can your makeup remover do that?

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welcome back to "world business today." >> speaking of commodities there, you saw the price of gold gaining in today's session. but shares of the australian mining company lynas have literally soared almost 20%. and this is on the back of news that the malaysian authorities have granted this company an operating license to run a rare refining plant. it means that the company's proposal to ship rare earth elements from australia to malaysia can proceed. lynas estimates the project will account for a quarter of the world's supply of rare earth, outside of china. this has sparked protests in both countries. this is from environmental and health concerns. among them, that the remining plant could produce harmful

waste. and as a result, the license is for an initial period of two years. and it's subject to some pretty strict safety conditions, andrew. >> even though rare earth elements are called rare, they're actually not. they're found in many parts of the world. china, as we know, is the world's largest expeorter that seems to have a stranglehold on rare earths. they are found in a wide range of high-tech products. smartphones, flat-screen tvs, for example. there's 17 different chemical elements that call into the category of rare earth. now, lynas hopes its plant will be operational by mid this year. its ceo nicholas curtis spoke to sky news, about the license it's been given to operate the refining facility. >> the word temporary is a normal process in malaysia.

we submitted a model of what our emissions are going to be. and naturally, and this is for all industry, the government process is that they require an actual physical plant to verify that theoretical model is correct. then, they permit you permanently. what the government's done, which is normal in any industry, is given us two years to demonstrate that the actual operation meets standards they've approved. >> there's been a lot of concern in malaysia about this. how are you going to manage that going forward? >> we've done more than 5,000 individual engagements with the community. we've taken on social media, printed media, television media. we've talked to the community in a variety of forms that make them feel comfortable that our operation is safe. we've gone far beyond the requirements that we would have in malaysia. and i think we reversed the

misinformation that was around before. >> there's going to be controversy around this. >> there's a core group that has taken a political side on this project, who are not going to align with the benefits of the project. and facts probably aren't speaking to them. but i think the vast majority of people understand the situation far better. >> you said that the waste from the processing of the rare earths is safe to people. but it is radioactive, isn't it? >> no, no. just to be clear, radioactive is a term that people don't necessarily measure and understand properly. the material has naturally occurring radiation, in the form of some contained elements. that does make some very low-level emissions. but the effective delusions of the residue, contains some of

the molecules, is absolutely measured. and has a background radiation level of emission level, less than you have probably sitting here. >> nicholas curtis, the ceo of lynas. we'll be right back and tell you what's happening in the markets after this. [ engine sputtering ]

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live from cnn hong kong and london, welcome back to "world business today." >> as we look at how things are faring on the european stock markets. any gains seem to be waning in this session. we have disappointing earnings. despite the fact we have sales from countries like france. shell and deutsche bank's, heavywieghts on the ftse and the dax, have come out with earning statements and missed analysts' forecasts. also, in the u.k., the second-biggest drugmaker, astrazeneca says it plans to cut thousands of jobs. we go into deutsche bank, i want to point out, this had a surprise loss, a heavy one. on the back of litigation, for its sovereign bond portfolio. i want to point out in the last half hour or so, fitts ratings

says that the euro's in crisis remains pivotal for some of these banks. >> 221 securities were halted in tokyo today. problems with the data system there's. the nikkei finished up, even though companies like sony and sharp came in with some huge losses. in australia, it was the mining companies that led the broader market higher, led by lynas, after it got the license to operate a rare earth refinery. shanghai and hong kong, the outstanding players today, on the back of small and medium-sized businesses. we want to point out one quick programming update we don't want you to miss. the death toll has been rising in syria and the united nations continues to devise sanctions to try and put pressure on the president to end the campaign of

violence. in a cnn exclusive, our own hala gorani speaks to the head of the arab league. >> 23.6 million people have died. >> you tell me what can be done more than that. you are going to been organization, which is responsible for world peace, the security council, vested with the peace and security in the world. you cannot go further than that. >> you can see that exclusive interview in full in just over an hour from now. at 11:00 a.m. in london, midday in berlin. and if you're watching in abu dhabi, at 3:00 p.m. that's it for us at "world business today." thanks for joining us. i'm andrew stevens in hong kong. >> i'm nina dos santos in london.