Weekly Digest
Weekly Digest Issue No. 435
02-10-2008
by Deirdre McArdle
Facebook set to locate HQ in Dublin | Communications Minister goes all Web 2.0 | Broadband developments roll on | Jobs joy for Limerick | Nokia rings in the changes | Apple plays hardball on royalty fees hike
Facebook set to locate HQ in Dublin
Ireland has scored somewhat of a coup with the news that leading social networking site Facebook has chosen Dublin as the site for its international headquarters. According to the Irish Independent, Enterprise Minister Micheal Martin met with Facebook executives last year when he visited California on an IDA Ireland trip. That meeting must have gone quite well, with the social network announcing on Thursday it would be using Dublin as its base to provide technical, sales and operations support to Facebook’s users and customers across Europe, the Middle East and Africa. Although there is as yet no indication just how many jobs will be created by Facebook in Dublin, recruitment is apparently underway and job notices have been posted on the social network's site. This news should be seen as quite an accomplishment for IDA Ireland and the Government. Attracting such an influential company as Facebook underlies the Government's strategy of positioning Ireland as a knowledge society. Add Facebook to companies such as Google, Yahoo, eBay and Amazon, who have also chosen Ireland for their European/international headquarters, and you have a veritable showcase that can be used to enhance Ireland's reputation on the foreign direct investment scene.
Communications Minister goes all Web 2.0
It's been a busy week on the broadband front. On Tuesday, Communications Minister Eamon Ryan hosted a public forum, which formed part of a general consultation on the next generation of broadband, in Dublin Castle. In the run-up to the event the minister had embraced Web 2.0 tools to allow members of the public to have their say in the development of broadband. He set up an 'online community' on ammado.com, which was open to anyone who wanted to discuss the broadband issue, and in what some might consider a brave move, the minister also started a thread on popular, and influential, online forum boards.ie. A department spokesperson told ENN that the minister's Web 2.0 moves have been broadly welcomed and that the general consensus on the event itself was that it was "very worthwhile". So, just what was discussed at Dublin Castle? Topics up for debate on the day were: models for open access, optimal use of State assets, the evolving regulatory model, encouraging market investment and Ireland's competitive advantage. Details of the actual outcome of the consultation, which consisted of the public forum, the polls taken, online contributions and written submissions, are currently being pulled together and should be available shortly, the spokesperson told ENN. On the whole, Minister Ryan appears to be quite enthusiastic and proactive about the future and the role broadband has to play. Have a look at his opening address on Tuesday here. While the open, and approachable, nature of the department is to be congratulated, we'll have to wait and see whether it's more than just all talk.
Broadband developments roll on
Separately, there was some progress made on the broadband front by Eircom on Tuesday. The incumbent announced it had unbundled a further 24 exchanges, making them broadband-enabled. Malin in Donegal and Crookedwood in Westmeath were among the exchanges made broadband-ready, and Eircom says it now has enabled over 600 exchanges across the country, according to a spokesperson. In the year to date the telecoms firm has opened up 66 exchanges, the spokesperson told ENN. Meanwhile, BT Ireland announced a EUR1.2 million deal with e-Net, the manager of Ireland's fibre optic Metropolitan Area Networks (MANs). The contract will see BT roll out a range of services on the 27 Phase 1 MANs immediately. If, as expected, e-Net wins the contracts to manage Phase 2 of the MANs, BT's services will be rolled out on an additional 66 MANs around the country. In another broadband development, Imagine has announced it's giving away free broadband to businesses that make the switch to Imagine. The firm said it will be offering companies 3MB of free broadband as well as savings on voice calls. Imagine is being quite bullish with this strategy; the firm said it aims to increase its current 9 percent share of the SME market to 15 percent within the next year, by which time it says it hopes to have 25,000 customers.
Jobs joy for Limerick
While Dell's 3,000 Limerick employees await news of their fate, there was some positive jobs news in the county this week. On Monday, waste management firm Re3 said it was going to create 50 jobs in the next year as it develops new waste recycling technology. The company is investing EUR15 million in a sustainable waste technology known as autoclaving, which uses steam technology to recycle domestic waste. Re3 has pioneered the technology at the Galvone Industrial Estate, where 20 jobs will be created initially, with a further 30 to come over the next year. Also making a substantial investment in Limerick is medical device firm Cook Medical, which is ploughing EUR25 million into its Limerick facility, creating 200 jobs in the process. The investment will establish the Limerick facility as the sole global manufacturing site for Cook's new device for the treatment of peripheral arterial disease. While these new jobs would be little comfort if Dell were to close its Limerick facility, they do bring a shot of positive news to the county.
Nokia rings in the changes
Finnish mobile giant Nokia has been busy of late. On Tuesday the mobile phone maker announced it had snapped up Canadian-based mobile messaging firm OZ Communications for an undisclosed sum. The acquisition goes along with Nokia's strategy of beefing up its services portfolio in its efforts to provide more than just handsets. OZ enables users to access IM and e-mail services from the likes of AOL, ICQ, Gmail and Windows Live Hotmail from their mobiles, and currently boasts 5.5 million paid-monthly subscriptions. The deal is set to close in the fourth quarter. Over the past year Nokia has been quite acquisitive; it purchased Plazes and Twango during the year to reinforce its multimedia and social networking offerings, respectively. Meanwhile, its USD8.1 billion acquisition of Navteq, which was recently approved by regulators, gives it an in to the growing personal navigation market. Internally, the Finnish firm has been making some changes; earlier in the week it said it was selling up its security hardware business, and that it was to stop making or marketing software used by businesses to support wireless e-mail, opting to outsource this instead. As well as releasing its mobile music venture, 'Comes with Music' at the beginning of September, Nokia is also taking aim at Apple's iPhone. It is poised to release a new touch-screen smartphone, dubbed the Tube, this week, with many industry commentators positioning it as an 'iPhone killer'. Although it seems like there's quite a lot going on at Nokia, all of these key developments display an aggressive strategy from the Finnish giant. Other phone makers take note.
Apple plays hardball on royalty fees hike
The ongoing financial crisis has claimed another victim, with shares in Apple dropping a massive 20 percent on Monday. The steep drop highlights analysts' concerns that the consumer electronics market is not immune to the downturn, and that companies such as Apple will be affected if consumers start cutting back on their spending. Meanwhile, Steve Jobs and Co are fighting another battle, this time with the recording industry and the Copyright Royalty Board (CRB). The board is on Thursday to rule on a 66 percent increase in royalty rates (from USD0.09 per track to USD0.15 per track). This increase would have to be taken on by either the record companies, Apple or the consumer. On Wednesday, a somewhat veiled threat made by Apple's vice president for iTunes, Eddy Cue, came to light, when he submitted testimony to the Board at the Library of Congress back in April 2007. "If iTS (iTunes Store) were forced to absorb any increase in the mechanical royalty rates, the result would be to significantly increase the likelihood of the store operating at a financial loss -- which is no alternative at all. Apple has repeatedly made clear that it is in this business to make money, and would most likely not continue to operate iTS if it were no longer possible to do so profitably," said Cue. So, the burning question is: "would Apple really shut down iTunes?" It seems unlikely. Apple has sold over 160 million iPods globally and over 5 billion tracks via iTunes. It is the largest music retailer in the US and controls 85 percent of the digital music market. That's some clout to have over the recording industry, which would no doubt feel the brunt of the iPod users' anger if Apple were to follow up on this threat. If the CRB votes in favour of the rate increase on Thursday it's likely that Apple will use its favourable hand of cards to get the recording industry to assume the bulk of the increase; the record companies are unlikely to want rock the apple cart, so to speak, and risk losing their largest distributor. Watch this space.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 