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Dublin: 16 °C Saturday 4 July, 2020

# business - Friday 27 August, 2010

UNEMPLOYMENT WILL RISE to 14% by the end of this year, according to the latest economic forecast by Ulster Bank.

Although the overall outlook shows positive signs for an export-led recovery in the Irish economy, Ulster Bank predicts that unemployment will rise slightly during 2010. That figure is expected to peak at 14% at the end of the year, and then begin to reduce in 2011.

The report stated:

On the jobs front, the labour market is set weaken further in the short term: employment probably has further to fall, though at a reduced pace compared with heretofore, while the unemployment rate is set to peak between 13.5 and 14% later this year, from 12.9% in Q1.

The report outlines that as the nature of the recovery in Ireland’s economy will be led by exports, this will probably not have a significant impact on employment as “export growth is not labour-intensive”.

Ulster Bank states that the cost of recapitalising Anglo Irish Bank is weighing “very heavily” on investor sentiment, and that several more years of fiscal tightening will be required because of the scale of the national deficit.

The banks stressed that “it is extremely important for the Irish authorities to provide clarity as soon as possible around the future plans for Anglo, and the ultimate total cost thereof to the exchequer”.

# business - Thursday 26 August, 2010

STRIKING WORKERS AT THE Bord na Móna power plant in Co Longford have decided to hold a ballot on whether to return to work or not. The 40 staff members have been on unofficial strike since last week, in a continuing dispute with management over wages. The staff say they are owed money to cover loss of earning incurred during the station’s closure for maintenance. The Lough Ree power plant was closed for three months and is due to re-open. The company claims the workers failed to fulfil their duties by returning for work.

A SURVEY OF IRISH credit unions shows that the vast majority – 90% –  of branches believe an image change is in order if they are to attract new customers.

The same percentage also said they also wanted a change of leadership in the sector.

The results of the independent survey were announced today at a credit union conference in Dublin, which was attended by members from all over Ireland.

Members also supported greater branch-to-branch cooperation, and even mergers. In May, the registrar of credit unions told an Oireachtas Committee that some credit uinions may not be able to continue as individual entities if they are facing serious funding issues.

90% of members also said they were optimistic about the future of the sector.

Last month, the Irish League of Credit Unions said it welcomed the appointment of independent consultants to review the sector’s financial standing, and told their members that their savings were safe.

IRELAND’S short-term treasury bill auction this morning seems to have gone rather well. Demand for the six-month treasury bills was ten times more than supply, and saw the bonds sold off with an average yield of 1.978% – compared to a 2.458% yield at the last similar auction just two weeks ago. Eight-month bills were four times oversubscribed with an average yield of 2.35%, down from 2.81%. That that, S&P!

THE NATIONAL TREASURY MANAGEMENT AGENCY (NTMA) is to hold a treasury bill auction today, hoping that a strong investor uptake will help the country soothe the fears of jittery investors.

The price of the interest offered on bills and bonds auctioned by the NTMA depends on how much investors demand – which in turn is determined by whether investors are confident or nervous about the chance of their original investment not being returned.

Today’s auction – of short-term treasury bills, maturing between three months and a year – will hope to raise €600m for the Exchequer, but also act as an early chance for Ireland to put the impact of the Standard & Poor’s ratings downgrade behind it.

A strongly-contested auction would drive rates down, showing that investors might be taking the S&P downgrade with a pinch of salt.

The NTMA itself criticised S&P’s decision to decrease Ireland’s rating to AA- from AA on Monday night, saying the projections assumed that the final cost of the banking bailout would vastly exceed the costs projected domestically.

Bids for the auction are closing about now (10:30am), and the yields will be disclosed later today.

# business - Wednesday 25 August, 2010

GOOGLE IS SETTING its sights on overtaking Skype as the main internet telephony provider by rolling out its new Google Voice service directly into Gmail.

Users will be able to call landlines in the US and Canada free of charge through the service, on top of their current ability to have free voice chats with their contacts – undercutting Skype which charges for such calls.

Sadly for Irish users, however, the service is currently only available in those two countries.

The company announced that it would be roll out the service to all Gmail users in the countries at a media event today, explaining that a new option would appear in users’ GChat windows showing a small ‘Call Phone’ listing.

Clicking on this option opens up a small ‘Call’ window with a keypad, from which users will be able to dial to landlines.

To promote the rollout, Google will roll out traditional red phone boxes – just like the famous ones in London – to airports and university campuses, which will contain VoIP handsets allowing users to make free phone calls.

NEW FIGURES PUBLISHED TODAY by the Central Statistics Office (CSO) show that manufacturing prices fell in July, though they are up by 0.9% on last year.

The prices are slowly sliding, however, with the same products having increased in price by 1.1% in May. The year-on-year increased was 2% at that point – meaning that the prices are, in real terms, falling fairly dramatically in such a short window.

The price index for export sales decreased by 0.7% as manufacturers try to cut costs in order to win more overseas customers.

The slight decrease comes despite the price of petroleum fuels being up by 24.1% on June 2009, while energy costs rose by 7.3% and electronic products cost 11.2% in the same period.

The price of new homes has begun to increase again, however, with costs up by 0.2% in the last month – though they had fallen by 1.2% in the previous month.

Overall the cost of manufacturing goods is 2% lower than it was in November 2008 – which was the same it had been in 2005 – while the housing index stands at 109.7, based on 2005 prices.

It had most recently peaked at 115.9 in August of 2008, just as the credit crunch was beginning to take effect on these shores.

THE NATIONAL TREASURY MANAGEMENT AGENCY – the body which manages Ireland’s borrowing requirements, and its national debt – has criticised the decision of ratings agency Standard & Poor’s to downgrade Ireland’s debt rating.

The decision from S&P to downgrade the ratings – down to AA- from a previous rating of AA – means that Irish debt is seen as a riskier investment, and will likely see the NTMA required to increase it pays to investors who buy Irish debt.

NTMA chief John Corrigan told RTÉ that S&P’s analysis was based on an “extreme estimate” that the final cost of the government’s bank recapitalisation programme would reach €50 billion.

“We have taken issue with the rating agency,” he said. “It’s something we don’t like to do but there comes a point when the analysis is not robust.”

Last night, as news of the downgrade broke, the NTMA issued a statement with a similar conclusion, describing the approach as “flawed“.

What does it mean?

But why is the NTMA so annoyed – and how important is it that our rating has been downgraded?

Well, basically Ireland’s national rating is similar to the credit rating a person might get. If you’re good at making loan repayments or have a lot of money in the bank, you’ll get a good rating. If you struggle to repay your debts and don’t have much assets, you’ll get a lower rating and it therefore becomes tougher for you to to borrow.

As the name might suggest, an ‘AAA’ (or “triple A”) rating is the best one the agency can offer, with progressively fewer As – and the occasional plus or minus – being given to lower rankings.

Ireland’s new score of AA- isn’t exactly top of the class, but it’s still definitely in the upper reaches of the scores S&P assigns. We’re still very far away from being called ‘junk’. In fact, we could slip to a single A or even to BB before we’re given that ignominious title.

The only difference is that unlike the Moody’s downgrade last month, which brought its rating in line with those of S&P and the other main ratings agency Fitch, this change brings Ireland’s average another step downward.

We won’t find out for some time how the downgrade will affect us, however – the NTMA’s next bond auction isn’t until September 21, and the agency has already raised 99% of Ireland’s fundraising target for the year with three auctions still to go.

It will also be interesting to see whether the other agencies follow suit, with the S&P rating based on an arguably inflated estimate of how much the bank bailout will ultimately cost. Other ratings may be a little more conservative than S&P’s €50bn projection.

IRELAND’S NATIONAL DEBT might be becoming more expensive as a direct result of the decision by ratings agency Standard & Poor’s – but at least we can console ourselves in fact that the Financial Times has been amused by the whole thing.

Writing on the paper’s Alphaville blog this morning, Neil Hume seems to take great delight in the “punch-up” (in his words) between “a downgraded sovereign and a rating agency”.

Reporting that Ireland had “come out swinging” after the S&P move to downgrade Ireland’s sovereign rating from AA to AA-, Hume quotes a rep from the National Treasury Management Agency in a piece from Reuters.

The emphasis is that of the FT:

In a strongly worded statement, the National Treasury Management Agency said it disagreed with S&P’s view that Ireland faced substantially higher costs to bail out its ailing banking sector.

“In terms of the specific analysis by S&P, this is largely predicated upon an extreme estimate of bank recapitalization costs of up to 50 billion euros,” the NTMA said.

We believe this approach is flawed.”

It also points out that the ‘spread’ – the percentage difference in interest offered – in German and Irish government bonds has now reached a record 3.29%, while in August 2007 Irish borrowing was cheaper than that of Germany.

“Either way,” Hume concludes, “its [sic] provided some entertainment on a quiet summer trading day.”

The New York Times’ much-respected economics blogger, Paul Krugman, has offered solace for worried Irish investors by suggesting that ratings agencies are not the be-all and end-all, however.

Writing on his blog, Krugman offers a brief reminder that Moody’s and S&P – the two agencies that have downgraded Ireland’s ratings in the past weeks – gave Japanese debt a similar treatment in 2002.

Although the moves ranked Japanese debt as a riskier investment than that of Bostwana and Estonia, Japan can still borrow with less than 1% interest a full eight years later.

PRIVATE INVESTORS have been selling shares in Facebook for $76 each, according to reports today – which would value the company at an astonishing €26.6bn, before the company even considers floating itself on a stock exchange.

The Financial Times today reports that shares in the company, being traded privately because the social networking site has not been floated, were fetching remarkable per-share prices on so-called ‘secondary markets’.

There is a slight premium to such shares, however, because of the fact that private limited companies are limited by law to having a maximum of 500 shareholders.

Even still, if the company was to be floated with shares valued at $76 (€59.88), the company would instantly be worth a remarkable $33.7bn – or about €26.6bn.

By comparison, Yahoo! is worth about $18bn on today’s values, while Microsoft and Google – businesses with far more wide-reaching and diverse – are worth $208bn and $143bn each. Apple is worth $219bn.

Google, when floated, had a value of $1.67bn.

Facebook’s $33.7bn valuation would make its founder Mark Zuckerberg (26) between $6.7bn and $10.11bn, depending on how much of the business he retains ownership of, with varying reports saying he owns 20% to 30% of Facebook.

Facebook said two weeks ago it was likely to postpone its Initial Public Offering – entering a public stock exchange – until early 2012. Some of its senior employees are remunerated in shares, however, and are welcome to sell them on private secondary markets.

AER LINGUS CABIN CREW have called off a work-to-rule strike threatened for today over a roster dispute.

Impact, the trade union representing the crew, said it would suspend the action to allow “detailed consideration” of the findings issued by the Labour Relations Commission yesterday evening.

The LRC delivered an arbitration ruling on the dispute between crew and management.

The union said:

The detailed findings, which run to 39 pages and reflect the complex technical issues under consideration, deserve and demand close reading and analysis.

Time will also be required for cabin crew staff to read, digest and discuss the document.

Staff said the strike would not have affected the flight schedule.

The ongoing dispute between staff and management centres on a range of cost-cutting measures planned by the airline.

Yesterday the airline announced losses of over €20m for the first half of this year – a significant improvement on the €81.7m lost in the same period of last year.

# business - Tuesday 24 August, 2010

HACKERS HAVE TARGETED iTune users through their PayPal accounts, deleting their stored music, videos and software.

Some users have lost thousands of dollars worth of downloads, according to reports from TechCrunch.

The site features a Tweet from one Joey Bruce which reads:

Someone hacked my iTunes/paypal acct and drained everything from my bank account. Life is kicking me in the balls while I’m down.

Those affected have complained about Apple’s reaction to reports, which has allegedly been weak.

Worse of all, the scam is apparently not even new. It is reportedly a “phishing” virus that has been known of for some time.

It has been reported that PayPal have been reimbursing customers affected by the attack.

Meanwhile,  Apple has told customers to contact their financial institutions regarding the scam.

REPORTS THAT FACEBOOK founder Mark Zuckerberg is the only person who users cannot block surfaced yesterday, but have been passed off as accidental by the company.

Users attempting to block Zuckerberg (many encouraged by anti-Zuckerberg website found they could not. When they tried to they simply received the message “General Block failed error. Block failed”.

Facebook explained that when too many users block another, the system interprets this as a viral campaign and, er, blocks the unblocking attempts.

They say that they’re “taking a closer look the problem”, and hopefully everyone can block away to their heart’s content again soon.

Still that’s gotta hurt a little, Mark….

BUILDING MATERIALS GROUP CRH has reported a pre-tax 77% slip in profits, compared with the same period last year.

Read CRH’s Interim Report 20101 here.

CRH posted pre-tax profits for the first six months of 2010 at €25m, a fall against last year’s positive return of profits of €108m.

Shares in the company have plunged following CRH warning that construction sector weakness would push down 2010 EBITA – earnings before interest, tax, depreciation and amortisation (the paying off of debt) – by 20%, from €651m to €520m.

First-half earnings per share fell 79% to 2.6c from 12.2c in 2009. Operating profit fell by 51% to €118m.

However, CRH said the 2010 interim dividend remains at 18.5 cent – in line with last year’s level.

During the first six months of 2010, the CRH spent €159m on 14 acquisitions and investments.

CRH’s Chief Executive Myles Lee said:

European economic indicators have been more encouraging although uncertainties remain; however, concerns relating to the recovery in the United States have increased with a continuing flow of disappointing economic data…

He added:

Arising from this we currently expect that full year Group EBITDA will show a decline of around 10% compared with the 2009 level of €1.8 billion.

JOSEPH STIGLITZ was ignored ten years ago when he warned about a global economic collapse, but he was right.

Speaking on Morning Ireland this morning, the Nobel laureate once again highlighted what is wrong with the economic system, and in particular he criticised the bank bailouts.

(Listen here.)

“The problem is that we’ve confused the financial crisis,” he said, adding that governments have been “so tied to the banking system that they thought: if we just fix the banking system then everything will be ok.”

He continued: “But the second problem is that because they were also so tied to the mistakes of the past, they didn’t see in what ways they had let the banking system malfunction.”

Stiglitz explained that the primary function of a bank is to provide credit, particularly to small and medium enterprises, but that banks today had moved away from that role and into different areas.

Addressing what has happened in Ireland and the United States, he said: “We’ve socialised losses and privatised gains, that’s not market economy, that’s not capitalism – and when you do that you get a really distorted economy.”

Stiglitz warned that he was worried about the European economy because a number of the countries in Europe are engaged in “major cutbacks”. He said that while books need to be balanced, financial austerity will ultimately create “a weakened  economy, high unemployment and disappointing tax revenue”

Instead, Stiglitz says, it is important for governments to focus spending on investment. By doing so, the economy will be stimulated in the short-term, growth will be promoted in the long-term and “even with mild rates of return on investment, long-term national debt will actually be lowered.”

Investment in innovation, education and infrastructure is the only way to lift an economy out of the crisis, he said.

When asked about whether he would have included Brian Cowen in the top leaders of the world on the back of his handling of the banking crisis, as Newsweek did, Stiglitz replied “probably not”.

He added that “the way the banking restructuring has been done (in Ireland) is actually one of the most problematic… the cutbacks have been draconian, and the public sector in a modern economy plays a very important role – if you cut wages you’re not going to attract good people to the public sector.”

“What you have to do to get things going is not just cut, cut, cut…” he said, “You have to have vision of where you want to go. It’s not just saying  ‘well we have to go back to where we were in 2007′ – something was fundamentally flawed about what we were doing back in 2007 that got us into this mess.”

Stiglitz’s book about the banking crisis, Freefall, is now available.

ANGLO HAS COMPLETED its second transfer of loans to the National Asset Management Agency. Almost €7bn was transferred to the state agency yesterday, at a whopping discount of 61.9%

The second tranche of loans from the five banks was given an average discount of 55.6%.

The average discount for Tranche 1 transfers was 50%. The increased discount indicates that the quality of the loans being taken by NAMA has deteriorated.

NAMA paid less for this round of loans, meaning that the banks have received a lot less money for them than they were originally worth. The knock-on effect of this is that taxpayers may be called on to keep the banks’ capitalisation at a certain level.

Figures show:

  • While 66% of Tranche 1 loans were based in Ireland, that figure fell to 50% for Tranche 2
  • 44% of Tranche 2 loans were based in the UK and Channel Islands
  • 23% of Tranche 2 loans were secured against hotels, compared to 4% of Tranche 1
  • Investment property accounted for 52% of Tranche 1 loans, and 43% of Tranche 2
  • 44% of Anglo’s overall exposure has now been transferred to NAMA
  • 34% of the overall exposure of the five banks has been transferred over

The price of Ireland’s debt also rose yesterday, reportedly on news of the cost of Anglo’s Tranche 2 loans.

The four other banks involved in transferring ‘bad loans’ to NAMA had completed their second tranche over a month ago.

Yesterday, NAMA said it had written to the chief executives of Irish banks, asking them to be quicker in providing the agency with details of the loans being taken over.

# business - Monday 23 August, 2010

BRITISH SUPPORT SERVICES group DCC has agreed to buy Comtrade, a distributor of consumer electronic goods. DCC will purchase a 74% stake for €11.4m in the company. The remaining shares will be bought for a price based on Comtrade’s results up to end of March, 2013. Comtrade, based in Paris, made €65.2m in revenue last year. The company has 65 employees.

THE CENTRAL STATISTICS OFFICE (CSO) has released its report on the “administrative burden” of its enquiries on Irish businesses in 2007.

The cost of responding to the enquiries reached an estimated €7.7m and €10.5m, depending on which of the two models used by the CSO is followed.

The higher figure is based on the assumption that enquiries were responded to in full, while the lower figure represents the level of responses the CSO actually received.

The CSO sent out 37 different surveys to Irish businesses in 2007, which involved over 500,000 forms. Of these, 368,928 were returned, taking 328,676 hours to fill in.

THE RATE OF RECOVERY in the eurozone lost some of its momentum this month, according to the purchasing managers’ index (PMI). The index surveyed 4,500 companies across the eurozone to gauge the pace of recovery. The rate fell from 56.7 points to 56.1 points in August, after accelerating for the first time in three months in July. Anything above 50 points indicates growth.

THE FINANCIAL REGULATOR says it’s time that tracker customers were informed of the implications of switching their mortgage.

Matthew Elderfield’s office today published the findings of a study into “switching practices relating to tracker mortgages.”

The findings have also been sent to all mortgage lenders, along with new measures the regulator says should be implemented immediately.

The study found:

[I]n some cases communication on the financial implications and consequences of switching were not fully transparent to the customer and that it was not always clear that if a customer moved from a tracker rate mortgage to an alternative interest rate (fixed, variable or other rate), for any reason, that their agreed tracker rate or an alternative tracker rate might not be available again in the future.

It did not find any evidence that customers were being offered incentives to switch from their tracker rate.

The regulator has requested that banks include new information regarding tracker mortgage switching in all customer communications.

MARK ZUCKERBERG has made it even easier for people to know where you are at all times with Facebook Places.

But what if you didn’t want anything to do with Zuckerberg? Well, if you thought about blocking his profile to make a privacy point, think again.

The online campaign says that the site has changed its settings so that it is impossible to block Zuckerberg.

On his profile page, as with any other Facebook user, is a link marked Report/Block this person. Click on this, and a message asks you to distinguish which action you’d like to follow: block or report. Click on block, and an error message appears, saying “Block failed”.

Incidentally, Zuckerberg also appears to be the only person on Facebook who can’t be added as a friend. He’d have to add you first.

REPORTS THAT ANGLO Irish Bank may be about to transfer its second tranche of loans to NAMA at a significant discount have triggered a jump in the cost of Ireland’s loans.

Reuters is reporting that Anglo is looking at a 61% ‘haircut’ on the bank’s €7bn loan transfer.

An official statement on the sale and the discount involved is expected today or tomorrow.

Fears over the rising cost of bailing out Anglo have pushed up the cost of the nation’s debts, as investors demand to hold 10-year Irish bonds over German benchmarks.

The Financial Times warns that the bond-yield spread is heading towards high levels last seen in May.

Last week, the governor of the Central Bank, Patrick Honohan, said that Anglo would end up costing taxpayers €25bn, or 20% of GDP. He said that the bailout was “costly but manageable.”

The bank’s first batch of €10bn in loans transferred to NAMA was given a 55% discount. The second transfer was due on 19 July, but missed the deadline by over a month.

BUILDING MATERIALS GROUP Kingspan has reported a rise in operation profits for the first time in three years.

Profits were up 9% to €33.1m for the six months ending 30 June.

The company said that demand for its insulated panel products in the UK had grown 14% on the same period of last year. Strong sales in the US and continental Europe were also credited with bolstering the company’s coffers.

Speaking on RTÉ Radio One this morning, Kingspan’s CEO, Gene Murtagh, said that the vast majority of the company’s business is outside of Ireland, and most of that is in the UK.

Business “took off”

Murtagh said that while Kingspan was “in the same boat as everybody else for January and February,” things “took off” in May and June, and he sees no reason why the next six months won’t also be good for the company.

Although new build is down in Ireland, Murtagh said people are willing to spend money on refurbishment and on the  back of this trade, business has been “reasonably good” for Kingspan.

But he also said he was confident that in the “not too distant future” Ireland would see growth in its new build sector, because the current low level of new build is unsustainable for the population.

# business - Friday 20 August, 2010

After Apple made it clear that Adobe’s Flash plugin would never be part of its iPhone or iPad, the last big hope for Flash on mobile devices was Google’s Android.

Google and Adobe now had a common rival in Apple and the thought that maybe Flash on Android would be so awesome that Apple would have to break down and let iPhone owners use it.

Doesn’t look like it. In a post for Laptop Magazine, Avram Piltch writes that Flash video on Android is indeed terrible:

“How bad is mobile Flash? When I went to and tried to play a clip, I waited five minutes while the player said “loading.” During that time, it was nearly impossible to scroll around the page or tap objects on it. Eventually, I scrolled up to see a message that was previously obstructed and said  ”Sorry. An error occurred while attempting to load the video. Please try again later.” It gets worse…

When I visited and tried to start an episode of House, the program actually played but, even over Wi-Fi, the playback was slideshow-like. Worse still, the player became unresponsive as it ignored my attempts to tap the pause, volume, and slider buttons. At some point during playback, an overlay message warned me that this video was “not optimized for mobile.” I encountered the same message when I tried to play a trailer of the Expendables that was embedded on the movie’s mySpace page. Wasn’t Flash 10.1 supposed to erase the boundaries between mobile and the desktop?”

Piltch goes on to list some Flash-on-Android experiences that aren’t so bad, but ultimately concedes, “I’m sad to admit that Steve Jobs was right.” (He also tries some Flash games, and discovers that they aren’t meant for playing on Android phones, either.)

Sure, in theory, Adobe, Google, and Android hardware partners could optimize Flash video to get it to a point where it’s watchable on mobile. And to be fair, perhaps this was an isolated bad experience. We haven’t had a chance to try it ourselves.

But in the meantime, many web publishers are already working their way around Flash, installing HTML5 video players onto their sites, so that they’ll work on the iPhone and iPad. Once HTML5 video is universal enough, there really won’t be a need for Flash on mobile devices.

Reprinted with permission from The Business Insider

Facebook looks bulletproof. It crushed its early competition, shrugged off privacy missteps and created a billion dollar platform within just a few years.

Built not on the backs of techie early adopters but of college kids, Facebook was quick to demonstrate its global, mass appeal.

And its appeal has held steady. While young techies sneer at AOL and Yahoo!, they’re still on Facebook.

Sure, you see the errant “as soon as my Mum friended me it was over” comment but those users are outliers. While it remains an industry maxim that the mighty will fall, there has been no viable challenger and no real test of Facebook’s dominance.

Until now Facebook’s launch of Places is without question its riskiest move to date. Why?

For starters, by challenging Foursquare, Facebook has chosen to take on a focused, scrappy underdog. A different fight than their battle with Google where even being a challenger could be counted as a win, this fight will say a lot about how nimble an organization Facebook – just a couple years out of start-up mode itself – remains. Facebook has already gone from pulling in Google talent to shedding key engineers on a regular basis. A loss to Foursquare will speed the trend, lessening their ability to attract top engineering talent.

Another important consideration: over the last 16 months Foursquare has found two million users willing to replicate (some would say refine) their social graphs. While they did this with the help of Facebook’s API they didn’t rely on Facebook as a distribution channel (unlike Zynga). It’s widely perceived that Facebook users can’t be bothered to recreate their social graphs and that these “switching costs” make user-acquisition too difficult for competing services. A win by Foursquare – heck, even survival – while in direct competition with Facebook will call that assumption into question.

The “if Foursquare could do it” bullet point will factor into countless strategic decisions.

Finally, a loss will show that Facebook does, in fact, have limitations. It took a number of years and countless failed products before the community realised that Google was not unstoppable on all fronts.

Right now Facebook is seen to have the potential to win at everything – display, search, even video – that it has taken “the internet from Google”. It’s worth noting that a Location Based Service like Places isn’t the same as, say, Google dabbling in Wave. It’s a pretty organic extension of Facebook’s social networking foundation. A Places loss, particularly in tandem with a Foursquare win in LBS, won’t be the end of Facebook but it will show it to be far more vulnerable than is presently assumed.

To be sure, Mark Zuckerberg is betting on none of the above. Last night’s high-profile announcement showed supreme confidence as did his decision not to acquire Foursquare. Facebook has gone “all-in” with Places – it’s a big bet and their success or failure with it will dramatically impact the industry.

Paul Marcum, a former Yahoo! and one-time Shake Shack Mayor, is working on a new startup and just launched the NY Data Visualization and Infographics Meetup. He can be found on Twitter at @jpmarcum and blogs at, where this post was originally published.

Reprinted with permission from The Business Insider

Communist megalomaniac Kim Jong-il has a taste for luxury, known to consume 20% of North Korea’s budget each year.

But which brands does he like?

Chosun Ilbo learned from a defector he likes Omega watches, Perrier bottled water, Martell Cognag, and imported menthol cigarettes. He wears French silk and scabal, a material “popular with foreign celebrities,” and Italian Moreschi shoes. He also recently bought 160 Mercedes-Benz sedans for top officials.

The defector says Kim Jong-il was impressed when Chinese diplomats knew to his tastes: “During his visit to China in 2005, Kim Jong-il was delighted to see bottles of Perrier that Chinese officials had prepared for him and asked his aides how the Chinese knew he liked Perrier.”

Now what happens when Kim Jong-il resigns? His likely successor is known to prefer Nike and other American brands.

Reprinted with permission from The Business Insider

THE CONSTRUCTION OF a cooperative wind farm project in Co Clare will create up to 300 jobs in the region.

West Clare Renewable Energy (WCRE) plans to build the largest community-owned wind farm in Ireland, with 28 turbines.

WCRE says the project will be able to produce enough electricity for every business and home in Co Clare.

Planning permission has been granted for the project, based between Ennis and Miltown Malbay.

It involves an investment of €200m and will be collectively run by 30 farming families.

The wind farm will take up to two-and-a-half years to construct.

THE EUROPEAN COMMISSION will transfer of a second tranche of loans to Greece, worth €9bn, to help the country with its economic troubles, the Financial Times reports.

Measures so far taken by the Greek government have been praised by Ollie Rehn, the EU Economics and Monetary Affairs Commissioner. Prime Minster George Papandreou’s move to cut public sector wages and reduce capital expenditure has resulted in the Greek budget deficit being reduced more quickly than anticipated.

Rehn said:

Greece has managed impressive budgetary consolidation during the first half of 2010 and has achieved swift progress with major structural reforms.

Nevertheless, Rhen also warned of the possibility of problems arising in the future for Greece:

Despite the significant progress made, challenges and risks remain. The main immediate challenge is to safeguard adequate liquidity and financial stability of the banking sector.

On 7 September, Eurozone finance ministers will meet to officially approve the next instalment.

Greece is currently the only Eurozone country to remain in recession. It’s economy contracted by 1.5% in the second quarter of this year, marking the country’s seventh consecutive period of negative growth.

# business - Thursday 19 August, 2010

PROCESSOR MANUFACTURER INTEL has agreed a massive €6bn cash deal to buy the security and anti-virus firm McAfee.

The deal will see Intel pay $48 (€37.40) per share for the security company, compared to the $29.93 closing price for McAfee shares on the NASDAQ yesterday evening.

Unsurprisingly, McAfee shares have taken an extraordinary spike this morning and were trading at $47.16 – an increase of 57.6% – at the time of writing.

It shares had been worth similar amounts as recently as the end of April, when the company revised its Q2 earnings significantly downward, but recovered some of its value when its ultimate Q2 earnings were higher than its downward forecasts.

Intel said that the deal would reduce its own net earnings in the first year after takeover, but that the takeover would significantly augment its own security services. Its own shares are down slightly today as a result.

It added that the takeover reflected how security was now a concern at the very core of computing, joining energy efficiency and connectivity as the ‘third pillar’ of computing requirement.

The processing giant – which employs over 4,000 people at its campus in Leixlip – said in its earnings reports for 2009 that it had almost $4bn in the bank and another $5.2bn in short-term investments – meaning it will probably have to seek a reasonable amount of financing to help fund the deal.

AMERICAN TELEVISION HOST Jon Stewart is the latest in a line of critics to blast the proposals made by Google and Verizon, a US Internet Service Provider, regarding internet traffic.

The companies have joined up to deal with what they call the “thorny issue of network neutrality”, which would consist of a tiered system of information access for users.

The proposals have worried and enraged internet users who believe that compromising net neutrality will destroy the internet as we know it, which is currently a level playing field that allows all users to access information they want.

Speaking on his programme, The Daily Show, Stewart accused Google of “flip flopping” on the issue. He said that while “Google doesn’t get to write laws”, the company does operate beyond the confines of a simple internet search engine:

They just photograph and post where everybody lives and republish every book ever written and negotiate with the Chinese government while building floating data centres in the ocean…

Last week a  group of protesters gathered outside Google’s headquarters in California to protest against the proposals. Protesters were especially angry about the agreement that wireless networks shouldn’t be subject to the same net neutrality restrictions as wired networks.

Calling on Google to live up to its informal motto of “Don’t be evil“, the protesters brought 300,000 signed petitions from users all over the world who disagree with the proposed plans.

Google have said that they support the principle of net neutrality and that the idea of a tiered system is simply a proposal.

Read the Google-Verizon agreement here.

Users can let their feelings on the matter be known at

# business - Wednesday 18 August, 2010

GOOGLE HAS voluntarily opened a new service allowing German users to pre-emptively remove images of their properties from its Street View service before it launches next month.

The search company had come under enormous public pressure to allow users opt-out of the service after the country’s biggest newspaper, Bild, encouraged citizens to voice their concerns that the data could be used maliciously, such as by would-be thieves to identify potential entrances to a building.

The move is an unusual one for Google, coming without any legal imperative or requirement to allow such a service – especially given the fact that local legal experts do not believe that property details are considered personal information, which would be protected by law.

Industry insiders now wonder whether Google will offer a similar opt-out service to users in other countries where the service currently, or intends to, operate – including Ireland, where the service is expected to launch later this year.

It also raises the possibility that users may in future be able to request that their own personal images – if they, for example, are depicted standing on a street while Google’s cameras were passing – be removed.

Residents can now remove houses they own, or live in, before the service if they fill out an online form before September 15. Those visiting the opt-out site, however, are told it is “a pity” they wish to remove their property, because the service allows users:

…to see where your family and friends live, no matter how far you are from each other, or if you want to explore your next holiday destination in in advance.

Germany’s interior ministry is currently drawing up plans to curb the ability of Google to roll out the Street View service nationally, though it is illegal under Germany’s Grundgesetz, the constitution, to enact laws which single penalise any individual company.

Despite being one of the leading voices supporting an opt-out clause in the service, chancellor Angela Merkel has indicated that she won’t be removing her residence from the service, with a spokesman explaining that Merkel’s address was already well known to the public.

RAPPER JAY-Z has topped a list of the world’s richest rappers, beating P Diddy, Eminem and 50 Cent.

Shawn “Jay-Z” Carter made a whopping $63m last year but he still made less than his wife Beyonce. The Empire States of Mind rapper grosses over $1m a gig and has investments in a clothing line, nightclub chain and owns a share of the New Jersey Nets basketball team.

Rapper Lil Wayne has managed to continue his earning despite being behind bars but there are a few who suffered. Kayne West’s earnings fell from $25m last year to $12m this year on foot of an outburst during Taylor Swift’s acceptance speech at MTV’s VMAs.

Forbes magazine which compiled the list said rappers weren’t hit by the recession. The top 20 rappers racked up over $300m in earnings last year, the same as the previous year.

  1. Shawn “Jay-Z” Carter – $63 Million
  2. Sean “Diddy” Combs – $30 million
  3. Aliuane “Akon” Thiam – $21 million
  4. Dwayne “Lil Wayne” Carter – $20 million
  5. Andre “Dr. Dre” Young – $17 million
  6. Christopher “Ludacris” Bridges – $16 million
  7. Calvin “Snoop Dogg” Broadus – $15 million
  8. Timothy “Timbaland” Mosley – $14 million
  9. Pharrell Williams – $13 million
  10. Kanye West – $12 million

US CLOTHING CHAIN American Apparel says it may not have enough money to continue operating for the coming year.

The company reported a preliminary second-quarter loss of between $5 million and $7 million today, and said it may not have enough liquidity to cover itself for another year.

The company said it expects its losses to continue into the third quarter. It opened its Grafton Street branch just over a year ago, on 30 July, 2009.

Shares in the company plummeted by over a quarter today after preliminary losses were announced and news broke the company had been subpoenaed over its change of accountants.

The company’s independent auditor Deloitte & Touche resigned earlier this year, and the chain hired Marcum which had audited American Apparel from 2005 to 2008.

American Apparel shares have fallen by 67% this year.

Company chief executive, Dov Charney, is known for controversial antics like personally photographing models in sexually suggestive photo shoots.

RTÉ IS refusing to cut the wages of its top talent, despite losing almost €17m last year.

The station says it hopes to break-even this year and although it will continue to reduce costs, the station will not be making cuts to presenters salaries. A spokesperson for RTÉ told the Daily Mail “the same cost discipline which was applied last year will be held in place this year. However, there will be no further wage decreases.”

The station paid over €4.5m to its top 10 presenters in 2008, the last year that figures were available. Pat Kenny, then the top paid presenter at the station earned €950,976 in 2008, nearly four times the salary of Taoiseach Brian Cowen. Ryan Tubridy was paid over €500,000 and the late Gerry Ryan earned almost €630,00.

RTÉ say that it expects advertising to recover somewhat, allowing it to break-even but top advertising execs disagree. Seán McCrave, chief executive of the Institute of Advertising Practitioners of Ireland said all the big government advertising, a staple of RTÉ is gone.

Labour Party communications spokesperson LizMcManus said “if there are further cuts that can be made, they should be made”.

# business - Tuesday 17 August, 2010

NINE EUROPEAN UNION member states have written to the European Commission asking it to change its accounting rules in a bid to try and artificially lower their official budget deficits.

The countries, mostly from Eastern Europe, have asked the bloc to consider changing its classifications so that the costs of reforming their various pension schemes do not count towards their budget deficits.

Lithuania, Latvia, Bulgaria, Sweden, Slovakia, Hungary, Romania, Poland and the Czech Republic say that reform of their pensions systems, while expensive, create long-term benefit while inflating their short-term budget shortfalls.

In a letter obtained by Reuters today, the countries backed a German proposal to introduce new penalties for countries which exceed the Union’s ‘glass ceiling’ of running a budget deficit of more than 3% of GDP.

But they wrote:

Maintaining the current approach to debt and deficit statistics would result in unequal treatment of Member States and thus effectively punish reforming countries.

The European Commission has described the proposal to change budgeting rules as a “relevant” one, but insiders believe it would be difficult to change the rules as they form part of the Stability and Growth Pact, amendments to which would require the assent of all 27 member states.

“There is likely to be some understanding for the position of the nine countries, but it is difficult to say how far it will go,” one source told Reuters. “To change the accounting rules everybody has to be on board, and some are not.”

Ireland is likely to face massive penalties from the EU one way or another, after its official statistical agency Eurostat ruled that Ireland’s costs of recapitalising Anglo Irish Bank would not be discounted from its budget deficit – meaning its deficit could be up to 24% of GDP, eight times the EU limit.

HAVE YOU EVER dreamed of holidaying with a legendary Rugby commentator?

No? Well someone must have because American Holidays are offering cruise holidays with the famous Cork broadcaster.

The tour operator says this is the first time ever for such an opportunity – to think it took the recession for them to package together such an offer? “You’ll get enjoy seven nights on the high seas in the company of the outspoken  George Hook. Listen to George give seminars on ‘How to beat the recession’ and ‘Irish Rugby to the World Cup 2010′ as well as enjoying his usual craic and repartee,” according to American Holidays.

No doubt George will also be lauding the benefits of Sky plus as well as giving you regular updates on his bowel movements.

And what could someone expect to pay for this unique privilege? Prices start from €1169.

In insight into a night with Hookey

GOOGLE has long been criticised for privacy issues. Complaints have been made about Google’s street view, collecting information on wi-fi networks and Google Buzz but Google chief Larry Schmidt has put minds at rest… or has he?

Speaking to the Wall Street Journal Schmidt said that adults should be allowed to change their names in order to get away from information held about their online misdemeanour’s.

He predicts, apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites…

“I don’t believe society understands what happens when everything is available, knowable and recorded by everyone all the time,” he says… “I mean we really have to think about these things as a society.”

Not sure that’ll fly Larry.

AN AIRPORT STRIKE threatened for six airports in the UK this month has been called off.

Thousands of passengers at Heathrow, Stansted, Edinburgh, Aberdeen, Glasgow and Southampton airports would have been affected by the strike.

The strike was cancelled after a day of talks between the Unite trade union, representing airport engineers and ground staff, and the BAA. BAA runs the airports.

After nine hours of negotiations, a new pay offer was presented to the union. Workers had rejected a previous pay deal, but are now being urged to accept the new agreement.

BAA said it was pleased that an agreement on pay was reached that is “fair to staff but which also reflects the difficult economic climate.”

RTÉ HAS announced a €16.5m loss in 2009 after a total revenues at the station declined by 15% to €375m.

The broadcaster revealed the information yesterday in its annual report. RTÉ said the deficit was considerably lower than the €68m that had been forecast.

Advertising at the station was down 33% to €131m, revenue at the station was however bolstered by the €200m paid by TV license holders.

RTÉ said while the advertising industry “remains fragile” the station is expected to break-even in 2010. RTÉ also said that it will continue its restructuring effort and will keep a lid on its expenses. RTÉ reduced staff in the group by over 100 to 2,035 and pay was down from 176.1m in 2008 to 161.3m in 2009.

There was also a 20% cut in in-house programming at the station while the spend on overseas programming rose slightly.

RTÉ said over 784,609 programs had been watched on the RTÉ player. Viewership of is also up, over 62m pages are viewed on the site each month up from 20m in 2005. Nine million pod casts were also downloaded from the station in 2009.

The station’s director general Cathal Goan made €326,000 in 2009, a 6% decrease on his 2008 pay packet. Goan is retiring from RTÉ this year. The front-runners for his job include Managing Director of News and Current Affairs Ed Mulhall and former Ryanair Chief Exec’ and now RTE’s CFO Conor Hayes.

# business - Monday 16 August, 2010

FACEBOOK USERS ARE being warned about a scam offering a “dislike” button to be added to their account, BBC reports.

Users are tricked into allowing another application access to their profile page. That application then posts spam messages.

No dislike button is actually added to the user’s Facebook page, but a message and link to the app come up on the user’s status.

Users are also lured into filling out a survey which the people behind the scam are being paid for.

Facebook said it has processes in place to quickly remove rogue applications and urged users to get in touch with them if they see anything suspicious on their page.