Weekly Digest
Weekly Digest Issue No. 528
12-08-2010
by Deirdre McArdle
Skype IPO generates investor hype | iPhone 4 gaffes signal high-profile departure
Higher-level maths 'time-consuming' and 'scary'
It's that time of year again as the Leaving Certificate results loom, and traditionally we prepare ourselves for the annual debate that arises surrounding the results and the impact they will have on the "smart economy". On Wednesday, a survey by Engineers Ireland kick-started that discussion. The survey focused on the perception of higher-level maths among ordinary-level maths students, and it doesn't bode well for the Government's push for the smart economy.
Just shy of 66 percent of those surveyed said they wouldn't study higher-level maths even if bonus points for sitting the paper were introduced. Bonus points for taking higher-level maths is one of the key strategies being bandied about to boost take-up of the subject; however the survey suggests that this strategy wouldn't have the desired impact, according to Fionnuala Kilbane, Engineers Ireland Communications Director. "The reality seems to be that the majority of ordinary level students surveyed [83 percent] turn their backs on the higher level syllabus by 5th year. We need to work harder to change the perception of maths at an earlier stage in schools and link it more closely to everyday applications that make it more accessible to students," she said.
Kilbane went on to praise the Project Maths curriculum, which was trialled in 24 schools this school year. "We are delighted that the Government is rolling out the [Project Maths] curriculum in September to first and fifth-year students. Maths needs to be de-mystified and shown that it is integral to everything from mobile phone use to the effective functioning of Facebook."
But will Project Maths be enough to change the view that ordinary-level maths students have about higher-level maths? Forty-one percent of ordinary level students surveyed believe that higher level maths is too time-consuming, 23 percent said they found the subject "scary", 21 percent believe they don’t need maths when they leave school, while the remaining 15 percent simply said it was boring. Looks to us like there's a long way to go to change this mindset.
Skype IPO generates investor hype
It's been on the cards for some time now, but finally internet telephony company Skype has filed its plans for an initial public offering (IPO). For now, it seems like the prospect of such a big tech IPO has really gotten Silicon Valley investors' blood flowing. Skype's document said it plans to raise up to USD100 million in the offering; however, the final sum could be much higher, depending on the offer price and amount of equity.
Investors have been starved of a big-name tech IPO in recent years, and with high-profile companies like Facebook ruling out a market floatation for now, there's definitely an appetite out there for a hefty IPO to get the teeth into. But is Skype going to be the answer? Well, it has recorded USD116 million of adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) since the beginning of the year. Skype has 560 million registered users, 124 million of which use the service on average at least once a month. Of those 124 million, 8 million are paying users. According to reports, the filing reveals that Skype expects these 8 million users to spend an average of USD96 this year, leading to predicted revenue of USD768 million, which of course could rise if Skype attracts new customers or converts non-paying customers into paying ones.
The firm is also eyeing new revenue streams. In November last year it announced it was in talks with mobile handset makers and mobile operators to install its internet telephony service, and in January of this year it announced deals with consumer electronics firms LG Electronics and Panasonic to bring internet video calls to television sets.
Late last year a consortium formed by private equity firm Silver Lake Partners, Andreessen Horowitz and the Canada Pension Plan Investment Board bought a majority stake in Skype for USD1.9 billion in cash and a USD125 million note. eBay retained a 30 percent stake. According to a filing with the US Securities and Exchange Commission, Skype shares will be listed on the Nasdaq later this year.
HP parts ways with CEO
This week marked the unexpected departure of two high-level executives at major technology companies. First up, Hewlett-Packard's Mark Hurd was ousted as CEO following an investigation into his relationship with a marketing contractor, as well as "numerous" expense violations. The probe that led to Hurd's forced resignation was prompted by an allegation of sexual harassment by the marketing contractor, Jodie Fisher; however, Hurd was cleared of the claim after an investigation by HP.
There's been plenty of media speculation over Hurd's departure and the way it was handled by HP, with some reports claiming that the rushed resignation was an effort by HP to quash any controversy that may have grown out of the sexual harassment allegations. In addition, Hurd supporters have accused the HP board of overreacting, while Oracle CEO Larry Ellison, a friend of Hurd, wrote a scathing letter directed at the HP board saying they had "just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago".
In a statement, Hurd said: "This is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time." HP said it "recognises that this change in leadership is unexpected news for everyone associated with HP", and the company tried to stem concerns that the departure had anything to do with the firm's financial performance. While the board searches for Hurd's replacement, Cathie Lesjak, HP's CFO, will assume the role of interim chief executive. A 24-year veteran of the company, Lesjak has ruled herself out of contention for the top job.
Lesjak claimed on Sunday that investors and customers had been "extremely supportive" of the way HP's board had handled the matter. However, it became clear on Monday that this was not necessarily the case. HP's share price plunged in early trading on Monday, to about USD42.58, down 8 percent from their NYSE close of USD46.30 on Friday. When the markets closed on Wednesday, HP shares were down to USD40.77. In the five years that Hurd had been at the helm, HP shares had doubled in value.
iPhone 4 gaffes signal high-profile departure
Also moving on this week was Apple's senior vice president for mobile devices, Mark Papermaster. Apple is being its traditional schtum self on the issue, and has said nothing apart from confirming Papermaster's departure. A report in the Wall Street Journal, quoting sources familiar with the situation, suggested that Papermaster's leaving followed the recent issues with the iPhone 4 (antenna-gate) as well as a falling out with Apple head Steve Jobs.
Papermaster was recruited by Apple 15 months ago from IBM. This was no straightforward recruitment though. IBM fought tooth and nail to prohibit Papermaster from joining Apple, and the corporate tug of war ended up in court with Apple determined to procure the services of the Big Blue veteran. Following a lengthy battle Papermaster finally joined Apple in April 2009. In his role as head of iPhone development Papermaster reported directly to Jobs. The Wall Street Journal report indicated there was somewhat of a falling out between the pair, and that Papermaster had struggled to get used to Apple's internal culture.
While it's not known exactly what role the iPhone 4 problems played in Papermaster's leaving, industry observers suggest the timing is no coincidence. The issues surrounding the release of the device have certainly caused Apple and Jobs some embarrassment, even if the controversy has failed to dampen interest in the smartphone. As well as the antenna problem, the firm has also been criticised for the delay in the release of a white version of the handset.
For now, Bob Mansfield, Apple's senior vice president of computer engineering, will assume Papermaster's duties. It's unclear as yet if that is to be a permanent appointment.
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