Weekly Digest
Weekly Digest Issue No. 467
28-05-2009
by Deirdre McArdle
New tech jobs lighten the mood | Nokia's app store has inglorious debut
Profits and revenue drop at Eircom
In a testing time for Eircom, the telco has posted its third quarter figures, which reveal a 27 percent drop in operating revenue. For the quarter ended 31 March, group operating revenue came in at EUR69 million, down from EUR95 million in the year-ago quarter. Revenue for the quarter also dropped, to EUR488 million, down 5 percent from the 2008 figure of EUR515 million. Meanwhile earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 1 percent year-on-year to EUR173 million. Meteor, Eircom's mobile arm, continued to perform well with EBITDA jumping 17 percent year-on-year to EUR35 million. Revenues at the mobile firm, however, were down 2 percent on 2008 to EUR117 million. Following the general trend among mobile operators, Meteor's average revenue per user (ARPU) decreased by 6 percent year-on-year to EUR37.52. Indicative of the competitive fixed line market, Eircom has seen revenues in the sector drop 7 percent year-on-year, while earnings in the segment dipped 5 percent. The results come at a time when Eircom is fielding interest from a number of companies looking to acquire the telco. Recent reports suggest that Arcapita, a Bahrain-based private equity firm which owns electricity company Viridian, is the latest suitor to emerge. CVC Capital Partners and Singapore Technologies Telemedia are also understood to be showing an interest. In separate, but related news, Communications Minister Eamon Ryan told attendees at the Telecommunications and Internet Federation (TIF) annual conference that "State ownership of Eircom is not on [the] agenda". Minister Ryan said that the Eircom ownership model of recent years "leaves much to be desired" and that he would not welcome a similar model again. "I would welcome, and indeed I would seek to facilitate in whatever ways I can, an investor who would have the capacity to invest in a long term business model that is bandwidth focused," he said.
New tech jobs lighten the mood
There was some good news on the tech jobs front during the week. On Monday, Cerner Corporation, which provides technology to the healthcare and pharmaceutical sectors, announced it plans to expand its Dublin headquarters and create 40 new high-tech jobs by the end of 2009. The firm is to add a software technical support service to its Irish operations, and there is the potential for more further expansion. The firm's Dublin operation, which is its European localisation and customisation headquarters, currently employs 14 people. Also on Tuesday, aviation training firm Simtech said it is to establish an 'aviation centre of excellence' near Dublin airport in a move that will see it grow its staff from 24 to 40. Employees at Simtech include engineering graduates. Meanwhile, on Wednesday, Dublin had another bout of positive jobs news when voice messaging technology firm VoiceSage announced it was to open new offices in Dun Laoghaire, creating 25 jobs in the process. The new jobs will be in software engineering, research and development and customer support. Founded in 2002, Cork firm VoiceSage provides software that allows automated telephone calls to be made to clients of its customers. Finally, Dublin-based software company Softedge Systems revealed plans to establish a centre of excellence in Newry, Co. Down. Softedge expects the move will create 15 new jobs over the next three years. The Newry operation will focus initially on developing software using Silverlight, which enables streaming of high quality video, animation and interactive features online.
Tech sector celebrates innovators
The technology sector celebrated its best and brightest last week with the Net Visionary Awards and ICT Excellence Awards. David O'Meara, managing director of games IT company Havok, was named IT Industry Person of the Year at the ICT Excellence awards, while e-Net, the company that manages Ireland's government-run Metropolitan Area Networks (MANs), took the Telecom Company of the Year gong. For a full list of the ICT Excellence Awards click here. Meanwhile, at the IIA Net Visionary Awards, the overall prize went to Ciaran Bollard and Mark French of Muzu.tv, the music video website and distribution platform. Maeve Kneafsey, IIA chairperson, said Muzu.tv was an "inspiration to the current and future generations of internet entrepreneurs who know that the internet means that there are no boundaries on what we can do in Ireland, the only limit being our imagination." The Dublin-based company is on a bit of a roll of late. During the past year it's signed deals with the four major record labels, including Warner UK on Wednesday. It's also signed contracts with independent labels such as Beggars Group, Defected Records and Cherry Red Records. To see who else picked up accolades at the Net Visionary Awards, click here.
Russian firm takes slice of Facebook
A little-known Russian investment firm slapped a USD10 billion price tag on Facebook on Tuesday when it bought a 1.96 percent stake in the social network for USD200 million. Digital Sky Technologies (DST) focuses on investments in internet firms, and has significant stakes in a number of Eastern European and Russian businesses. This latest valuation is down on the USD15 billion figure inspired by Microsoft's investment of USD240 million for a 1.6 percent stake in Facebook back in October 2007; however, Mark Zuckerberg has said that the Microsoft valuation came at a peak in the market and that the economy has changed considerably since then. Zuckerberg has called the DST valuation "fair". There are some that would argue this point, particularly given that Facebook has yet to turn any profit to speak of. In saying that, part of the Microsoft deal included selling ads on the Facebook site, an area that is reportedly becoming a fast-growing revenue stream for the social network. In addition, Zuckerberg has said he expects an increasing portion of revenue to be generated by charging users for extra features.
Nokia's app store has inglorious debut
Nokia's much-anticipated online app and content store Ovi Store launched on Tuesday, but the excitement was short-lived. The Finnish giant was forced to apologise to customers shortly after the launch due to "performance issues" as a result of what Nokia said was "extraordinarily high spikes of traffic". In order to address the problem, the mobile maker said it added servers, which apparently led to "intermittent performance improvements". The glitches are a blow to Nokia, which has positioned Ovi as its response to the phenomenally successful Apple App Store, as well as Google's Android Market and the BlackBerry's App World. Ovi Store allows users to download free and paid-for applications and content for over 50 Nokia devices. Ovi's potential customer base is huge: over 50 million Nokia handset owners worldwide, more than double the 20 million iPhone users globally. But will this negative publicity -- TechCrunch's Robin Wauters called the launch a "complete disaster" -- surrounding the unveiling taint the store's reputation? For now, reports are coming in that the store is up and running smoothly again. Nokia will be crossing its fingers that there are no more hiccups.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 