Weekly Digest
Weekly Digest Issue No. 477
06-08-2009
by Deirdre McArdle
STT revises Eircom bid | Mobile phone market on road to recovery
New jobs a welcome sign
This week has seen a smattering of good news on the jobs front in Ireland. On Wednesday Irish search engine start-up Mugurdy became the first company to enter the Guinness Enterprise Centre's (GEC) Microsoft BizSpark cluster, as it moves to speed up the global launch of its search engine. As it works on getting the new search engine ready for market Murgady said it will likely create 20 new jobs for network engineers, software designers and support roles by the end of 2010. Mugurdy claims its search engine, which is expected to launch by the end of this year, is unique in that it is an image-based service that displays real-time website screenshots in the results field. Elsewhere, on Tuesday, Kenexa, a company that provides software solutions aimed at recruitment and human resources, has opened a new office in Dundalk, Co Louth, which will create up to 30 jobs by the end of 2010. As the operation develops, additional jobs are expected to be created. The company said that Dundalk was an ideal location from which it will be able to deliver a personal, local service to its customers in Ireland, as well as allow it to scale its operations to better serve its European customers. Tanaiste Mary Coughlan called Kenexa's Dundalk operation "a welcome addition to the country's profile as a leading centre for technology and innovation".
STT revises Eircom bid
Eircom's fifth change of ownership in the last 10 years appears to be a step closer following the news that Singapore Technologies Telemedia (STT) has raised its bid for Eircom Holdings (ERC), which owns 57.1 percent of Eircom. Under the new bid STT is offering ERC shareholders AUD0.40 (EUR0.23) for each share held and has said it will distribute all of ERC's available surplus cash to shareholders via a capital return, which is expected to amount to AUD0.97 (EUR0.57) per share. This comes in at an overall value of approximately AUD230 million (EUR135 million). STT's original offer totalled approximately EUR108.15 million (this included EUR30 million and an expected return of capital to shareholders of EUR78.15 million). Shares in ERC were suspended on the Australian stock exchange on Tuesday while its board considered the offer. ERC's share price at the time of suspension suggested a market capitalisation of EUR106.78 million. STT became the preferred bidder for ERC in June when the powerful Eircom Share Ownership Trust (ESOT), which owns 35 percent of Eircom, put its weight behind it. The move saw two other potential bidders, Irish telco exec Sean Melly and equity group Arcapita, withdraw from the race. STT is owned by Temasek, the Singapore state investment company, and holds a majority stake in Global Crossing, the international fibre-optic network company which has an operation in Ireland. ERC said in a statement on Thursday morning that it will continue to negotiate with STT to improve the proposal, as there are some terms and conditions that it is unable to recommend in their current form. A final decision is imminent.
Mobile phone market on road to recovery
As the global recession marches ever onwards, there have been glimmers of hope of a recovery in the past few weeks, with some tech sector companies reporting better-than-expected figures and forecasts. The mobile phone market, which had experienced a global decline in the past few quarters, has seen that decline slow somewhat, enough for analysts to tentatively suggest the worst may be over. According to Strategy Analytics, global handset shipments reached 273 million units worldwide in the second quarter, a drop of 8 percent from 297 million units in the same period last year. Meanwhile, IDC reported that shipments dropped 10.8 percent to 269.9 million units, compared to 302.1 million units in the year-ago quarter. Both research firms agree that the rate of decline has slowed off from the first quarter, indicating a stabilising of the market. According to both reports Samsung and LG were the best-performing mobile makers during the quarter, and the only two to record positive growth. Though Nokia retained its market lead, the Finnish firm saw shipments drop by 15 percent. Meanwhile fourth-placed Motorola had another woeful quarter, shipping 47 percent fewer handsets than a year ago. Sony Ericsson in fifth place recorded a 43 percent drop in global shipments. Outside of the top five but notable all the same is Apple, which, according to Strategy Analytics, saw iPhone shipments grow by a massive 626 percent year-on-year. Looking ahead, Strategy Analytics expects 290 million handsets to shift during the third quarter, for an annual decline of just 5 percent.
Firefox celebrates major milestone
Last Friday Mozilla celebrated the 1 billionth download of its web browser Firefox. At the time of writing Firefox had been downloaded 1,006, 472, 513 times, according to a rolling counter on Twitter. Firefox has become increasingly popular over the past year. At the end of June 2009 Mozilla released version 3.5 of the browser and recorded just shy of 5 million downloads in the first 24 hours; in June 2008 when it launched Firefox 3.0 the firm said it was downloaded over 8 million times in 24 hours. It remains to be seen how Microsoft's announcement on 27 July that it will offer European Windows users a choice of web browsers will affect Firefox downloads. For now Firefox is currently the second most popular web browser behind Internet Explorer with a reported 22.4 percent market share in July; Internet Explorer had a 62.8 percent share, according to Net Applications. In other news of Mozilla, the firm on Tuesday released new security patches to fix two vulnerabilities in versions of Firefox prior to 3.5 that could allow attackers to steal personal data and remotely execute code. The first vulnerability allows attackers to issue false security certificates while the second could enable them to use a specially crafted certificate to cause an application crash and remotely execute code on affected machines. Increased security attacks have long been the negative side to a growth in popularity.
Finer details of Micro-hoo deal revealed
Following last week's announcement of a search alliance, more details have emerged about the Micro-hoo partnership. According to a filing with the SEC (Securities and Exchange Commission) in the US, a number of Yahoo employees will transfer to the software giant: "Microsoft will hire not less than 400 Yahoo employees and will offer the 'transferred employees' market competitive compensation packages." The filing also outlines a number of 'escape clauses' that allow Yahoo to break away if the partnership falters. Yahoo can pull the plug, the document says, if Yahoo and Microsoft's combined share of search queries falls below a certain percentage of the market that the two sides have agreed on but not disclosed. Yahoo can also up and leave if its revenue per search drops below a set percentage of Google's. The papers also show that Microsoft is to pay Yahoo USD50 million in each of the first three years of the 10-year deal in order to settle transition costs. On Friday last week, Microsoft head honcho Steve Ballmer was forced to step in to defend the company's deal with Yahoo after investors expressed disappointment that Yahoo will get no upfront payment for the partnership. Ballmer said investors have failed to appreciate the value the search deal will generate for Yahoo. "Yahoo gets 88 percent of the search revenue they have today. They have zero percent cost of goods sold against 88 percent revenue and they have no [research and development] expense and no ongoing [capital expenditure]," he declared.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 