Weekly Digest
Weekly Digest Issue No. 437
16-10-2008
by Deirdre McArdle
Budget gets mixed reaction from tech sector | Comms budget dips, broadband still a priority | Andor Technology plays hard to get | Belfast gets jobs boost | Google dons its money-making cap | Will users Krave Moto's new phone?
Budget gets mixed reaction from tech sector
Finance Minister Brian Lenihan's first Budget threw up a few surprises on Tuesday, with the new income levy perhaps being the key talking point. From the tech sector's perspective there was a mixed reaction to the finance minister's cutbacks and measures. ICT Ireland and HP Ireland welcomed the Government's increase in science, technology and innovation spend by EUR15.4 million to EUR309 million and the increase in the R&D tax credit from 20 percent to 25 percent. However, ICT Ireland said it had some concerns about the lack of extra investment in the teaching and support of science and mathematics in primary and secondary schools. Slashing investment in the roll out of ICT in the classroom by 30 percent also hit the wrong note for ICT Ireland. "A reduction in the Government's commitment to roll out the use of ICT in the classroom by reducing the current and capital spend on schools ICT activities by almost 30 percent is particularly damaging to the future skills of our young student," said Kathryn Raleigh, director, ICT Ireland. For his part, Martin Murphy, managing director at HP Ireland, urged the Government to establish a five-year plan that focuses on both retaining and attracting multinationals to Irish shores. "We have to focus on the new generation of companies in previously untapped geographies, we have to offer even greater incentives to undertake R&D in this country, so that Ireland has the skills and more importantly the know-how to get back into the game," he advised. Looking towards homegrown companies, the Irish Software Association was disappointed the Government did not increase the limits companies can raise through the Business Expansion Scheme (BES). "Software and other SMEs who can achieve real growth are having extreme difficulty accessing sufficient funding. Allowing companies to raise more investment for growth through the Business Expansion Scheme is essential," said ISA director Shane Dempsey.
Comms budget dips, broadband still a priority
Calling Tuesday's Budget a "platform for recovery", Minister for Communications, Energy and Natural Resources Eamon Ryan said he is going to focus his department's spending on energy efficiency and broadband. Although Minister Ryan's department saw its budget cut by 6.5 percent, from EUR536 million to EUR501 million, the minister said the bulk of these cuts will come from savings on the administration budget. Within the department, communications took the biggest hit with its budget being cut by EUR15 million, from EUR65 million in 2008 to EUR49.5 million for next year. The minister said that with this money the communications section of his department would focus on the rollout of broadband across the country and to secondary schools. He said a provision has also been made for a pilot project of high speed (100Mbps) broadband to second level schools. When ENN asked what areas of communications would be affected by the EUR15 million cut, a spokesperson for the department said "the reduction in the communications budget is explained by the pause in the construction of MANs following a value for money review earlier this year." All monies for the National Broadband Scheme and Broadband for Schools were secured, according to the spokesperson, who told ENN that the minister had allocated an extra EUR6 million for the 100Mbps for second level schools project. The minister appears adamant that energy and broadband are central to Ireland's economic future; whether or not he'll reach his self-set target of providing broadband for everyone in the country by the beginning of 2010 remains to be seen. The general slowdown in construction and infrastructure projects could cause this target date to be extended; however, the fact that the National Broadband Scheme has the money to go ahead (albeit a couple of months delayed) should be seen as a positive sign.
Andor Technology plays hard to get
The Andor Technology bidding saga took another turn earlier this week with the news that Carraig has dropped its plans to take over the Belfast high-end digital camera maker. Carraig is the investment vehicle of Kingspan founder Eugene Murtagh. Its offer price of STG0.80 a share was rejected by Andor's independent directors, who said they wouldn't recommend it to the board. It remains to be seen now whether another bid will be forthcoming from a management-led group called Thorndale Trading, which had a per share bid of STG0.73 turned down by Andor back in July. Ironically perhaps, that bid was turned down due to Carraig's initial STG0.76 per share bid, which was later raised to STG0.80 per share. The STG0.76 per share bid valued Andor at around STG21 million. It's not yet clear what Andor's motives are for rejecting the higher Carraig offer; perhaps it is holding out for yet a higher bid and hopes its anticipated results will convince either Thorndale or Carraig that it's worth a higher price. At the beginning of September Andor had said its results for the financial year to the end of September would be better than expected after a strong second half. The company said revenues for the full year would be at least EUR24.5 million, while pre-tax profits would be around EUR2 million. The firm's results will be revealed on 6 November.
Belfast gets jobs boost
Despite gloomy financial news from all over the globe this week, Belfast had something to celebrate. US telecoms firm BTI Systems announced it is to set up its European headquarters and software centre of excellence in Belfast, invest STG6.7 million in the region and create 60 high-quality jobs in the process. BTI Systems provides so-called Intelligent Service Edge solutions, which includes the development of state-of-the-art systems for the delivery of high bandwidth voice, video and data communications. The jobs to be created will be in the area of software development and engineering, an Invest Northern Ireland spokesperson told ENN. "BTI are looking for both graduates and experienced software developers and engineers and they are currently recruiting for those positions," said the spokesperson. Invest NI has given STG600,000 towards the overall investment. And there could well be more good news on the horizon for Northern Ireland; Enterprise Minister Arlene Foster is leading an Invest NI trade mission to San Francisco and Boston later this month.
Google dons its money-making cap
Internet giant Google, which just last week unveiled its click-to-buy money-making scheme for YouTube, has now announced it is to begin showing full-length TV shows on its video-sharing website. This is a departure for YouTube, which spawned the now prolific trend of online video shorts, and signifies the perfect vehicle for Google to cash in on its USD1.65 billion investment in YouTube. All TV shows will feature advertisements before, during and after each TV episode. YouTube has for now signed a deal with CBS, which means it will be able to show programmes from the studio's stable such as 'Star Trek', 'Dexter' and 'MacGyver'. It will however really need to augment its content if it is to attract the number of eye-balls it requires to make this venture worthwhile. It's contending with established sites such as Hulu, the joint venture of NBC Universal and News Corporation, which boasts a massive database of shows. Elsewhere, Google has been busy devising a way to insert ads into online games. It has released a beta version of AdSense for Games, which allows video, image or text ads to be slotted into the beginning, end or change of level in an online game. Advertisers will be charged on a cost-per-impression or cost-per-click basis and revenue will be split between Google and the games developers. Meanwhile, MySpace has gatecrashed the online advertising party with the launch of a public test of an ads system that enables advertisers and users to create ads that are targeted at specific categories of MySpace visitors by age, interest and region. With the launch of MyAds, MySpace hopes to boost its advertising sales by convincing some of the social network's 76 million US users to not just view adverts, but also to start buying them.
Will users Krave Moto's new phone?
Embattled mobile phone maker Motorola showed some fighting spirit this week with the release of the nifty-looking Krave, a touchscreen phone, available in conjunction with Verizon Wireless in the US. The Krave has a 2.8-inch touchscreen with an interactive clear flip screen over it it. "The clear, touch-enabled flip over the large, high-resolution touchscreen is nothing like you've seen and yet it's totally intuitive," said Ken Hallman, VP of Motorola's mobile devices, in a statement. Reviews are mixed on the usefulness of this clear flip screen - some call it a great addition, others see it as an annoying distraction. The Krave features 3G connectivity but not Wi-Fi, something that hasn't gone down too well on the discussion forums. Still, general consensus is that the Krave is a good phone; it's no iPhone, or even a G1, but it's likely to do well for Motorola. God knows, Moto could do with a break.
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