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On Tuesday it was announced that the UK Internet Service Provider, AOL UK, will expand its existing operation in Waterford, creating 125 new jobs and giving the company 650 workers in its facility in Ireland's Southeast. The new jobs will be primarily in the technical support, sales and customer services areas and the expansion makes the Waterford call centre AOL's largest facility in Europe. AOL UK's Waterford call centre opened in September 1998 with 25 employees.
"Our Waterford expansion is testimony to the growth of the AOL business, the early success of our new broadband product and our commitment to providing members with the best possible customer service," said Waterford-based Vice President of AOL UK Member Services, Tony Hanway. "It also demonstrates the dedication and performance of our existing member services team."
AOL Time Warner, the US media giant that control America Online (AOL) and its UK subsidiaries, has two other facilities in Ireland, both of which are located in Dublin. AOL Technologies in Citywest Business Campus, which is technically part of the firm's US operations, employs around 200. The company also has a billing and back office service centre that is part of AOL Europe, based in East Point Business Park where it employs around 200. After the expansion the company will employ over 1,000 in the Republic.
Weighing in on the announcement, Tanaiste and Minister for Enterprise, Trade & Employment, Mary Harney, said the news was a continuation of the IDA's relocation of some of its activities to the regions. She also said the announcement was in line with the National Development Plan for balanced regional development and that the investment by AOL will help the Southeast compete for further investment in the future.
The new jobs in Waterford follow two days of significant news for the AOL Time Warner Group. On Monday, the world's largest media group cut full-year forecasts for its America Online division, citing the long-standing downturn in Internet advertising.
AOL's full-year advertising and commerce revenues are now expected to be around USD1.7 billion this quarter, down from a previous forecast of between USD1.8 billion and USD2.2 billion. Forecasts for earnings before interest, taxation, depreciation and amortisation (EBITDA) were also lowered to between USD1.7 billion and USD1.8 billion, down from previous guidance of between USD1.8 billion and USD2.2 billion.
However, the AOL Time Warner group said that it expects third-quarter overall revenue growth in the mid-single digits on a percentage basis. Third-quarter EBITDA is forecast to decline to the low-single digits, said the company. AOL Time Warner still expects 2002 EBITDA to increase at the low end of a range of 5 to 9 percent. It further reiterated that it expected a full-year sales increase of 5 to 8 percent.
Despite revenue concerns, on Tuesday the company signalled that it could be planning to make a large purchase in the UK as AOL Time Warner CEO Richard Parsons said the UK was an especially important market. This has led to speculation that the business may be in the market to buy music rival EMI.
Of course Parsons tempered those remarks by saying the firm's priority was "getting the house in proper order and making sure (AOL Time Warner) is positioned strategically and from a standpoint of profitability."
In practice, the company, created only 20 months ago when AOL merged with Time Warner, has made it clear that it wants 50 percent of revenues to come from non-US markets, up from around 20 percent currently. And in further remarks on Tuesday Parsons said that the business will look closely at its international operations, particularly AOL Europe and AOL Latin America, to see how loss-making operations can be turned around.
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