Live Blog

December 19, 2014, 5:07pm
Instagram exceeded Twitter in terms of daily users last month; now it looks like that has trickled through to its valuation. 
The photo-sharing app has been valued at $35bn by Citi analyst Mark May, nearly double the amount he previously estimated. 
Based on Twitter's current share price, it's worth just over $23bn.
Instagram was bought by Facebook founder Mark Zuckerberg in 2012 for around $1bn, when it had 100m active users. Now it has 300m.
As a result, it has the potential to drive revenues within the Facebook group far more significantly than previously thought, May said.
“While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized,” he wrote in a note issued today. 
Citi has raised its price target for Facebook to $91 from $86 as a result. 
 Next year could be a particular boom year for the business. May reckons 2015 will be the first year that Facebook begins to develop “more meaningful off-Facebook revenue streams”, including Instagram.   
Here is how those valuations compare with other social media platforms this year:

This is what it looked like back in 2008. Obviously many of the multi-billion dollar businesses dominating the industry were just twinkles in their creator's eyes six years ago. 

December 19, 2014, 5:00pm

The FBI confirmed today that a massive data breach at Sony's movie production arm was, indeed, rooted in North Korea.

North Korea seemed the obvious perpetrator, given the group behind the hack, Guardians of Peace, purported to take offence at upcoming movie Seth Rogen movie The Interview, which centres around a plot to kill North Korean leader Kim Jong-un. 

However, there has been confusion over where the hack originated, after experts cast doubt on the idea it was North Korea.

But the US official confirmed today that its investigations showed North Korea had been behind it, alongside a possible Chinese link, which came in the form of either collaboration with Chinese agencies or using servers in China to mask the origination of the hack. 

In a statement, it said: 

Technical analysis of the data deletion malware used in this attack revealed links to other malware that the FBI knows North Korean actors previously developed. For example, there were similarities in specific lines of code, encryption algorithms, data deletion methods and compromised networks.

The FBI also observed significant overlap between the infrastructure of this attack and other malicious cyber activity the US government has previously linked directly to North Korea. For example, the FBI discovered that several internet protocol (IP) addresses associated with known North Korean infrastructure with IP addresses that were hardcoded into the data deletion malware used in this attack.

It added that the move was intended to inflict "significant harm" on US businesses. 

Such acts of intimidation fall outside the bounds of acceptable state behavior. The FBI takes seriously any attempt – whether through cyber-enabled means, threats of violence, or otherwise – to undermine the social prosperity of our citizens.

Yesterday, the company confirmed plans to withdraw the release of the movie altogether after threats by Guardians of Peace caused most major US movie theatres to decide against showing it.

White House spokesman Josh Earnest had said US officials were considering an "appropriate response" to the hack, under which thousands of gigabytes of data - including five movies, the script to the next James Bond film and thousands of personal emails - were leaked.

Man wearing novelty glass with "stop spying" written on them
December 19, 2014, 4:42pm
It's dangerous territory, some smart-arse proffering a crystal ball projection of the future. 
From weathermen to economists, the curse of the prediction has floored many a better man and woman than I; but as the headline states, we are wallowing in the age of empowerment. 
I’m not talking about John Lennon’s “power to the people”, revolution and all that jazz – I’m musing on a power shift so profound that as it creeps into all aspects of our lives, the blinkered and belligerent will be left in its wake. With this in mind and feeling empowered, predict I will.
All aspects of our lives are now subject to a refreshing layer of empowerment fuelled by our digital infrastructure - our intuitive, protected and “nowhere-to-hide” transparent friend. And, of course for some, foe.
This year witnessed the kick-off of the UN’s Decade of Sustainability for All – an audacious program placing the individual at the heart of its programme for change, empowering the person to affect positive change through a multitude of initiatives, from harnessing natural energy to education programmes. 
Track back to 2007 and Tesco funded the Sustainable Consumption Institute with a £25m grant. Seven years on we are witnessing a shift from stick to carrot.
In government, the idea of “crowdsourced” is no longer a buzzy vote pleaser. Citizens’ imaginative ideas are viewed as the start point to a sustainable future – across the world, initiatives and programmes inform action, a new type of government model in play.
Midata Labs, the cross-organisational partnership blending academic, government and commercial bodies collaborates to empower and protect consumers in the data age, wrestling back the ethics on who owns and can use your data. The tipping point cometh, the big push to claw back personal data from the conglomerates and put basic (as my mother would say, “polite”) measures in place to at least ask for permission to use one’s precious data profiles.
The theme is rampant, from diagnosing and managing health to sharing opinion to defining the actual activities of organisations and government bodies.
In parallel, commercial brands are embracing the shift to empowerment.
Unilever, for example, has pledged to empower five million women through its employment programme, but also to empower young entrepreneurs within its supply chain, shifting from “say” to “do”. 
While few brands pooh-pooh the idea of empowerment, the genuine shift from listening to responding to a model where comment and ideas are embraced will affect everything a brand does. One angry tweet can torpedo a brand, but it’s how the organization structures itself to embrace genuine ideas and comment that will win out.
Arguably. a prediction loses some of its punch if it’s already happening – but it’s the prevalence I predict. 
December 19, 2014, 3:05pm
Tesco's share price is on the rise. 
The beleagued supermarket was up four per cent at pixel time, making it the best performing stock on the FTSE 100 so far today. 
That's a trend that stretches back the whole week (more or less), with the share price starting at 165.9p on Monday morning and rising as high as 183p today. It's not much considering the wider context, but you know, every little helps. 
Clearly over the last six months, the trend is hardly positive, particularly from the point at which its profit overstatement was revealed, but continuing as the situation deteriorated with various management being suspended and the involvement of the Serious Fraud Office. 
But on Tuesday Kantar Worldpanel figures showed a slowing in the sales decline at Tesco to 2.7 per cent, the best performance since June. Kantar said this showed “some signs of stablisation for the retailer”. 
So is this week's rally a sign that Tesco is benefiting from the Santa rally or is there more to it than that?
Analysts are pretty mixed on the outlook. 
Here's Shorecap's Clive Black, referring to Tesco's announcement earlier this week that it was cranking up its customer service ahead of the big Christmas shopping week: 
“Dave Lewis & Co., have made a smart move in characterising in detail the customer service proposition that they offer because in this respect it is a clear point of difference versus the discounters, and may also stand them well against the larger store operators, including Sainsbury's for whom we harbour real worries about its current trading momentum and morale.”
And on predictions for Christmas trading: 
“The laggards will be the Big Four but maybe it will not be Tesco holding up the rest of the league. While the price and promotion proposition remain to be determined by Dave Lewis, there may be much needed signs of stabilisation from the market leader. We are interested to see if Morrison's can improve momentum against favourable comparatives, this is necessary to prevent further downgrades to our minds; whilst we reiterate the worrylines we have for Sainsbury.” 
JPMorgan is rather more negative, not only warning that the profit overstatement could grow by another £174m, but also arguing that it does not have the competitive edge anymore:
“It is often argued that Tesco is a Buy because ‘it has to be a long term winner due to its scale advantage’. However, we believe that scale alone does not guarantee success; it is the effective use of it for the benefit of the customer that supports success. 
“The world of retail is full of large companies that have failed. Execution and skills are the factors that lead to success much more than scale, in our view. But in any case, the benefit of scale has already been enjoyed by Tesco (it is in the numbers), it is not an incremental benefit. 
“In fact, we can conclude that scale has become an incremental headwind for Tesco as the benefits of scale unwind. After years squeezing suppliers very effectively through volume rebates, as sales fall, these rebates unwind, becoming a headwind.”
December 19, 2014, 2:56pm

The ecigarette revolution has taken the world of public health by storm. Depending on your point of view these devices are either a critical part of getting people to quit smoking or a new gateway drug that could lure young people back to cigarettes.

Either way, it's difficult not to notice the growth of these devices and the subsequent controversy it often sparks. In the UK, the number of ecigarette users tripled by the middle of 2014 compared to the same point last year. American lender Wells Fargo has predicted that e-cigarettes could be outselling conventional cigarettes within a decade.

Here are some of the highlights of ecigarettes in 2014.


Most new products are greeted with a degree of suspicion as consumers and regulators natural conservatism kicks in. Back in June, the debate over ecigarettes intensified after 100 scientists and anti-tobacco campaigners wrote to the World Health Organisation demanding more regulation.

The letter called for rules governing advertising and questioned the safety of the devices and the effect from second-hand vapour. "The absence of detailed evidence on adverse health effects is not evidence that no health effects exist", the letter said. It also echoed what has been a central argument of ecigarette opponents that the devices could renormalise smoking.

A little over a month after the letter to the WHO was published a study in the Journal of Addiction warned that government interference in the ecigarette market could "damage health on a big scale."

Thomas Eissenberg, co-director of the Centre for the Study of Tobacco Products at the Virginia Commonwealth University of Richmond:

Current evidence suggests that there is a potential for smokers to reduce their health risks if electronic cigarettes are used in place of tobacco cigarettes and are considered a step toward ending all tobacco and nicotine use.

In the same month, the WHO itself decided to intervene in the debate. It was a low-point for ecigarette advocates. The UN agency called for the devices to be banned indoors, and their sale should be prohibited to minors. The WHO claimed vaping could also be a risk to pregnant women. The organisation moderated its criticism somewhat by adding that the products should only be banned indoors "until exhaled vapour is proven to be not harmful to bystanders".

Some places are already beginning to move in this direction. In May this year ecigarettes were banned in Irish health facilities. The Health Service Executive (HSE) said the crackdown was justified because the devices "pose a challenge to smoke-free campus enforcement and come with safety concerns for a healthcare environment".

Health studies, research and reports

There have been a host of research papers and studies authored on the safety and potential appeal of ecigarettes. Regular cigarette smoking has been on a downward trend for many decades but has recently experienced something of a flatlining. Some public health advocates fear that the widespread use of ecigarettes could spark a rise in regular cigarette smoking. As a consequence, some have labelled ecigarettes as a gateway to smoking.

In June, assessing a survey of 26,500 consumers across all EU member states, Harvard School of Public Health's Constantine Vardavas found electronic cigarettes are not a gateway to regular tobacco products. The study was the largest ever conducted on ecigarette use in Europe and was published in the Journal of Tobacco Studies.

Furthermore, data from the Office for National Statistics suggested that those using the devices in the UK were almost wholly current and ex-smokers. Less than one in 300 people have never smoked currently use an ecigarette.

In terms of helping smokers kick their habit the first Cochrane review concluded that ecigarettes do help smokers quit or cut down on the amount they smoke.


Given the controversy surrounding their health effects its no wonder that there was some nervousness around the prospect of these devices being advertised. However, ecigarette ads have been legal in the UK for some time but only recently was the first ad featuring vaping allowed on TV. The Committee of Advertising Practice (CAP) ruled the ads must not show tobacco in a positive light.

This was a pretty low bar for the ecigarette company considering regular tobacco products are their direct competitors. The ad featured below was aired on ITV during Grantchester

A full supermarket trolley
December 19, 2014, 2:56pm
Although at first glance any shift in the share of the grocery market seems slim, the changes that have taken place over the last two years tell an interesting story.
It shows the gradual increase of smaller companies such as Aldi, Lidl and Waitrose at the expense of larger chains such as Tesco, Sainsbury’s and Morrisons. 
Particularly interesting is the increase in the market share of discount stores such as Aldi and Lidl. These have increased by 1.8 and 1 percentage points respectively since January 2013, according to grocery share figures from Kantar Worldpanel
Along with Iceland, these discounters now make up 10.7 per cent of the grocery market - up from eight per cent two years ago.
The discounters are benefiting from disruption within the market - Aldi’s sales are 25.5 per cent higher than last year, while Lidl’s are up 16.8 per cent. 
The biggest drop belonged to Tesco, the largest supermarket in the UK. Its market share dropped by 1.3 percentage points over two years as it struggled to deal with a series of profit warnings and scandals. 
The rate at which it is losing ground, however, has slowed slightly in the last few months - indeed, it increased by 0.4 per cent in the last month. 
Asda, Sainsbury’s and Morrisons all saw their share in the market fall as consumers switched to discount supermarkets. 
The major supermarkets have all had a difficult period, hit not only by the flow of shoppers towards cheaper alternatives, but also reduced revenues as they cut prices in an attempt to compete. 
Asda had the best performance of the "big four". Its sales have fallen in line with the overall market and its market share only fell slightly. 
In November 2014, Kantar reported the first contraction in the British grocery market since records began in 1992 - with sales down 0.2 per cent compared with last year. 

Pugachev and Putin
December 19, 2014, 2:14pm

Vladimir Putin's former "banker" has lost a $2bn (£1.3bn) legal battle in the UK courts.

The man in question is Sergei Pugachev, a former Russian senator. Pugachev had sought to overturn a UK court order issued in July this year that froze his global assets due to a $2bn claim made against a collapsed bank he co-founded. $2bn is equivalent to 120.2bn (for now).

Pugachev co-founded Mezhprombank, which collapsed in 2010 leaving a deficit of more than $1.7bn. The Deposit Insurance Agency, a Russian body, is looking to recoup what it can, pursuing Pugachev both in the UK and Russia.

The DIA accuses Pugachev of concocting schemes to extract money from Mezhprombank in 2008, when it had already received some hefty loans from the Central Bank of Russia.

Pugachev’s lawyers had argued that his global wealth, worth an alledged $70m, was too small to be worth freezing and wouldn’t be able to clear a substantial portion of the $2bn owed. The judge disagreed.

December 19, 2014, 11:28am

How to make a presentation without boring your audience

Not all presentations are exciting. Not every speech will change the world. But giving good presentations and speeches can preserve your world, secure promotions and enhance how much you earn. Which are all nice.

In your business life, you are more likely to have to give a presentation demonstrating your findings, communicating progress or proposing a specific action. It is not always exciting or glamorous, but you still need to communicate effectively with your audience. Whatever your subject, you need to communicate and transfer information without your audience nodding off.

Here are some ways to present information without boring your audience:

Cut the fat

You may be able to speak about the subject for hours - you are an expert on it after all, and you know enough to drone on for days. This is a problem. Please don’t. Being knowledgeable about a subject does not automatically mean that you can talk about it in an interesting way - it often makes you just a niche bore. Write out a script of what you want to say and go through it line by line. Audit every sentence: “Does that really need to be there? … What does it add?” Be a deleter. If your speech or presentation is short and focused you have more chance of keeping your audience awake and engaged.

Know your audience

Knowing your audience will help you adapt your presentation or speech to what they want to hear. Understanding who your audience is, and what motivates them, will allow you to assess how much detail to give, what jargon is acceptable and how to focus your content. And how much you need to slap them into listening mode with your introduction.

Relevance. What’s in it for them?

How does what you are saying make your audience richer, happier, healthier? Remember - it’s all about them. How could they benefit from what you are saying? People are more likely to invest their time and attention when they can understand they could get something back. Take your presentation or speech to their level. You are not there to show off what you know, but to explain how what you know can affect them. 

Santas congregate en masse outside the Bank of England
December 19, 2014, 11:10am

Is this a Christmas miracle, or merely a sign of a touch of festive merriment among investors? In looks like yesterday's "Santa Rally" will continue into today, as European equities markets rose in morning trading. 

The FTSE 100 was up 0.7 per cent in mid-morning trading, while the Dax rose 0.3 per cent and France's Cac 40 rose 0.2 per cent.

They were continuing an example set overnight by Asian markets - the Japanese Nikkei closed 2.4 per cent up, while Hong Kong's Hang Seng rose 1.25 per cent. 

A bit of festive cheer among markets isn't unusual, but this year rises have been more welcome than usual, eating into recent losses. Yesterday, shares across Europe made their biggest one-day gain in three years, while the S&P made the biggest two-day jump since the end of 2011.

The Dow also ended the day with a bit of festive sparkle, closing 2.43 per cent up.

But analysts cautioned markets started the month from a low base. Connor Campbell, financials analyst at Spreadex, blamed a range of factors. 

If the thought of the Dow Jones not reaching 18000 was laughable a few weeks ago, then the thought of it hitting that peak this week was equally dubious following a dismal run of losses for the US index. Yet a bit of Christmas magic, following the display of faith by the US Fed, the stabilising rouble and Brent Crude, and the Swiss slash in interest rates has led to the Dow nearing its record highs of November and early December. Another rally this afternoon could see the US index pushing its 2014 resistance level.

(Blue is FTSE 100, red is Dax, green is Cac 40)

December 19, 2014, 11:04am

During his regular phone in with LBC radio Nigel Farage gave it business secretary Vince Cable with both barrels.

The Ukip leader slammed the Lid Dem cabinet minister saying we've got a "Marxist in charge of the business department".

Farage was answering a question referring to the privatisation of Royal Mail. He added that Cable had "made an absolute pig's ear of the sale of Royal Mail" and he (Cable) "was not fit for purpose".

Yesterday, Lord Myners released his report on the privatisation that was commissioned at the behest of the business secretary. The report concluded that the Royal Mail sale was undervalued by £180m.

The conversation with LBC's Nick Ferrari may turn out to be one of Farage's more controversial after he defended former Ukip candidate Kerry Smith's use of the word "chinky" referring to Chinese women by asking the question:

If you and your mates are going out for a Chinese, what do you say you’re going for?

He said he was saddened by Kerry Smith's resignation and praised him as a "rough diamond" but added that Kerry was not fit to be a parliamentary candidate.