Weekly Digest
Weekly Digest Issue No. 493
26-11-2009
by Deirdre McArdle
Irish market 'challenging' for Eircom | Swings and roundabouts for PC makers
Daft Media on the Fast track
Just a month ago Daft Media was on a high when it came top of the Deloitte Fast 50 awards in Ireland. On Wednesday, the online property heavyweight stormed into the top 10 in the Deloitte Fast 500 EMEA, securing 8th position with a growth rate of 8,453 percent over the last five years. In all, 18 Irish firms made it on to the Fast 500 list, including Lincor Solutions. Lincor came second on the domestic list and achieved a ranking of 17th on the Fast 500. In 69th position was iSite, while further down in 105th place was Avvio. SLA Mobile, Northern Ireland's highest-ranking company in the Irish Fast 50 in third place, ranked at number 29 on the European list. Ireland's representation in the Fast 500 EMEA has been pretty consistent over the past few years, fluctuating between 24 companies and 18. Daft's performance equals that of silicon wafer maker Xsil in 2006 when it too ranked 8th in the European list. The overall winner of the Fast 500 EMEA was Turkish software firm Biotekno with a spectacular five-year growth rate of 42,417 percent. Turkey was well-represented on the list with 30 companies in all, including second-placed telecoms firm Millenicom. The UK leads the way though with 87 companies in the top 500 list, followed by France with 80. The Deloitte Fast 500 ranks the fastest-growing technology companies in the EMEA region based on companies' five-year revenue growth. Check out the complete Fast 500 EMEA ranking here.
Irish market 'challenging' for Eircom
Incumbent telecoms firm Eircom posted its third-quarter results this week, with the figures reflecting the increasingly competitive telecoms market in Ireland. Revenue for the quarter dropped 9 percent to EUR468 million while EBITDA (earnings before interest, tax, depreciation and amortisation) came in slightly lower (less than 1 percent) than the year-ago quarter at EUR168 million. CEO Paul Donovan said the environment in Ireland was challenging for the telco from an "economic, competitive and regulatory perspective". On a more positive note for Eircom, the group's operating costs were cut by 11 percent, reflecting the firm's reduced labour costs and other cost-cutting initiatives. Usually a bright point in Eircom's quarterly results, Meteor saw its revenues decline by 6 percent to EUR119 million. Falling ARPU (average revenue per user) was cited as the main cause, although recruitment of 20,000 new customers during the quarter worked to soften the effects of the 8 percent drop in ARPU. Meteor now has 1,046,000 customers, while DSL subscriptions stood at 673,000 at the end of September. These quarterly results are the penultimate figures to be produced under the current ownership, with Singapore Technologies Telemedia (STT) due to complete its acquisition of Eircom on 4 January 2010. Under the terms of STT's proposed AUD225 million takeover of Eircom, the Singapore telco does not plan to own more than 50 percent of Eircom. The Esot will rollover its 35 percent stake. In the event that all existing Eircom shareholders take the cash offer, convertible loan notes for about 15 percent of the company will be issued. A third-party investor will be sought for the loan notes but if none is found by mid-2011, the Esot will be obliged to buy them.
Swings and roundabouts for PC makers
Quarterly results this week from two of the biggest PC makers in the world reminded us just how important it is not to put all your eggs in one basket. Dell saw its quarterly profits plummet 54 percent year-on-year to USD577 million, or USD0.17 per share. Revenue dropped too, by 15 percent from the year-ago period, to USD12.9 billion. The significant fall in profits comes as the overall PC market itself is showing signs of revival and other PC makers are churning out improved results. Dell cited its over-reliance on the corporate PC market as one of the key factors behind its less-than-inspiring figures. The corporate market has been slower to recover from the recession than the consumer sector as companies keep their hands out of their pockets. On the other side of the coin, Dell's chief rival Hewlett-Packard (HP) saw its quarterly profits jump 14 percent to USD2.41 billion, or USD0.99 per share, compared to USD2.11 billion, or USD0.84 per share a year earlier. Despite HP's revenue declining by 8.4 percent to USD30.8 billion, its figures were heralded by analysts as a sign that conditions are improving in the tech sector. Over the past year HP has heightened its focus on technology services. The bet seems to have paid off as its services business posted an 8 percent rise in revenues for the quarter, while operating profit in the segment jumped 48 percent to USD1.4 billion. During a conference call, HP CEO Mark Hurd was bullish about the firm's prospects. "We feel as good about our portfolio and our market position as we ever have… If you talked about our view of our competitive position, it just has never been stronger."
Busy week for social sites
It was a busy week in the world of Web 2.0 with Twitter co-founder Biz Stone indicating that the micro-blogging firm is close to launching corporate accounts. Stone said Twitter was planning to roll out a package of tools for business users of the site by the end of the year in a move that would help the site begin to generate revenues, something that industry analysts have welcomed. "Clearly they need to make sales at some point. It is one of the points of being a business," Nate Elliott, principal analyst at Forrester Research, told the Financial Times. Meanwhile, Facebook is also looking to the future and generating some cash. The social networking site introduced a dual-class stock structure this week, perhaps the clearest sign yet that it is preparing to launch a public offering down the road. Dual-class stock structures are a divisive issue as they give certain shareholders much stronger voting rights than others. Meanwhile, business networking firm LinkedIn also gave hints this week that it too would be seeking to float on the stock exchange at some point in the future. "Probably at some point a balance will occur when [an IPO is] the right thing. That will not occur in the near term," LinkedIn co-founder and chairman Reid Hoffman told Reuters. A recent Reuters poll found LinkedIn to be one of the Silicon Valley companies most eligible to go public. The firm raised USD76 million in its last funding round in 2008, at which time the company was valued at USD1 billion. Meanwhile, documents lodged with the Companies Office in Ireland this week suggest that LinkedIn plans to set up an Irish operation. The firm registered two Dublin companies: 'LinkedIn Ireland Limited' and 'LinkedIn Technology Limited'. Both companies describe their purpose as "to carry on the business of an interconnected network of experienced professionals from around the world", in keeping with LinkedIn.com's global operations. Also this week, LinkedIn opened its API (application programing interface) to external software developers, in a move that is likely to make the site more appealing to members.
Big Bang experiment restarts
Over a year later than originally planned, the world's biggest science experiment took centre stage this week as it smashed together proton beams for the first time. The Large Hadron Collider at the European nuclear research centre CERN fired up last Friday after being out of commission for 14 months while it was being repaired. The LHC occupies a 27km long tunnel beneath the ground on the borders of Switzerland and France. On Monday, two groups of sub-atomic particles were sent racing around the tunnel in opposite directions at the same time. Researchers said collisions were registered during Monday's experiment, with Rolf-Dieter Heuer, Cern's director, describing the outcome as a "great achievement". This initial collision has been called a 'pilot beam' and CERN researchers have explained that this will be "tiny" in comparison to the full-blown experiment. The pilot beam reportedly contained about 1 billion particles; the ultimate aim is to create a beam containing around 300,000 billion particles in about a year's time. At that time the researchers are aiming to simulate the "Big Bang" in a bid towards discovering how the universe came into existence. Researchers from University College Dublin will be among those analysing the results of these collisions.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 