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QUEST MEANS BUSINESS
French Senate Passes Pension Reform; G20 Financial Summit Reveals Cracks Within Group; Interview With Martin Sorrell
Aired October 22, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Its France versus the people. A senate vote on raising the pension age, down to the wire.
Soul searching: The G20 financial summit reveals cracks within the group.
And back on side at Man Uers, you heard, who stands to gain the most from the Rooney turn around?
I'm Richard Quest. It may be a Friday, but I still mean business.
The debate is over. The decision time is now. Right now the French senate is voting on a series of controversial pension reforms bills. A series of amendments were cleared earlier today. Now the plan is to raise the retirement age from 60 to 62. It has sparked protests across the country. Demonstrations, more than a million people took to the streets on Tuesday.
Some demonstrators are hitting hard where it hurts especially at the start of a national holiday season. Refinery strikes and fuel blockades are causing fuel shortages in parts of the country. Those fuel shortages were so bad that the government burst its way into the fuel depots.
The Prime Minister Francois Fillon says it will be several more days before supplies return to normal. And there are more protests to come. France's main student union body has called upon its members to demonstrate next week. Six other unions are planning two days of strikes nationwide. Now, you and I have been talking about this all week and we are getting coverage and analysis as always from our Senior International Correspondent Jim Bittermann, who joins me now.
Jim, we have much ground to cover, so let's start briefly. The vote and what is happening now in the French senate? They have got rid of the amendments. Are we expecting a final vote tonight?
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We are. And in fact, Richard, it should come before the end of your program. I think they are right in the final speeches now, and if we get it, we'll get it to you as quickly as we can. Basically, though, I don't think there is a question about whether this is going to pass. Because the amendment sailed through and I suspect that that his an indication that the bill itself will sail though, as well.
Also it should be said that between President Sarkozy's party and the right-leaning centrists party, basically there is a majority that would support this bill in any normal circumstances. So I think we can safely say, after this vote tonight that the age of retirement in France has been raised to 62, Richard.
QUEST: Jim, the-the polls suggest, if I remember you correctly saying that the public are against this move, one assumes Sarkozy doesn't have a complete which to commit political suicide. So why has he-if there is so animosity, such anger and such opposition, why is he railroading it through?
BITTERMANN: Well, I think it is a question of the deficit, Richard. And I know you have been talking about this all week long in case of Great Britain, but France here, too, they have the same problem. That is to say, they have got an out of control deficit, they are hoping they bring it in around 7.7 of GDP, 7.7 percent of GDP this year. And they want to get it down to 6 percent next year. And to do that they have got to find places to cut. And one of the places that-one of the deficits they like to cut is that outflow of euros to support the pension program. And the plan that they have come up with is to make people work longer, hoping that that will plug the gap, plug the hole.
As a matter of fact, Christine Lagarde, the finance minister, says it may take a few years, but in fact it should down the line.
BITTERMANN: So, that is basically what they are up to, but you know, obviously that is caused a lot of furor in the streets.
QUEST: We are going to see more furor next week with more industrial action. But you know, economically, Jim, this rise in the pension age, it doesn't take affect for years. The economic affect won't be felt for some years to come. It is a long term benefit. But what is going to happen when they start the real cutbacks in terms of immediate spending on social benefits?
BITTERMANN: Well, they have already done that in some ways. I mean, they have had the defense cuts here as of about a year ago, they closed down some military bases. They have also done things in the health sector. They have consolidated hospitals. They have taken away unemployment benefits and subsidies to unemployed and they are taking away some of the subsidies for medicines and things like that. So there have been a number of cuts here.
And what I think we are seeing here, Richard, is not so much the beginning, but rather the end here. I think what we have seen on the streets here is basically the culmination of an enormous amount of anger that has been building up over months and months of reforms that are very unpopular. And in France they have been protesting here and there, it just hasn't made a lot of news outside of France. And the fact is that now, this reform and the pension reform is where everybody drew the line, both the government and the protestors in the street, and the union, Richard.
QUEST: Jim, don't go too far away from where you are at the moment, even though it is Friday evening. Because the vote is taking place. We have live pictures at the moment. We will need you, Jim, as some point to analyze as and when we have the result. Because it is electronic voting.
Jim Bittermann, who is in Paris. And as soon as there is a vote or a result on that you can bet your bottom euro that Jim will be back with us.
Now not everyone in France is against those pension reforms we've been talking about. In Paris, our correspondent Phil Black met one business owner who thinks that raising the retirement age is business friendly. And he says the protests have had little effect, except to grab the headlines.
PHIL BLACK, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Anger on the streets, the country's fuel supplies strangled, images of a country in crisis. It is what the world has seen of France over the last week. Businessman Pierre Demonsant says it is not the France he's been living in.
PIERRE DEMONSANT, CEO, PLANISWARE: Everybody could take the middle, look where I am, in the middle. We had some meetings in Europe, in the U.S., we could take a plane. Everybody was coming to work.
BLACK (on camera): Uh-huh?
DEMONSANT: So I mean, there is a big difference between what you see in the media and the reality (ph) of the situation.
BLACK (voice over): He's right, to a point. There have been isolated hot spots and problems, like long waits to fill the tank, but French life has largely continued unaffected. The strikes and rallies are in response to the government's plans to delay the retirement age by two years. Demonsant says it is a traditional French reaction to social change.
DEMONSANT: It is like child, which is upset, and says, Mommy, I don't want that. I want it done OK, it will be done and we continue to move forward, you know?
BLACK (on camera): So, you think the French people are like a little child throwing a tantrum?
DEMONSANT: No-yeah, just a bit.
BLACK (voice over): His business, Planisware, develops software that helps big companies manage innovation projects. He started with 7 people 15 years ago. He now employs 130, with offices in France, Germany, and America.
(On camera): Did you vote for Monsieur Sarkozy?
DEMONSANT: Basically, I like this idea of trying help the business. And I know, reduce the spending, you know, try to have a more futures, more liberty in jobs, try to reduce tax on companies, and so on.
BLACK (voice over): And Demonsant believes the president is being business friendly by increasing the retirement age because it fixes the pension deficit without raising taxes. He says he knows many people who support the plan. Some of them work for him. They insist they haven't been coerced.
UNIDENTIFIED MALE: People work 35 hours per week here. We have an excellent healthcare system. Maybe French people can't have it all, you know? And it is time for some cuts to protect what is left of, you know, the social system.
UNIDENTIFIED MALE: I think if with the pension reform we are able to secure future pensions of this country, the I think that will be great.
BLACK: Opinion polls a big majority oppose the changes. There are those who believe it is the latest move by the French government to open the economy and support the country's entrepreneurs, which, after all, is a French word. Phil Black, CNN, Paris.
QUEST: So voting is, I believe, underway in Paris at the moment. We have pictures of what is taking place in the French senate. When we get a sort of decision-it looks as well, either they have gone off for a bite to eat, or they are about to start voting, one or the other. As soon as the result-yes, it looks like voting is getting underway, a lot of procedural things taking place.
I'm not familiar, unfortunately, with the minutia of the French senate procedures. And indeed, the ayes, to the left, the nays, to the right, type of procedures. It is an electronic system that they use here.
While we continue to look at that, let me remind you of what happened. The protests in France had little effect on the main stock market this week. The Paris CAC 40 followed the rest of Europe lower, but it is up for the week, as a whole. Mining shares fell, Eurasia Natural Resources, 2.2 percent. Anglo-American, 0.9, carmakers rose, you get the idea.
Now, let's go back to Paris. Jim Bittermann is with us. We can see the way the markets ended.
Jim Bittermann, I need your interpretation and your assistance here. It looks like voting is underway?
BITTERMANN: Yes, it is true, Richard, those three large green urns are what people are voting in. They have sort of credit card-sized plastic chips that they put in; white chip for the bill, blue for against, and red if they are abstaining. And what they have just done is they have voted and now they are taking-I'm trying to look at the monitor as well-they are taking them back stage where they will weigh them. And they have a very precise scale. And by the weight of these plastic card they will determine whether this bill has been passed or not, Richard.
QUEST: You mean it is like the tellers at the bank? With the coins, that they can weigh the notes and the coins.
QUEST: So, I apologize to the dear viewer, I had implied it was an electronic voting system. It is far from it. It is like the grocers', they are weighing the vote.
BITTERMANN: Right. They may have electronic scales back there but in fact it is a pretty archaic system. Back in the old days, they just counted them by hand. Now they have scales to sort of speed up the process a little bit, but they haven't taken that one more step to actually doing electronic voting. They have electronic voting in the lower house, but they upper house they are-
QUEST: It looks like he's got a-
BITTERMANN: --in fact, they-
QUEST: Jim, it looks-Jim, I need you to interpret this. It looks like we might have a result.
BITTERMANN: OK, let's see here. I-I-
(BEGIN LIVE FEED , IN PROGRESS)
UNIDENTIFIED MALE: (SPEAKING FRENCH)
BITTERMANN: Well, it passed. It passed, I heard 177, Richard.
UNIDENTIFIED MALE: (SPEAKING FRENCH)
QUEST: All right, Jim.
Jim Bittermann, in Paris. My French isn't good enough to hear those numbers. I'm hoping that you heard the numbers better than I did.
BITTERMANN: Well, I heard the first number, that was the one number, for the bill, and it passed, by the way, 177, but I didn't catch the number, on the number that voted against. We'll try to get that for you, Richard. But it did pass. This has been something of a spotlight cast on the French senate. A kind of a sleepy body, it is amazing the attention that the French senate has gotten.
Usually, this is kind of a rubber stamp organization here, but because of the importance of this bill, a lot of attention being paid. Like I said it did pass, the law of raising the retirement age has passed, 177 to- blank. And we'll try to get that blank number for you sometime in the next couple of minutes, Richard.
QUEST: While you are trying to get that blank number, again, the wire copies, the wires, AFP saying, it has passed, but again, it doesn't give me the numbers. It doesn't matter, Jim, the devil is in the details, but it we know it is passed.
(DESK BELL CHIMES)
Many thanks, Jim Bittermann is in Paris for us, tonight. Just to recap. The French senate has just voted, you say the live pictures here on QUEST MEANS BUSINESS. By 177 to something. We know that it has passed and will become law.
Mixed signals from the G20 finance ministers tonight. They are divided. We are going to talk to the master of the message. The man who knows about making policy, Martin Sorrell, Sir Martin, head of (UNINTELLIGIBLE).
QUEST: There is a growing divide over how we're dealing the aftermath of the economic crisis, from tense talks at the G20 to the violent unrest on the streets of Paris and the government announcement in London. It is minister versus minister, and government versus people. Protest is erupting in Paris tonight after the Senate vote, has just voted to raise the retirement age.
Also, deep divisions between G20 finance ministers in Seoul. Talking over currency tensions. Brazil's finance minister is not there. He is working on measures to curb the rise of the real.
From Washington, Tim Geithner has tried to steer debate away from currencies, caused by countries to make the balance of tread more equitable, a way to break the deadlock with China over the renminbi, using policy tools, caps on trade surpluses and deficits. There have been protests from Germany and Japan.
In London it is all about spending caps, austerity and protest is simmering. Britain's main trade union movement, the TUC will hold a national demonstration, in March of next year. The U.K. national borrowing costs at lows this week, partly because of the cuts, partly the growing impossibility of quantitative easing.
So Martin Soros is the chief exec of WPP, one of the world's leading agencies. He is also part of the committee which advises the British government on it's finances. I suggested, given cuts in France, U.K., Spain, as we look to a cold winter-things aren't looking good.
(BEGIN VIDEO CLIP)
MARTIN SORRELL, CHIEF EXECUTIVE, WPP: When you cut, you do create disaffected parts of society. I mean, the welfare cuts have been particularly penile and discussed. And that has funded departmental reshuffling of spending. It has been a capital cut. Interest cut has funded that.
When you do that you are obviously going to have disaffected people, but we have been here before. Somebody said to me, do I remember the Geddes (ph) cuts of 1921. The answer to that is no, I wasn't even that old. I'm pretty old, but not that old. But I do remember what happened, when I came out of university in '66 and '68, and we had the same problem.
I do remember what happened, pre-Reagan and pre-Thatcher. Every body said the Americans were dead and were going to be eclipsed by the Japanese. That didn't happen. Every body said the U.K., is in a mess. I look at Rupert Murdoch's valedictory speech, to Mrs. Thatcher last night. I thought an interesting and-and the speech about Israel the day before, at the Anti-Defamation League was even more interesting. But I do think that we have been here before and we mustn't make too much of it.
It is painful, but we did overspend, we did get ourselves into trouble. And it is just like you running your household budget, or me running my household budget, or trying to run the company. Last year we were having a very hard time. We had to take our headcount down. We've actually been hiring 4 or 5 percent more people in the U.K. this year.
QUEST: You are on the British government, prime minister's panel of advisors.
SORRELL: Yes, the photo opportunity as some people call it.
QUEST: You are part of that august group of people.
SORRELL: They are all august, yes.
QUEST: That is advising the British government.
SORRELL: Yes-well, we are not advising.
QUEST: Well, you are.
SORRELL: Well, well, I guess what we are there for is to draw the government's attention. And that is the prime minister, the chancellor, the Business Secretary Vince Cable, and others, to the issues that are wearing business, both national and global.
QUEST: And what is the one interest that you want to draw the attention to today?
SORRELL: Well, this is a persona view.
SORRELL: The one thing is, having made these cuts, this is a steadier platform. You know, we are pruning the tree. I guess I don't know what the right analogy is for it. Whether you are regarding an analogy or not, what is essential is to invest in the areas that are critical for growth in this country. As he tries to compete, in a world, against the Singapore, against the China, against the India, against a Russia, against the U.S., against the Brazil, in what areas? It is going to be obviously education. It is going to be obviously technology, it is going to be obviously infrastructure. I mean, this is apple pie and motherhood, in many respects.
But it is having made the cuts, having got the thing into balance, having got the thing into balance, having got it into kilter, having dealt with the legacy from the previous administrations of one color or another, now we have got to set the stage. It is exactly like running a company that has been in a loss. You get in there, you get it into balance. And then you start to invest; it's capital budgets, and its P&L budgets, it is cost budgets in the areas where you will get greatest top-line growth. That is what we try to do.
QUEST: Always a delight to have Sir Martin in our studio. Sir Martin Sorrell of WPP, talking good common sense.
The vote that took place in the French senate tonight has passed the legislation President Sarkozy's legislation that will raise the French retirement age. This is despite major demonstrations that have taken place in France over the past few days. Demonstrations that will continue next week. But the vote has passed, it will become law. You are going to have to work longer if you live in France.
In a moment, Wayne Rooney's spectacular maneuver. The Volt fast, the reverse, whatever you want. He's not leaving Man U after all. But how much cash was involved in the decision? (UNINTELLIGIBLE) will explain it to you in a moment.
(DESK BELL CHIMES)
QUEST: Shape up, or I'm shipping out. But how quickly ambition seems to disappear in the face of a fatter weekly paycheck. That is how it might look to some people, the latest twist in the Wayne Rooney saga. There is more to it. Don Riddell is here to read between the lines.
I mean, look, he's got-
DON RIDDELL, CNN CORRESPONDENT: He's still here, we didn't think that was going to be the case, did we?
QUEST: Well, I don't know-but he's still there isn't he? Tell us, who gains, who looses, and how much money is involved.
(DESK BELL CHIMES)
RIDDELL: OK, Wayne Rooney will be staying with Manchester United for another five years. Many of us thought that he had actually played his last game, especially given that statement he had released earlier in the week when he really did question the quality of his teammates and the ambition of his club. So we thought he was gone, but at lunchtime today, U.K. time, we discovered that he was staying.
Now, we don't know exactly how much money he is going to be getting, but we can assume that it is a fair chunk more than the $140,00 a week that he was on. Who wins out of this? Well, I think Wayne Rooney has probably got himself a pretty good deal. I think United are a very, very good club for him. And if he wants to keep winning trophies and stay with a globally recognized brand, I think, Richard, United are the club.
But are they ambitious enough? And I suspect-
QUEST: How much of all that-come on, how much, of all that they are not ambitious enough? They all-you know, they haven't got the right mentality? I love Alex Ferguson, but the CEO is a man I can't do business- how much of all of that was just-brrrrr!
RIDDELL: Well, I mean, who knows? I mean, his main gripe this week was the club aren't ambitious enough. I mean, let's talk about the debt, the massive hole that Manchester United find themselves in. They currently owe 750 million pounds, or there about. So if they sold Rooney for say, 50 million pounds, he is worth $80 million, that would just have paid the interest for one year.
RIDDELL: On that debt.
QUEST: So what is in it for Man U, in terms of keeping him? Is he that good?
RIDDELL: Well, at the moment he's not, he's injured. He is out for at least another three weeks. He is suffering a horrendous loss of form and confidence, but this is a player that when he is on form can carry the team. He has caught 34 goals for the United last season. Without him they would have been absolutely nothing. So he is a very, very good player. When he's fit and when this mind is in the right place. And I think if they had let him go, that would have been disastrous for the reputation of Manchester United.
UNINTELLIGIBLE ran out two years ago, if they lost him as well, they would be a selling club, the empire would be crumbling.
QUEST: And the agent?
QUEST: Right, the agent, we know plays a good thing. If he had left it any longer for Rooney to go, Rooney could have been a free-
RIDDELL: That's right. In a year and a half's time, Wayne Rooney would have left for nothing.
RIDDELL: Which would have been a disaster for Manchester United, there is a huge asset to them. Rooney and Stepford (ph) would have got all the money. You know, what was he holding out for?
QUEST: What does he get for this? What does he get for this deal, for-for?
RIDDELL: I would imagine he takes roughly about 10 percent, that is what agents do. So, I mean, what-
QUEST: Of a resigning fee?
RIDDELL: And his weekly salary.
RIDDELL: I mean, can you imagine at the moment he's been on about 9,000 pounds a week, just for the fact that his player is playing football and he is just sitting there, counting the money.
QUEST: 9,000? 9,000? And the bookies?
RIDDELL: Anyway, so he'll be on the look for a lot more. It has been interesting watching the bookies this week, because they, along with many of us, thought that Rooney was on his way out. But they changed their tune overnight. I think it was interesting, bookies know what they are talking about, Richard. They have got sources. They do their research. I think they also analyzed the statement from United last night, which suggested that they might be about to hang on to Rooney. And they changed their odds so, they knew what was going on.
QUEST: Mike Patruso (ph) is shrieking in my ear, that I need to know about Portsmouth. I need to know about Portsmouth! Which for those of you who don't know, is a seaside resort on the southern coast of England.
RIDDELL: They are also a football team. They were in the Premier League up until last season. They got relegated. Which happens now and then.
QUEST: Do I care?
RIDDELL: I'm giving you the build up. Stop interrupting, let me get on with it. They won the FA Cup two years ago, which is a big deal. But they have been in administration. They have overspent, and news tonight, Richard, is that they are set to be liquidated.
QUEST: Toast? History?
RIDDELL: There is a lesson in there for the Liverpools, and the Manchester United, that clubs-
RIDDELL: Yes, well, clubs that spend too much money. Clubs that can't make enough money and they spend too much. This is what happens.
QUEST: Mr. McCorber (ph).
RIDDELL: Good to see you.
QUEST: Good to see you. Don Riddell.
Making sense of the earnings season. We're back in a moment. A red or a green, we are not talking about winning and losing on the football field. It is the Q25 in just a moment.
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And here, the news always comes first.
As expected, the French Senate has passed a controversial pension reform measure by a vote of 177-153. Anger over the move to raise the retirement age has been seething in the streets of France for days. Since Friday, police broke up protests at oil refineries and fuel depots, scuffling with protesters at some locations. Union leaders called it an assault on the constitutional right to strike.
Haiti is struggling to contain a fast moving cholera outbreak north of the capital that has at least killed as many as 138 people already. More than 1,500 cases have been reported. Hospitals are overflowing. Sick people are lined up outside. It's unclear where the outbreak and the cause of the cholera came from, but the cases followed heavy rains and flooding of the river.
China is bracing for Typhoon Megi. The strongest storm to hit the region in decades is expected to make landfall in Southern China on Saturday. To the east, another major storm, Cyclone Giri, has just hit the western coast of Myanmar, packing winds more than 170 kilometers per hour at the center.
The U.S. Pentagon is preparing for WikiLeaks' next release of secret papers. The site is expected to publish 400,000 documents related to the Iraq War. A source says the material provides an uncensored view from 2004 to 2009. WikiLeaks published 70,000 classified documents on the Afghan War in July.
Now, we're wrapping up the first week of the Q25, our very own index that's helped to make sense of the earnings season and the trends. Just to remind you how it all works, you get a green balloon if the company meets four out of the five tough tests. You get a red balloon if you don't get that.
And we've upped the ante this time around to make it tougher to meet the criteria. Despite the higher bar, companies like Apple, Caterpillar, Southwest, have sailed through easily.
If you look over here, you'll see pretty much neck and neck, which is very much what you'd expect at this point in the earnings cycle in this part of the economy. Those international companies like Apple, like Caterpillar, clearly got greens. Those with mainly U.S. exposure certainly didn't do as well.
Felicia Taylor is in New York and joins me now.
Verizon is a U.S. corporation, a telco, one of the largest mobile phone operators, has a link up with Vodafone. It got three out of five on the tough love Q25, which meant we had a debate.
Where did you stand?
MAGGIE LAKE, CNN CORRESPONDENT: Would have a little bit of a date -- debate. But I'm going to tell you, I go green on this one and I'll tell you why. Their customer growth took a little bit of a hit. But the truth is, going into 2011 -- and the forward looking is the most important, it -- whether or not the outlook is positive.
For this company, it is. They've got the iPhone coming on board. Initially, that's going to cost them some money. But looking into 2012, it's going to be very good. And don't forget, this has a long-term "buy" on it because it's got that payoff of a 6 percent dividend. So the stock is looking very attractive.
QUEST: And I particularly like...
LAKE: I give it a green.
QUEST: I particularly like, with Verizon, they've got a lot of products coming on the line. The CEO says Verizon is doing particularly well. And customers are spending more with them on a monthly basis. All in all, even though it's -- it's just about a grudging one, but there it gets a green.
Amazon had four out of five, so it's an automatic -- it's an automatic green.
LAKE: Yes. It...
QUEST: But you've got a cautionary tale.
LAKE: I have a -- a little slight bit, because I -- but this is pretty much a slam dunk. You can't -- you can't, you know, fight this one too much. The stock has run up from 105 to 170 since the summer. So we're talking about a couple of months. So if there's any kind of a pullback in the marketplace, this stock could take a hit. It's trading about 169 right now. And so look for there to be some profit-taking off of this one in the future.
QUEST: And finally, American Express. It was a three out of five again, so it was a debater. I liked particularly -- I liked the fact that the affluent AMEX holders are spending more. They reduced dramatically -- dramatically the amount of bad loans and the balances are holding steady. I went for a green.
LAKE: I -- I, you know, look, I've given this a good think since we spoke earlier this morning. And to tell you the truth, I'm -- I'm still middling about it. Look, there's no question, the luxury market is making a comeback. Whoever is out there using their black card, they're definitely putting it to use now. There's no question about that.
But, listen, this stock has been trading at its lows of the summer...
LAKE: It's under a significant amount of pressure technically. It's true. Right now it's trading at, what, 39. We've seen it drop from 46 to about 38. And, also, don't forget, it's still facing an anti-trust lawsuit here in the United States. MasterCard and Visa have already settled. American Express is putting pressure on its merchants, which is where they make a significant amount of their margin.
QUEST: All right.
LAKE: I'm a little middling.
QUEST: You went for a red, I went for a green. It was left to the Q25 producer, David Brend (ph), who had the vote -- the casting vote. And he went also for a green.
So there you are. That's the way -- now, we're -- we're just about one of time. Before we finish, the greens have got it at the moment. We'll talk next week about whether that's reflecting the greater economy. We're pretty much equal at the moment between green and red.
Felicia, have a great weekend.
While I was getting ready to do the Q25, there's an editorial called the Amazon Amazing Stock Bubble -- exactly what Felicia was talking about, the Amazon share price, which has risen so sharply and what one must question how much of that is forth versus underlying strength?
It's retailer's shares are valued at more than three times Apple's. And on this article, which you can read at CNN.quest.facebook.com/cnnquest, you can read it for yourself and decide for yourself, are you with Felicia or myself on this one?
In a moment, the role of innovation in the modern economy -- the co- founder of Wikipedia joins me live on QUEST MEANS BUSINESS.
QUEST: Welcome back.
Wikipedia has come a long way since it was launched less than 10 years ago. It's a free Internet encyclopedia which anyone can edit. It's consistently among the top most visited Web sites in the world. Its very name has become part of our language.
The co-founder, Jimmy Wales, has attended a conference to promote business technology in Tijuana, Mexico.
Jimmy Wales joins me now from Tampa in Florida.
Jimmy, good evening to you.
I need to start with something very topical. In the next few hours, WikiLeaks is going to bring out or release, supposedly, 400,000 documents concerning the Iraq War.
I know you are critical about the WikiLeaks on the Afghan War.
Do you share -- do you still have those criticisms about this latest release?
JIMMY WALES, WIKIPEDIA CO-FOUNDER: Well, I think mostly I just echo the concerns of several human rights organizations, including Amnesty International, about WikiLeaks in terms of vetting what they're releasing to make sure that innocent people aren't inappropriately harmed or named. I just think they need to be very careful about what they're doing.
QUEST: That does point up, doesn't it, the -- it's a classic rights versus responsibilities which goes to the heart of the Internet and the Web and the way we use it -- it might be my right to show it, but is it responsible to do it?
WALES: Well, and it goes right to the heart of all journalism and -- and basically all publishing. It's a very old question, what do you publish, what do you refrain from publishing?
And there are no easy answers, but there are thoughtful answers.
QUEST: As we look at Wikipedia and the funding and finance model, which, frankly, is -- is quite unusual in the sense of, you know, if you choose to send it commercial, you'd be walking off an extremely rich man. You've chosen not to.
But at what point are you going to have to let commerce in?
WALES: Well, I don't think we have to. We're just about to launch our annual giving campaign. We do this every fall. And the primary funding is from small donors, an average of $35 or so. So, so far, that's worked very well for us and we expect it to keep working.
QUEST: But why do you have, if you like, a philosophical opposition to a -- a -- a proper funding, a long-term commercial funding model?
WALES: Well, I -- I wouldn't agree that it's not a proper funding model that we do have. We are a charity. We're focused very much on free knowledge for every single person on the planet. I think of Wikipedia as being something like a -- a national park or, as I've been saying, a temple for the mind. But I'm not anti-commerce. My for-profit company, Wikia.com, we run advertising and we're supported by the traditional advertising model. I just think Wikipedia is a little bit different.
QUEST: If you take the Wikipedia model and the way in which it has become ingrained, to the point where some -- one school district even says Wikipedia takes over from school books.
And what is your biggest problem in dealing with that sort of phenomenal growth?
WALES: I mean, I think there are several. You know, we have a -- a really keen, strong interest within our community to be of the highest possible quality. So one of the questions is what are the software tools that we need to be developing to support the good people in the community who want to make Wikipedia better?
We also focus a lot on the developing world and so trying to get a free encyclopedia to every single person on the planet implies a lot about language, about our support, about our technical infrastructure in terms of how fast is it to load a page at Wikipedia is you are sitting in India, for example.
So those are the kinds of things that we're really focused on.
QUEST: And what has always impressed me is the speed with which Wikipedia is update.
Jimmy Wales, many thanks, indeed.
I'm guaranteeing that by the time this program is finished on Wikipedia tonight, there will already be the vote of the French Senate to raise the retirement age. Let me remind -- thank you, Jimmy.
Let me remind you about exactly that story.
The French Senate has voted tonight to raise the French retirement age to 62. It's a vote that happened just a short while ago. The voting was more than 177 in favor of that; 150 odd or so were against it.
There have been massive demonstrations in France over the last few days and the prospect of more demonstrations in the weeks ahead.
But tonight, if you live in France, you will be retiring at an older age.
And that's QUEST MEANS BUSINESS for tonight.
What a marvelous week we've had.
I thank you for making time to be with us.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
"MARKETPLACE MIDDLE EAST" starts right now.