Weekly Digest
Weekly Digest Issue No. 442
20-11-2008
by Deirdre McArdle
Yahoo's Yang steps down | Carphone Warehouse to split in two | Researchers urged to think outside the box | Papermaster strikes back | Tech giants take cost-cutting action | LHC off-line until summer
Yahoo's Yang steps down
The news of Jerry Yang's departure as Yahoo's CEO was likely cheered by shareholders, who blame him for the steep decline in the search giant's share price, which has fallen dramatically since Yang turned down a USD33 per share offer from Microsoft earlier this year. The market also reacted positively to Yang's stepping down, with Yahoo shares jumping by as much as 17 percent on Tuesday. Yang, who took over at the helm of Yahoo in June 2007, 13 years after he founded the company with friend David Filo, will stay on at the search giant and assume the role of 'Chief Yahoo'. For now, the Yahoo board has a tough decision on its hands as it searches for a replacement. A few names are being bandied about, including Susan Decker, current Yahoo president; Peter Chermin, News Corp president; former AOL CEO Jonathan Miller; and Tim Armstrong, a senior vice president at Google. At this early stage though it's anyone's guess as to who will be chosen for this tough job. Whoever does take up the challenge will be diving right into the deep end. Yahoo has seen its fortunes dwindle over the past couple of years as it struggled to make tough decisions that would give the firm more focus. Now that Steve Ballmer has effectively squashed any hopes of a revised bid from Microsoft, sending Yahoo shares tumbling by as much as 21 percent on Wednesday, the new CEO is going to face substantial pressure to come up with some way of digging Yahoo out of the rut it's currently in.
Carphone Warehouse to split in two
As it posted a fairly sturdy set of financial results on Tuesday, Carphone Warehouse confirmed it has begun "a formal review of the group's corporate structure and capital requirements, which may lead to a separation of the two businesses". This separation would most likely take the form of a de-merger of Carphone's retail (Best Buy Europe) and telecoms (TalkTalk) business. Although the group as a whole is performing well in the current market, CEO Charles Dunstone said he expects the next 12 months to be the "most challenging economic environment it has ever operated in". For the six months to 27 September Best Buy Europe saw revenue jump to STG1.6 billion from STG1.4 billion in the same period last year, while EBITDA increased slightly from STG96 million to STG99 million. Meanwhile, TalkTalk's revenue for the period was STG697 million, down from STG711 million in 2007; however, EBITDA jumped from STG82 million to STG120 million. Dunstone said Carphone had reached a watershed in its evolution, and described its retail and telecoms interests as two discrete and focused businesses. "We recognise... the structure of the group may now no longer be appropriate for the optimal development of the two businesses," he said. The firm aims to give an update on its review in the spring, according to Dunstone. Industry commentators are already speculating that TalkTalk will be put up for sale, a rumour that Carphone has reportedly dismissed.
Researchers urged to think outside the box
Some 400 scientists made their way to Kilkenny this week to attend Science Foundation Ireland's science summit in Lyrath Estate. For this, the second year of the event, SFI decided to introduce an overriding theme for the two-day summit: Converging World. Professor Frank Gannon, director general of SFI, said the chosen theme reflects a general trend that is happening in the research sector in Ireland. "The SFI areas of responsibility are biology, ICT and engineering, and as such our aim is to encourage these worlds to interact with each other." Minister for Science, Technology and Innovation Dr Jimmy Devins, who attended the event, urged attendees to "persevere, probe and push the parameters of possibility in their day-to-day research". Prof Gannon said that Ireland has gotten off on the right track when it comes to converging research. Certainly the line-up of speakers outlining their specific research projects points to a healthy culture of integration between areas as diverse as biology and software. Projects such as that being run by Brian Norton, which combines telecoms and sunlight; Autonomic Network Management, which uses biological models to enhance comms networks; and a project being run by Paddy Prendergast, which combines mechanics and biology. "We want researchers to step away from just adding the next brick in the wall," said Prof Gannon, who told ENN he believes events like the science summit will help to develop the scientific community in Ireland.
Papermaster strikes back
In the latest installment of the corporate tug-of-war between IBM and Apple, Mark Papermaster has fought back by countersuing Big Blue. A federal judge last week ordered Papermaster to stop working at Apple, while the judge hears a breach-of-contract case brought against the chip expert by his former employer, IBM. Papermaster has turned IBM's case on its head, countersuing the firm while maintaining that his non-compete contract with IBM simply isn't relevant to his move to Apple, as the firms aren't competitors. Papermaster also claims that the non-compete clause in his IBM contract is "unreasonably broad in that it purports to impose an unreasonably lengthy time limitation," reports Information Week. For now, Papermaster is out of a job, although he needn't worry too much about money; the court has ordered IBM to post a USD3 million bond to cover any costs or lost wages incurred by Papermaster if IBM loses the lawsuit. Apple appointed Papermaster as head of iPhone and iPod development in late October. The former IBM executive was previously vice-president of IBM's blade server unit and IBM is worried that he may take whatever expertise he gleaned in that role and use it to design rival chips for Apple.
Tech giants take cost-cutting action
PC giant Hewlett-Packard's results were among the last in a long list of tech giants' figures to be released, and the firm didn't disappoint. In spite of the fall-off in consumer spending and the general economic downturn, HP posted a 19 percent rise in revenue to USD33.6 billion, beating analysts' expectations of USD33.09 billion. Earnings per share for the quarter increased from USD0.81 to USD0.84 per share. HP expects per-share earnings, excluding items, of USD0.93 to USD0.95 on revenue of USD32 billion to USD32.5 billion for its upcoming quarter. Despite the positive figures though, HP isn't taking any chances. Last week it notified employees that it would extend its traditional week-long Christmas shutdown to two weeks, as it seeks to "achieve significant operational savings". Meanwhile, another giant of the tech world, Sun Microsystems, has taken more drastic action. It has announced it will be cutting between 5,000 and 6,000 jobs, or 15 percent to 18 percent of its workforce, which it said will help it reduce costs by between USD700 million and USD800 million annually. Sun has been under pressure from investors to make substantial changes in the face of widening losses at the firm. For its first fiscal quarter to the end of September Sun posted a USD1.68 billion loss.
LHC off-line until summer
It's been a while now since the Large Hadron Collider made headlines. At the end of September an electrical fault shut the machine down, and at that stage scientists at the European Organisation for Nuclear Research (CERN) said they expected it to be back up and running by November. It turns out though that the damage is worse than expected. A spokesman for CERN has said repairs, which will cost around EUR21 million, won't be completed until May or June of next year. "If we can do it sooner, all well and good. But I think we can do it realistically [in] early summer," he said, in a BBC report. After a successful beginning to the world's largest physics experiment -- which involved sending beams of protons clockwise, then anti-clockwise, around a 27km underground tunnel at CERN -- work at the LHC ground to a halt just days later when researchers discovered a large helium leak in sector 3-4, which had been caused by a faulty electrical connection between two magnets. The fault means the 'real' experiment that everyone was waiting for, during which scientists shoot two beams in opposite directions at the same time, causing a 'super' collision, which may or may not cause a black hole that may or may not consume the Universe, will now not happen until at least next summer.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 