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Russian Elections; Possible Syrian Cease-fire; Italian Officials Convicted in Earthquake Case

Aired October 24, 2012 - 08:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KRISTIE LU STOUT, CNN ANCHOR: Hello, I'm Kristie Lu Stout in Hong Kong and welcome to NEWS STREAM, where news and technology meet. And we begin in the U.S.

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STOUT (voice-over):

There are less than two weeks to go before the presidential election, as candidates focus their attention on key battleground states.

U.N. envoy Lakhdar Brahimi says there will be a cease-fire in Syria during the four-day Eid holiday.

And Apple unveils a smaller iPad. But it's more expensive than its rivals.

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STOUT: Now there are only 13 days to go until this man, U.S. President Barack Obama learns whether he will keep his job or whether this man, Republican Party challenger Mitt Romney will become the next U.S. president. Opinion polls show the race is neck and neck. Romney's numbers surged after the first debate between the candidates.

And now with all three debates behind them, both men are hitting the campaign trail hard in this final stretch before the November 6 election. Jim Acosta has the latest.

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JIM ACOSTA, CNN CORRESPONDENT (voice-over): Bang! The final presidential debate was the starting pistol for a two-week sprint to the finish line.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hello, Florida!

ACOSTA (voice-over): As President Obama fought to hold onto Florida, Mitt Romney tried his luck in Nevada, arguing he's got the big Mo.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: And these debates have supercharged our campaign. There's no question about it. We're seeing more and more enthusiasm more and more support. His is a message of going forward with the same policies of the last four years. And that's why his campaign is slipping and that's why ours is gaining so much steam.

OBAMA: And, by the way, the math in my plan adds up.

ACOSTA (voice-over): After the president unveiled a pamphlet outlining his agenda for a second term, Romney's advisers on the campaign plan were trying to read between the lines.

UNIDENTIFIED MALE: I would say that is a glossy panic button.

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ACOSTA (voice-over): The Romney campaign has already turned the GOP nominee's debate pivot to the economy --

BOB SCHIEFFER, MODERATOR: Governor Romney, wrong and reckless policies?

ROMNEY: I have got a policy for the future, an agenda for the future.

ACOSTA (voice-over) -- into a new ad.

ROMNEY: I will get us on track to a balanced budget.

ACOSTA: A trio of key debate flash points lay down the battle lines for three crucial swing states: for Jewish voters in Florida, Romney's attack on Mr. Obama's decision not to visit Israel during his first foreign trip as president --

ROMNEY: You went to the Middle East and you flew to Egypt and to Saudi Arabia and to Turkey and Iraq. And, by the way, you skipped Israel.

OBAMA: If we're going to talk about trips that we have taken, when I was a candidate for office, first trip I took was to visit our troops. And when I went to Israel as a candidate, I didn't take donors. I didn't attend fundraisers. I went to Yad Vashem, the Holocaust museum there, to remind myself of the nature of evil.

ACOSTA (voice-over) -- for factory workers in Ohio, the flare-up over Romney's opposition to the auto bailout --

OBAMA: They would have gone through a (inaudible).

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ROMNEY: You're wrong, Mr. President.

OBAMA: No, I am not wrong. I am not wrong.

ROMNEY: People can look it up, you're right.

OBAMA: People will look it up.

ACOSTA: -- and for military voters in Virginia, Romney's charge that the size of the Navy is at 1917 levels.

OBAMA: Well, Governor, we also have fewer horses and bayonets, because the nature of our military's changed.

ACOSTA (voice-over): It was hardly a direct hit for either candidate. As it turns out, every Marine still undergoes bayonet training. And the fact-checking watchdog, PolitiFact, rated Romney's attempts to blame the president for the Navy's current fleet levels as "pants on fire".

ACOSTA: As for the president's resurrection of the term "Romnesia," senior Romney adviser accused Mr. Obama of trying to play Scrabble with the GOP nominee's name. In reality, the race is more like a Rubik's Cube, with both sides furiously trying to line up the states they need to eke out a victory -- Jim Acosta, CNN, Henderson, Nevada.

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STOUT: As you just heard in Jim's report, both candidates are hitting a handful of key states in the final stretch of the campaign. And here's a look at their itinerary for Wednesday. Obama is in blue; Romney's is in red. And both men will make stops in Nevada, in Iowa, while Mr. Obama will also stump in Colorado, and Romney in Ohio. No coincidence that both are battleground states.

And here is a list of the key swing states in yellow. And there are nine into total, including Colorado and Ohio, New Hampshire, North Carolina, Virginia, Florida, Iowa, Wisconsin, Nevada. These states have a total of 110 electoral votes. And it is those crucial votes that could make or break the election for either candidate.

Now CNN political editor Paul Steinhauser joins me now live with more.

And, Paul, Obama and Romney, they're in their final push. Ohio has been called the jewel in the crown. Why? Why is Ohio the big state?

PAUL STEINHAUSER, CNN POLITICAL EDITOR: For so many reasons. Remember, go back to 2004, Ohio was the state that put President George W. Bush over the top in his reelection that year. Four years ago, President Obama, then-Senator Obama, he turned Ohio from red to blue and the Democrats won the state. But it was by a pretty narrow margin.

And that's why so much attention back in Ohio this time, you know, you mentioned those nine battleground states. That's true, Kristie. But I think three of them really stand out in getting the lion's share of candidate visits, ad attention, you know, the airwaves being flooded by ads and ground game, basically, the campaigns putting troops on the ground there to get their voters out.

And those three states are Virginia, Florida and Ohio, Ohio, Ohio. Eighteen electoral votes in Ohio. It is such an interesting state; it really is a microcosm of the United States. It's got urban areas. It's got rural areas. It's conservative, it's liberal, it's got a little bit of everything. You heard in Jim Acosta's piece the talk about the auto bailouts.

There are a lot of automobile workers that make their living working in the auto industry in Ohio. That is why President Obama thinks his pathway to victory goes through touting the bailouts, the resurrection of the domestic auto industry. You're going to see both candidates back in Ohio plenty between now and Election Day. And you're going to see the state continue to be flooded by ads, Kristie.

STOUT: So Virginia, Florida and especially Ohio, the three states to watch.

I want to ask you about the impact of the debates. Now both candidates, they scored; there were attack points. Some say that the debates really charged up the Romney campaign.

Do you think the debates will be the determining factor in this election?

STEINHAUSER: You know, debates have had an outsized influence so far this cycle. You know, back in the Republican primaries, the debates had a lot of importance. They really shifted the polls, the public opinion polls, and they seemed, in the same case in the general election, that first debate was very instrumental in really shaking the foundations of what we thought was going to be this election. The second and third debates have shifted it a little bit.

So the debates overall have had more influence in this election on the public opinion polls than we ever thought they would.

What we saw in that final debate two days ago in Florida was really how the campaigns will run the last two weeks. We saw President Obama really acting like a challenger in a way, being very aggressive, somebody who seems to be needing to make up lost ground.

We saw Mitt Romney almost playing the role of the incumbent -- safer, more guarded, trying to protect his lead and do no harm. We saw that same theme play out over the last 24 hours on the campaign trail. I think we'll see a lot of that over the next two weeks, Kristie.

STOUT: Yes, Mitt Romney capitalizing on his performance in the debates on his new TV ad. In fact, both Obama and Romney have released these new TV campaign ads.

How are they making their case to American voters?

STEINHAUSER: It's interesting, because one of the few times in the debate two nights ago, where Mitt Romney seemed to get under President Obama's skin was on the whole idea of President Obama going overseas and apologizing for the United States. Take a listen to this new ad by the Romney campaign.

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ROMNEY: The president began with an apology tour of going to various nations and criticizing America. (Inaudible) and saw weakness.

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STEINHAUSER: The ads are going to be on the economy. But that one, you're going to see more of over the next two weeks. They think they have a winning issue when it comes to the president on this whole idea of whether he apologized, about whether it's true or not. It's effective in an ad.

As for the president, what is he doing now in his ads? He is laying out what he will do over the next four years. Here's a taste.

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OBAMA: Here's my plan for the next four years: making education and training a national priority, buildings on our manufacturing (inaudible), boosting American-made energy, reducing the deficits responsibly by cutting where we can and asking the wealthy to pay a little more, and ending the war in Afghanistan. So we can do some nation building here at home.

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STEINHAUSER: Now the president's been criticized by a lot of people for not really saying what he would do over the next four years if he was reelected. That's why they have this new ad out. And, Kristie, that's why you're seeing the president say on the campaign trail now what he would do if he gets another four years in the White House, Kristie.

STOUT: All right. Paul Steinhauser, joining us live from Washington, thank you.

And don't forget that you can look at the electoral map yourself on our website, can click or tap on these states to build your own calculations for what each candidate needs to reach the magic 270 electoral votes and win the presidency.

All this is at CNN.com/election.

Now it has been six weeks since terrorists attacked the U.S. consulate in Benghazi, Libya, killing Ambassador Christopher Stevens and three other Americans. And now leaked emails sent from a U.S. State Department address and other government agencies are providing new insight into the assault, including who knew what and when.

Now some of the emails describe the consulate attack as it was happening. One details how Islamist militants claimed responsibility just hours after it unfolded. And the release of these emails is fueling a political blame game in the United States.

World affairs reporter Elise Labott explains.

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ELISE LABOTT, CNN CORRESPONDENT: First communications that describe the attack on the diplomatic mission in Benghazi in real time, they were sent out by the State Department Operations Center; the members of the White House in the Situation Room, the FBI, the Pentagon, the State Department.

The first email is at about 4:00 pm Washington time. Now that would be 10:00 pm in Tripoli and the subject reads, "U.S. Mission in Benghazi under Attack."

It goes on to say that the embassy in Tripoli "reports approximately 20 armed people fired shots; explosions have been heard as well. Ambassador Stevens, who's currently in Benghazi, and four personnel are in the compound safe haven."

About a half hour later, an update, saying that the firing has stopped and the compound has been cleared; a response team is onsite attempting to locate the personnel.

Now we now know that that wasn't the case, as some of those armed gunmen had actually breached the compound walls and set fire to the main building, where Ambassador Stevens and Sean Smith died. Now the third email goes on to say that the extremist group Ansar al-Sharia, which does have links to Al Qaeda and the Islamic Maghreb, an Al Qaeda affiliate operating in North Africa, has claimed responsibility on Facebook and Twitter and has called for an attack on the U.S. embassy in Tripoli.

And we know now that a member of this group has been arrested and is being held in Tunisia.

So what these emails show is that the night of the attack, the White House and others in the administration were told that militants with links to Al Qaeda could possibly be involved, and these emails will likely become part of the ongoing political debate over whether the administration initially misled the American people in saying the assault grew out of a protest rather than a planned attack by terrorist groups, which officials didn't publicly link to the attack till weeks later -- Elise Labott, CNN, Washington.

STOUT: Now still to come here on NEWS STREAM, there are hopes a holiday truce could take hold in Syria. Details of the U.N. envoy's plan to halt the violence, straight ahead.

And united in their opposition to Vladimir Putin, Russian pro- democracy protesters lead by example, voting in a shadow government.

And prison sentences handed down in Italy rocked the scientific community. Six Italian scientists convicted for failing to predict a fatal earthquake.

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STOUT: Welcome back. Now there is hope of a cease-fire in Syria, as a major Muslim holiday approaches. The U.N. Arab League special envoy Lakhdar Brahimi says the Syrian government has agreed to a cease-fire during the four-day Eid al-Adha, which begins on Friday. But a spokesman for Syria's foreign ministry says the proposal is still being studied and a final decision won't come until Thursday.

Now there are, of course, two sides to the conflict, and Brahimi says some rebels have also, quote, "agreed to the principle of a cease-fire." Now for the latest, I'm joined by CNN's Mohammed Jamjoom in Beirut.

And, Mohammed, cease-fires have been declared before. So how much hope is there about this one?

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Well, Kristie, there hasn't been a lot of hope up until now that this cease-fire would really take effect, based primarily on past experiences when U.N. envoys and Arab League envoys, such as Kofi Annan, had asked for cease-fires and had been agreed to by all the sides. And yet, they never really took root in Syria for various reasons.

Now Lakhdar Brahimi in Cairo today, he will be briefing the U.N. Security Council later in the day by phone. He has been meeting with former U.S. president Jimmy Carter as well as the secretary-general for the Arab League Nabil Elaraby. Now he spoke earlier about what he was told by the Syrian government regarding this cease-fire. Here's what he had to say.

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LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY TO SYRIA (through translator): I would just like to tell you that after this recent visit that I made to Damascus, there is an agreement from the Syrian government on the cease- fire during the Eid break. And I believe that they will be issuing a statement either today or tomorrow in that regard.

The other parties involved inside Syria, we spoke to some of them. Those that we were able to reach, the commanders of the armed factions, the majority of them agree on the principle of the cease-fire.

And we hope that if this humble initiative manages to succeed, we hope that we can build upon that, to have a longer, stronger, more stable cease- fire. And this should be part of a comprehensive political process.

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JAMJOOM: Important to note, as you mentioned, Kristie, that the Syrian government has not yet said publicly that they will accept this cease-fire. The foreign ministry said to CNN that it was still under review, that an announcement would not be made until tomorrow.

We reached out to opposition figures, including the Syrian National Council. That's the main umbrella group for the Syrian opposition. We spoke with George Sabra. He's the spokesman for that group in Paris.

He told us, "Based on our long experience in dealing with the Assad barbaric regime, we know that the Syrian government is just buying time and playing on words.

"The whole world knows that the Syrian regime cannot be trusted and doesn't have any credibility in fulfilling any promise that they make to anyone."

So that's quite a bit of skepticism being expressed by opposition members. Now the SNC also added that they, along with the rebel Free Syrian Army, were ready to comply with the cease-fire if they felt that the Syrian government was sincere and made the first move.

Also, we spoke with a spokesman for the rebel Free Syrian Army in Syria, who told us that they were willing to comply, but they had to see that the Syrian government was serious about this. And they put conditions on adhering to the cease-fire. They said they have to see that Syria really makes the first move, the government.

They also said that they want to make sure that the Syrian government does not use drones to spy on their rebel Free Syrian Army locations during the time of the cease-fire if it actually takes hold, Kristie.

STOUT: So the signals are getting very tentative and talk of a cease- fire aside, the violence drags on.

Tuesday was a brutally violent day, with a bakery shelled in Aleppo.

What can you tell us?

JAMJOOM: This was really a horrific scene as reported to us by activists and eyewitnesses. They said that this was in Aleppo, that a bakery was shelled by Syrian regime forces and that dozens were killed as a result.

It's hard to imagine why a bakery, where people are standing in bread lines, in a city that's been experiencing food shortages since conflict erupted there this past July, why that would be a target, especially when activists insist that it's only been civilians in those areas lining up to get bread.

Nonetheless, we've heard these claims before. In August, Human Rights Watch put out a report in which they said they had credible evidence that 10 bakeries in Aleppo have been targeted by the Syrian regime, that they had been shelled, that many had been killed as a result.

The Syrian regime has not made any comment as to why they might target a breadline. There's only been speculation from some of the activists that we've been speaking with and saying perhaps, perhaps the Syrian government felt that because these were large gatherings of people, maybe they felt that they were rebel Free Syrian Army members out there, trying to plot against the government.

But, again, very, very hard to see these kinds of pictures, this kind of aftermath, when we're told that it's just civilians there, trying to get food for the day, Kristie.

STOUT: So breadlines being targeted in this war, a horrific act of violence.

Mohammed Jamjoom reporting for us, thank you.

Now 3/12 years ago, 300 people were killed when an earthquake struck the Italian city of L'Aquila. But were scientists, who failed to predict the quake, in any way to blame for those deaths? We've got the latest on the prison sentences that rocked the scientific community.

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STOUT: Welcome back. Now seismologists around the world are reacting with anger and disbelief to the manslaughter convictions of six Italian scientists for failing to predict the fatal L'Aquila earthquake in 2009. Two leading government scientists have resigned from their posts in protest over the verdicts and six-year prison terms, which many believe could harm future research into seismic activity.

Ben Wedeman has the story.

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MARCO BILLI, JUDGE (through translator): I condemn you to six years, each one of you.

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Six Italian scientists and a government official sentenced to six years in prison, fined $10 million each. They were accused of fatally misjudging a series of tremors preceding a 6.3 strength earthquake that leveled much of the medieval Italian town of L'Aquila at 3:22 in the morning on the 6th of April, 2009.

The quake left more than 300 dead, more than 1,500 wounded. Linda Vizione (ph) lost her daughter and two grandchildren in the quake.

"Finally, some justice," she says. "I hope this never happens again. This isn't a vendetta, because even they, the accused, have their families. But what we have gone through is just terrible. It never ends. Each day is worse; it has never ended."

The seven defendants, members of a government-appointed commission that studies the risks of natural disasters, will appeal the verdict.

The defendants and their lawyers are in shock.

"It's a sentence I just can't understand," says defense lawyer Alessandra Stefana (ph). "It's a sentence that just doesn't make sense."

Most scientists insist earthquakes are impossible to predict. But in this case, the prosecution accused the defendants of giving incomplete, imprecise and contradictory information and downplaying the risks that a major disaster was about to happen.

The earthquake also highlighted the poor state of Italy's disaster preparedness. Many of the residents of L'Aquila remain in temporary housing.

The implications of this ruling are obviously broad. Anyone in the business of forecasting, be it earthquakes or weather or any manner of natural disaster, may be inclined to predict the worst to avoid spending time behind bars -- Ben Wedeman, CNN, Rome.

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STOUT: You're watching NEWS STREAM. We'll be back right after this.

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STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching NEWS STREAM and these are your world headlines.

Now with just 13 days until the U.S. presidential election, the race is now closer than ever. Today President Obama and Republican Mitt Romney will both be on the stump in Iowa and Nevada. The president will also visit Colorado.

The U.N. Arab League envoy to Syria says Damascus has agreed to a cease-fire during the upcoming Eid al-Adha holiday, but the Syrian government's public position is that the final decision won't be issued until tomorrow.

Lakhdar Brahimi also says that some rebels have, quote, "agreed to the principle of a cease-fire."

Violence has flared across the border between southern Israel and the Gaza Strip. (Inaudible) airstrike on Gaza on Tuesday night killed two people. There were said to be fighters from the military wing of Hamas. In a separate strike Wednesday, two more Palestinians were killed. (Inaudible) took action against the militants after rockets were fired into his territory from Gaza.

The man behind the biggest rogue trading scandal in French history is heading to prison after a Paris appeals court upheld his original sentence. Jerome Kerviel cost lender Societe Generale some $6 billion as a result of risky bets that he made without its knowledge. Kerviel had battled to clear his name but will now serve a three-year term in prison.

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STOUT: Apple has unveiled the long-awaited iPad Mini, the smaller version of the company's tablet. As with most of Apple's recent products, much of the new iPad was leaked in advance, enough that we have an accurate model of the new iPad size. And here it is. As you can see, you can comfortably hold it in one hand. It is significantly smaller than the full-sized iPad, but it's got a less advanced processor than its bigger brother. And the iPad Mini also lacks the newer iPad's sharper screen.

Now Apple has often accused rivals of copying its products. But this time, Apple could easily be accused of copying its rivals. Now months after Apple unveiled the iPad, Samsung showed off this, the Samsung Galaxy Tab, the tablet with the 7-inch screen.

But it's not just Samsung. Amazon's first Kindle Fire had a 7-inch screen, so does Google's Nexus 7, even BlackBerry maker Research in Motion's tablet is 7 inches. And all of those devices are much cheaper than the iPad Mini. Now Steve Jobs actually ridiculed devices like this back in 2010. Jobs called 7-inch tablets, quote, "dead on arrival."

He said this, "This size isn't sufficient to create great table apps in our opinion." (Inaudible) users would need to use sandpaper to reduce the size of their fingers.

Jobs, he passed away one year ago. So you might assume that the project happened without his involvement. But that is not entirely true.

This email was released during the Apple Samsung trial. It suggests that Jobs was quite receptive to the idea of a 7-inch iPad, just month after ridiculing similar tablets. While Apple grabs attention with the iPad Mini, Microsoft is preparing for what could be the biggest day in the company's history.

On Thursday, Microsoft will release Windows 8, the largest upgrade of its Windows software in more than a decade. And if that's not enough, on Friday, they will unveil the Surface, Microsoft's only tablet.

And it comes as Microsoft struggles with its new place in the computing industry. For years, it's been playing catch-up to rivals Google, Apple and Amazon, as they've moved from the desktop to mobile devices and the cloud.

So can Windows 8 bring the magic back to Microsoft? Well, let's bring our regular contributor, Nicholas Thompson. He's the editor of thenewyorker.com.

Nick, good to see you. We know that the company, especially its CEO, Steve Ballmer, they're all fired up about Windows 8. But should they be? I mean, is this a winning product?

NICHOLAS THOMPSON, NEWYORKER.COM: It's a very exciting product. And Microsoft has always been afraid of change. They've always moved too slowly. They've always embraced new trends more slowly than they should have.

Now they're really jumping full in. They have a brand new start screen; it very much feels like a modern, up-to-the-minute design. There are a lot of people who like it. This is a -- there is the potential that this could be a great success.

However, its early reviews have not been that great and a lot of people are confused. So I think they're going to have a tough couple -- they're going to have a -- they're going to have a tough period once people get used to it. We'll know in a few months how successful it's going to be.

STOUT: Now Microsoft is also launching its own tablet. But by building their own hardware, Microsoft (inaudible) competing with their own hardware partners. But is this a necessary move? Or is this a big gamble?

THOMPSON: It's a big gamble. The -- Google has shown that you can -- Google with Android, where they built their own device and they built an operating system which they licensed to other people, who put it on competitive devices, has shown that you can do this, that you can build your own device and not alienate your partners.

Google mostly did that by failing with its own hardware device. If Microsoft is very successful and it takes market share away from its competitors, then there might be a -- there might be a real problem.

I mean, what -- the reason why Microsoft is building its own hardware is that it needs people to write apps for its software. And in order for people to write apps for its software, they need to know that there are devices on which people will be using this.

So Microsoft has tried to sort of supercharge the app development process by building hardware for its operating system. And the hardware, weirdly, for Microsoft, in the early reviews, everybody loves the Surface tablet. They love the hardware. They think it's great and they're perplexed by the software.

So a software company has succeeded in making a device that people really like, but has failed in the software, at least, you know, one minute into this experiment.

STOUT: That's right. There's something wrong with this picture with the software giant.

Now we know that Google has gone after Microsoft in a big way over the years with its operating system and also its Office productivity software, which it gives away for free, mind you. And not many people use Google's spreadsheets compared to Excel. So is the Google threat overstated?

THOMPSON: Well, Google and Microsoft compete in about 100 areas. You know, they compete on search, where Microsoft has gone after Google with Bing and they compete, of course, with Google Docs.

But I think the threat of Google to Microsoft's productivity suite, Microsoft Office, probably isn't that large. I, a couple of years ago, thought it was going to be huge. Why won't people transition to Google Docs? It's just great.

But it turns out it has -- there are a lot of things that Microsoft Office just does really well. They've been churning it out for a long time; it's hard for companies to switch and Microsoft Office maintains its -- maintain its position.

STOUT: Yes, it's incredible. I love using Google Docs, but it's just buried in Google Drive.

Anyway, in addition to Google, in terms of rivals to Microsoft, there's also Apple and Amazon. Now among the three, who do you think is the biggest rival to Microsoft?

THOMPSON: I think the biggest is Apple. I mean, if you look at the growth trajectories of those two companies over the last decade, it's extraordinary. I mean, Apple is now larger than Microsoft was at its peak. Microsoft has been declining.

I think what's happened is Apple has pushed us out of the era where Microsoft thrived, because the PC era, where everybody buys a machine which has the Microsoft operating system and Microsoft software on it, Apple has transformed that paradigm. Sometimes you don't buy desktops.

They're the ones who've moved us out of the desktop era. They're the ones who have moved us out of the Windows operating system era. So all the big changes that have undermined Microsoft have come from Apple. Apple's success has come with the success of Microsoft. So Microsoft and Google fight a lot and they kind of hate each other.

And that's partly just cultural, because a lot of the people who are the top of Google grew up in the late '80s, early '90s, when Microsoft was sort of the evil empire of Silicon Valley, anti-trust trial was going on. So there's more personal animus between those two companies. But actual business competition, Apple's eaten more of Microsoft's lunch in recent years.

STOUT: And what happened to Microsoft over the years? I mean, it seems to be stuck in the '90s, stuck in computing, before the cloud, before social, before mobile, before even search. I mean, what happened? How did it lose the plot?

THOMPSON: Well, I mean, a couple thing happened. One was the anti- trust trial, which really slowed it down. They had to be quite cautious. A lot of their best people spent a lot of time dealing with regulators instead of dealing with invention.

That was a really bad moment. And also, the company was -- it was the evil empire. No one wanted to work for it. So I remember when I was in college, none of my coder friends wanted to work for Microsoft. And those are people who are now successful coders now, and they work everywhere else.

So that's problem number one.

Big problem number two: Steve Ballmer. I mean, he's been CEO for the last 10 years. The stock hasn't moved an inch. He doesn't do a good job. They have -- it's very bad personnel management. They have some very inefficient and clunky systems in the way they determine who gets promoted, who doesn't get promoted, who does well. He's very energetic at times, but he's not a visionary; he's missed everything.

They were building e-books and they shut it down before Amazon started building the Kindle. So he's just made -- I mean, he's not a bad guy. He's just not equipped to be CEO of one of the most important companies in America. And the board can't force him out because he's still friends with Bill Gates. So those two things, I think, are responsible for most of Microsoft's woes.

STOUT: Yes, number of missed calculations over the years. We'll see with Windows 8 if the magic will return to Microsoft.

Nick Thompson, as always, thank you. We'll talk again (inaudible).

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THOMPSON: Thank you, Kristie.

STOUT: Time now for a look at the global weather forecast. And we've got two tropical storms and another in the making.

Mari Ramos joins us now from the World Weather Center.

Mari?

MARI RAMOS, AMS METEOROLOGIST: Hey, Kristie, yes, the weather map is getting crowded in the tropics. Now let's go ahead and start, first of all, a little closest to you, closest to home there in the Philippines. We are starting with this new storm system that has been lingering off the coast and finally did strengthen to a tropical storm.

It has been moving across the Philippines very, very slowly. (Inaudible) starting to pick up a little bit of forward speed and that will help things out here, because it won't keep the rain as long over that same general area. But there's a huge concern here with the threat of flooding and mudslides. So I'm very concerned, anywhere from southern Luzon all the way down, even as we hit into the southern Philippines.

So (inaudible) 166 millimeters of rain. In fact, Luzon, you had 75 millimeters of rain. That's just in the last 24 hours. This is just an example of what's been going on here.

If you're in these areas, you know, send us your pictures. Go to iReport. We want to know how you're dealing with yet another storm system, more flooding and rain which, of course, never, ever put yourself in danger when you're taking those pictures or video.

I want to show you what we're expecting with this storm. Right now, winds close to 65 kph. That is, of course, a concern. The track continuing to move across the Philippines and moves into the South China Sea. When that happens, guess what? We're probably going to see some strengthening with this storm. But for now the main concern is of course, the rain that continues to affect most of these areas.

And look at that. Some localized areas, up to 25 centimeters of rain possible. So we're really looking at a huge potential for flooding. And notice how that spreads all the way down, even down over into Divau (ph), we're going to see some very heavy rains.

There's the storm continuing to track along the South China Sea, possibly headed anywhere from Vietnam to Hainan. So there's a huge margin of error here that we could see, but definitely something we need monitor closely once it moves back out over the water.

There's another storm right over here. This is tropical cyclone that is in the making. This is in the Arabian Sea. Here's India, there's Oman, there's Yemen, there's Somalia.

Whether or not this develops, the threat for rain is going to be the main concern, very busy shipping channel here as well, of course, and that's going to be impacted somewhat by the high waves from this. But we're not expecting huge delays and anything like that.

And the last time I want to talk to you about is what's happening here in the Caribbean, Tropical Storm Sandy nearing hurricane strength, winds right now close to 113 kph. It is expected to continue tracking north. It's just now beginning to get close to Jamaica, the airports there, the major airports already closed.

The rain spreads farther to the south; we're even seeing some wraparound rainfall coming around parts of Central America. But the main threat for rain is going to be over Jamaica, Haiti, Cuba; eastern Cuba and Jamaica have hurricane warnings. But then look at that. The storm heads across the Bahamas, tropical storm warnings there and tropical storm watches as far north as south Florida.

So there's a lot going on and we'll keep you posted.

We'll take a break right now, though, right here on NEWS STREAM. Don't go away. More news in just a moment.

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STOUT: Now in Russia, the opposition is practicing what it preaches and has democratically elected leaders to front the right for free and fair elections. Now tens of thousands of Russians cast ballots.

Phil Black reports.

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PHIL BLACK, CNN CORRESPONDENT (voice-over): Lyubov Sobol is a 25- year-old Russian lawyer, who says she's taking part in something her country hasn't experienced for a long time.

LYUBOV SOBOL, RUSSIAN LAWYER: The issues (ph) are clear and legal election in modern Russia.

BLACK (voice-over): Sobol is one of more than 160 candidates who have been campaigning and debating for a place on a new coordination council, a body that promises to lead the fight for greater democracy in Russia.

SOBOL: We need to be opposite to our parliament and make some reforms.

BLACK (voice-over): What Sobol calls an opposition parliament, of course, doesn't have any legislative authority but hopes to be a shadow government. It's a product of Russia's recent protest movement that have held regular mass rallies against the ruler, President Vladimir Putin. But they haven't changed anything.

So the movement's leaders are now trying to build their own small, credible democracy to show there is an alternative. It was Leonid Volkov's job to run a fair, cheat-proof voting system.

LEONID VOLKOV, ELECTION ORGANIZER: So we have a convergent voting so the (inaudible) both electronic and offline as of we just quite a technical challenge.

And we have (inaudible) voting.

BLACK (voice-over): The election took place over the weekend. The few polling stations were busier than expected because organizers say their website experienced repeated denial of service attacks. More than 80,000 people voted and the results were broadcast live online.

UNIDENTIFIED MALE: (Speaking Russian).

UNIDENTIFIED MALE: (Speaking Russian).

BLACK (voice-over): The clear winner, with more than half the votes, was anti-corruption crusader Alexei Navalny. The top five also included writer Dmitri Bykov, former world chess champion Garry Kasparov, leading activist Ilya Yashin and Ksenia Sobchak.

BLACK: Are you surprised at how well you did?

KSENIA SOBCHAK, CANDIDATE: Well, I wouldn't be modest today I would say no.

BLACK (voice-over): Sobchak is a TV celebrity and the daughter of Vladimir Putin's political mentor.

BLACK: What is your priority now in terms of strategy, in terms of what you would like the council to address?

SOBCHAK: Well, I would like to form a real platform for discussion of political reform, of judicial reform and I think that real work would take place, because protests are not what really is effective now.

BLACK (voice-over): Lyubov Sobol also won a place on the 45-seat council, with more support than some high-profile activists.

BLACK: Now the hard work must start.

SOBOL: Yes, now hard work begins and I think that we try to make something real of work together.

BLACK: There is little reason to believe the Kremlin will treat this shadow government with any respect, just because of its democratic credentials. The first big challenge for the coordination council will be dealing with a recent legal crackdown against members of the opposition.

At least 12 people who have just been elected to this new body are already being targeted in various criminal investigations -- Phil Black, CNN, Moscow.

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STOUT: The Champions League holders were left feeling blue after their trip to the Ukraine on Tuesday. Amanda Davies joins me now. She's got the details.

Amanda?

AMANDA DAVIES, CNN CORRESPONDENT: Hi, Kristie, yes. The actual Wednesday certainly has some ways to go to compete with the drama of Tuesday night in the European Champions League. We'll look back in a second. But in terms of Wednesday, it's going to be all eyes on Group D once again, as Manchester City travels to Ajax, needing a win against the Dutch side.

And Borussia Dortmund boss Jurgen Klopp admits that his team will certainly have their work cut out against Real Madrid, although (inaudible) side have only won once in 23 attempts on German soil.

In terms of what happens on Tuesday, the Chelsea boss Roberto Di Matteo says his side must win their two remaining home games now in the Champions League after they were beaten by Shakhtar Donetsk on Tuesday night, and that leaves the defending champions on the verge of failing to make it out of the group stage.

The Ukranians really outplayed Chelsea, taking the lead through Brazil's (inaudible) after just three minutes, Captain John Terry, of course, had been the focus for Chelsea prematch just days after being fined by his club for racist abuse. But with Frank Lampard limping off injured and Fernandinho's second goal ensuring a 2-0 win for Shakhtar, his side has bigger problems now.

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ROBERTO DI MATTEO, CHELSEA MANAGER: We need to win our next -- our two home games remaining for sure. I think consolation tonight is that probably (inaudible) Denmark. That just shows how the Champions League is very competitive competition. But certainly we have to win our home game against Shakhtar.

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DAVIES: (Inaudible) for Manchester United is that they would have fancied their chances ahead of their match against Braga. There's still (inaudible) game where (inaudible) to pick up three points pretty easily. They did get the points certainly took the scenic route to get there. The Portuguese side stunning the (inaudible) crowd with two goals inside 20 minutes.

Alan (ph) got both of them, but United did recover and ran out winners, thanks to two goals from Javier Hernandez and one from Jonny Evans. (Inaudible) scratching his head after that one. The biggest shock of the night, though, almost came in Spain, where Barcelona approached halftime trailing to Celtic.

They did go into the break on level terms, thanks to a brilliant goal that was finished by Andres Iniesta, but it looks as though they were going to have to settle for that point until in the fourth minute of stoppage time, Jordi Alba popped up to take the three points of Barcelona. So heartbreak for the Scots.

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JAVIER MASCHERANO, BARCELONA MIDFIELDER (through translator): There have been several games in which we have scored in the last minutes. That is something that gives an extra value to the team. We have the brains to keep on going. We could have given up and kept the 1-1 and started fooling around, but we didn't.

ALEX SONG, BARCELONA MIDFIELDER: (Inaudible) on tonight (inaudible) as well (inaudible) can win anytime and (inaudible) worry about what's happened.

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DAVIES: Now (inaudible) of the season ending WTA toward championships in Istanbul and Petra Kvitova has been forced to pull out, suffering a virus. She was beaten, you may remember, in her opening match yesterday and cast a seriously emotional figure in her postmatch press conference. But she's decided enough is enough, and she's now been replaced by Sam Stosur.

The tournament goes on, though. Serena Williams is back in action later on against Li Na, and she'll be looking to build on her easy first match victory. She frankly brushed past Angelique Kerber in straight sets in her first match since her victory at the U.S. Open. She says she's become sick of the sight of the practice courts in the last six weeks and bludgeoned her way to a 6-4, 6-0 win. (Inaudible) 26 winners along the way.

Certainly the player to beat for this week in Istanbul. Back to you, Kristie.

STOUT: Amanda Davies there, thank you.

You're watching NEWS STREAM. And still to come, it is now a 50-year franchise. The new James Bond movie "Skyfall" premieres London. You'll meet the stars on the red carpet.

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STOUT: Welcome back. Now 50 years and 23 movies later, the James Bond film franchise is still going strong. And on Tuesday night, the current 007, Daniel Craig, walked the red carpet in London at the world premiere of "Skyfall."

As Neil Curry reports, Craig's third outing in the iconic role is being hailed as one of the greatest adventures to date.

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UNIDENTIFIED MALE: Murder?

"JAMES BOND": Employment.

UNIDENTIFIED MALE: Skyfall?

"BOND": Done.

NEIL CURRY, CNN CORRESPONDENT: The last time Daniel Craig was seen in the presence of royalty was at the opening ceremony of the Olympic Games, an encounter which apparently ended with the Queen parachuting from a helicopter.

CURRY (voice-over): But her son, Prince Charles, kept his feet firmly on the ground on Tuesday evening, as he accompanied the Duchess of Cornwall to the world premiere of Craig's new film, "Skyfall," the 23rd official Bond movie.

"BOND": Some men are coming to kill us. They're going to kill him first.

CURRY (voice-over): Director and cast walked the red carpet at the Royal Albert Hall in London, buoyed by the wave of critical approval, but also with a sense of occasion worthy of Bond's 50th anniversary.

DAME JUDI DENCH, ACTRESS: Ian Fleming left us an endearing and enduring hero who is really essentially British. And maybe that's what this -- you know, all this (inaudible) fast cars and beautiful women, I think, I think (inaudible) maybe for another 50 years, who knows.

CURRY: People's perception is that "Casino Royale" raised the bar on Bond movies, and there's a similar feeling about this movie as well. Do you share that?

DANIEL CRAIG, ACTOR: I, as an actor, that's why I want to do every time you make a movie, you always try and make the best movie you can. You know, this was a long -- you know, it was a collaborative process. We got, you know, the best people we could for the job and you just hope for the best.

UNIDENTIFIED MALE: (Inaudible) you're not ready (inaudible) you will likely die (inaudible) was very bad.

CURRY: You yourself have brought a unique take to the Bond villain. What are the key ingredients in your mind for a Bond villain?

JAVIER BARDEM, ACTOR: You have to be theatrical in some way. A Bond villain is between reality and fiction. So you have to be grounded but at the same time you can -- you are free to go a little bit out there.

SAM MENDES, DIRECTOR, "SKYFALL": I'm honestly more nervous, seeing all these people here tonight, you know, than I was making the film, because you're in such a tunnel when you made the film. You're so obsessed with detail and making everything work that you really can't -- you don't have time, almost, to think about what people are going to think.

"BOND": 007 reporting for duty.

CURRY (voice-over): Audiences in most parts of Europe and the Middle East will be among the first to see "Skyfall" this weekend. But Bond fans in Germany, India, China , Japan and the Americas will have to wait until November for a chance to experience Bond's latest mission -- Neil Curry, CNN, London.

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STOUT: And, finally, when you have children you need to entertain over the weekend, there's no safer bet than the movies or -- you would think. Now British media report some moms and dads in Nottingham, England, drove their kids to a local cinema on Saturday morning, expecting to be treated to this:

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UNIDENTIFIED MALE: All right, animals. You may be our new owners, but we don't want to reinvent the circus wheel here. So just go out, do what you do. The fun warm-up for that promoter --

STOUT (voice-over): Yes, that would be family from the animation threequel, "Madagascar 3: Europe's Most Wanted." But after a mix-up, the parents' most wanted may have been the theater projectionist, because this is part of the film that actually rolled.

UNIDENTIFIED FEMALE: Mom, I don't think it was an accident.

STOUT (voice-over): This is "Paranormal Activity 4," and the opening scene, it features a corpse hurtling toward the camera. Now (inaudible) greatest fear was that their beloved cartoon animals would not get back to Central Park, they probably now have other things keeping them awake at night.

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STOUT: And that is NEWS STREAM. But the news continues at CNN. "WORLD BUSINESS TODAY" is next.

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