Weekly Digest
Weekly Digest Issue No. 427
07-08-2008
by Sylvia Leatham
Yahoo leaders shaken, not stirred | Moto says hello to handset unit head | Heads roll at Alcatel-Lucent | Siemens tells Fujitsu it wants divorce | UPC Ireland sees Q2 revenues rise | All aboard the netbook bandwagon
Yahoo leaders shaken, not stirred
Leadership at Yahoo was shaken, though not stirred, this week, as it emerged that -- oops! -- there was a miscount in the shareholder votes in favour of re-electing the board. After Yahoo's annual meeting last week, the internet giant declared that CEO Jerry Yang received the backing of 85 percent of the shareholder vote. This week, one of Yahoo's biggest stakeholders, an arm of Capital Group, asked for a recount of its votes, and a calculation error was brought to light. While the new tallies did not affect the overall outcome of the vote, they did show a marked decrease in the level of support for Yang and co. Yang had in fact only received a 66 percent vote of support, while Yahoo chairman Roy Bostock saw his original 80 percent endorsement fall to 60 percent. All of the directors who were re-elected will retain their positions, but the new numbers show that Yang and his colleagues still have a way to go to regain the confidence of shareholders, following the on-again off-again acquisition talks with Microsoft and the subsequent haranguing of the board by ever-vocal activist investor, Carl Icahn.
Moto says hello to handset unit head
Things were looking up slightly this week for Motorola, with the news that the beleaguered telecoms equipment maker has recruited a highly respected telecoms exec to head up its struggling mobile phone unit. As well as being charged with turning around the mobile unit, Sanjay Jha, chief operating officer at mobile chipmaker Qualcomm, was also named co-chief executive of Motorola, a role he will share with current CEO Greg Brown. Motorola had been searching for a head for the mobile arm for four months. News of the appointment on 4 August sent the mobile maker's shares upwards on Wall Street, as analysts greeted the move as reassurance that the unit would indeed be spun off from the rest of the business next year. Motorola's two other main divisions -- home and networks mobility and enterprise mobility -- have been performing well lately, but the handset division continues to drag numbers down. On 31 July Motorola revealed that higher profits at those two units helped to neutralise a deficit from the mobile devices division, enabling the company to report an operating profit of USD5 million for the second quarter, compared to a loss of USD158 million in the same period in 2007.
Heads roll at Alcatel-Lucent
Another telecoms equipment firm facing turmoil in its executive ranks this week was Alcatel-Lucent, as both its CEO and chairman announced their resignations. The move is a bid to relieve some of the cultural tensions that have dogged the firm ever since it was formed in a merger of France's Alcatel and US-based Lucent in 2006. Chief Executive Patricia Russo and Chairman Serge Tchuruk said they will step down by the end of 2008. The Wall Street Journal reported on 5 August that the two executives had each told the board separately that they could no longer work together, according to sources. An international search for a new leader or leaders has now begun, with recruitment unlikely to come from within. The paper also said, quoting unnamed sources, that former BT chief Ben Verwaayen had turned down an approach from the company in the days before the global headhunt was announced.
Fujitsu Siemens, Sony BMG: breaking up is hard to do
Separations of another kind also hit the headlines this week, as two high-profile joint ventures announced they would be parting ways. It was reported on 6 August that engineering giant Siemens had informed partner Fujitsu that it wanted to end their nine-year PC-making joint venture, Fujitsu Siemens Computers. The Wall Street Journal cited "people familiar with the matter" as the source of the news, but both companies had refused to comment on the matter by the end of the day on Wednesday. Fujitsu has the first refusal on buying Siemens' 50 percent stake, although it remains unclear whether the Japanese firm is interested in making the acquisition. Last week, Siemens saw its quarterly net profit drop by almost one-third as it restructures itself to focus on energy, healthcare and industrial automation. Meanwhile, it came to light on the same day that the Sony BMG music joint venture was also set for a rupture, with Sony agreeing to buy out Bertelsmann's stake for USD1.2 billion. The new unit, to be known as Sony Music Entertainment, is the second-largest record company in the world, after Universal Music Group.
UPC Ireland sees Q2 revenues rise
Revenues at UPC Ireland increased by nearly 30 percent for the second quarter ending 30 June to USD95.6 million, as broadband subscribers grew by over 33 percent year-on-year to 89,000. CEO Robert Dunn said the company had delivered "a solid set of results" that highlighted "the strength of our operation in Ireland". UPC said it provides a TV service to more than half a million people but admitted that overall TV numbers were down for the quarter due to "the reduced number of new builds released during this period and seasonal factors". Digital TV numbers were up slightly to 314,000 subscribers, and Dunn noted that the company would roll out video on demand (VoD) and high definition (HD) services during 2009. UPC Ireland owns NTL and Chorus, and is itself owned by Liberty Global.
All aboard the netbook bandwagon
Lenovo this week became the latest PC maker to jump on the 'netbook' bandwagon, announcing its intentions to manufacture a low-cost ultra-portable computer called the IdeaPad S10. Netbooks are a hot new trend: originally conceived as 'starter PCs' for emerging markets, the devices have been warmly embraced in the developed marketplace as well, as travel-friendly alternatives to shoulder-crushing laptops. The devices, which have limited functionality, are generally lightweight, with a scaled-down screen and keyboard, have a long battery life and connect wirelessly to the internet. Last week, analyst figures estimated that the market for these low-budget mini-laptops would reach the dizzying heights of over 8 million unit sales this year. Taiwan-based Market Intelligence Centre also predicted that shipments would more than double next year to 18.3 million. Following the runaway success of Asustek's Eee PC, manufacturers such as Hewlett-Packard, Dell and Acer have launched their own devices, and now Sony, Toshiba and Fujitsu, as well as Lenovo, are all planning on getting in on the action. Lenovo's IdeaPad S10 will retail for around USD399 and perform simple tasks such as surfing the web, playing music and running basic apps. Only one question remains -- will the IdeaPad be coffee-proof?
Caped Koala Studios has built a virtual world for kids, combining education and social networking 