Weekly Digest
Weekly Digest Issue No. 488
22-10-2009
by Deirdre McArdle
New jobs offer signs of hope | E-book battle is quite the page-turner
Daft gets on the fast track
The eagerly awaited Deloitte Fast 50 awards took place last Thursday, with property website giant Daft Media soaring to the top of the list with an aggregate growth rate of 8,453 percent over the past five years. This is the first year Daft was eligible for the overall ranking; it had previously received a Rising Star prize in the awards in 2007. Last year's winner, Lincor Solutions, which provides next-generation interactive digital media solutions for the healthcare sector, came in second with growth of 6,802 percent, while Northern Ireland technology business solutions firm SLA Mobile took third place with a growth rate of 4,436 percent. Technology solutions provider iSite, which came third in last year's awards, slipped to fourth this year, while web-enabled hotel software firm Avvio rounded off the top five. The Rising Stars this year were awarded to alternative energy company AER from the Republic and Learning Pool, an e-learning provider for the public sector, from Northern Ireland. Now in its tenth year, the Deloitte Fast 50 ranks the fastest-growing technology companies in the Republic of Ireland and Northern Ireland. The Rising Stars award recognises younger companies with the fastest growth in turnover over the past three years, while the Fast 50 itself ranks the fastest-growing technology companies based on percentage revenue growth over a five-year period. For a full list of winners click here.
New jobs offer signs of hope
The Irish tech sector had another positive week with a couple of new jobs announcements. First up, New York Stock Exchange (NYSE) Technologies unveiled its plans to create some 400 jobs in Belfast over the next two years. The jobs will include new technology, operational and corporate posts. Invest Northern Ireland will be providing approximately STG9.6 million to support the move of NYSE Technologies business operations into a new state-of-the-art development facility in 2010. NYSE has two other technology centres in Europe -- one in Paris, the other in London. The firm said the centres allow it to "address the growing technology and trading needs of our customers". Elsewhere in Northern Ireland, Indian outsourcing firm Firstsource said it will create up to 100 new jobs at its call centre in Derry. The group provides support to the banking, financial services, telecoms, media and healthcare sectors. Meanwhile, in the Republic, Newsweaver announced it is to create 33 new jobs in Cork. The Bandon-based internet services firm will also invest EUR700,000 in research and development as part of the expansion. The firm provides software that allows companies to publish and send newsletters to their customers. In Dublin, US software firm Sajan announced it is to establish its European headquarters on the Nangor Road, creating 35 jobs in the process. The jobs will be primarily in research and development, as well as sales. Sajan provides on-demand translation technology. Finally, in another coup for Ireland, Google CEO Eric Schmidt has revealed that expansion of the search giant's Irish operations is on the cards. Schmidt was in Killarney this week for a Google Ireland get-together. The internet firm currently employs 1,500 people at its European headquarters in Dublin and Schmidt said "it's an absolute fact" that the firm would be increasing its workforce there.
Solid results point to turnaround
Following Intel's positive quarterly figures, results have been tumbling in from other high-profile tech firms such as Google, Yahoo and Apple, all of whom recorded impressive quarters. Google posted third-quarter revenues of USD5.94 billion, up 7 percent on the year-ago quarter. The internet behemoth also saw profits grow 27 percent to USD1.64 billion during the quarter as it reined in its costs. The results beat analysts' expectations, which had risen in recent weeks as CEO Eric Schmidt dropped hints that business was looking up. Wall Street responded well, with shares in Google rising 3.3 percent to USD547.30 in after-hours trading following the results announcement last Thursday. Meanwhile, fellow search firm Yahoo also had a solid quarter. Despite a 12 percent drop in revenue to USD1.58 billion, profits more than tripled to USD186.1 million, or USD0.13 a share, up from USD54.3 million, or USD0.04 a share, a year ago. The long-term prognosis is good for both Google and Yahoo, with signs indicating that spending on internet ads is stabilising, particularly from large marketers. Last among this market-beating trio, Apple saw its profits surge 47 percent to a record USD1.67 billion, or USD1.82 per share, shattering the Wall Street consensus forecast of USD1.42 per share. Revenue too showed an impressive increase from USD7.9 billion in the third quarter of 2008 to USD9.87 billion in 2009. Surging sales of iPhones, up 7 percent year-on-year, and Macintosh computer shipments, up 17 percent from last year, propelled the firm above market estimates. The future looks good for Apple too: Steve Jobs indicated that the firm has "some really great products in the pipeline for 2010". In after-hours trading on Monday shares in the firm jumped 6 percent to a record USD207.
Nokia feels the heat
On the flip side of the coin, Finnish mobile giant Nokia had a woeful quarter, reporting a loss of EUR559 million, down from a profit of EUR1.09 billion in the third quarter of 2008. The surprise loss came on the back of a 20 percent drop in sales from EUR12.2 billion to EUR9.81 billion, and a one-time charge for the fallen value of its network equipment unit, Nokia Siemens Networks. Nokia's share price plummeted 6.6 percent following its results announcement to EUR9.62 and the poor performance had a knock-on effect on the European markets in general. On a brighter note, the mobile maker said it expects the mobile phone market to contract by 7 percent in 2009, a slight improvement on its previous prediction of a 10 percent decline. Nokia is feeling the pressure in the European market where rival Samsung is making inroads into its market share. At the end of the second quarter Samsung had amassed a 29 percent share, hot on the heels of Nokia's 36 percent slice of the pie. Following the less-than-impressive results, Nokia outlined a management reshuffle. Rick Simonson, currently Nokia Chief Financial Officer, has been appointed to head of the Mobile Phones entity within the Devices unit as of 1 November. Mobile Phones is one of two new entities within the Devices unit that came into operation at the beginning of October, the other being Smartphones. Replacing Simonson as CFO will be Timo Ihamuotila, currently global head of sales, who will transfer to his new role on 1 November.
Insider trading stuns Wall Street
Wall Street was rocked this week by a massive insider-trading ring that allegedly traded on non-public information involving Intel, IBM, Google and others. Last Friday authorities made a swoop and rounded up members of the ring, which included Raj Rajaratnam, co-founder of Galleon Group, and Robert W Moffat Jr, a 53-year-old IBM veteran. Rajaratnam allegedly received insider information about impending Intel earnings releases from Rajiv Goel, an executive in Intel's treasury department. For his part Intel chief Paul Otellini said the company had no advance warning or knowledge of the SEC investigation into the activities of Galleon Group and other Wall Street hedge funds. In the wake of the arrests Galleon clients began, er, jumping ship. The firm announced on Wednesday that it is to wind down all its hedge funds. "I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind down of Galleon's funds while we explore various alternatives for our business," Rajaratnam wrote in a letter to employees. Meanwhile, IBM placed Moffat, who was a senior vice president at the firm, on a leave of absence following his arrest. Edward Barbini, an IBM spokesman, said "In view of a US federal investigation into his personal activities, Robert W. Moffat Jr has been placed on temporary leave of absence and is no longer serving as an officer of IBM." According to affidavits in the case, Moffat allegedly provided advance information about IBM and Sun Microsystems earnings to Danielle Chiesi, of hedge fund New Castle Partners. Chesi and her boss Mark Kurland, CEO of New Castle Partners, were also arrested last Friday.
E-book battle is quite the page-turner
Competition intensified this week in the burgeoning e-book market. Google announced plans to launch an e-book store that will deliver e-books to any device with a web browser. To be called Google Editions, the service will launch in the first half of 2010 and will initially offer about 500,000 e-books. According to Tom Turvey, Google's director of strategic partnerships, who spilled the beans at the Frankfurt Book Fair, readers will be able to buy the e-books either from Google Editions or from other online stores such as Amazon or Barnes and Noble. Amazon last week announced that it was to roll out its Kindle e-reader to 100 countries worldwide as it tries to capitalise on the device's success in the US market. Not to be left out, Barnes and Noble has revealed its plans for the e-book market. The US book chain has launched an e-book reader that industry observers are going ga-ga for. The Nook, as it's called, takes the e-reader to a new level. The device features a 3.5-inch colour touch screen for navigation and a 6-inch electronic paper display. Where it shines is the addition of Wi-Fi, for browsing when in Barnes and Noble stores for example, and the innovative LendMe technology, which allows users to share books with friends for a 14-day period at no charge. Using this technology, e-books can be sent to devices like the iPhone, iPod Touch, certain smartphones, PCs or Macs. Analysts have said that features like this are essential to really bring the e-reader market into the mainstream. Priced the same as the Amazon Kindle at USD259, the Nook e-reader could quite possibly make a dent in the Kindle's estimated 60 percent market share. No doubt it's a promising market, with analyst firm Forrester predicting that some 6 million e-readers will be sold in 2010, up from an estimated 3 million this year.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 