Weekly Digest
Weekly Digest Issue No. 539
28-10-2010
by Deirdre McArdle
EMEA PC sales hit by netbook decline | Yahoo, MySpace unveil makeovers
US firms create new Irish jobs
There was some positive news on the jobs front, north and south of the border, this week. In Galway, US tech firm Synchronoss announced the expansion of its international operations in Europe by opening a research and development (R&D) and operations centre in Galway’s Parkmore business park. It will create 50 new jobs at the Galway R&D centre and recruitment is currently underway for developers for engineering, software and technology divisions. Synchronoss develops on-demand transaction management and synchronisation software platforms primarily for the telecoms industry. Its headquarters are based in New Jersey, while its other European operations are centred in Germany.
Meanwhile, US firm Market Resource Partners (MRP) has said it will create 106 new jobs in Newry over the next two years as it expands its operations into Europe. MRP develops software to help companies improve their marketing and sales activities. The firm cited the well-educated workforce as one of its key reasons for setting up in Northern Ireland. In addition, MRP was bought by Newry-based software firm First Derivatives nearly two years ago in a deal valued at around USD20 million.
First Derivatives itself has been going from strength to strength in the past year. The firm's latest financial results for the six-month period between April and September reveal a 56.2 percent jump in revenue to STG17.7 million, up from STG11.4 million in the year-ago period. EBITDA increased by 16 percent to STG3.9 million, while pre-tax profit grew by 6 percent to STG3.2 million.
PayPal delivers for eBay
As the latest financial results season comes to a close, online marketplace eBay put in a solid third quarter performance. Quarterly profit came in at USD431.9 million, or USD0.33 a share, up from USD350 million, or USD0.27 per share, a year earlier. Revenue edged up to USD2.25 billion, from USD2.24 billion a year ago. eBay said the performance of its marketplace had stabilised, logging a 3 percent rise in the total volume of goods sold through eBay, excluding automobiles.
However, it was PayPal that was the real star of the show; revenues at eBay's online payments service jumped 22 percent year-on-year to USD838 million. For the full year, eBay now expects per-share earnings of USD1.67 to USD1.70 on revenue of USD9.05 billion to USD9.15 billion, up from its prior estimates of USD1.60 to USD1.65 a share in earnings and USD8.8 billion to USD9 billion in revenue.
As PayPal continues to grow at a steady pace, contributing more significantly to eBay's bottom line, the online auction site is keen to exploit the full value of its payment service. Just days after it released its quarterly figures, eBay unveiled PayPal software that will help consumers use their mobile phones to make payments. The mobile software, called Mobile Express Checkout, facilitates two-click checkout from a mobile device, and will essentially transform mobile devices into "digital wallets" from where users can make payments, keep coupons and store loyalty card data.
PayPal considers mobile payments as a huge growth area. "In 2008, USD25 million in mobile payments were booked through our system. This year, we'll see USD700 million in mobile payments come through -- nearly 30-fold growth," said Osama Bedier, PayPal's Vice President of Platform, Mobile and New Ventures.
EMEA PC sales hit by netbook decline
Following strong growth in the first half of 2010, the PC market in the EMEA (Europe, Middle East and Africa) region lessened somewhat during the third quarter. PC shipments hit 27.8 million in the quarter, up 10.5 percent year-on-year; however, growth slowed from the 21.1 percent increase recorded in the previous quarter. Central and Eastern Europe was the star of the region, with shipments growing by a robust 43 percent, while the Middle East and Africa saw a shipment increase of 12.4 percent. The region's overall growth though was dragged down by a lacklustre performance in Western Europe, where shipments grew by a paltry 0.5 percent.
The over-riding dampener on the Western European market was the fall-off in demand for netbooks, which had been a key driver over the past couple of years. Netbook shipment growth declined by 25 percent during the quarter as consumers became more interested in the selection of new tablet computers hitting the market. "Mini notebooks had started to slow down in 1H10, but increasing noise and announcements around media tablets have contributed to accelerating the trend... Some users already purchased an iPad, and many others adopted a wait and see position as more products develop towards Christmas," said Eszter Morvay, research manager, IDC EMEA PC Tracker.
One of the main vendors to be affected by the netbook's fall from grace in Western Europe was Acer, which recorded its first ever shipment decline there during the quarter. However, a strong performance in Central and Eastern Europe, where it saw shipments grow by 60 percent, meant Acer reclaimed the top spot with 23.1 percent EMEA market share. Hewlett-Packard dropped to second place with growth of 5.6 percent, while Dell posted a healthy 12.2 percent shipment jump and held on to its third spot. Asus and Lenovo, which recorded impressive growth of 26.8 percent and 61.1 percent respectively, rounded off the top five vendors in the EMEA region.
Yahoo, MySpace unveil makeovers
Two internet giants, both formerly top of their game and now struggling with intense competition from rivals, debuted makeovers this week. First up, Yahoo launched a re-vamped Yahoo Mail in an attempt to lure more users to its mail service and compete with the likes of Google's Gmail and Microsoft's Hotmail. The new-look Yahoo Mail allows users to post updates to Facebook and Twitter, as well as view photos and videos from Flickr, Picasa and YouTube without them having to leave their inbox.
The makeover, which Yahoo is calling its most important in five years, aims to make Yahoo Mail a 'message hub' for its 279 million users. Some analysts say the strategy is also an attempt by Yahoo to make its service more relevant and cool, particularly in light of the popularity of the Gmail brand. The revamp also tackles user issues such as improving the spam filter, speeding up the service and adding better search functions.
Also trying to recapture its glory days with a redesign is former social network darling MySpace. It has released a beta version of the redesigned site, which it says will "redefine the company as a social entertainment destination for Gen Y".
The new site features elements including content hubs, personalised streams and a discovery tab. The content hubs are dedicated to movies, television and celebrities and will feature news, videos and photos from various content partners. MySpace said it will be adding hubs focused on games, comedy, sports and fashion in the coming months. The personalised streams will automatically learn what to feature based on a user's preferences and habits, and the discovery tab, which will be a permanent tab on a person's homepage, will combine content that friends are watching with what's popular on Myspace, in real time.
MySpace has been suffering from dwindling visitor figures for a while now; in September, the number of unique visitors dropped by 18 percent year-on-year, according to comScore. This new redesign looks to reposition MySpace as a content-sharing, trend-watching destination, differentiating itself from social networking giant Facebook in the hope of turning its fortunes around. Some analysts have suggested the revamp could be a precursor to MySpace hanging up a 'For Sale' sign.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 