Weekly Digest
Weekly Digest Issue No. 450
29-01-2009
by Deirdre McArdle
Yahoo beats forecast, Bartz is not for selling | Eircom on the lookout for new CEO | Job site hit by Monster attack | Ireland escapes worst of tech giants' cuts | National Broadband scheme: will it hit the spot? | Mobile phone market dazed by slowing economy
Yahoo beats forecast, Bartz is not for selling
New Yahoo CEO Carol Bartz presided over her first results conference call on Tuesday as the search firm released better-than-expected fourth-quarter figures. Although the troubled search firm posted a net loss of USD303.4 million compared with net income of USD205.7 million a year earlier, its earnings per share figures, excluding items, came in at USD0.18 per share, better than the USD0.13 expected by Reuters Estimates. Revenue for the fourth quarter was USD1.81 billion, down 1.4 percent from the same period the previous year; however if fees passed on to partner sites are excluded the sales figure of USD1.38 billion meets projections. All in all it was a relatively okay showing from Yahoo, with its share price surging by as much as 6.7 percent in after-hours trading. For her part, Bartz reaffirmed her no-nonsense attitude, saying she didn't join Yahoo to simply sell all or parts of the company, a move some Yahoo investors have actively encouraged. "Did I come to Yahoo to sell the company? The answer is no," said Bartz during the conference call. "This is not a company that needs to be pulled apart and left for the chickens." Indeed. As for the year ahead, Yahoo is being extremely cautious. It said it expects income from operations of USD75 million to USD85 million in the first quarter, about half the average analyst forecast of USD165 million, according to Reuters Estimates. The firm isn't comfortable giving any indication of expected results down the line in 2009, due to the general market uncertainty, it said. One thing's for sure though: there's a lot of work to be done to turn Yahoo around.
Eircom on the lookout for new CEO
Eircom chief executive Rex Comb has announced he is to resign in June and return to his native Australia to pursue other opportunities. Comb was named CEO of Eircom in August 2006 following Babcock & Brown's acquisition of the Irish telco. He took over the role from Dr Philip Nolan, who had held the top position at Eircom since 2002. Comb was previously head of Babcock & Brown Capital Management. According to reports Comb's decision to leave Eircom came as a surprise to some senior management. In a statement issued late on Tuesday, the firm said Comb's decision to step down in June is "ample time to conduct a thorough search process to recruit a successor and ensure a smooth and orderly transition between CEOs". Speaking on behalf of the board, Ned Sullivan, chairman, said: "I would like to thank Rex for the great work and achievements under his stewardship including the extended rollout of broadband to more than 90 percent of the country; the continued growth of Meteor; the implementation of the Next Generation Core Network; and the improvements to customer service." Sullivan himself replaced former chairman Pierre Danon who left Eircom in June 2008 to take up the position of CEO at French telecommunications firm Numericable and Completel. So, the search begins for a new CEO for Eircom. To be sure, it's a tough role for anyone to take on, particularly given the firm's less than stellar results of late.
Job site hit by Monster attack
So, what have we got to look forward to for the coming year? Well, an increase in data loss, according to KPMG's Data Loss Barometer, which predicts that 190 million people around the world will be hit by some form of data loss during 2009, some 100 million more than were affected last year. No sooner had KPMG's report come out than lo and behold it emerged that the details of millions of people registered on the Monster.com job-seeking site had been compromised. Though its not been confirmed yet just how many people have been affected, The Times in the UK has reported that the details of 4.5 million people registered on Monster.co.uk have been compromised. Monster has yet to divulge the range of the attack but has admitted that names, passwords, telephone numbers, e-mail addresses, birth dates, sex and ethnicity data, as well as other "demographic information", were all stolen. In a statement posted on its website on Friday, Monster advised customers to change their passwords the next time they logged on to the site and warned them to be on the lookout for phishing e-mails built around details taken from the Monster site. In addition to the Monster breach, USAJobs.gov, the official job site of the US government, whose database is run by Monster, has also warned of a hacking attack. Graham Cluely of security firm Sophos warned that it is important to understand the "serious risks that Monster and USAJobs customers may be placed in because of this incident". He said hackers armed with details from Monster accounts could target other online information. "It is surprising just how many people use the same password for a variety of sites. They need to change all passwords that are the same as that for their Monster login," he said.
Ireland escapes worst of tech giants' cuts
Following the blow of the loss of 1,900 Dell jobs in Limerick, there has been much speculation as to the future of the other multinationals based in Ireland. In the wake of the Dell decision, reports had suggested that Intel job cuts could be on the cards. However, in spite of these reports, Intel, which has announced it is to close several of its older factories, displacing 5,000 to 6,000 workers, has confirmed that Irish workers would not be affected by initiative. The chip giant, which employs over 5,000 people in Ireland, did say however that its Irish site was involved in a global evaluation of proposals to cut a further 1,000 manufacturing and related staff jobs. Still, there was good news on Thursday when it was revealed that the chip giant had chosen Leixlip as the location for a new European R&D hub. Meanwhile, another large Irish employer, Microsoft, which has 1,200 staff in Ireland, has said that less than 20 people will be affected by its decision to cut jobs globally. The software giant is poised to cut 5,000 jobs worldwide, with 1,400 to go immediately. Another multinational stalwart of the Irish tech sector, Hewlett-Packard, has written to one-third of its 4,000 Irish employees asking them to take eight days' leave in March or April so it can temporarily close part of its Dublin Inkjet Manufacturing Operation (DIMO). The firm has requested that staff take either annual leave or unpaid leave during this time. While these announcements are all relatively minor compared to what happened at Dell, they don't completely banish the fears that Ireland could feel the brunt of more job cuts at a later date.
National Broadband scheme: will it hit the spot?
After a few false starts, the Government's National Broadband Scheme was officially unveiled last Thursday by Communications Minister Eamon Ryan. The scheme will be rolled out immediately and pledges to deliver broadband all over the country by September 2010. It will be funded by a combination of Exchequer funds, EU co-financial and Three Ireland investment to the tune of EUR223 million, and will create 170 new jobs directly. In November 2008 it was announced that mobile operator Three had won the contract to deliver the scheme. It had been up against telecoms incumbent Eircom for the contract and many industry watchers considered it almost a foregone conclusion that the might of Eircom would prevail. There has been much industry reaction to the scheme, with Chambers Ireland welcoming the announcement and saying that a "wireless and scaleable broadband offering is a viable option for rural business provided that it is always on, is easily accessible, and is good value". The product to be delivered by Three will cost EUR19.99 per month and offers initial download speeds of 1.2Mbps. The speeds on offer and the broadband delivery method have come under fire from two angles. Fine Gael, though welcoming the scheme in principle, said it had concerns that it is based almost solely on mobile broadband via a mobile network. Meanwhile, broadband lobby group IrelandOffline, which recently reformed to address what it considers the poor state of Irish broadband, has termed the offering 'midband' and has argued that the technology being used will not be able to support the "advertised headline speeds". A report released by internet monitoring firm Epitiro in December highlighted some concerns about advertised broadband speeds versus actual speeds. Though mobile broadband users were found to be getting 64 percent of the speeds advertised, the report found that browsing using mobile broadband was "considerably slower" compared to fixed line services advertised at similar speeds. IrelandOffline's interim spokesperson Eamonn Wallace has said that the group is in the process of publishing "a more comprehensive document outlining the technical issues" of the National Broadband Scheme.
Mobile phone market dazed by slowing economy
The mobile phone market is the latest sector to feel the negative effects of the global downturn. Although growth in the market had been slowing in recent quarters, the last three months of the year revealed the impact the slowdown is having on shipments. Just 295 million phones were shipped worldwide during the fourth quarter, a drop of 10 percent from 329 million in the year-ago quarter. According to Strategy Analytics, this represented the market's weakest growth rate since 2001. The slowing of consumer spending on mobile phones is taking its toll on most of the top five vendors, three of which saw their growth rates drop during the fourth quarter. Nokia experienced a 15 percent drop in shipments and saw its fourth quarter net profit plummet by 69 percent year-on-year. Sony Ericsson and Motorola also saw handset sales dip by 21 percent and 53.6 percent, respectively. On the flip side, LG and Samsung had relatively strong quarters, with growth of 8 percent for LG and 14 percent for Samsung. At this stage we're so used to hearing predictions of continuing growth for the mobile phone market that talk of a decline doesn't entirely register, yet Strategy Analytics has outlined its expectation for the coming year, and it ain't pretty. The firm estimates that 1.08 billion handsets will be sold worldwide for the full year 2009, 9 percent less than in 2008, potentially making 2009 the weakest year for the mobile industry since it began way back in 1983. Tough times ahead.
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