Weekly Digest
Weekly Digest Issue No. 436
09-10-2008
by Deirdre McArdle
Dell plans still uncertain, HP cuts jobs | High-speed broadband rips into Gaeltacht | ID theft: it could be you | Tech stocks feel the pinch | Big Blue lifts the mood | AMD lightens its load | Google to milk YouTube cash cow
Dell plans still uncertain, HP cuts jobs
The ongoing Dell saga continued this week, with Irish staff still waiting to hear what's to become of the firm's facilities. Dell has yet to announce its plans for Ireland, with the PC giant saying its global review is still ongoing. Weekend reports claimed that government minister and Limerick TD Willie O'Dea, along with IDA Ireland, had previously been told that Dell was withdrawing from Ireland as early as January 2009. Dell and O'Dea were quick to deny these reports, however, with O'Dea saying that speculation he had been privately informed on a decision by Dell to end its Irish operation was a "total lie". If Dell were to pull out of Ireland, it would mean the direct loss of 4,200 jobs (3,000 in Limerick and 1,200 in Dublin) and the indirect loss of thousands more. A spokesperson for Dell told ENN that no announcement of a decision is planned at the moment. Meanwhile, Hewlett-Packard has announced it is to cut 133 jobs from its Irish operations over the next two years. The news doesn't come as a surprise; last month HP said it was to cut 24,000 staff worldwide following the integration of EDS, the IT services firm it bought earlier this year. EDS' Irish operation employs around 400 people. Finally, another big hitter in the technology sector also announced it is to cut some Irish jobs. eBay, which is based in Dublin, is cutting 1,000 jobs worldwide. The impact on Ireland, where the online marketplace employs 1,600 people, will be minimal, however, with just 10 jobs likely to be affected, a spokesperson said.
High-speed broadband rips into Gaeltacht
The Gaeltacht region of Galway, as well as parts of Donegal, got a boost this week with the news that a high-speed telecoms network was to be rolled out in the area. The network, which supports 300Mbps in broadband connectivity, comes as a result of a link-up between HEAnet and AirSpeed Telecom. The contract between the pair is for three years and forms part of HEAnet's National Backbone Extension (NBE) programme. Under the contract, HEAnet clients such as NUI Galway and the Galway-Mayo Institute of Technology (GMIT) will be able to develop high-capacity links with their off-campus locations in areas such as Carraroe, Inverin, Carna, Castlebar and Letterfrack. AirSpeed Telecom also plans on making this capacity available to businesses and residential providers operating in the region. The announcement is seen as a major boost to the area, with chief executive of Udaras na Gaeltachta Padraigh O hAolain saying high-speed broadband is as important as "air and water" for commerce in the region.
ID theft: it could be you
Identity theft in a growing problem across Ireland and Europe, with more and more incidents of data theft regularly coming to the fore. The most recent large-scale data theft came to light on Monday when Deutsche Telekom admitted to having lost the personal details of 17 million of its subsidiary T-Mobile's customers. The theft at T-Mobile included the names, addresses and mobile phone numbers of high-profile politicians, celebrities and business leaders; although no bank details or credit card numbers were disclosed. Here in Ireland, the Government has been criticised by Labour TD Ruairi Quinn for its lack of encryption on department IT systems, despite the fact that 19 laptops, three desktops, at least nine Blackberry mobile phones and four portable storage devices have been lost across government departments in 2008. Reports like these highlight just how vulnerable our personal information can be. Raising awareness of ID fraud is the main aim of National Identity Fraud Prevention week, which was launched on Monday. A survey accompanying the campaign indicates that 87,000 people in Ireland have to date been victims of ID fraud. It also revealed that 80 percent of Irish people regularly throw out their personal information in the bin. The awareness campaign has set up a www.stop-idfraud.ie site, which features a test to see how at risk you are of becoming a victim of ID theft.
Tech stocks feel the pinch
Last week we noted Apple's vulnerability to the ongoing financial crisis, and it looks like other stalwarts of the tech industry are now also feeling the brunt of the economic slowdown. On Monday SAP warned that its third-quarter revenue would come in lower than expected, blaming the global financial turmoil for a sudden drop in orders. The German software giant said it now expects global software revenue for the quarter ended 30 September to be between EUR740 million and EUR750 million, a rise of 4 percent to 5 percent from a year earlier. Analysts had been forecasting 20 percent growth. SAP's warning contributed to the general panic among investors and tech stocks spent the day on Monday riding out some serious turbulence on the markets. eBay and Amazon saw shares drop 5.54 percent and 2.64 percent, respectively, while Microsoft, IBM, AMD and Cisco also saw single digit drops at close of trading. Yahoo and Google stocks also took a hit, although this could have been as a result of the pair's decision to hold off on launching their advertising pact while the US Justice Department takes a closer look at the deal.
Big Blue lifts the mood
Amid all the doom and gloom of the global slowdown, there was a smidgen of positivity on Wednesday when tech giant IBM posted better-than-expected third quarter figures. The firm's results, which were released unexpectedly at close of trading on Wednesday, showed net income growth of 20 percent year-on-year to USD2.8 billion, with earnings per share coming in at USD2.05; analysts had been expecting per share earnings of USD2.01. IBM reaffirmed its forecast of at least USD8.75 per share in profit in 2008, a 22 percent improvement over last year. The results, which bucked the general panic surrounding the global markers, saw IBM shares rally in after-hours trading, gaining just under 4 percent. IBM had originally planned to report its results on 16 October, but "with the market conditions the way they are, we felt it was important to get our results out as soon as possible," an IBM spokesman told Bloomberg News.
AMD lightens its load
As it bids to compete more effectively with its main rival Intel, AMD on Tuesday announced it was to split into two companies. One of the companies will work on designing microprocessors while the other will focus on manufacturing them. AMD plans to create a new enterprise, temporarily called The Foundry, with Abu Dhabi's Advanced Technology Investment Company. The new company will absorb AMD's existing manufacturing fabs, expand a facility in Dresden, Germany, and spend USD3.2 billion on a new plant in New York. Advanced Technology Investment will invest USD2.1 billion over the next five years for a stake in The Foundry, and will also assume around USD1.2 billion of AMD's existing debt. AMD will own 44.4 percent of the company, and Advanced Technology Investment will hold a 55.6 percent stake. The move relieves AMD of the costly burden of manufacturing chips, and frees it up to focus on product design. The ink on the deal had just about dried when Intel piped up saying it was evaluating the announcement, in particular where it relates to a patent licensing agreement between Intel and AMD. "We certainly have to evaluate it," said Intel spokesman Chuck Mulloy, in a ComputerWorld report. "It certainly could be a change in the competitive landscape."
Google to milk YouTube cash cow
Google may just have figured out how to make some serious cash from its video website YouTube, which it bought in a USD1.65 billion stock deal. The internet giant has developed an advertising feature called 'click to buy', whereby users who are looking at music videos on YouTube can click on a featured ad and buy the particular song they're listening to via Apple's iTunes store or Amazon's MP3 Store. YouTube will be paid each time a user makes a purchase. Apparently, this marks the beginning of a larger e-commerce push, according to a message on the YouTube blog. "Our vision is to help partners across all industries -- from music, to film, to print, to TV -- offer useful and relevant products to a large, yet targeted audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos." For now, Google is taking a slowly, slowly approach to this program. What it doesn't want to do is bombard users with this feature; internet users are a notoriously fickle bunch who are quick to show their displeasure and simply move on to another website offering the same service without the annoying ads. For its part Google does seem to realise this: "We'll be experimenting with the UI over time to make sure this works for our community, and we'll continue to innovate based on your feedback. We're just getting started, so stay tuned..."
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