Weekly Digest
Weekly Digest Issue No. 463
30-04-2009
by Deirdre McArdle
Sun results fail to shine | Tough road ahead for new MySpace chief
BCM considers its future
In the latest installment of the Australian soap opera Babcock & Brown, shareholders at Babcock & Brown Capital (BCM) voted overwhelmingly to separate from its former parent company, Babcock & Brown. Reflecting the fact that its primary investment asset is now Irish telco Eircom, BCM has been renamed Eircom Holdings. The other point on the agenda, namely a controversial remuneration and termination package for newly appointed chief executive Andrew Day, was resolutely shot down, with shareholders voting to reject the incentive package. This vote opens the way for a renewed bid for BCM (or Eircom Holdings) from TaemasBridge, the Rob Topfer-led company. Topfer had threatened last week to withdraw the TaemasBridge offer if the package for Day was passed. The Topfer bid was firmly rejected by BCM, which said the offer was "unacceptable in its current form". For now, BCM says it's considering "several" proposals, including the Topfer offer. BCM chairman Kerry Roxburgh said these other proposals are confidential.
Roaming caps not to everyone's liking
Nicely in time for the summer holiday season, the European Union Parliament approved the decision to cap the cost of mobile calls and text messages last week. From July, the retail price of sending text messages in the EU will fall to EUR0.11, compared with the current price of EUR0.29. Phone calls will also be reduced to EUR0.43 per minute to make calls and EUR0.19 per minute to receive them. Wholesale data roaming prices will also be reduced, costing EUR1 per megabyte, with prices expected to reduce to EUR0.50 per megabyte in 2011. While holidaymakers will undoubtedly welcome the changes, not everyone is happy with the move. The GSM Association has opposed the caps, arguing that prices were dropping anyway, making the new caps unnecessary. Irish mobile operators Vodafone and O2 are also among a group that will challenge the decision at the European Court of Justice. Lawyers for the companies said the legislation was adopted using "flawed reasoning". David Pannick, a barrister for Vodafone, told the court that the EU had imposed a "blanket" regulation, without investigating whether a "less intrusive" remedy would suffice. EU Telecoms Minister Viviane Reding is fairly adamant about the move, though. "EU citizens should be free to text across borders without being ripped off," she said. "The regulation will protect the vast majority of ordinary customers who up to now have been heavily overcharged when travelling abroad."
Is Microsoft prepping iPhone killer?
There have been some iPhone-related stirrings state-side over the past week. Reports surfaced early this week suggesting that mobile operator Verizon Communications had held talks with Apple about the possibility of it selling a version of the iPhone based on the 3G wireless technology CDMA 2000. Verizon's chief rival AT&T currently has an exclusive iPhone sales deal with Apple, using a different wireless technology. When these rumours had just left the mill, speculation emerged that Verizon was also in talks with Microsoft about the possibility of launching a so-called 'iPhone killer' as soon as 2010. According to a report in the Wall Street Journal, Microsoft is currently working on a project, code-named "Pink", which is pitched as a rival to the iPhone and extends Windows Mobile with new features and capabilities. Rumour has it that Microsoft itself will design both the software and the hardware for the device but that a third-party will manufacture the phone, possibly the Sidekick maker Danger, which Microsoft bought last year. For all the speculation though, Microsoft has reportedly insisted that it is "not going into the phone hardware business" and is focusing instead on updates for its existing mobile operating system. So will all the gossip and speculation come to naught? Or are Microsoft and Verizon really planning to go toe-to-toe with Apple and AT&T?
Tough road ahead for new MySpace chief
As it strives to recapture some of the buzz from days gone by, MySpace has made three key appointments. In an interesting choice, Owen Van Natta has been selected as the social network's new chief executive officer. Formerly chief operating officer at Facebook, Van Natta also worked at Amazon and brings with him a wealth of experience in the internet arena. Certainly he'll need to draw on all of that experience if he is to jump-start MySpace, which has been eclipsed in terms of worldwide users by Facebook. In the US, MySpace is still top dog on the social networking scene, but only just. According to comScore it attracted 70.1 million unique users in March, down 3.6 percent on last year, compared to Facebook, which saw its unique user stats grow by 72 percent to 61.2 million. Joining Van Natta at the management table will be Michael Jones, founder and CEO of Tsavo Media, an online content publisher, who has been named MySpace's chief operating officer, and Jason Hirschhorn, former chief digital officer at Viacom's MTV Networks, who takes up the new role of chief product officer. Crucially, industry analysts believe Jones and Hirschhorn will bring key experience in the tech and product development sectors to MySpace. However, it's also well acknowledged that regaining the MySpace glory days is going to be a tough job indeed.
Sun results fail to shine
On the back of lower technology spending and uncertainty about its future, Sun Microsystems saw its quarterly losses widen. Net loss for its third fiscal quarter ended 29 March was USD201 million (including a restructuring charge of USD46 million), or USD0.27 a share, compared to a net loss of USD34 million, or USD0.04 a share in the year-ago quarter. Revenue fell to USD2.61 billion from USD3.27 billion; analysts had been expecting revenue of USD2.85 billion. Industry observers believe that news of Sun's near-acquisition by IBM in the last few weeks of the first quarter took its toll on the tech giant's bottom line, with some customers opting to hold off on purchases until they knew what was going on with Sun. Due to its impending acquisition by Oracle, which swooped in when talks with IBM fell apart, Sun didn't comment on its earnings. For its part Oracle believes Sun is a sure bet; it expects Sun to contribute over USD1.5 billion to its operating profit in the first year, and more than USD2 billion in year two.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 