Weekly Digest
Weekly Digest Issue No. 542
18-11-2010
by Deirdre McArdle
Online ad spend on the rise | Kinect makes its mark for Microsoft
Software stars lauded at awards
Ireland's software sector was out in force last Friday as the Irish Software Association awards feted the most impressive companies in the sector. In all, eight companies were honoured, including IT healthcare firm Helix Health, which was named Company of the Year. The firm employs 88 people at locations in Dublin and Limerick. The company's focus on innovation and its strong export strategy were highlighted by the judges.
Other winners on the night included Cork software firm Qumas, which won the Business to Business collaboration award for its partnership with content provider LexisNexis. Another Cork-based firm, DataHug, took home the Technology Software Start-up award. DataHug is currently trialling a business networking solution that automatically manages, measures and shares business relationships. Meanwhile, mobile domain name provider dotMobi, which employs 25 people and has nearly 1 million domains registered, won the Technical Innovation category, and Dublin-based ServiceFrame, which provides an evidence-based governance tool for outsourced and shared services, was named the Emerging Software Business for 2010.
Mobile security firm AdaptiveMobile won the Sales Achievement award, thanks to its impressive 300 percent increase in sales and a 70 percent increase in its customer base over the past 12 months. Brian Collins, CEO of AdaptiveMobile, said the rise in sales was led by increasing demand for smartphones and, more recently, tablet devices. Twelve Horses took home the Academic Collaboration of the Year award, as a result of its partnership with the Institute of Art, Design and Technology and University College Dublin to create an online data visualisation platform for enterprise business users. Finally, the Corporate Social Responsibility award went to SAP Business Objects.
Also on the night, two individuals were highlighted for their roles in the country's software industry. Alex Sintoni from UCD won the Student of the Year award for developing the most commercially viable piece of research from a student. His work involved developing a hosted utility consumption portal and benchmarking service that will offer enterprises real-time, personalised utility consumption data. Bernie Cullinan, CEO of Clarigen, was named Software Industry Person of the Year. She was heralded for her long-time contribution to the industry, which includes the setting up of the Leadership 4 Growth programme for Irish managers in Stanford University, and her chairing of the ISA between 2005 and 2007.
Online ad spend on the rise
While advertising spend in offline media such as radio, newspapers and TV continues to drop, companies are increasingly targeting their budgets toward internet advertising. Figures released this week by IAB Ireland showed that spending on web advertising jumped by 12.2 percent in the first half of 2010 to EUR53.9 million. IAB said the increase was driven primarily by growth in the number of Irish internet users, and the amount of time they are spending online.
Breaking it down, paid-search advertising accounted for almost half (45 percent) of total online spend in the period, down slightly from 46.6 percent in the same period in 2009. Classified ads also saw a slight decline in the first six months of the year, to 26 percent, down from 27.6 percent. Where classifieds and paid search dipped, display advertising benefited, claiming 29 percent of the market, compared to 25.7 percent last year. The automobile sector was the biggest spender on online advertising, clocking up 22 percent of the overall spend, while property/recruitment were next with 19 percent of the total spend.
Separately, in the US, online ad spend jumped to its highest quarterly tally ever during the third quarter, hitting USD6.4 billion. This represents a 17 percent increase on the year-ago figure, according to IAB. The record figure marks consistent growth in the sector for the past nine or ten years, with the exception of 2009 when spend was hit by the global recession.
Apple iAd expands to Europe
In more news of advertising, Apple this week revealed details of the launch of its iAd platform in Europe. The mobile ad network will launch in the UK and France in December, followed by Germany in January. Some big names have already signed on to iAd in Europe, including L’Oreal, Renault, Louis Vuitton, Nespresso, Perrier, Unilever, Citi, Evian and LG Display. iAd is built into Apple's latest iPhone operating system, iOS4. Ads can be integrated into iPhone and iPod touch apps, with developers getting a 60 percent cut of the advertising revenue.
Apple launched iAd in the US in July of this year. It claims that in the first four months it signed on over half of the top 25 leading US national advertisers. Research firm IDC estimates that the mobile ad network will win percent share of US mobile display advertising revenue for 2010.
In a busy week, Apple finally scored the rights to sell The Beatles tracks and albums on iTunes. According to Steve Jobs, this is something Apple has been vying for over the past 10 years, since iTunes first launched. In all, The Beatles' 13 re-mastered studio albums, the two-volume 'Past Masters compilation, and the 'Red' and 'Blue' collections are now available to buy on iTunes worldwide as either albums or individual songs.
According to the Guardian newspaper, on day one of the group's catalogue debuting on iTunes, their tracks comprised 15 percent of the UK's top 200 download chart. Their highest entry was Hey Jude at number 40, although they have 30 other tracks in the charts, with some lesser-known tracks such as Hey Bulldog proving popular. Securing the deal with The Beatles is quite a coup for Jobs and Apple; the New York Times reported that both Google and Amazon fought for the rights too, but Apple reportedly offered a better deal.
Kinect makes its mark for Microsoft
Although it was a long time coming, Microsoft's motion-gaming device, Kinect, which launched in the US on 4 November, has made quite a splash. Just days prior to the launch of the USD150 device, the software giant revised upwards its sales estimates for Kinect to 5 million from 3 million by the end of 2010. That higher estimate now looks to be right on track, as the firm announced this week that in the first 10 days of its launch 1 million Kinect devices had been sold. The Kinect device, Microsoft's answer to the massive success of Nintendo's Wii motion controller, went on sale in Europe on 10 November and by Christmas it will be available in 38 countries, with 17 supporting games.
The success of Microsoft's gaming division -- in the third quarter sales of its Xbox 360 console grew 38 percent -- has led to some investors suggesting the company be split in two, specifically splitting the Xbox unit into a separate company so that the firm can focus on its core Windows and Office products. At the company's annual shareholder meeting on Tuesday, Chief Executive Steve Ballmer and Chairman Bill Gates sought to calm investors, some of whom asked if the maker of Windows operating systems and Xbox game consoles would be more valuable as individual companies. Ballmer dismissed the idea, saying it would reduce Microsoft's value by making it more difficult for the company to compete.
Ballmer and Gates also came under fire from shareholders who are less than happy with Microsoft's weak share price, particularly given the firm's solid sales and profits for the most recent quarter. Gates also faced tough questions as to why he was selling his shares and donating proceeds to the Bill & Melinda Gates Foundation instead of removing his shares from the corporate balance sheet, a move that would boost the share price. These latest rumblings from shareholders follow a number of high-profile executive departures at the software firm and mark a difficult time for the software giant.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 