(CNN Student News) -- October 13, 2008
Quick Guide
Stand Together - Discover how world leaders are standing together amid the financial crisis.
Users First, Revenue Second - Consider a popular Web site's decision to prioritize users over revenue.
North Korea Nuke Deal - Hear reaction to an agreement concerning North Korea's nuclear program.
Transcript
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CARL AZUZ, CNN STUDENT NEWS ANCHOR: Hi, I'm Carl Azuz. Thank you for tuning in to this Columbus Day edition of CNN Student News!
AZUZ: Eight days. That is how long the Dow Jones' losing streak has lasted heading into today, and last week was the worst in the history of the economic indicator. On Friday, it dropped 128 points, which means the stock market lost about $100 billion. And that was the Dow's best day. For the full week, it plunged 1,874 points. That translates to $2.4 trillion in losses. This financial crisis is spreading across the globe. But as Elaine Quijano tells us, world leaders are vowing to work together to fight it.
(BEGIN VIDEO CLIP)
ELAINE QUIJANO, CNN REPORTER: President Bush allowed cameras in just long enough to capture images meant to convey solidarity in tackling the financial crisis. He dropped by a meeting of 20 of the world's wealthiest and fastest-growing nations, and spoke privately to the group after the cameras left. Earlier, a similar image at the White House, as President Bush surrounded himself with finance ministers from the group of seven industrialized nations.
U.S. PRESIDENT GEORGE W. BUSH: We are in this together. We will come thru it together.
QUIJANO: The president started his day meeting with officials for about 30 minutes, and afterwards outlined broad principles, but no details on how the international community would tackle the crisis together.
BUSH: We resolve to continue our strong efforts to return our economies to the path of stability and long-term growth.
QUIJANO: A senior administration official would only say the U.S. is in the "early stages" of reviewing ideas from other countries. Meantime, Treasury Secretary Henry Paulson and his team are moving ahead with a plan to buy stock in banks and inject much-needed capital into financial institutions.
HENRY PAULSON, U.S. TREASURY SECRETARY: We are working to develop a standardized program that is open to a broad array of financial institutions.
QUIJANO: The move is meant to encourage banks and financial institutions to lend money once again and help thaw the now-frozen credit markets. As investors anxiously await that action, Secretary Paulson insists it will happen soon:
PAULSON: Trust me, we are not wasting time. People are working around the clock dealing with this. There is no doubt, in any of our minds, looking at the U.S. or countries outside the U.S. what we are dealing with is capital in U.S. financial institutions.
QUIJANO: President Bush again urged patience as the government gets its massive financial rescue plan up and running, a message he's aiming at not just Americans, but to the broader global markets as well. Elaine Quijano, CNN, the White House.
(END VIDEO CLIP)
Second Stimulus?
AZUZ: In addition to that rescue plan, Democrats in the House of Representatives are putting together another one. Same goal: to stimulate the U.S. economy. The price tag could be up to $150 billion. House Republicans said they haven't been consulted on the details. One GOP aide said they're not opposed to the plan, but they'd question if it will really help.
Word to the Wise
APRIL WILLIAMS, CNN STUDENT NEWS: A Word to the Wise...
revenue (noun) the amount of money a company receives for its goods or services
source: www.investorwords.com
AZUZ: Think about Web sites for a second, especially social networking ones like Facebook or MySpace. Millions of people and a lot of you use them, but you don't have to pay to sign up. So, how do they get their revenue? Benjamin Cohen examines the answer and how a company like Facebook could be affected by all this economic mess.
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BENJAMIN COHEN, ITN REPORTER: Online social networking gave Facebook a value of $15 billion dollars when Microsoft bought a small stake in the business a year ago. The company now values itself at just a quarter of that, and there is concern that as the economic slide continues, the fundamentals of many dot com businesses could be destroyed. But try telling that to billionaire Mark Zuckerberg, the 24-year-old Harvard dropout who started Facebook. His prime concern remains getting more people to join.
MARK ZUCKERBERG, CEO & FOUNDER OF FACEBOOK: We're basically viewing revenue as just - we need to make enough to sustain ourselves.
COHEN: So it's growth first, revenue second. Isn't that not dangerous? Because that's what it was like in the dot com boom: people chased users, not money.
ZUCKERBERG: The thing that I'd say is different now, is that we're not just doing growth at the expense of having no revenue, right. What we're trying to do is have enough revenue to sustain ourselves, but we're not trying to optimize for profit.
COHEN: But in today's harsh economic climate, that might not be realistic anymore.
DR. ANTONIO CORDELLA, LONDON SCHOOL OF ECONOMICS: In the first period, it was enough to be a social networking Web site to attract investment, which means to get different financial resources to grow the business. Nowadays, I think investors, because of the crisis in the financial markets, they are looking for more tangible business plans rather than the social expectations.
COHEN: So, how does Facebook intend to make money? Well, because of the vast amount of information we tell Facebook about ourselves, it's possible to place incredibly targeted adverts. Now, say I was trying to reach bankers who might be looking for a new job or possibly a loan. I can select people in London, those who are in their 30s, and those who list some of the troubled banks as their work place. My advert will only be seen by these 120 people, and I'll only have to pay Facebook if they then visit my Web site. Advertising is currently Facebook's sole source of income, and sales haven't been huge. But Zuckerberg has given himself until 2011 to revise the business model.
ZUCKERBERG: You know, in the long-term for Facebook, is we're really just focused on our mission: just helping people share information. We believe really deeply that if people are sharing more, then the world will be a more open place where people can understand what's going on with the people around them. And that's really what we want to get towards.
COHEN: Facebook has a unique sticking point, if not a unique selling point: People won't just jump ship to a rival, because by doing so, they'll turn their back on their own social network, and who's gonna do that?
(END VIDEO CLIP)
I.D. Me
WILLIAMS: See if you can I.D. Me! I'm an eastern Asian country that's home to 23-and-a-half million people. I gained my independence from Japan in 1945. My capital city is Pyongyang. I'm North Korea, and my nuclear program has been an international controversy for years.
AZUZ: North Korea says it's getting rid of that program after the U.S. removed the Asian country from its terror watch list this weekend. Those two nations and four others have been negotiating North Korea's nuclear program for five years. Sohn Jie-Ae gauges the reaction from the southern half of the Korean peninsula to this latest nuclear deal involving the north.
(BEGIN VIDEO CLIP)
SOHN JIE-AE, CNN CORRESPONDENT: A reverse of the reverse. North Korea state media announces it will stop trying to restart the nuclear reactor in Yongbyon and start dismantling it again - its response to Washington's decision to take North Korea off the list of countries sponsoring terrorism. North Korea says international inspectors that were barred from the sites just last week will now be allowed back in. In the South Korean capital, however, this political ping-pong is not affecting a beautiful autumn day. With Washington's announcement happening overnight here, most people enjoying their Sunday in the park have no idea about what is happening. But when you tell them, most people have something to say. This college student likes the fact that North Korea is not fingered a bad country any more.
PARK JAE-HYUN, STUDENT: I think this may help reunify South and North Korea.
JIE-AE: But this pastor is not pleased.
YOON HYUNG-BAE, NORTH KOREAN RESIDENT: I think Mr. Bush rushed to do this for its own political reasons. We really haven't gotten North Korea to do anything in return.
JIE-AE: A conservative political party in Seoul issued a statement criticizing Washington for becoming a victim to the North's blackmailing tactics. While Seoul welcomed the de-listing, South Korea's chief envoy to the six-party talks put the ball squarely in North Korea's corner.
KIM SOOK, SOUTH KOREA'S CHIEF ENVOY TO THE SIX-PARTY TALKS: I think the most crucial point is whether North Korea will completely cooperate in the verification process. And we must also make all efforts to get such cooperation from North Korea.
JIE-AE: North Korea was first put on the terrorism sponsor list in 1988 after it was suspected of bombing Korean Air Lines Flight 858. Being removed from the list will free up exports and allow North Korea to receive foreign aid, including energy aid equal to a million tons of heavy fuel oil from the nations involved in the disarmament talks. Sohn Jie-Ae, CNN, Seoul.
(END VIDEO CLIP)
Before We Go
AZUZ: It's time for an annual October tradition: pumpkin carving! While you're making jack-o-lanterns, though, this guy is thinking bigger; a lot bigger, transforming this gigantic gourd into a boat! The floating fruit, or gourd, weighs about 760 pounds and it's outfitted with a chair, even a heater! The plan is to paddle the pumpkin 150 miles over eight days, all to raise money for charity. And maybe trick-or-treat at some houseboats along the way.
Promo
AZUZ: You might not be turning a pumpkin into a paddle-boat, but with Halloween on the horizon there's probably some carving coming up on your calendar. So show off your skills! Send us an iReport of your carving creations. Find out how at CNNStudentNews.com!
Goodbye
AZUZ: That carves out all the time we have for now. Have a great day. I'm Carl Azuz.
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