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QUEST MEANS BUSINESS

Road to Rejuvenation; Ford's Strategy; Mulally Says No Change in Plans to Stay at Ford; Microsoft Earnings; Donuts and Coffee; Twitter Prices IPO; US Stocks Close Higher on Upbeat Earnings; European Markets Up; Ericsson Shares Slump; US-EU Trade Deal Threat; Spanish Recovery; NFL in Europe; Make, Create, Innovate: Clean, Green Energy

Aired October 24, 2013 - 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)

MAGGIE LAKE, HOST: A bounce on the markets as China and earnings give Wall Street its wings. It's Thursday, October the 24th.

Tonight, Ford goes forth with its 17th quarterly profits.

Unemployment falls as Spain's recovery hopes rise.

And iPad, iPhone, Icahn -- the activist investor takes aim at Apple's board.

I'm Maggie Lake, and this is QUEST MEANS BUSINESS.

Hello and welcome. Tonight, as Ford Motor Company proves it's back in good health, we look at the company which may be Alan Mulally's next patient: Microsoft. Both firms put out their latest results today. Ford reveals how far it's come. Microsoft may tell us just how far it has to go.

Both of these companies are in the midst of a turnaround. Ford, led by Mulally, made a profit overseas for the first time in two years, and it looks like it's about to stop bleeding away cash in Europe. Overall, this is the firm's 17th straight quarter of growth. Pretax profit is up 19 percent from a year ago to a record $2.6 billion.

We'll bring you the numbers from Microsoft when we get them. The firm launched a massive internal overhaul in July, and it's looking for a new CEO.

Ford's CEO, Alan Mulally, will likely get the credit for today's strong numbers. He was brought in to overhaul the automaker in 2006, steering it back to profit from the brink of bankruptcy. Ford used to lag behind its rivals in Asia, and now, that's an area of strength. I asked Ford's chief financial officer, Bob Shanks, what's changed?

(BEGIN VIDEOTAPE)

BOB SHANKS, CHIEF FINANCIAL OFFICER, FORD: What we're starting to see is the payoff from the huge investments that we've been making over the last number of years, particularly in China. And that's really flowing through to the bottom line.

The customers are responding as we continue to roll out new products and expand the portfolio. The most recent one being the new Mondeo, which is the Fusion here in the US. We just launched that in August, and we've got a strong order bank. And it's just paying off, all those investments, and we're very, very pleased about that.

LAKE: Another area that has been a weak spot, of course, is Europe. The situation there, the economy's under pressure. Are we starting to see things bottom out? We hear a lot about the fact that maybe Europe's turned the corner. Do you see that?

SHANKS: We do actually think that both the industry and the economy have stabilized and are poised for very, very modest growth in the near term. So actually, I think that's what lies ahead. In addition, all of the various elements of our European transformation plan that we announced back in October of last year, the team over there is just delivering on every single aspect of it.

LAKE: In Europe, I know, a lot of your smaller vehicles are where you see a lot of traction. Here in the US, it seems to be really rolling back to trucks -- pickup trucks, trucks a big source of strength. Is that tied to the recovery in housing, and if so, does that leave you vulnerable if that stalls out?

SHANKS: We're seeing strong growth in what we call our super segment vehicles. That would be Fiesta, Focus, Escape, C-MAX, Fusion. We're seeing very, very strong growth in that, particular on the west coast and the east coast and the southeast, where traditionally we're not as strong as we are in other parts of the country. So, we're seeing very, very strong growth there.

We are seeing growth in F-Series, particularly in the F150. We've had a share improvement over the past year, and we're seeing growth in the segment itself for the reasons that you've mentioned, which is around housing and the energy sector.

So, all of that is working to contribute to our overall growth and our bottom line results, and we think that there's more yet to come from both of those parts of our business.

LAKE: And finally, Bob, Alan Mulally has been such a high-profile CEO for you. He's really led the charge in turning Ford around. We know one way or another in 2014, he's going to be leaving his post. Whether he goes to Microsoft or not, he's going to be leaving. Can this success continue with a change at the top?

SHANKS: Well, what we're working to is a plan, and we've got the whole organization around the world focused on and aligned around delivering what we call the One Ford Plan. Alan is a fantastic leader and a great individual, a great person, love working with him.

But we're all working on the plan that he's helped us put together, and we've got a great team around him. So whenever he leaves or any other members of the senior team, very, very confident about the future of Ford because our plan is so robust and we're executing it so well.

(END VIDEOTAPE)

LAKE: Now, that's what they say, but those Microsoft rumors just won't go away. I do want to let you know, we are still waiting to hear what Microsoft's results were, they're after the bell, they're due out any minute. We will bring them to you as soon as we get them.

But this really is a tale of two companies, Microsoft on the one side, Ford on the other, that's already turning around. That's why Alan Mulally's name keeps coming up. And despite what you just heard, many do believe that he may be the man destined to take the place of Steve Ballmer at Microsoft. Richard Quest takes a look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ladies and gentlemen, Steve Ballmer!

(CROWD CHEERS)

RICHARD QUEST, CNN INTERNATIONAL (voice-over): When it comes to Microsoft, Steve Ballmer is passionate.

STEVE BALLMER, CEO, MICROSOFT (shouting): Come on! Thank you, thank you, thank you!

QUEST: Some might say too passionate.

BALLMER: You work for the greatest company in the world!

(CROWD CHEERS)

BALLMER: Soak it in!

QUEST: Microsoft is indeed a world-class company, and thanks to Windows and Office, a money-making machine. The critics, however, say Ballmer has failed to respond fast enough to competitive threats, especially from mobile technology. And they believe new blood is needed.

ADAM HANFT, BRAND STRATEGIST, HANFT PROJECTS: They need fresh thinking, an outsider, somebody to really shake things up, stir the pot dramatically and really reinvent the company.

QUEST: To find the perfect replacement for Steve Ballmer, you might want the genius of Steve Jobs, the software expertise of Bill Gates, the vigor of Marissa Mayer, and the vision of Elon Musk.

QUEST (on camera): As the Microsoft board pores over potential candidates, ironically, the best person may not come from tech at all. This man's CV seems to rise to the top: Alan Mulally.

QUEST (voice-over): The epitome of the loyal company man, Alan Mulally has worked for just two firms in his 43-year career: Boeing until 2006; until now, Ford. Alan Mulally is an experienced corporate executive, and speaking to CNN this week, he kept his future plans quiet.

ALAN MULALLY, CEO, FORD: I'm very, very happy serving at Ford. We have no plans that are different than that.

QUEST: He's coy. Those who've followed Mulally believe he's enjoying every minute of this attention.

MICHELINE MAYNARD, AUTO INDUSTRY WRITER: To be at his point in his career, age-wise and seniority-wise, and have a tech company coming after you, that's pretty flattering for a modern-day CEO.

QUEST: Alan Mulally is far from the only name that's surfaced. Others mentioned include eBay's John Donahoe, Oracle's Mark Hurd, and the former Nokia chief exec Stephen Elop. The common view is if Mulally wants the job, it will be tough to turn him down. From aircraft to cars to computers, this boardroom legend might have one more corporate challenge left in him yet.

Richard Quest, CNN, New York.

(END VIDEOTAPE)

LAKE: Microsoft's first quarter numbers are out. EPS 62 cents versus an estimate of 54 cents, so handily beating the street. Record revenue of $18.53 billion, shares are up 5 percent in after hours, and in their press release, Microsoft says "robust enterprise sales as well as improving consumer demand" is driving that broad-based growth.

Again, these are the numbers from the company. We'll have to see what the analysts, how they break it down, but at least initially in premarket - - post -- after the close, rather, they are trading up some 5 percent.

We also have earnings from Dunkin Brands, the firm behind the donuts and Baskin Robbins ice cream. Sales at the established Dunkin Donuts stores in the US were up 4.2 percent in the third quarter, it's stronger than analysts expected.

That was sugar-coated bit, but just like the famous confectionery, which we have some in the studio, there's a little hole in the books. The company wrote down $3.7 million related to a joint venture in Spain. Nigel Travis joins us, he is chairman and CEO of Dunkin Donuts.

Nigel, I'm not going to indulge in cookie. I will have a little bit of coffee with you, though, because I'm feeling tired at the end of this day.

NIGEL TRAVIS, CHAIRMAN AND CEO, DUNKIN BRANDS GROUP: I've heard. Cheers.

(LAUGHTER)

LAKE: You've got yours as well. Talk to me a little bit about that write-down. Since we just mentioned it, we should give you an opportunity to tell us what was happening there. What happened in Spain?

TRAVIS: Well, actually, Spain is an interesting case. We invested just about a year ago into Spain. Our franchisees there have gone on an expansion -- movement, and obviously, the Spanish economy got rather tough.

LAKE: Yes.

TRAVIS: They had a few other concepts, so we decided it was a great opportunity to go in and support them. We also saw some supply chain synergies because we're now changing our supply chain in Europe. It was a very strategic investment, it was one that we're pleased to make. We're very optimistic about Spain in the future and, indeed, we're very optimistic about Europe as a whole.

LAKE: So, interesting, investing for the longterm when a lot of people think maybe they see, finally, the bottom in and certainly a turn. We'll see if that pays off for you.

Here in the US market, you have more customers coming through the door. That's good news. Are you stealing them away from the competition, or is this a case of a rising tide lifting all boats?

TRAVIS: Well, I think it's interesting. I think clearly we're taking some people away from the competition, because if you look at quick-service restaurants overall, the numbers are essentially flat. So clearly, we've picked up some share.

But I think what happens with our brand is we're all about value, we're all about speed, we're all about variety. We have a great series of breakfast sandwiches, we have a great number of beverages, be it ice coffee, be it our Coolattas, be it our hot coffee, and of course, our donuts.

So, I think we've got a variety that really appeals to consumers in the morning and snacking throughout the day. So, we're picking up share, we're probably taking some customers away from some of our prime competitors, but at the same time, I think people are grazing more and more, and that's certainly a big trend.

LAKE: Yes -- Nigel, I think we've got some news coming in. Do we want to do that now, the -- yes. OK, sorry, Nigel, just hang with us right for a second. $17 to $20 is --

TRAVIS: Sure.

LAKE: -- the price we're hearing for the Twitter IPO. As we know, that's watched very closely, one of the biggest-anticipated IPOs of the year, perhaps. Interesting to see how it'll fare after Facebook, which was the last one. So Twitter, now, looks like that price range is going to be between $17 and $20 a share, at least for the pricing.

Nigel, I'm going to see if we're going to come back to you. Right now, we want to go straight to Alison Kosik, who is standing by at the New York Stock Exchange. Earnings a big catalyst for the stock. Alison, we just had that Twitter pricing range coming into us. What's the initial reaction? Does it seem low, high? Was it where it was expected?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right where it was expected. I think you're certainly going to see the folks here at the New York Stock Exchange get excited about Twitter listing here at the New York Stock Exchange.

A trial run is going to be happening here, actually, on Saturday, where the New York Stock Exchange is actually going to be putting all its systems to work as if Twitter is going public on Saturday, so they're trying to make sure that they dot their Is and they cross their Ts for when Twitter actually makes its public debut, right here where I am at the New York Stock Exchange.

As for today, it looks like the bulls were certainly running on what was a very busy earnings day with hundreds of companies reporting. It was earnings that ruled the day. Heavyweights 3M and Ford getting a thumbs-up on their earnings.

Throw in the data from the labor department, weekly jobless claims falling, although Wall Street looking for a bigger drop. One analyst putting it this way, saying that the market loves getting these numbers that aren't too bad and aren't too good, either, since the lack of clarity means the Fed is less likely to pull back on that stimulus. Maggie?

LAKE: Oh, we're back to Goldilocks. I thought we'd put that to bed, Alison.

KOSIK: Never.

LAKE: I do know, it's not just the earnings, is it? A lot of the companies, or at least some of them that are causing investors to react are also upping their guidance for the year. I'm sure that's weighing in here.

KOSIK: It is, because this is exactly what you want to see, because a lot the companies have been much more dour about guidance. Yes, today's basket of earnings was certainly more on the favorable side.

LAKE: All right, Alison Kosik for us at the New York Stock Exchange. Thank you, Alison. European shares climbed higher today. All major markets ended the session higher, with Frankfurt's DAX the strongest performer in the region, Daimler up more than 3 percent on strong Q3 earnings.

HSBC, China PMI indicates growth, that beat expectations. As you can see, a pretty decent day. Not quite the gains we're seeing here in the US, but up across the board.

In Stockholm, shares in Ericsson dropped sharply after the firm reported weaker-than-expected third quarter profits. Sales in the US and Japan were slow despite an uptick in Europe. Jim Boulden spoke to Ericsson CEO Hans Vestberg about the results.

(BEGIN VIDEOTAPE)

HANS VESTBERG, PRESIDENT AND CEO, ERICSSON: If you look at the pattern here, we have basically flat between Q2 and Q3, and that we're actually calming down in the third quarter, but of course it depends very much on the best mix.

Now, we had the $53 billion Swedish krona sales with 3 percent growth with the currency adjusted in this quarter.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I noticed in some places, like India, northeast Asia, as you say, down strongly. Is that a blip for the third quarter, or is there something going on there?

VESTBERG: It is something going on. In India we have been down for quite a long time because the infrastructure investments in India has not been happening due to regulatory issues and also the situation in India. So, that's nothing new.

In the northeast Asia, it's the same thing. It's nothing new, but it's very different. In China, the 2G investments are for structure reasons. Stop them right now, and they will go to 4G. In Japan, we have the currency, the yen against the Swedish krona, is making us come down quite dramatically. But also a little bit less of activities on the large project.

(END VIDEOTAPE)

LAKE: Spain's economy is mending slowly. Half the young people in the country still don't have a job. We'll hear from one CEO who says the recession may have been a good thing. That story just ahead.

(COMMERCIAL BREAK)

LAKE: Some news just into CNN. Twitter has set the price for its IPO between $17 and $20 is the price if you're interested.

German politicians have threatened to delay free trade talks with the US over the latest spying allegations. German chancellor Angela Merkel said trust between Europe and America must be reestablished after claims US National Security Agency eavesdropped on her cell phone.

The White House has denied that. Some lawmakers in Germany say trans- Atlantic talks shouldn't go ahead without assurances from the US about privacy.

Unemployment is down in Spain. It's a further sign the country is emerging from years of recession. The jobless rate edged lower to 25.98 percent. That still sounds painfully high, but it is the lowest level in a year. More than half of all young people in the country are still without a job.

Next week, the government will announce GDP numbers. The Bank of Spain just yesterday predicted a small return to economic growth in the quarter after two years of recession.

There's no doubt Spanish businesses have been hurting over that time, but one CEO says the recession was helpful to some companies. Al Goodman spoke to Ana Ugidos, the chairwoman and CEO of BTSA, a Spanish biotech company. Listen to her reason why.

(BEGIN VIDEO CLIP)

ANA UGIDOS, CHAIRWOMAN AND CEO, BTSA: I think it was a good thing, the recession, for some of the companies that I'm in touch with. It was a good time to stop and think about the future and to organize the growing of the company. And sometimes we don't have the time to do that.

AL GOODMAN, CNN MADRID BUREAU CHIEF: The government predicts recession this year, very slow growth, less than 1 percent next year, then in 2015, 1.3 percent. With those kinds of numbers, is Spain really recovering from the economic crisis?

UGIDOS: Absolutely. I'm still a believer in my country, and I'm still investing in my country. And I really believe that our country, as well as the whole European community, it will grow. It will grow in the future.

(END VIDEO CLIP)

LAKE: The NFL is also betting on Europe. Today it announced three more games in London next year on top of this weekend's game between San Francisco and Jacksonville. The Jaguars' owner, Shahid Khan, runs the English football club Fulham. He says if the two sports collide in the US, there's only going to be one winner. Alex Thomas asked him if a winter World Cup could ever compete with the NFL.

(BEGIN VIDEOTAPE)

SHAHID KHAN, OWNER, JACKSONVILLE JAGUARS: Let me put it this way: NFL is very powerful in America, and unless you are in the US, you really don't comprehend that. So one of the reasons I've been enthusiastic about doing what we're doing in London is that I think NFL has very little room to grow in the US: 25 of the 25-highest rated programs this year are NFL shows on television.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: So, why is this important?

KHAN: I think it's important because anything that goes up against NFL in the US has a huge challenge. So, if I would be looking at that very carefully that you're not going to reach the highest audience if you are going head-to-head with the NFL.

THOMAS: What's the end game for the NFL's expansion? How far is it going to go?

KHAN: The end game is to really find out what the appetite is, what the passion is in the fans. Is it really one of those circus coming to town every year, everybody goes, sees, enjoys. Or is there roots here that they can support more games on a -- just a regular basis.

THOMAS: What's your feeling? Do you think that there could be a permanent overseas franchise?

KHAN: Well, I think it's too early, quite frankly. It's too early. This year, there were two games. Next year, there's going to be three games. And so we want to see how it goes.

THOMAS: You're a really popular character and figure in sports, now, on both sides of the Atlantic. Tell us a bit about your background. Obviously, born in Pakistan, a self-made success story as a businessman in the United States. Could you sum up the secret to your successes?

KHAN: Well, I think first of all, only in America. I think what happened to me wouldn't have happened in Pakistan. In all likelihood, no other country other than the US because hard work is appreciated and the status quo doesn't exist.

I started in a factory about the size of this locker room, basically two employees, that was in 78. And we've had a lot of growth since then, and it's -- and it happened once I discovered that I've got to have people much smarter than I am making some of the bigger decisions.

(END VIDEOTAPE)

LAKE: One man's waste is another man's energy. A Danish engineer and his plans to create clean, green energy.

(COMMERCIAL BREAK)

LAKE: The United Nations chief has wrapped up a visit to Copenhagen by launching a hub dedicated to energy efficiency in the Danish capital's UN building. Ban Ki-moon says access to clean energy will be critical for eco-friendly development around the world. One Danish engineer has plans to do just that, turning green waste into energy.

(BEGIN VIDEOTAPE)

JENS DALL BENTZEN, DALL ENERGY: All of this waste, which people drop off, they call it waste, I call it energy.

NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Jens Dall Bentzen is a Danish engineer and biomass is his passion.

BENTZEN: Biomass is a very unique renewable fuel. It's taking leftovers from forestry or farming and taking these leftovers and the energy in it, we use it for people's houses or for industries.

GLASS: Biomass power involves the breakdown of vegetation, like leaves and wood, to produce gases like hydrogen and methane that can be burned to heat water, for example.

BENTZEN: What's unique about biomass is that you can store it. Wind and solar, you never really know when the wind is blowing. With biomass, we have the control to use it when we need it.

GLASS: But the problem with existing biomass power plants like this is they need the greenery to be dry. In other woods, wood chips or straw. Bentzen came up with a solution: a new kind of furnace.

BENTZEN: The main invention in this system is the furnace. When you burn biomass, it has a lot of moisture. This moisture represents energy, which is normally not extracted. But we have a system to extract this energy and make it into hot water. So, we can make 20, 30 percent more energy than a normal system.

We can take moist and dry fuel, we can even take very moist, up to 60 percent water, and it can have little particles, big particles. It's very robust in terms of the types of biomass we can feed into it.

This pile of waste consists of branches, apples, flowers, whatever. Leaves. I'll estimate this will heat up a town of 10,000 people for three, four, five hours on a cold winter day.

GLASS: The Danish government is backing his company, Dall Energy, providing 50 percent of his start-up costs back in 2007.

MARTIN LIDEGAARD, DANISH CLIMATE AND ENERGY MINISTER: Wind is the resource we have most of in Denmark, but we need the biomass and we need the biogas to have the backup to when the winds stop blowing, and that's why we are putting our efforts both in wind, biomass, biogas, and so on.

GLASS: With this financial support, Bentzen has been able to open a Dall energy plant here in the Danish town of Bogense, providing heat and hot water to its 6,000 residents. It's one of just three in the world.

BENTZEN: We are only the beginning now, and I look very much forward to go global with this and also to have this system in different scales.

GLASS: Bentzen is well aware of the drawbacks of this technology: the high capital costs of building plants.

BENTZEN: The system costs around $5 million, $10 million, so it's a competition about a cheap fuel with a high capital cost against a more expensive fuel with a low capital cost.

GLASS: So, will the world catch on?

BENTZEN: Sometimes I get ideas, a lot of people say this is crazy, and I don't really give up that easily. And sometimes they are crazy. I'm an engineer, and I like to think of things to work well, and if they don't work well, I can't help trying to think of a way to make things work better.

(END VIDEOTAPE)

LAKE: Carl Icahn is telling Apple to get on with buying back its shares. The activist investor is warning Tim Cook to act now or pay later. We'll look at Carl Icahn's latest tactic when we come back.

(COMMERCIAL BREAK)

MAGGIE LAKE, BUSINESS ANCHOR AND CORRESPONDENT FOR CNN INTERNATIONAL: Welcome back, I'm Maggie Lake. The headlines this hour. Germany says the U.S. must now reestablish trust among its European allies after the latest allegations of U.S. spying. Chancellor Angela Merkel says that if claims the NSA eavesdropped on her mobile phone conversations are true, it is completely unacceptable.

A U.S. official says two men have been abducted from their ship off the coast of Nigeria. The captain and chief engineer were seized when their oil supply vessel came under attack on Wednesday in the Gulf of Guinea. Police in Portugal have reopened their investigation into the case of Madeleine McCann. The three-year-old British girl disappeared from a Portuguese resort town six years ago. Portuguese and British police are chasing fresh leads.

In Australia, a pilot has died after his water-bombing plane crashed as he tried to battle the bushfires. More than 60 wildfires are still raging in the state of New South Wales, but officials say the immediate danger is over. France's footballers are set to go on strike in protest at new tax laws. President Francois Hollande has proposed a new income tax rate of 75 percent for the country's highest earners. That would include many of the league (inaudible) players. The strike has been called for the last week of November. Let's get to more details on the breaking business story. This hour, Twitter has set the price range for its IPO on the New York Stock Exchange. Alison Kosik is there for us. Alison, $17 to $20 is the range. Given the huge amount of interest that this stock is likely to generate, it seems like it's a little on the low side. What are you hearing?

ALISON KOSIK, BUSINESS CORRESPONDENT FOR CNN: You know it depends on who you talk to. Some analysts say it's a little above. One trader that we just talked with said this is priced beautifully, that he expects the -- once the thing starts trading to actually move higher because he says there's going to be massive interest. So he actually thinks it's priced right where it needs to be. It's interesting because you look at the paperwork that was filed. Twitter is saying that its user base is growing -- that's a good deal, it says its mobile business is growing -- something that really needs to happen because everybody really accessing Twitter is accessing Twitter on mobile devices. In this IPO, though, you have to remember that that $17 to $20 range is going to be revised several times especially after the road show, and it can be revised all the way up until the night before Twitter makes its public debut which we're hearing could happen as soon as November 4th or maybe even the week of -- the week of November 4th or maybe even the week of November 11th. Twitter is looking to raise $1.4 billion in this offering. Maggie.

LAKE: It's very tricky, isn't it? Because that price is the price that sort of insiders are going to get -- favorite institutional clients. The rest of us are going to have to settle for where we're able to buy it the first day it starts trading.

KOSIK: Right.

LAKE: So if you price it, yes, you want to see a rally, but if you see too much of a rally, they're going to be cries that the little guy's getting screwed and/or that the company left too much money on the table -- that they could've raised more capital. I'm wondering how much, Alison, that the shadow of Facebook is hanging over this, because there was so much controversy, not only on where it was priced, but also the glitches on the first day of trading.

KOSIK: The shadow may be there, but I think the sun is coming out for this social media web site, and here's why. Because Twitter's not going to be listing at the NASDAQ, where Facebook listed, and NASDAQ pretty much messed up that public debut of Facebook. So, yes, Twitter is -- they're trading under the ticker symbol TWTR -- it's going to be right here at the New Stock Exchange. Kind of a snub to the NASDAQ when the New York Stock Exchange won this listing. In fact, the New York Stock Exchange is getting so serious about this, that this Saturday, they're going to have a dry run of what it's going to look like when Twitter goes public here. So, they're going to have all the systems up and running on a Saturday, calling people in to go ahead and give this thing a dry run, just to make sure their I's are dotted and their T's are crossed. Because what happened with Facebook -- who could forget? The most hyped IPO in such a long time, going public at $38, falling after that, and only recently it's been over $50, so it was really a rough start for Facebook. Twitter clearly not wanting to even come close to you know getting close to possibly messing up and so deciding not to go with NASDAQ, and going here with NYSE. Maggie.

LAKE: All right, well we'll see if officially those individual investors are willing to take a (punt) given what happened last time. It's going to be such a fascinating one to watch. Alison Kosik for us at the New York Stock Exchange.

KOSIK: Sure.

LAKE: The iPad, the iPhone -- you know them well. Now Apple has to contend with another 'i' -- the Icahn. Activist investor Carl Icahn has written to Apple's CEO Tim Cook demanding that the firm spend $150 billion on backing back its own shares. Now, Apple is already spending $100 billion to do just that, but Icahn says it's too little and it could soon be too late. He says the shares are undervalued and blamed the board's lack of investment experience for not seizing the opportunity to get their hands on them.

He writes, "In my opinion, any further delay in executing the buyback we hereby propose will reflect the lack of expertise on the board." Icahn warns that this opportunity will not last forever. Now, he controls just half of 1 percent of the company's outstanding shares, but Icahn's voice has echoed loudly, and he has already faced backlash on one of his favorite discussion forums of late -- Twitter. BillGross@Pimco tweeted out today, "Icahn should leave Apple alone and spend more time like Bill Gates. If Icahn's so smart, use it to help people, not yourself." The controversy continues.

And from a company which doesn't know what to do with all of its cash, Apple, to one which is starting to attract a large amount of it -- Pinterest. Pinterest has pinned down a $225 million round of funding from investors. It boosts the virtual scrapbooking site's value to $3.8 billion. Samuel Burke is here with us today. Samuel, there's so much attention around this social media web site. That's a pretty big valuation for a company where we know very little about its financials.

SAMUEL BURKE, BUSINESS CORRESPONDENT: But we do know that it's never earned a dime, not even a penny. That said, investors think there's huge potential in Pinterest because people come to this site with the intent to buy. Maggie, I know you've talked to brides-to-be who come to this web site to see what other users have posted in terms of wedding dresses -- what other companies have posted. Also, a lot of people come to this web site when they're remodeling their homes. So you see here, they're looking for what people have pinned up -- new fireplaces for example.

LAKE: Guilty. Guilty. I have been -

BURKE: And you do it. You've done it. But you see --

LAKE: -- in this particular area of Pinterest I have to say.

BURKE: -- and you see, underlying all this -

LAKE: Right.

BURKE: -- is that potential for commercialization, because people are coming here with the intent to buy something. Unlike other social networks.

LAKE: Right, where they're chatting or they're just hanging out with their friends, they do have an intent to buy, that's why they're there. So, OK, they're not making any money yet. Do they have a plan on how they're going to monetize all these users?

BURKE: So just last month they rolled out a new plan to use sponsored pins. So let's say you're looking for camping equipment. You see here somebody on Pinterest posted how much they like this backpacks, but tucked in here is a sponsor pin from a camping company that's selling these lanterns. So here it's not quite like a banner ad that you might see on some big web sites -

LAKE: A little bit more subtle, yes.

BURKE: -- exactly. They're also looking to monetize possibly analytics -- telling big retailers how people are interacting with their pin boards and how they're going forward from these pin boards over to their web site and back. How they're going from the retailer's web site back to Pinterest.

LAKE: And I've actually had people tell me when I've covered this before and asked people about it that -- they'd actually like a direct link to sites. So they don't actually mind the advertising that may be coming as long as it doesn't interfere with the process.

BURKE: Exactly.

LAKE: So the question is -- great idea, people love it, it could make a lot of money, what -- are we going to see one of the giants just come in and copy the idea?

BURKE: Well, we've seen a lot of people come in and try to copy it and it hasn't worked quite yet. I think a lot of the investors like the organic user base. That it happened in a very organic way -- the growth of Pinterest, especially very popular with females. And they're not just sharing the way people do on Facebook or Twitter. They're curating content -

LAKE: Right.

BURKE: -- as a community, and they have 25 million unique monthly users according to (CompCor). That's not bad at all. A lot less than Facebook's billion plus users, but again, these people are coming here with the intent to buy, and plus they like that people spend a lot of time on this platform. They're not just going in to check the news feed, they're coming here to go from page to page to page, and you get sucked in buying just like you do at the store.

LAKE: You do, yes, and I have to say the fact that there are people - - things people have done in their real life. It's not just a bunch of ads plastered on. There's something sort of very interesting about this, right. This is going to be one to watch -- maybe the next big IPO we end up talking about. Samuel Burke, thank you so much for that. Time for the weather now. We want to find out what's going around the world. Jenny Harris joins us right now. And, Jenny, I understand you've got some bad news for folks in Europe.

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes, and none of our weekend had (inaudible) mind you, but it's really (late) Sunday into Monday. There's a very intense area of low pressure on its way. I'll talk about that as it gets a bit closer. But you can in the last few hours, huge sways of cloud almost covering Ireland, the U.K., the west of Europe as well, pushing into France. As you can see, that already bringing with it quite a bit of rain. We've had some thunderstorms here in the last few hours. You can really beginning to see them appear quite clearly there on the radar, so this is the system responsible. Already some pretty strong winds are coming in with this system, but once this has come through, first part of the weekend, it's setting the scene for the next storm system -- this one coming through late Sunday into Monday. Now, this particular storm is likely to bring winds hurricane strength. So that means in kilometers an hour, we're looking at winds possibly as strong as 130 kilometers an hour. So the warnings are already posted certainly across the U.K. from the U.K. Met Office. So it's really northern areas of France to the low countries, up into Denmark, as you can see, and also southern areas of the U.K.

So if this system is as strong as it looks right now and comes in the position that it looks like it's going to come through, then we really are going to see some really widespread problems. Because it'll lead to huge problems travel-wise, and of course with still many, many leaves on the trees, we're expecting to see downed power lines, downed trees, a really significant storm late Sunday into Monday. So we'll keep you very well up to date with that as we get closer to the time. In the meanwhile, we've got that rain coming in from the west. The systems are of course bringing the rain with it -- not just those strong winds. And Thursday into Friday, the warnings are in place for this first system coming through. Very heavy amounts of rain, severe winds even a threat of tornadoes. Surprisingly, the airports at this point -- not looking too bad. We've got low clouds, so Dublin some fairly lengthy delays on Friday -- 45 minutes maybe at tops, and also Glasgow the same -- 45 minutes there. When it comes to temperatures, again, not too bad. It's actually a fairly mild air flow. So, 18 in Paris, and we've got 17 degrees Celsius up there in London. Where it is getting very cold is across the United States, and Maggie, if you've been feeling cold in New York, you're not wrong -- 10 degrees below the average. It's sweeping down in to the southeast, really more like December than it is October. Here are the temperatures for the next few days. Well below average in New York, and look at Chicago actually just not even making its double figures until about the weekend.

LAKE: I am not ready for that, Jenny. Thank you so much for that, and that's "Quest Means Business." I'm Maggie Lake in New York. Marketplace Europe is next.

(END QUEST SHOW)

(BEGIN MARKETPLACE EUROPE SHOW)

ISA SOARES, REPORTER AT CNN INTERNATIONAL: Hello, and a very warm welcome to "Marketplace Europe" from Plaza Major in Madrid, I'm Isa Soares. As the Eurozone drags its heels towards recovery, there are some positive signs that Spain too is getting back on its feet. Exports are on the up, and GPD this quarter is expected to rise up to nine consecutive quarters of decline. But, critics warn that this recovery that we are now witnessing could be premature, with some even saying it's dangerous. Here in prosperous Madrid, the signs of austerity are also visible. The line to the job centers are long. Spain continues to have one of the highest unemployment rates in the Eurozone and for sale signs line every street as the banks try to shift property off their balance sheets. So, on this week's program, fighting back Spanish style -- what does Spain still need to do to attract those much-needed investors? Coming up on the show, I investigate Spain's haphazard working hours and put the latest gift accessory to the test. And the High Commissioner of Bran), Spain tells me how he's trying to boost Spain's image for investors.

CARLOS ESPINOSA DE LOS MONTEROS, HIGH COMMISSIONER, BRAND SPAIN FROM VIDEOCLIP: First thing we would like is to be perceived -- Spain to be perceived as a country which is business-friendly.

SOARES: It's lunch time here and people are taking a break from work with a stroll in the park or a paddle on the lake behind me. It's that time of the day when they can really relax and put their feet up. You and I know it as a siestas. But these traditional long breaks are back in the spotlight, with many arguing that although Spaniards work longer, they're not necessarily the most productive, as I find out.

(BEGIN VIDEOCLIP)

SOARES: Autumn may have arrived, but here in Madrid, workers are still enjoying their outdoor lunch breaks as if summer had never left. Not even the music can disturb their public napping. Just a few kilometers down the road, at Studio Banana, when it's time for a siesta, they use this.

ALI GANJAVIAN, CO-FOUNDER, STUDIO BANANA: The Ostrich Pillow is a product which is devised for sleeping. It kind of came about because we were spending a lot of time working at studio, so we though to ourselves, why don't we create a product that allows us to sleep anywhere.

SOARES: Their product is in many ways a wakeup call for workers who tend to leave work, eat and go to bed later than their European counterparts. But that's about to change. The government said it's considering turning back the clocks by an hour which could increase eating and sleeping habits and make workers more productive. Spanish dictator General Franco moved Spain from Greenwich mean time in 1942 to follow his ally Nazi Germany. Since then, Spain has been one hour ahead of GMT during the winter and two hours ahead in the summer. And that reportedly cost the economy as much as 8 percent of GDP because of lost productivity.

IGNACIO BUQUERAS Y BACH, PRESIDENT, FUNDACION INDEPENDENTE, VIA TRANSLATOR: For 71 years, we have been on the wrong clock. We need a clock that is more convenient and follows better our biological clocks. We are also recommending a more flexible work schedule and so that the days don't finish any later than 5 p.m. and that at midday, lunch won't last any longer than roughly 45 minutes.

SOARES: Advice that has been taken up by Studio Banana, an architecture and design company who everyday have lunch together. The working lunch here has been reduced to 45 minutes, but it's still an important part of their working day. Over (inaudible), they can really bounce ideas off each other. It's this model that many say Spain should adopt because it means they have more time to spend with their families, they sleep longer and they're less lethargic at work. All in all, more productive. Over lunch, I query one of the company's employees and asked what the work schedule's like. She tells me she starts at 8:30 in the morning. The people can start and finish whenever they want. Flexible working hours, which experts recommend, should include a modern siesta.

BUQUERAS Y BACH: We're recommending a siesta light which is what doctors and dream clinics recommend. Ten to 15 minutes is more than enough time after lunch to relax and to be able to return to work, reinvigorated for the afternoon.

SOARES: A modern twist on tradition that this company has taken on board. Now, how long would you nap for?

GANJAVIAN: Some of the time 15 to 20 minutes.

SOARES: Wow, that's how long it might take me to fall asleep. How often do you power nap here?.

GANJAVIAN: Once a day, once or twice day, depending on how the -- (inaudible).

SOARES: Should we go for it?

GANJAVIAN: Sure.

SOARES: OK. This is great.

(END VIDEOCLIP)

SOARES: It may be time for lunch break, but don't go anywhere. Coming up, I sit down with the High Commissioner for Brand Spain to find out how the country can increase its inward investment. That's next.

(COMMERCIAL BREAK)

SOARES: Here at Plaza de San Miguel Spanish workers are enjoying a bite eat and making the most of the last of the summer sunshine. But their scheduled 1 o'clock lunches may have to move back an hour to make them more competitive and productive. The question is, are Spaniards ready to do away with Central European time? Let's find out.

(BEGIN VIDEOCLIP)

Male FROM VIDEOCLIP, VIA TRANSLATOR: It's for the wellbeing of the country, so to me it's logical to change the clocks. In terms of the changing working hours, it won't bother me much.

Female FROM VIDEOCLIP, VIA TRANSLATOR: No, I think we are productive but everything happens later in regards to working hours. Lunch is too late, we leave work too late, everything is late.

SOARES: And to really relax, there's nothing quite like a midday glass of Rioja.

Male FROM VIDEOCLIP, VIA TRANSLATOR: Of course Spain is less productive. In Spain we spend more time for lunch than anywhere else. In Europe, people can eat a sandwich, but here we eat hearty food. Work in Europe finishes at 5 p.m., and here it finishes late -- perhaps 6 or 7. But I don't think shifting the clock will solve the problem.

SOARES: Perhaps those fighting for a time zone change have bitten off more than they can chew. The only question left -- what to eat? Well, perhaps a bit of everything.

(END VIDEOCLIP)

SOARES: Changing the time zone may be one way to make Spain more competitive, but it's not the only one. A government body called Brand Spain has been tasked to find ways to promote the country as more dynamic and more modern. But critics say this is merely glossing over the country's deeper problems.

(BEGIN VIDEOCLIP)

ESPINOSA DE LOS MONTEROS: The first thing we would like is to be perceived -- Spain to be perceived a country which is business friendly. We need to reduce taxes -- this is always something that companies look very, very carefully. The labor reform I think has been an asset -- today it's an asset because most of multinational companies that (compare) the situation on the different countries here in Europe are ranking Spain as the first one in terms of flexibility and cost of labor. And the third one would have to do something with the logistics with transportation.

SOARES: Now, you've led many companies here in Spain. You're the CEO of Iberia, you were also the CEO of Daimler Chrysler Spain, including Mercedes-Benz Spain, and you're also the vice president of Inditex Group which -- the group behind Zara.

ESPINOSA DE LOS MONTEROS: Very successful group.

SOARES: Very successful indeed. What do you think are the main barriers Spanish companies face abroad? Is it structural, is it cultural, the language factor?

ESPINOSA DE LOS MONTEROS: Well, I think the main barriers are related to the small and medium firms. The small and medium firms very often have not the means necessary to move into foreign markets and to find good distribution and to spend the money and to speak the language, all these things.

SOARES: Language is a question that keeps on popping up when I speak to a lot of CEOs -- the fact that within the European Union, we still have a language barrier, and the majority of the people do not speak English. Is that something that worries you?

ESPINOSA DE LOS MONTEROS: Well, it worried me more in the past because people over 40, you don't find so many talking fluent English. The problem is at my time and for many years later, the language was French. And what we were taught in school was French, and that you know, French is losing ground to Spanish and obviously to English. So, what is needed is to have a population bilingual English and Spanish, and this is coming with the younger generations.

SOARES: Unemployment in Spain is without a doubt your Achilles heel. What do you think the government will have to do to improve that?

ESPINOSA DE LOS MONTEROS: It's going to take place but very slowly. It will take many years to come below 20 percent. My estimate this would be something like five years before figures go below 10 percent. And no one has really a solution -- a magic solution -- to move things faster. There is some structural problem and will take, as I say, a lot of time.

(END VIDEOCLIP)

SOARES: That was Carlos Espinosa De Los Monteros, the High Commissioner for Brand Spain telling me how his country is going to sharpen up its image. And that is it for this edition of "Marketplace Europe" and the team Madrid. Thank you very much for watching. We'll see you again next week.

END