Weekly Digest No. 531
by Emmet Cole
Google enjoys busy week | Apple, Sony seek music lovers' attention
Eircom considers debt options
Eircom announced its results for the 12 months ending 30 June on Tuesday. Declining sales saw revenues fall by 8.5 percent to just over EUR1.8 billion. The company lost a staggering 70,000 fixed-line customers during the year; fixed-line revenues fell by 8.5 percent to EUR1.4 billion. Meanwhile, Eircom's Meteor mobile phone business saw revenues fall 7.7 percent to EUR458 million. More positively, the company trimmed operating costs by 11.5 percent, which enabled it to keep its reduction in EBITDA to 3.3 percent, at EUR669 million.
A company statement acknowledged that "net debt remains very high" and warned that Eircom could breach the covenants on its EUR3.8 billion net debt within the next 12 to 18 months. Eircom is "actively reviewing [its] options to address this issue," the statement continued, with the company revealing plans to reduce labour costs by a further EUR90 million over the next three years. Eircom chief executive Paul Donovan told the Irish Times that Eircom may meet with lenders to see if the company can "achieve some relief".
Meanwhile, Eircom launched a new broadband and phone package, offering up to 8Mbps broadband, unlimited local and national calls and 30 mobile minutes from EUR42 (previously EUR47) a month (off peak). The company said that customers switching back to Eircom who order online can receive up to EUR69 off their broadband bundle.
Google enjoys busy week
Google's quest for digital domination continued apace this week, with the Mountain View, California-based search giant adding to recent social media acquisitions and launching a Gmail-based voice and video service.
First up, Google sealed a deal to buy Canadian start-up SocialDeck, which manufactures video games for social networking platforms and mobile devices. And Google added another piece to its social networking plans with the purchase of Angstro, which has developed a search engine that aims to provide intelligent search results from a limited number of social networking sites -- a capability that could help Google make social networking sites more interoperable. These two buys follow on from Google's acquisition of social widgets company Slide earlier in August.
This week, Google also launched Realtime Search -- a standalone search engine that finds the latest conversations on social media sites including Facebook, Twitter and MySpace.
The positive buzz around Google's social networking plans is certainly growing and, given the unpopularity of Google Buzz, the company's last foray into social networking, that has to be a good thing.
Meanwhile, watch out Skype! Google added VoIP voice and video services for its US-based Gmail users this week. The service allows users to call any phone through Gmail. Calls to the US and Canada will be free for one year. Google expects to eventually make this service available to international Gmail users, but no date has been set. Skype is expected to launch an IPO later this year, so it will be interesting to see how Google's system develops.
Google also announced a tweak to its standard Gmail service, with the beta launch of its Priority Inbox feature -- an automatic e-mail filtering and prioritisation system that sorts e-mail based on several factors, including how often you mail the sender, which messages you most commonly open, and which messages you tend to ignore. Google plans to release this functionality to all users over the coming weeks.
Time is right for tech deals
Google wasn't the only one loosening its purse strings this week; several others were also willing to splash the acquisition cash.
Chip giant Intel made a serious move into the smartphone market with the acquisition of German rival Infineon's wireless chip operations for USD1.4 billion. In the process, Intel acquired Infineon's baseband radio chips, which are used in Apple's iPhone. Infineon's wireless business enjoyed USD1.2 billion in sales last year. The deal follows Intel's purchase of US-based security company McAfee for USD7.7 billion -- the largest acquisition in Intel's history.
Meanwhile, Dell and HP continued to battle it out over data storage firm 3Par. In the latest spar, HP offered 3Par USD30 per share, bettering Dell's most recent offer of USD27 per share. Dell had until the end of the day on Wednesday to respond, but has not publicly made a new offer. At time of publication on Thursday, there has been no official word from any of the parties involved.
Separately, 3Par is one of several companies being sued by Crossroads Systems for patent infringement, in a lawsuit filed Wednesday with the US District Court for the Western District of Texas. Crossroads Systems alleges that 3Par (among other companies) has infringed on a router patent that provides virtual local storage on remote storage devices.
Meanwhile, tech firm 3M has agreed to acquire Israeli company Attenti Holdings for an estimated USD230 million. Attenti makes remote monitoring technology used to track people awaiting trial or who need to be monitored after their release from prison.
Finally, unconfirmed rumours abound that Cisco wants to buy Skype, according to unnamed sources quoted by the New York Post and Techcrunch. The New York Post reported that Cisco has reached out to the private-equity firms that own Skype to gauge their interest in selling the VoIP giant ahead of Skype's planned IPO later this year.
Apple, Sony seek music lovers' attention
Sony and Apple competed for headlines on Wednesday, with the latter, predictably, winning the day with a slew of upgrades, a second-generation Apple TV and the launch of a social networking service for iTunes.
Sony attempted to steal Apple's thunder earlier in the day by launching Music Unlimited, a cloud-based music streaming service. The company also announced a new and improved e-book reader line that promises better display and more memory than previous devices. The new Sony Reader Daily Edition, for example, features 2GB memory (expandable to 32GB) and a 7-inch touch screen. Expected to be released soon in the US, the device will have a base price of USD299.
Meanwhile, Apple's second-generation Apple TV comes with integrated Wi-Fi connectivity, connects to a television through a HDMI cable, and is around 80 percent smaller than its predecessor. Available later this month in the US, the device will retail at USD199.
Apple also announced a new range of square-shaped iPod Nanos, which come with a radio included and whose standard click-wheel will be replaced by a touch screen.
Apple also unveiled Ping, a social media platform for Apple's iTunes software. Ping allows users to create profiles, send messages to friends and see which songs their friends are listening to.
Finally, Apple unveiled iOS 4.1, the new version of its operating system for the iPhone and iPod Touch. It will be rolled out for free to existing iPhone and iPod Touch users next week.