ISIS Threat Looms Over Libya's Oil; Major Airlines Quit Venezuela; Stocks Inch Higher in Europe; Former Zurich Insurance CEO Commits Suicide;

MEANS-BUSINESS-01

BUSINESS-01

Stocks Inch Higher in Europe; Former Zurich Insurance CEO Commits Suicide;

Cameron, Khan Unite to Oppose Brexit; Zhu: Structural Reform is Crucial in

China; Bitcoin at Two-Year High Above $500; Israeli Company Masters

Smartphone Hacking; Inside the World of Esports; Goenka: India Won't Face

Issues with U.S. Trade. Aired 4-5p ET - Part 2>

Don Riddell >

Michael Schaulov; Bk Goenka>

funding from oil sales. Forces combatting ISIS are making gains in Libya

and in Iraq. It could be a crucial week for two countries both with rich

oil resources. Venezuela is one of the countries which is being

dramatically affected by the serious fall of oil prices and with the

largest known proven reserves. Now, two major international airlines are

halting flights to and from Venezuela blaming the economic crisis. Martin

Senn, former chief executive of Zurich Insurance Group has taken his own

life. Senn was a longtime employee of Zurich Insurance and he was the chief

executive for six years before stepping down last December. David Cameron

and Sadiq Khan formed a political odd couple. They both are urging the

British voters to stay in the European Union. The U.K.'s top economic minds

have weighed in on whether the U.K. should leave the EU. There's a broad

agreement, Brexit in their view, would hurt the British economy. China's

deputy finance minister says the Chinese government knows the importance of

sustainable development. He is worried about sustaining rapid growth in the

currency turmoil times. Bitcoin prices are surging as interest in the

virtual currency is enjoying a resurgence especially in China. The price of

a bitcoin jumped over 20 percent over the week at more than $500 first time

in 2 years. Israel's is trying to entice young tech experts to move to a

so-called cyber city in the desert. An Israeli tech company is already

making an international reputation and believed to be responsible for

breaking into the iPhone used by the San Bernardino gunmen. Thirty-six

million watched last year's world championship "League of Legends." Esports

is redefining gaming. India is the company called Welspun, the company that

supplies towels for events like Wimbledon and the Rugby World Cup. >

Technology; Stock Markets; Internet; Textiles >

QUEST: Right. But I'm trying to remember the name of the bitcoin trading. It went bankrupt. Is there a feeling, because every time I look at bitcoin and I always sort of head in the opposite direction and I don't really understand how the whole thing operates? Is there a feeling that there is an element of stability about it?

SAMUEL BURKE: Well, I think right now, and don't worry. It is hard enough to understand the currency as it is, a currency around for a long time like the dollar much less a new one without a central bank. But I think experts are now -- when I talk to them what they tell me is China is the one that has control over bitcoin and so what happens in China dictate the future at least in the near term future for bitcoin.

Fascinating number, I saw today, Richard, 92 percent of the bitcoins that are traded are through two bitcoin markets in China and essentially China's moving the vast, vast majority of bitcoins. And what happened with the Chinese in bitcoins is really what is going to dictate the future of this virtual currency.

QUEST: Samuel Burke, thank you for that. Samuel's in New York.

Israel's is trying to entice young tech experts to move to a so-called cyber city in the desert. An Israeli tech company is already making an international reputation. One of them believed to be responsible for breaking into the iPhone used by the San Bernardino gunmen. Oren Liebermann visited another company where they make phone hacking look easy.

(BEGIN VIDEOTAPE)

OREN LIEBERMANN, CNN CORRESPONDENT: I've come to the headquarters of Check Point, one of the world's leading cyber security firms to learn about mobile security and if my cell phone hasn't been hacked already, it's about to be.

MICHAEL SCHAULOV, HEAD OF MOBILITY PRODUCT MANAGEMENT, CHECK POINT: You just sent me this text message, new carrier settings update is available. Click to install. That's it. You only click on this link.

LIEBERMANN (voice-over): Cyber expert. Michael Schaulov leads me through a series of mobile hacks. The first is a common fishing attack. I get a text message from a number with my area code, I click the link.

SCHAULOV: And that's it. It's installed.

LIEBERMANN: Now they see everything on my phone.

SCHAULOV: I'm just going to go to CNN's website. I see that I've just typed in CNN.

LIEBERMANN: They have access to what I'm typing, my e-mails, my cloud storage.

SCHAULOV: That's it. It immediately picks up that I have typed in e-mail address and the fake pass word I typed in.

LIEBERMANN: But who's careless enough to type on a link in a random message? Next hack is one Check Point discovered and reported to Apple. It targets work networks on Apple's operating system. The message looks professional and looks like it's coming from the employer.

SCHAULOV: So on the device from this point on, you don't see anything. From this point on, we have a pretty much full control of the device.

LIEBERMANN: Schaulov pulls the contact list and calendar from the phone, he gets an email with all the information. Hackers can use the vulnerability for corporate espionage. The final hack we go through is called stage fright.

SCHAULOV: It's a vulnerability that affects nearly 90 percent of the Android devices.

LIEBERMANN (on camera): Ninety percent of Android devices.

LIEBERMANN (voice-over): I get a message with a link to a Prince video. One click. That's it. My phone is infected. And now they have more access than before.

SCHAULOV: We can actually take a photo of you.

LIEBERMANN (on camera): So he can take a picture of me right now. He just did take a picture of me right now. It's not the most flattering angle.

SCHAULOV: And it's locked, right?

LIEBERMANN: And it's locked. This a different phone infected with the same malware and you can see the phone isn't doing anything. I am not doing anything with it. But they are recording me right now on this phone. They can do it using the front camera or back camera. Complete control over this phone.

LIEBERMANN (voice-over): Most cyber-attacks still target desktops, but Schaulov says there's a dramatic shift happening as hackers figure out how to monetize attacks on mobile. Orin Lieberman, CNN, Tel Aviv.

(END VIDEOTAPE)

QUEST: Fascinating. Worrying. Deeply disturbing. All that. And yet I think about number of sort of weird things one gets sent to the phone.

Computer games have changed since the days of Pacman, which only just about managed to play with any degree of proficiency. Now the real professional players are treated like rock stars and attracting millions of spectators. We'll talk about this after the break.

[16:40:00] (COMMERCIAL BREAK)

QUEST: It's a long weekend. It's a bank holiday in the United States. And indeed in the United Kingdom and other countries, as well. So a question to think about. What did you watch on television over the weekend? What did you tune in for? Just imagine 36 million viewers tuning in to watch people play computer games, 36 million.

And now compare that to the 10.7 million who watched "Game of Thrones" series 6 premiere which is the HBO smash hit fantasy drama. HBO of course, part of Time Warner, parent company of this network. But only 11 million people watched it. Now "Coronation Street" here since I'm in U.K., I love it, it's been going since the 1960s. And but only 6 million people watched "Coronation Street," which is the much loved soap opera.

And yet, the old style television of these two, well, what's the future? Electronic sports or Esports. Professional gamers playing online. Spectators all watching streaming on platforms like Twitch. So bear this in mind. You have got 10 million for "Thrones." 6 for "Coronation Street." But 36 million watched last year's world championship "League of Legends." Esports is redefining gaming. Very likely to do the same to broadcast sports. Don Riddell with me now from the CNN center. I heard of Twitch or when I finally heard of Twitch, and I hear the numbers and they say something like tens of millions are watching, this is a phenomenon, Don.

DON RIDDELL, CNN WORLD SPORT: It is a phenomenon. It's a digital revolution. I think going to change the entire media landscape, to be quite honest. You say you heard of Twitch you probably heard about it when Amazon bought it for nearly a billion of dollars a couple of years ago. This is an absolutely fascinating world to be part of. I've spent quite a long time talking to people within the Esports industry. The passion and excitement is real, it is really going places and just take a look. If you don't know anything about it, it's all here.

(BEGIN VIDEOTAPE)

RIDDELL (voice-over): It's a scene you'd expect at any major sports event. Fans lined up for hours outside. Merchandise stands doing a roaring trade. Broadcast cameras ready for action. And fever pitch excitement. During the game. Except this is a little bit different.

This is Esports. The sport for the digital generation. The Intel extreme masters in Poland, some of the best teams are going head to head in games like "League of Legends" and "Counterstrike" and it is already worth an absolute fortune.

[16:45:03] RALF RECHERT, MANAGING DIRECTOR ELECTRONIC SPORTS LEAGUE: The most simple way to put Esports that's 200 million fans worldwide who watch it. It is bigger than the NHL.

DON RIDDELL: Last year's League of Legends world championship attracted 36 million viewers an audience that sports like the NBA only dream of. These are dynamic games in which lightning quick reflexes and communication are critical for success. And the players are vetted like rock stars.

OLOF KAJBER, GAME PLAYER: When you are playing you are so focused on playing the games, you block everything out. But when you win, and see everyone, like, the arena full, it is unreal.

CRAIG LEVINE CHIEF EXECUTIVE OFFICER, ELECTRONIC SPORTS LEAGUE AMERICA: Players like Faker and League of Legends are international icons. Call of Duty players like Nadeshot have over a million twitter followers. So there's stardom and celebrity element to it.

RIDDELL: Once maligned as a pastime for lethargic kids in the basement, Esports is now highly lucrative. The Pakistan-born Syed Sumail Hassan has amassed career prize money of almost $2 million. He's just 17 years old.

RIDDELL (on camera): As you can see in this aptly named bar called Joystick, there's still a niche market for retro video games, but things have changed so much since Kong was king. Over last 15 years, the advent of internet technology has enabled Esports to explode into a highly sophisticated and global gaming community. A creation of Twitch which Amazon paid almost a billion dollars in 2014 helped turn it into a spectator sport.

MARCUS GRAHAM, DIRECTOR OF PROGRAMMING, TWITCH: Twitch is a game changer not only because of what it represents, that it represents basically like the first global cable channel for Esports.

KEVIN LIN, CHIEF OPERATING OFFICER, TWITCH: As much as I might like Stephen Curry, I probably can never see the guy anywhere. He probably will never respond to my tweet of mine. It is very different in Esports. And that all is happening on Twitch where my favorite League of Legends player realistically might respond to my question. I mean, I might even get to play a game with this guy.

RIDDELL (voice-over): That is why sponsors are paying very close attention to the growth of Esports. It might be the only way to reach an elusive young demographic. Games like StarCraft 2 aren't just meant to be played they were specifically designed with broadcasting in mind. And that's now an industry standard. And it is impossible to cap the potential of Esports in the future.

ANNOUNCER, ESPORTS EVENT: GG Po Secures his championship title 4-2!

RECHERT: Esports is a global sport. It has a huge advantage around any other sport and these teams usually are usually focused on regional championships and then have some international competition. Esports is in its own definition global. You can play against someone in any game any time in the world. And therefore, we're seeing it's from that perspective actually much more global than any other sport can ever be.

CARLOS RODRIGUEZ, TEAM OWNER, G2 ESPORTS: Be safe to say that Esports will be very, very close if not on par with traditional sports we see today like football, basketball and whatnot. For traditional sports and traditional media so to say, I would be a bit scared. You know?

(END VIDEOTAPE)

QUEST: Don, what's fascinating there is in your report you've got the tens of thousands of people in an arena, which is a community spirit, if you like, coming together to watch something collectively. But what you're saying it's the streaming that's the future where you get the really big numbers.

RIDDELL: Yes, huge numbers in the streaming. But I mean, the numbers are huge wherever you look, Richard. The prize money is creeping up and up and up. The numbers of people that can be watching online, really this is probably going to become the new television when you think of the way that the fans are interacting with the sport and the athletes, the teams and just a whole medium in general. It really, really is quite astonishing.

And when you look at traditional sports, how they're played and how you get into them, of course, you've got physical ability, which is God given. It's not necessarily something you can do anything about. Sports aren't necessarily that accessible depending on where you live in various parts of the world. This is very accessible. It's very, very democratic. If you play this game and you are good at it, you will be noticed and you will be picked up and you will end up on the biggest teams with the chance to compete for the biggest prizes.

And the money you can make doesn't just come from prize money. It comes from streaming. I mean, I've spoken to some players saying they're competing for big sums of money is almost to the detriment of the amount of money they can make just by performing on Twitch. Well, you could half a million dollars a year, it is just incredible.

And at the same time tomorrow, Richard, --

QUEST: Fascinating.

DON RIDDELL: -- we are going to be continuing this series. We are going to introduce you to the best League of Legends player in the world, he's from South Korea. He's called Faker and he's a huge celebrity.

QUEST: I'm looking forward to it. Fascinating. Thank you, Don. This is all the sort of stuff we love to have on QUEST MEANS BUSINESS. Thank you so much, indeed.

[16:50:00] From a very new industry to a remarkably old one. We're going to be talking to the man that sells roughly 1 in 6 of every towel that's sold in the United States. In fact, he sells so many towels he's the Welspun's chief executive joins me after "WE MAKE, CREATE, INNOVATE."

(COMMERCIAL BREAK)

QUEST: Microsoft Chief Executive, Satya Nadella, is on a tour of India. On Monday, he met the government ministers and he spoke to entrepreneurs in Delhi. Nadella's visit follows, of course, Tim Cook's Apple the chief exec who was there just a week or so ago. One home grown success story in India is the company called Welspun, the company that supplies towels for events like Wimbledon and the Rugby World Cup.

It's a dominant player in the U.S. market selling by the hundreds of millions. BK Goenka is the chairman. He joins me now from New York. Sir, I'd hoped to be in New York to be putting your towels to the test but I'm in London tonight. So, I just need to know. I mean, from your point of view, what is the secret of success in selling into a market like the United States?

BK GOENKA, CHAIRMAN, WELSPUN GROUP: I think the most important thing is the dedication, the commitment to the customer. The customer centricity is most important pillar Welspun has and that has created a differentiation between us and the others.

QUEST: Right. But you've got to break into a market to start with. And I know you did that via Walmart. I'm wondering, how worried are you by the rising trade rhetoric, particularly that of Donald Trump, as the U.S. goes into its general election?

GOENKA: I mean, I'm not the expert on the politics, but definitely, textile is already coming from -- most of the textile in U.S. is coming from outside U.S. and I think India is one of the dominant player and I don't think that it will be having a major issue with the sifting of the industry in the U.S. in particular in textile what we feel.

QUEST: But, you're right when you talk about textiles. Over many years, different -- here in the United Kingdom which used to have a thriving textile industry. What -- you know, it's been moved to those countries with a lower cost base. But is it just about cost?

GOENKA: No. I think cost is one factor. Richard, when I started the towel 20 years back, I was in Manchester, and the first towel we want to sell from India was a biggest issue was whether an Indian company can sell towels or make towels of this quality. They thought it's basically they changed the label.

[16:55:00] So that made in India credibility was so low in those years, those times, that is over time it has changed. But not only basically the low cost, today we are talking of completely technologically driven company. We are not only talking of basically buying and selling with the customer. Today we are having customer partnership literally. Whether it's Walmart or JC Penny or Kohl's or Sears or Bed, Bath and Beyond in the U.S., all the ten retailers in this country, we're having a partnership.

QUEST: So, briefly, with that idea, you don't see a backlash then against a textile industry, say, for example, in India?

GOENKA: I'm firmly a believer of that. I see there is backlash on particularly in textile.

QUEST: Good to talk to you, sir. Thank you very much. Next time I'll be in there in New York and we can your towels to the test. Good to see you, sir.

GOENKA: Thank you very much.

QUEST: We'll have a Profitable Moment after the break. This is QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment. Since I arrived in the U.K. it is a good opportunity to actually get the temperature of the whole Brexit debate. You heard us talk about it on the program tonight. We'll be talking a lot more about it before the referendum on June 23rd.

The one thing without taking sides, obviously, without coming to any conclusions is the depth of seriousness with which people are looking at this, from those in favor to those against and those undecided. Everybody realizes this is a decision that will dramatically change the United Kingdom.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. I'll be in London tomorrow.

END

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