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Quest Means Business
Final Hour of Voting in Scotland; Alibaba Investors Face Risks; US Markets Hit New Records; Larry Ellison Stepping Down as Oracle CEO; Hollande Says French Reforms Can't Be Rushed; European Markets Up; Sweden to Form New Government; Sixth Anniversary of Lehman Collapse; Tomorrow Transformed: Smartphones and Transportation
Aired September 18, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
POPPY HARLOW, HOST: US markets surge to a brand-new record high on the eve of a historic day for Wall Street. It is Thursday, September the
18th.
Tonight, 300 years of union, millions of voters, and now Scotland has just one hour left to decide its future as polls prepare to close.
Also tonight, Alibaba will price its IPO this hour. We'll show you why investors could be wary of the biggest public offering in history.
And keeping up with the next-door neighbors. Francois Hollande says that we can't go any faster than Germany.
I'm Poppy Harlow, this is QUEST MEANS BUSINESS.
Good evening, welcome to the program. There is one hour left for Scotland to decide its future. Voters are being asked to answer yes or no
to this question: "Should Scotland be an independent country?"
Max Foster is live for us tonight from inside the Royal Highland Centre near Edinburgh. That is where the final results will be announced.
Max? What are you seeing?
MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT: Well, they've got one of the local counts here, so the Edinburgh count will be here, and they've got
these tables out and these big boxes in the middle of them, so they're going to dump those votes in there, and then they literally start by hand
going through each one.
It's an exciting moment for Scotland, a big moment for Scotland, because it's such a big question, should Scotland be an independent
country? We'll get the result, we think -- it's all guesswork at the moment -- in around ten hours' time.
And I think it will go up to the wire, because you've got these big population centers, like Glasgow, North Lanarkshire, and Edinburgh, which
are all reporting at the end, and that's where the bulk of the population is. So, we'll wait to see what comes out of that.
But earlier on, we've got some interesting results as well coming out, so we'll bring that to you over the course of the next ten hours. I think
we'll get the first sort of results sort of coming in about four or five hours. So, a big day for Scotland. A date with destiny, Poppy.
HARLOW: Absolutely. And of course, Max, the question is the turnout. There's a lot that the media is not allowed to talk about on the day when
people are heading to the polls, but in terms of what you've seen in terms of turnout?
FOSTER: Well, we're relying on anecdotal evidence, really, from the polling stations, and certainly, all the anecdotal evidence seems to
suggest that a lot more voters have come out than they would for a general election or a national election here in Scotland. So it does look as
though the population's been fully engaged with this debate, which has been going on for two years.
Some concern about the weather, Poppy. Well, this is the UK, and Scotland in particular, and there's been some fog out on the outskirts of
the outer isles, and there's some concern that they won't be able to get the planes that they need into the airs to bring those ballot boxes in.
May have to rely on boats instead. So, that might slow things down a bit.
But so far, things look OK. There haven't been any reports of major problems at any of the polling stations, so we're looking forward to
getting the vote in in less than 12 hours, and it will be announced here in the hall next to me.
HARLOW: And of course, we will bring you those results live on CNN when we have them. Max Foster, thank you, we appreciate the reporting.
Meantime, another huge story we are tracking. Chinese e-commerce giant Alibaba expected to announce pricing for its shares at any moment.
We are expecting to see prices in the range of $66 to $68 per share. Could be a lot higher. That would make this the biggest IPO of all time.
It has been variously described as the Amazon, the eBay, the PayPal, a combination of them, of China. And it's had huge success there while
Western companies have struggled to gain a foothold. Investors are hoping for a fairy tale return. Instead of getting three wishes, though, they
face three key hazards. These are important to point out.
First, a complex ownership structure. Jack Ma and a select inner circle will retain control of decision-making at this company. Investors
are not actually investing in Alibaba. Instead, they are buying into a contract to share in Alibaba profits. That is actually registered in the
Cayman Islands.
Also, that structure is driven by Chinese law, of course, which prohibits foreign investment in strategic sectors of the Chinese economy.
So, how will this be deemed? And investors have faced transparency concerns with Chinese companies in the past.
And unlike many IPOs, some of those earliest investors, they will be able to sell their shares on the first day of trading. That typical lock-
up period, which is often in place, is not in place here, and it's designed to prevent investors from flooding the market and damaging the share price.
Let's talk a lot more about this. Very, very big day. Joining me now, Martin McNulty is CEO of the digital marketing agency Forward3D.
Samuel Burke is our business correspondent. Gentlemen, thank you both for being here.
Martin, let me begin with you. You call this "Competition against the business we never thought we'd see competition again." You're talking
about Amazon.
MARTIN MCNULTY, CEO, FORWARD3D: Yes, absolutely. I think in Alibaba, you've got a credible threat to Amazon, eBay, and even dare I say, Google?
HARLOW: Samuel points out three very important pitfalls: mobile, social, and their international recognition and exposure.
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Yes, so on the mobile front, yes, a lot of people use Alibaba to buy things on their mobile
phones in China. But they're really lacking a mobile messaging platform, and as we saw with the purchase of WhatsApp by Facebook, that's very
important.
They do have a mobile messenger, but it has not done very well compared to Tencent's WeChat, which has hundreds and millions of people on
the social front. They don't have a social networking platform, and many people think that platforms like Pinterest, buying things based on what
your friends recommend, could be very important to e-commerce moving forward, and the international strategy.
Clearly, they've made a lot of revenue inside of China, but if you try and buy something from Alibaba here in the United States particularly at a
consumer level, you see barely any to no footprint.
HARLOW: What do you think about that, Martin? There is this name recognition issue in the West, and you're going up against a formidable
competitor like Amazon.
MCNULTY: Well, I wouldn't agree with that analysis at all. I think what consumers are experiencing when they look at Alibaba at the moment is
a business-to-business service. It's not a business-to-consumer services.
So, if you look at the power of Alibaba today, quarter upon quarter of colossal profits. Compare that to an Amazon absolutely paper-thin profits,
and you have to look long and hard to find a profitable quarter, I don't think they're terribly well-equipped to whether a storm of really
aggressive price-matching, for instance.
Or Alibaba courting some of the sectors that they're not particularly strong in, for instance, luxury. And there's clear evidence that they're
doing that. So, I think they are a genuinely credible threat to Amazon.
HARLOW: Let's talk about that. You point out the numbers: Alibaba, $2 billion profit alone in the last quarter. You have mentioned how they
can have the ability to price undercut so many of their competitors, going after one specific thing, whether it's luxury, whether as you brought up
before, a PlayStation 4, for example, and get it so cheap that they're just going to dominate.
MCNULTY: Yes, absolutely. I think Amazon has done two things very well. They've demonstrated utility through a great web service and through
a great product range, and they've been aggressive on prices. You'd expect most businesses at some point to want to claw back that margin. Amazon do
not have that luxury now, because I think that's exactly where Alibaba will go after them.
HARLOW: Samuel, in terms of any potential rocky IPO, public offering here. Obviously, following what happened with Facebook and the NASDAQ,
this is going to be on the New York Stock Exchange, but some people are saying, should we be concerned? Is there any reason to think that because
one big tech IPO went that way, this one will?
BURKE: Well, they have the luxury of coming after Facebook And for instance, their price point, this between $66, $68, a lot of people were
saying that that would -- they're just trying to stay shy of that $70. They don't want to fall into maybe a little bit of the greed track, which
we saw Facebook have at the beginning. So, I think they do have the benefit of being second in line after Facebook.
HARLOW: Quickly before we go, Martin, what do you think it's going to price at?
MCNULTY: What do I think it's going to price at? Absolutely no idea. I would never call that one.
(LAUGHTER)
HARLOW: All right, we'll be watching very closely. Thank you both for joining us this evening. We appreciate it.
MCNULTY: Thank you.
HARLOW: We have breaking news just coming into us here at CNN. Oracle CEO Larry Ellison is stepping down from the company, a company
really synonymous with his name. He will be replaced by Mark Hurd and Safra Cat. He has become the company's CTO and executive chairman.
All right. This comes on the day that the Dow hit an all-time record high. The S&P 500 also a record high. What a market. Alison Kosik is
here. What is driving it?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, today, it was more about the residual effect of the Fed's decision to not raise interest rates
--
HARLOW: Right.
KOSIK: -- too soon, so you were seeing sort of that cheering effect. As you said, we see the Dow having its 17th record high of the year. The
S&P 500 its 23rd record high today --
HARLOW: Wow!
KOSIK: -- we can't forget about the S&P 500.
HARLOW: Wow. Talk to us about Alibaba. We're still waiting for the pricing news.
KOSIK: We are waiting. And he says, we don't know where it's going to go.
HARLOW: I've seen some projections, $80, $100.
KOSIK: Yes.
HARLOW: We know the price range is $66 to $68.
KOSIK: It really is astounding to think about. If shares are going to go for $68 a share, it means that Alibaba's market value is going to be
somewhat around $170 billion, making it the 23rd most valuable company just behind Intel, but bigger than Amazon. It just is -- it's just amazing to
just watch and see how it goes.
HARLOW: Yes, and we're going to be watching. You're standing by as we --
KOSIK: Yes.
HARLOW: -- wait for the pricing to come out sometime this hour.
KOSIK: Exactly.
HARLOW: Alison Kosik, thank you.
KOSIK: Sure.
HARLOW: We appreciate it. Anders Borg says he is through with politics. Even though his party was voted out in Sweden, he does still see
a way for ward for center-right politics in Europe. My interview with the former finance minister is next.
(COMMERCIAL BREAK)
HARLOW: As we just told you before the break, breaking news into CNN. Oracle CEO Larry Ellison is stepping down. He's going to be replaced by
pretty common names in tech, Mark Hurd and Safra Cat. He will stay with the company, though. He's going to be the CTO and the executive chairman.
You think -- but let's bring in our Paul La Monica. He's managing editor over at CNN Money. You think of Oracle, you think of Larry Ellison.
Any idea why this timing?
PAUL LA MONICA, CNN MONEY MANAGING EDITOR: This is very shocking to me. Oracle's going to be reporting their earnings or have reported their
earnings this afternoon as well, so strangely, the timing there.
But I hadn't heard anything to suggest that Ellison was going to back from the company in any way. As you mentioned, he is the company.
HARLOW: Yes.
LA MONICA: There's a slew of executives who have been at Oracle for many years then subsequently left. People like the guy who started
Salesforce.com, and --
HARLOW: Sure.
LA MONICA: -- and PeopleSoft and others, Siebel, that there was always this perception that you never were going to get the CEO job at
Oracle because Ellison was never going to relinquish it.
HARLOW: So, it sounds like he's bringing in these two big names to replace his job. Do we know if Mark Hurd, Safra Cat are going to have
equal position?
LA MONICA: They have already been operating as kind of this co- president model. So, I do find it very curious that Ellison and the board decided to promote both of them rather than make a choice. Hurd obviously
has CEO experience. He was at HP, resigned --
HARLOW: Right.
LA MONICA: -- in a bit of a scandal there.
HARLOW: Right.
LA MONICA: But then, Oracle scooped him up pretty quickly. With Safra Cat, she's been a loyal lieutenant at Oracle for years and is widely
respected on Wall Street, had been the CFO at one point. So I think this is just a reflection that obviously Ellison has a lot of faith in here, and
I guess didn't want to maybe risk her leaving if she didn't get the job and they just gave it to Hurd.
HARLOW: But why, was there talk about them giving it just to Hurd? I guess there was no talk about this, it's all happening --
LA MONICA: I know, this is literally just happened, yes.
HARLOW: You could have seen a trajectory where she would have just gotten the role, no?
LA MONICA: It's possible, and I think a lot of people assumed that if there was ever some sort of accident or act of God if you will, before Hurd
joined, she was the obvious person to replace Ellison.
Once they brought in Hurd, that's when things got murky and you had to wonder, OK, they're both kind of this co-number two, which one would
eventually get promoted?
HARLOW: Sure.
LA MONICA: But we didn't -- no one ever thought Ellison was going to step down.
HARLOW: OK, what about strategy-wise for Oracle? What needs to happen in the next phase of life for Oracle under new leadership?
LA MONICA: I don't really think there's going to be that much difference. I suspect that with Ellison saying as the CTO, they're going
to continue to emphasize this shift into the Cloud that most business software companies are doing.
When they brought in Hurd, obviously, there was also a lot of expectations about what they might do on the hardware side --
HARLOW: Right.
LA MONICA: -- because of his experience with HP. Oracle had just purchased Sun Microsystems, which had a big server component. Also some
software as well. So, I'm not so sure this is going to be a dramatic change in strategy.
HARLOW: But do look out for the hardware side of it, possibly.
LA MONICA: It's possible, but again, this is really shocking.
HARLOW: What a week in tech. What a day!
LA MONICA: I know. And the co-CEO model doesn't always work.
HARLOW: Yes.
LA MONICA: BlackBerry had co-CEOs for a long time, and BlackBerry has not been that great of a company.
HARLOW: Yes, we will see what happens. Paul La Monica on the big news for us this evening.
LA MONICA: Thank you.
HARLOW: Thank you, we appreciate it.
France's president says he can't be expected to push through economic reforms faster than Germany did. Hollande's approval ratings are
plummeting due to worries over the French economy. The French government has denied reports widely speculated that Moody's is planning to downgrade
France's sovereign credit rating. Hollande says that economic reforms simply cannot be rushed.
(BEGIN VIDEO CLIP)
FRANCOIS HOLLANDE, PRESIDENT OF FRANCE (through translator): Don't ask us to do it in five years. It's only been two and a half years so far.
To do in five years what our German friends did in more than ten years in a much more favorable economic setting and without any constraint from the
public deficit. We French are very good, but we can't do twice as fast and twice as good as the Germans.
(END VIDEO CLIP)
HARLOW: Looking at the European markets, now, stocks finished higher during Thursday's trading. The London FTSE 100 was up more than 0.5
percent. Germany's DAX shot up nearly 1.5 percent. One worry for investors, banks have been slow to embrace the ECB's new lending scheme,
taking up just about half of the anticipated funds offered so far.
In Sweden, a Social Democrat leader has been invited to form a new government. That is after Prime Minister Fredrik Reinfeldt was voted out
in last week's election.
The country's now former finance minster, Anders Borg, says the road ahead looks very rough for Sweden. As one of the key players in Europe's
response to the financial crisis, I asked him today, looking back, would he do anything differently?
(BEGIN VIDEOTAPE)
ANDERS BORG, FORMER SWEDISH FINANCE MINISTER: I would be very supportive of an expansion under monetary policy. I think if you have a
crisis with some debt components, an expansion under monetary policy is extremely important, and it might have been that the ECB could have done
more earlier.
On the other hand, I think it's always difficult in dealing with circumstances with a lot of uncertainty. So, basically, I would be very
supportive of what Draghi had done, and maybe he could have stepped on the gas pedal somewhat earlier.
HARLOW: Looking back, of course, we know more than when we were in the situation, but looking at how everything stands now, do you think that
the lack of take-ups for the TLTROs will force the ECB into more drastic action? And if so, frankly, what more do they have in their war chest?
What more can be done?
BORG: Well, I basically think that they have quite a lot of dry powder left. And what they need to do is provide liquidity and also
longer-term liquidity to create an environment where the growth is coming back in the economy.
But that's only half of the story. You probably also need some more fundamental structural reforms in key states like France and Italy to get
this to work.
HARLOW: You said recently -- and this got a lot of headlines -- that the road ahead for Sweden does not look good. Obviously, you're not going
to be in your position anymore, your party is leaving. When you look at the new left-leaning government there just elected, why do you think that
the road ahead does not look good?
BORG: Well, there's a lot of political uncertainty here, and we've seen that some of our neighbor countries that have gotten into a political
gridlock has also lost quite a lot of competitiveness. So, there is a high degree of political uncertainty, there is not a clear majority in
parliament.
And given that they are implementing some reforms that are going to decrease the flexibility of the labor market, that's a long-term issue
here, I think.
HARLOW: Let me ask you this: your party's defeat is seen as a hit to fellow conservative leaders like UK prime minister David Cameron, German
chancellor Angela Merkel. How do you view the broader implications of this across Europe?
BORG: Well, the fact that we have done quite a lot of long-term growth reforms and still wasn't able to convince the voters to vote for us,
I think to some extent is problematic. But I do also think that we weren't able to reload our reforms program with enough strength.
So, it's always difficult to be reelected a third time, and I still think that there is a kind of a main road forward for the center-right
parties in Europe, structural reforms and fiscal responsibility is two key areas.
HARLOW: What are you going to do next? You've said no more politics. So, what is it going to be?
BORG: Well, I will have to make up my mind in a few weeks about that. I have a background in central banking and investment banking, so something
in that neighborhood in Sweden or elsewhere is likely to become the answer.
(END VIDEOTAPE)
HARLOW: Maybe he will go Wall Street, we will be watching. Anders Borg there, thank you for that.
Six years ago this week, Lehman Brothers filed for bankruptcy, yet to date, not a single criminal charge has been filed against any bank
executive involved in the ensuing meltdown. US attorney general Eric Holder admitted his frustration about that in a speech in New York on
Wednesday.
He also added that investigations are open right now regarding the conduct of individuals at several Wall Street firms. Holder said he
expects to bring charges in the coming months. While he did not indicate the targets, reports say he was likely referring to manipulation in the
currency markets.
Protecting the public from financial fraud has been a priority for my next guest. Bart Chilton is a former commissioner of the Commodities
Futures Trading Commission. He joins us from London, where he just gave a speech and is focusing on creating a framework for transparency, frankly,
in the global markets. Thank you for being here, sir. Appreciate it.
BART CHILTON, FORMER CTFC COMMISSIONER: Good to be with you, Poppy.
HARLOW: Let's talk first about this speech that you gave to a group of Treasurers Conference. You said that "the financial system is somewhat
better protected." You also clearly stated there are still institutions that are too big too fail. How can that be after all of the changes? What
needs to happen now?
CHILTON: Well, we've seen both the regulators in the US and the regulators here in the EU have said that these living wills -- that is,
what happens if one of these mega institutions goes under -- are still -- still need to be tweaked. They still need to do some more to ensure that
their balance books will be OK, and that it doesn't have some ripple effect on the economy like we saw in 2008.
So, they're working through that, but it's a good thing they're working through that. But overall, to answer your question about whether
or not we're safer, there's certainly improvements. There are capital and margin requirements on these trades that before some of the regulation were
dark markets.
HARLOW: Right.
CHILTON: So, there's something has been done, but there's more to be done.
HARLOW: You still -- you brought up in your speech -- you still have a real divergence between the regulation of US markets and European
markets. For example, one trader needing to report a trade in the US versus both traders on each side reporting in the EU, just one example.
And you've said that if we don't have harmonization of regulation, what we're going to see is a race to the bottom in terms of a jump to
markets where people can operate in the financial system with the thinnest rule books. Do you have confidence that the US, the EU are going to get on
that same page?
CHILTON: Well, I think this -- the new phrase is "alternative compliance," and deferential treatment of similar but not uniform, not
identical rules. I've used this analogy of the movie, Poppy. You may remember the US movie called "Field of Dreams" --
HARLOW: Of course.
CHILTON: -- with Kevin Costner where he hears in his ear in the cornfield, "If you build it, he will come." And ultimately, he builds a
baseball field in Iowa and old-timey baseball players and his good old dad come out and they play ball.
So, I've used the analogy that if the US and the EU build global -- build regulations that are harmonized, that the rest of the world will
come. I think that will happen.
But there's a real test during this next few months, really before European Commissioner Michel Barnier leaves at the end of the year, along
with chairman of my old agency, the Commodity Futures Trading Commission, Tim Massad.
Those guys really have to work on this alternative compliance, and they have to do it pretty quick, because there's window of opportunity. If
they don't get it right, Poppy, I am worried that some will be racing to the bottom --
HARLOW: Right.
CHILTON: -- and that we could see some market migration from the EU and the US to other places around the globe.
HARLOW: We really do have to go. Very quickly, your reaction to Attorney General Eric Holder's comments yesterday in New York that they are
looking to bring charges against individuals at US banks it sounds like in the coming months. Are you encouraged by that? Do you think that needs to
happen?
CHILTON: If you do the crime and it's against the law, you should do the time, not just pay the fine.
HARLOW: And there have been some very big fines paid, especially lately. Multibillion-dollar mortgage settlements at some of the biggest
banks in the world. Thank you for joining us. We appreciate your time, Bart Chilton from London.
CHILTON: Good to be with you.
HARLOW: Coming up here on the program, for some people, renting makes a lot more sense that owning. And armed with a smartphone, you've now got
limitless choices in vehicles to share: cars, bikes, even boats, all with just a touch of a finger.
(COMMERCIAL BREAK)
HARLOW: Today is September 18th, 2014. More than a billion people worldwide are using their smartphones, one-seventh of the world's
population. Millions will get their hands on a brand-new model on Friday when the iPhone 6 hits the stores.
This time ten years ago, few of us could have imagined that kind of hype over a phone. The smartphone market was just taking off, dominated by
BlackBerry. My, how things have changed. And remember this? I had one of these -- the Palm Trio? One of the earliest smartphones.
Fast-forward another ten years, and we can only imagine how the smartphone will have transformed our daily lives. And one of the most
important parts of our daily life is already transforming. It is our daily commute.
You have Uber, ZipCar, bike-sharing schemes, all at your fingertips. Here our own Richard Quest, we miss very dearly this week, Richard Quest
with the traveler's guide to Tomorrow Transformed.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL (voice-over): Hail a cab. Buy a bike. Own a car. The traditional ways of getting around town, which in
the future could look quite quaint.
QUEST (on camera): Today, the smartphone is our vehicle for getting from A to B. Transportation has embraced new technologies that widen our
choices in ways we couldn't have imagined even a decade ago. Just touch the screen and a car arrives. Scroll through the maps and find a bicycle
waiting for you.
QUEST (voice-over): Vehicle-sharing is growing around the world. It's a reflection of a reality that we all have different transport needs
for different times. And these can now be met using technology.
SAM AQUILLANO, SHARES VEHICLES: The smartphone allows for things that are just unbelievable.
QUEST: Sam Aquillano is living this new life. Two years ago, tired of his brutal commute into Boston, Sam packed up and moved into the city.
He bought a bike, got rid of his car, and now shares vehicles of all types when he needs them.
Such as Uber, for the one-off trips. You book on the app, monitor the car's arrival, and someone like Fadi Ghorra is driving the car.
FADI GHORRA, UBER DRIVER: Every single trip with Uber, it's recorded. It's innovations, it's technology.
QUEST: Car-sharing companies like ZipCar wouldn't be possible without hefty technology in the background. Managing large fleets of cars that
never stay still.
MILLIE PARK, ZIPCAR: It's not easy to always know where your cars are, and our vehicles are kitted with technology that allows us to lock and
unlock cars remotely, that allows to understand where cars are when they're in trouble. So, there's a lot of technology beyond just the app that goes
into making ZipCar successful.
AQUILLANO: If it wasn't smooth, then I'd do something else. These car-sharing and bike-sharing are competing with I have a car, I'll just
start the car and go. And so, it has to be that smooth, and that's where the technology comes in and just makes it amazing.
QUEST: Like the cars and the bikes we rent, this revolution is moving fast, ready to take advantage of whatever technology offers us in the
future.
PARK: I'm really interested to see what happens with driverless cars. We know that that's just around the corner.
QUEST: Less traffic on the roads, fewer accidents, more time at home. Technology is evolving the way we move. Our lives are evolving with it.
(END VIDEOTAPE)
HARLOW: Richard Quest, thank you for that. Still to come on the program, a decision made nine years ago means Yahoo! will cash in big when
Alibaba goes public. We'll explain right after the break.
(COMMERCIAL BREAK)
HARLOW: Welcome back. I'm Poppy Harlow in New York. These are the top news headlines we are following this hour. In around 30 minutes' time,
voting in Scotland's independence referendum will end. More than 4 million people have registered to vote. They're being asked should Scotland be an
independent country. A simple majority for either yes or note will carry the vote.
The United Nations has declared the Ebola outbreak in West Africa to be a threat to international peace and security. The first time that a
public health crisis has been referred to in that way. This comes as the World Health Organization said the number of deaths from the virus has
risen to more than 2,600.
Ukrainian President Petro Poroshenko is in Washington today in an effort to find a diplomatic solution to the crisis in Eastern Ukraine.
Addressing a joint session of Congress, Mr. Poroshenko has asked the U.S. for more military assistance.
(BEGIN VIDEOCLIP)
PETRO POROSHENKO, UKRAINIAN PRESIDENT: We need more military equipment bought - lethal and non-lethal.
(APPLAUSE).
POROSHENKO: Urgently.
(END VIDEOCLIP)
HARLOW: Australian authorities say they have topped a terror plot that involved plans for a public execution. They've now charged two men in
connection with this. More than 800 police officers carried out the massive raids. In Sydney and Brisbane. The prime minister says the plan
was to kidnap and behead a member of the public.
We are still waiting for Alibaba to price its initial public offering on the eve of its stock market debut. One key winner though is clear - it
is Yahoo. Yahoo owns 22 and 1/2 percent of Alibaba. Its investment dates back to 2005. If you look at Yahoo's stock, it is up about 12 percent in
the past month, all because of Alibaba in anticipation of this IPO. Add its IPO price, Yahoo's stake in Alibaba is worth $35 billion. We'll see
where that price actually falls. But it's 80 percent of Yahoo's entire market cap at current prices.
Yahoo is expected to report a decline though in sales for the year. It'll sell one quarter of its stake in Alibaba. It may use those proceeds
for share buybacks or more acquisitions. Alibaba's IPO will give the company a huge war chest that it can use to expand its reach. That is
worrying some of Silicon Valley's biggest layers as our Maggie Lake reports.
(BEGIN VIDEOCLIP)
(CHEERS)
MAGGIE LAKE, BUSINESS ANCHOR AND CORRESPONDENT FOR CNN INTERNATIONAL: Forget Twitter and Facebook. Alibaba's IPO is unlike anything investors
have seen before.
BRENDAN AHERN, MANAGING DIRECTOR, KRANESHARES: Really it's like 12 companies. It's - you know - the eBay and Amazon and PayPal's pretty easy,
but it's a Netflix, it's a Groupon, it's - they have a money market fund business. They were buyers and sellers to just park their cash. They have
100 billion U.S. in their money market fund business. So it's almost like it's an ecosystem of its own.
LAKE: The numbers swirling around this ecosystem are huge, even by Silicon Valley standards. Alibaba's profit for the second quarter jumped
some 179 percent to $2 billion. Revenue increased by 46 percent, double that of U.S. online retailer Amazon. Mobile user growth has jumped ten-
fold, and last year, the company delivered six billion packages, more than global delivery giant UPS. Those stats are enough to put even the most
confident CEOs on edge. Who should be afraid of them, if anyone?
MAX WOLFF, CHIEF ECONOMIST, MANHATTAN VENTURE PARTNERS: I don't know about afraid, --
LAKE: Who do they compare to?
WOLFF: -- but they're going to be a big competitor I think to a lot of other countries trying to have their own e-commerce. So to be honest
with you, I don't see Alibaba bumping eBay or Amazon out their place in the United States. But as eBay and Amazon try to become global in more and
more markets, they're going to fight a heavily-entrenched Alibaba that's working really hard to get into those markets. So it'll more cut them that
way.
LAKE: The financials are backed up by some serious sizzle. Charismatic founder Jack Ma has the stage presence to rival many tech
icons. And he's followed the tech world's presence for structuring the stock sale to make sure controlled stays in management hands. But Alibaba
is still young, and analysts say it won't be easy to knock the likes of Amazon and eBay from their perch.
WOLFF: They are kind of a wall garden, and they're not the cheapest deal in the world. They force you to use Alipay, it's not that cheap and
they don't have as global a mix of premium brands because they have a counterfeiting problem on Tmall which is fairly extreme. So a few times
when you checked on Tmall which is the brand, maybe half or more of some of the branded content was knockoffs.
LAKE: Maintaining momentum after the listing will be a challenge. But the windfall from the IPO means Alibaba has the cash to spend on
winning over skeptics. Maggie Lake, CNN New York.
(END VIDEOCLIP)
HARLOW: Maggie, thank you for that report. We're watching Alibaba very closely. Meantime, there was a vote in Scotland today. Have you
heard? We're not talking about the one for the right for independence, we're talking about the right to golf. Two and a half centuries later,
women get the right to play through at St. Andrews. Next.
(COMMERCIAL BREAK)
HARLOW: As Scotland goes to the polls on independence, we've already had the results of another very historic vote. Women are now allowed to be
admitted as members to the Royal and Ancient Golf Club at St. Andrews. Eighty-five percent of the club's more than 2,000 members voted to drop a
centuries-old policy barring women from membership at what is known as `the home of golf.' This is a big deal - letting women into the world of golf
is about a lot more than just getting with the times, folks. IBM CEO Ginni Rometty was famously barred from the Augusta National Course here in the
United States. After protests and even the White House weighing in, Augusta later found the `fairway' and admitted women. Former U.S.
Secretary of State Condoleezza Rice was also among one of the first women members there.
Golf is not just a hobby as, you know, it is an opportunity to really be a deal breaker. Steve Ballmer and Donald Trump are among the business
icons who have admitted to having cemented deals - business deals - over, around of 18 holes. The games - the game really even affects - this was
surprising to see - a chief executive's take-home pay. A study in Barcelona found that bosses who play golf get 17 percent more than those
who do not. CNN World Sports Lara Baldesarra joins us now from the CNN Center. I guess I suppose I should learn how to play golf.
LARA BALDESARRA, SPORTS ANCHOR AND CORRESPONDENT FOR CNN: (LAUGHTER). Well it is a very good game for people to play and clearly there are a lot
of benefits that go along to it. However, I am going to take exception, Poppy, with one thing that you did say.
HARLOW: Tell me.
BALDESARRA: I don't know - I think that this notion that business deals are constantly done on the course - I'm not sure that it's entirely
justified. I think it might have been a myth that's created by professionals, by workers that want to, you know, --
HARLOW: (LAUGHTER).
BALDESARRA: -- have an excuse to take an afternoon off. I think that what we're actually seeing is that this - it just simply - allows people to
form those necessary relationships that are needed for -
HARLOW: Sure.
BALDESARRA: -- business deals to move forward. You know, you can do that over dinner, over lunch, going to see a sporting event, what have you.
HARLOW: Lara, you brought up an important point earlier today when I was watching you talking about the fact that - just to be fair here - there
are also courses that do not allow men.
BALDESARRA: Absolutely. You know, all of these courses that we're talking about - these single-sex membership courses which are now in the
public eye because of a vote today --- we're looking - a lot of people are looking - at them as though they are only male-only membership courses.
And I do want to add that at those courses, women are allowed to play, they're just not accepting membership - or extending membership - to them.
On the flip side, there's a number of female-only membership clubs. And we're kind of seeing a growth in some areas of the world in not just golf
clubs that are female membership only, but other types of clubs. I mean, Poppy, you -we both - know, there's women's-only gyms out there that, you
know, that a lot of people are quite fond of. We see this kind of thing everywhere, but everyone just wants to focus on the fact that there's male-
only memberships.
HARLOW: So, well OK, so this was a historic - is a historic - course though. I mean, `home of golf,' right, as the Augusta National is in this
country. Looking globally, are there any other major courses that still do not allow women to be members? Or was this sort of the final frontier on
that?
BALDESARRA: Well, this one is - let's put it this way - the Royal and Ancient Golf Club - this is like you said, it's the home of golf. This is
where all of the tradition comes from. This is where the administrative faction of the Royal and Ancient - is called the R&A - they're the
governing body of golf. Rules of golf are made here. There's actually a total of 30 single-sex membership clubs in the United Kingdom, and that's
both male and female. So now we're going to see if all of those clubs will be following suit. But you ask if there's clubs outside of just the United
Kingdom - yes there is. You know, in Toronto where I'm from, there's women's-only golf clubs. These things do exist. And, but we'll see now if
because of this change in decision by golf's governing body, if it means that other clubs will follow suit.
HARLOW: Lara Baldesarra, thank you for joining us. We appreciate it.
BALDESARRA: Of course.
HARLOW: All right, this just in to CNN. Reuters is reporting that eight bodies, including those of three journalists, have been found after
an attack on an Ebola education team in Guinea a government spokesman has announced. We will bring you more on that developing story here - very
troubling of course - as soon as we get it.
Now this on the program - five years ago Goldman Sachs committed $100 million to help 10,000 women around the world start small businesses. Now,
they find out their 10,000th woman. The results are in. I sat down with Dina Powell of Goldman Sachs who really led the program along with Isobel
Coleman of the Council on Foreign Relations to talk about how this is working and what's next.
(BEGIN VIDEOCLIP)
DINA POWELL, GLOBAL HEAD OF CORPORATE ENGAGEMENT, GOLDMAN SACHS: When Goldman Sachs made this investment, it was really based on data in the
sense that we saw that when women had the chance to start businesses, the growth of women in the economy was going to lead dramatically to GDP
growth. And now we're hoping that this is really proving the case. The women that were surveyed have increased their revenues by more than 60
percent. Eighty percent of them have created net new jobs both in developed and very challenging emerging markets. And what's interesting is
that the most important I think part of the thesis was proved which is that when you economically empower women, they take those proceeds and
dramatically improve the entire society.
HARLOW: One thing, Isobel, that was also found in this report that stood out to me a lot was that despite the success that Dina just talked
about, there was a significant portion of the women who did not look for outside funding. And you found specific reasons as to why that is.
ISOBEL COLEMAN, SENIOR FELLOW, COUNCIL ON FOREIGN RELATIONS: Well I think there are a number of reasons. I mean, women are - they go into
business with a lack of confidence, so they're already doubting their own abilities and when they have a little bit of success, then they think OK,
I'm going to just turn to friends and family to grow my business. The idea of approaching a bank or external financing is very intimidating. And then
of course there're also structural barriers - banks are not particularly friendly to women entrepreneurs. You know, there are a lot of built-in
assumptions about what a woman entrepreneur can or cannot do. And it just is an added layer of difficulty to access external financing.
HARLOW: This is a fascinating story, Dina, but I want you to tell us about one of these entrepreneurs in Egypt.
POWELL: Yes. Well, you know, we have worked with women all around the work from 43 countries, and in particularly challenging countries where
there's some cultural issues obviously about women working. And yet the need for their income at home and for them to be part of that economy is so
critical. There's a woman we worked with in Egypt whose husband really did not want her to work outside the home. And the idea of her starting up her
own business was really something he could not understand. She actually had a tourism transporting business that, after the revolution, really, you
know, was almost completely lost -
HARLOW: Right.
POWELL: -- and as a product of going through 10,000 Women, she learned how to revamp her business plan, found a new niche in the market
that we sort of describe as an Uber-like product in Egypt --
(LAUGHTER)
POWELL: -- without all the technology necessarily.
HARLOW: Right.
POWELL: She doubled her revenues, she doubled her workforce. By the end of it, she was making more money than her husband and contributing to
the family so much so that he currently works for her.
HARLOW: Now the question is always what's next? This program is being expanded exponentially to 100,000 women, you're teaming up with the
World Bank to get a lot of the funding because they're going to need a lot of funding. What's the goal here, what are the challenges ahead?
POWELL: Sure. Well when we started, we knew we were reaching the 10,000th woman. We at Goldman Sachs really wanted to hold ourselves
accountable to a measurable impact. We tracked the progress of each of these women, and in that data which is a very large data set, we learned
that the next greatest barrier to not having education - management education with capital - women must have growth and working capital for
their businesses. This is a gap that has - been identified by the World Bank. But we also learned through this data that it's not just a supply
side issue - that women are not applying for loans, they are nervous to do that, they don't have the confidence, they don't have the business plans -
HARLOW: So that needs to be addressed as well.
POWELL: -- to go into the bank. And we're addressing that through grant capital and this partnership with the IFC.
(END VIDEOCLIP)
HARLOW: (AUDIO GAP). Dina Powell and also Isobel Coleman for that. Now let's take a look at the weather. Jenny Harrison joins us at the CNN
International Weather Center. Of course we have to start in Scotland. How's it looking?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: We do, because as you say, Holly (ph) well it's coming up to the last hour - hour and ten
minutes I think is left in the voting. But this is what it's been like all day. We've had a lot of cloud around - quite a lot of fog this morning.
Quite drizzly as well. There'll be a bit more rain too before the day is actually done. But these are the current conditions. Of course it is dark
right now. Not bad for Aberdeen, Edinburgh and Glasgow, but there is actually some fog to come in in the next couple of hours. And then we've
had actually had some fog in Stornoway. That has actually since cleared and you can see that it's obviously mostly cloudy everywhere. But I said
been a bit of drizzly all day, and not a particularly cold day. In fact, some very nice weather further to the south. And in the afternoon Dumfries
got up to about 22 degrees Celsius.
Now, talking about this particular region - the U.K. in particular - and rain of course we're, what, in the middle of September? So far, this
time in the month we'd expect to see about 48 millimeters of rain across the entire country. So far though it's only been 6.7 millimeters, driest
first half of September since 1960. But as well as that, being so dry, it's also been very warm. Temperatures on average as much as 2 degrees
above the average, and in fact there's some more pretty warm weather to come across much of Western Europe.
At the same time, in the last few hours, quite a few showers and thunderstorms have been working their way in. And in fact that rain will
eventually spread into more central areas as we continue through the next 24 hours. Still quite warm though in places, and also dryer than it was
across those central and southeastern areas. But the rain of course has been coming in pretty heavily across parts of Spain and Portugal. Look at
this - 137 millimeters. Even into parts of France we've seen 64 millimeters and there are some more sharp showers and thunderstorms to
come.
But look at these temperatures - this is what I mean about how nice and warm it has been even this part of the middle of September. Paris 27
against an average of 21 and in fact Amsterdam 6 degrees about the average - no, in fact 7 - 7 degrees above the average - 25 with an average of 18.
So enjoy Friday and Saturday because come Sunday, it is all about to change. Look at that - Amsterdam low 20s again but by Sunday 17. The same
in London, 17 on Sunday and Paris starts at 21 which is the average but after 27 Celsius, that might feel a little bit chilly.
Now when it comes to rain, we've certainly seen plenty of that of course across the Eastern Pacific. We're now following this. It is
actually a tropical storm Polo. It was a hurricane a bit earlier on, but the winds have just dropped down to 110, so it's very close to hurricane
status. We have to hope it continues in that journey, keeping away from land. Even so, we know there's quite a bit of rain to push into the
southwest of the U.S., so that falling on some very saturated ground.
Unfortunately, we could do with the rain into California. It is so dry - the drought of course is severe and extreme across as much as 90
percent of the state, and this is one particular big fire. This is the big fire - this is the King fire. You can see where it is, just to the east of
Sacramento. A very, very big fire. We've actually got some images to show you because a very, very hard fire to fight this one right down in the
valleys and canyons, so people have had to evacuate, and evacuate well ahead of the time to be safe. Over 2,000 people evacuated. And in fact
over 3,000 structures are actually at risk.
But it's producing, Poppy, some huge amounts of smoke and you can see it here actually. The smoke plume travels as far as 400 kilometers within
the U.S. So hopefully weather conditions will change -- a bit more humidity and lower temperatures. But it's a big fire, only 5 percent
contained. They've got a big job ahead of them.
HARLOW: Only 5 percent contained.
HARRISON: Yes.
HARLOW: It has been devastating and continues to roar there in California. Jenny Harrison, thank you, we appreciate it. Coming up next
on the program, he was the very familiar barista in one of the favorite settings of the classic television show "Friends." I talked to Gunther
actor James Michael Tyler about what it takes to brew up a television phenomenon.
(COMMERCIAL BREAK)
HARLOW: Polls in Scotland are about to close in just about 7 and 1/2 minutes' time at 10 o'clock local there. This has been a vote where 97
percent of the electorate has registered to vote. Sixteen-year-olds and 17-year-olds also included in this voting. We will see what the outcome
is, we will bring you the results here on CNN as soon as we have them.
Also now this - it may be the most famous coffee shop in the world, and it didn't exist until now. Remember Central Perk? It was one of the
main settings in "Friends," a show that became a rite of passage for many 20-somethings in the 1990s, and it's back here in New York City - a pop-up
replica opened this weekend in Manhattan. It will be there for one month. It is part of the 20-year anniversary celebrating that show -- that show
that introduced us to Rachel, Ross, Joey, Chandler, Phoebe and Monica. None of their good times would have been possible without the ever-faithful
barista, Gunther, serving them up coffee.
I went down to Central Perk to meet the actor, James Michael Tyler, and started by asking him what was the recipe for such a successful show?
(BEGIN VIDEOCLIP)
JAMES MICHAEL TYLER, "GUNTHER" ON "FRIENDS": I think it was like universal characters. I think the characters were real, people can
identify with people in their 20s, you know, they're no longer with their families, so their friends become their families, and they're struggling in
life, love, work, ambition and they're a support group. So I believe that fans and people who enjoyed the show could see a little bit of themselves
in at least one of the characters and relate to them.
HARLOW: The story of how you became part of the show is pretty phenomenal. You were cast the night before the first episode as an extra.
TYLER: Yes. I wasn't actually even cast, but I have a friend who was a second AD, and he became the second AD on "Friends" for the first
episode. He called me the night before, he said, `Hey, would you come in tomorrow. We need someone with some experience as a barista. "I dropped a
cup."
HARLOW: You were in more than half of the 248 episodes. What stands out to you the most?
TYLER: The last scene, because Gunther, my character, had an obsession and a deep-seated love for Jennifer Aniston's character Rachel.
So he does finally get to express his love to Rachel and she rejects him once again, but in a very kind way. So it gave the character some closure.
("FRIENDS" CLIP)
TYLER AS GUNTHER: Rachel, --
JENNIFER ANISTON, ACTRESS, AS RACHEL: Yes?
GUNTHER: I know you're leaving tonight, -- I just have to tell you - I love you."
(LAUGHTER)
(END "FRIENDS" CLIP)
HARLOW: When you think about "Friends," it was really a reflection of the time, right? People - a little more than they can now - could come in
their 20s to New York, maybe afford an apartment. I don't know about as nice as the one in the show, but now it's just impossible in this city. Do
you think about that ever?
TYLER: Wow, you know - if "Friends" were set today and it was Monica's apartment, which was enormous as you pointed out, --
HARLOW: Huge.
TYLER: -- you know what, it would be split up as a ten. Right? It would be ten separate apartments.
HARLOW: So, something people may not know about Gunther, we don't love coffee.
TYLER: Kind of odd, and I understand that you have never even tasted coffee.
HARLOW: I've tasted it but I've never had a -
TYLER: A full cup.
HARLOW: -- full coffee in my life.
TYLER: You know what, I think we need to remedy that right now. That's like coffee-flavored milk.
("FRIENDS" CLIP)
GUNTHER: Maybe you'd just like to get something to eat with me sometime.
(LAUGHTER)
(END "FRIENDS" CLIP)
HARLOW: Delicious. It's not that bad.
TYLER: It's really great, isn't it?
HARLOW: Not that bad.
TYLER: Told you.
HARLOW: Thank you, Gunther.
TYLER: You're welcome.
HARLOW: We appreciate it.
TYLER: Thank you.
(BEGIN VIDEOCLIP)
HARLOW: Best cup of coffee I ever had made by Gunther, though I didn't drink the whole thing. Thank you for that, sir. Scotland's vote
counters may well be dosing up on a lot of coffee now -- the final minutes of voting next.
(COMMERCIAL BREAK)
HARLOW: We want to return to our top story tonight. Polls in Scotland are about to close. Voting will be over at the top of the hour as
you can see from the countdown clock on the bottom of your screen. That is just a few seconds from now. You are looking at live pictures from
Edinburgh, Scotland, the country's capital city. This is the scene outside a polling station near Edinburgh. This is the day that will go down,
certainly, in Scottish and in British history.
For now, that is "Quest Means Business." I am Poppy Harlow in New York. Our special coverage of the referendum begins now with Christiane
Amanpour.
END
