In The Papers 10 October

10-10-2008

by Deirdre McArdle

Irish firms fail to exploit IT: PwC | Credit crunch hits online shopping

The Irish Times reports that Irish companies are failing to capitalise on the potential of IT to bring innovation and improvements to their business and increase revenue, according to PricewaterhouseCoopers' IT Technology Value survey. The survey revealed that IT is still being viewed as a means of cost reduction, rather than a way to boost revenue.

Sixty-eight percent of chief financial officers (CFOs) who took part in the survey said they had experienced no increase in the revenues of their organisation in 2007 that could have been attributed to IT.

According to the same paper Irish consumers are spending less online now than they did in 2007. The Net Behaviour Report found that luxury items were hit the hardest, with purchases of flights, videos and DVDs falling by 5 percent since last year. Hotel bookings dropped by 7 percent, compared to a 2 percent fall overall in online shopping. The survey found that not only were Irish shoppers spending less online, but they had also reduced the amount of time they spent researching potential purchases -- by as much as 10 percent in some cases. Emmet Kelly, operations director with Net Behaviour, said the economic downturn had been a major factor in contributing to the decline.

The paper also writes that although investments and corporate activity in the tech sector are holding up in the current downturn, funding for high-tech start-ups is a major concern. According to Who42's equity funding review for the third quarter, EUR55.9 million was invested in firms during the quarter; this involved just 12 transactions, and was mostly in later-stage companies rather than start-ups. "The figures show there is very much still a pulse in the sector," said Neil Pope, director of high-tech advisers Who42. "It's by no means a surge in activity but people are still investing and others are getting exits." Pope suggests the "funnel is not being fed at the top" and the next generation of companies are finding it hard to get funded.

The same paper reports that a 20-year old man has been indicted for hacking into Republican vice-presidential candidate Sarah Palin's personal e-mail account, according to the US justice department. Read more on ENN.

Still in the Irish Times, Canadian firm Research in Motion (RIM) held an open day at the Jury's Croke Park Hotel in Dublin on Friday and Thursday as part of a European tour to recruit technical staff willing to relocate to the Canadian city of Waterloo. The vacancies with RIM, maker of the popular BlackBerry device, are on its reliability team, which tests the quality of its hardware and software.

The paper also reports that AirSpeed Telecom has won a contract understood to be worth about EUR1 million to facilitate the extension of the Higher Education Authority's (HEA) broadband network to the Galway and Donegal Gaeltacht regions. Read more on this story on ENN.

Finally in the Irish Times, Solaris Mobile, the Dublin-based joint venture between satellite communications providers Eutelsat and SES Astra, has confirmed that it has submitted an application for a pan-European licence to provide mobile broadband services via satellite. The European Commission will allow successful bidders to provide services such as mobile TV, high-speed broadband and disaster recovery, via satellite.

The Examiner reports that Newry-based financial services IT support company, First Derivatives is actively pursuing acquisition opportunities in the Australasia region, in the coming months, as it seeks to significantly expand its international presence. The firm reported a 21 percent jump in profit for the six months to August on Thursday, read more about its results on ENN.

The Financial Times reports that Vodafone has offered to pay ZAR22.5 billion (USD2.5 billion) for a controlling stake in South Africa's biggest mobile operator, Vodacom. Vodacom is currently owned 50/50 by Vodafone and Telkom, South Africa's incumbent telco; Vodafone wants to purchase a further 15 percent stake from Telkom to strengthen its position in this key emerging market. The deal, if it is completed, would be financed from Vodafone's cash pile and existing debt facilities, allowing the company to avoid seeking funds from the chaotic global finance markets.

The Wall Street Journal reports that the technology industry, which hadn't been feeling the effects of the credit crunch to date, is now getting squeezed from two sides. IT companies are struggling with sagging demand whilst VCs are telling start-ups to cut costs and plan for a prolonged downturn. According to the paper, Sequoia Capital, which invested in such companies as Google and YouTube, gathered the chief executives of its portfolio companies this week and told them to focus on being profitable, and to take a firm hand to expenses and cost-cutting, according to people who attended the event.

The same paper also reports that Apple may announce a new sub USD1,000 laptop, setting a low price point for the company -- as it aims to get a greater share of one of the fastest-growing categories in the business. Apple has issued invitations to media and analysts for a press event next Tuesday that indicated the focus would be on its portable Macintosh line.