The digital business week

16 Apr 2012

A digest of the top business and technology news stories from the past week.

Google Q1 revenues jump 24pc to US$10.6bn – announces stock split

Google reported revenues grew 24pc in the first quarter to hit US$10.6bn, yielding the internet giant a profit of US$2.89bn. Google took the occasion of the bumper results to reveal a new stock dividend structure aimed at preserving the corporate structure that enabled Google to focus on the long term.

The internet giant reported an operating income of US$3.3bn, or 32pc of revenues. Earnings per share in the first quarter was US$8.75, up from US$5.51 last year.

Google-owned site revenues were up 24pc to US$7.31bn. Its partner sites generated revenues of US$2.9bn, up 20pc on last year.

Revenues from outside the US totalled US$5.77bn. Revenues from the UK totalled US$1.1bn.

Traffic acquisition costs, or revenue shared with partner companies, was US$2.5bn during the quarter. The majority of this revenue – US$2.04bn – went to network members.

Sony to cut 10,000 employees in ‘One Sony’ restructuring

Sony confirmed it would cut 10,000 staff globally as part of a major restructuring of its business to become more competitive.

In a press release, Sony said some staff would be transferred outside the Sony Group as part of the sale of businesses and aims to secure these jobs at new destinations.

The job cuts come as part of Sony’s new business initiative – called ‘One Sony’ – in order to strengthen its core business, expand into emerging markets, realign its resources and boost its television business.

Sony will evaluate other businesses and will form alliances and business transfers based on these analyses. The company estimates that its restructuring costs will amount to US$926m. It aims to target sales of US$10.5bn and operating income margin of 5pc by March 2015.

Electric Ireland and Abtran to partner in outsourcing contract

Cork-based Irish business process outsourcing company Abtran has won a tendering process with Electric Ireland to extend its contract with the energy utility for another five years and deliver service solutions to its 1.2m customers.

Abtran has been working with Electric Ireland (formerly ESB) since 2004. Under the terms of the new contract, Electric Ireland said Abtran would be working in collaboration with the utility to re-engineer its current service offering through advances in technology, customer analytics and service innovation.

Electric Ireland’s general manager Liam Molloy said the contract would allow the utility to build on its service for customers and to achieve further efficiencies through process improvements and technology.

US court prevents Motorola from blocking Microsoft products

A US judge has given Microsoft a motion for a temporary restraining order to prevent Motorola from blocking the sale of Microsoft’s products in Germany in their patent dispute.

A judge in the US District of Western Washington in Seattle made the ruling which will prevent Motorola from using its patents to block the sale of Microsoft products until a court decides if Motorola is offering its patents under fair, reasonable and non-discriminatory (FRAND) terms.

The ruling stems from a dispute between Motorola and Microsoft over Motorola’s patents. In November 2011, Microsoft sued Motorola, claiming it charged excessive royalties for its patents. Motorola then countersued, claiming Microsoft infringed 16 of its patents.

Despite selling 12m smartphones, Nokia warns of disappointing quarter

Nokia’s Devices & Services division is still in the midst of transition, Nokia’s CEO Stephen Elop said as the company warned its first-quarter financial results will fail to meet expectations.

Nokia estimates that net sales in the first quarter from the Devices & Services division were €4.2bn.

This included the sale of 71m (€2.3bn) mobile phones and 12m smartphones (€1.7bn) and achieving gross margin of 26pc and 16pc respectively.

During the first quarter, Nokia sold 2m Lumia devices at an average selling price of €220.

It said the Windows Phone ecosystem is attracting developers, with more than 80,000 apps now available.

In a statement, Nokia said a number of factors affected its Devices & Services group, including competitive dynamics that affected mobile and smartphone sales in India, the Middle East and China, as well as gross margin declines in its Smart Devices unit.

The company said operating margins for the first quarter of 2012 will be -3pc, narrowly missing an expected break even.

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