The digital business week

14 Mar 2011

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

Microsoft pays Nokia US$1bn in ‘hello money’ for alliance

Microsoft is understood to be paying Nokia more than US$1bn to promote and develop Windows Phone 7-based handsets as part of their strategic alliance. In turn, Nokia will pay Microsoft a fee for each copy of Windows deployed on its smartphones.

According to a report on Bloomberg, the price Nokia will pay per licence will be offset by a reduction in R&D resources at the Finnish mobile giant.

The US$1bn in hello money to Nokia is understood to have played a role in keeping Nokia from choosing Google’s Android operating system.

Last month, Nokia outlined its new strategic direction, including taking on Windows Phone as its primary OS, a major organisational restructure and a focus on getting developing growth markets connected to the internet. Nokia and Microsoft will also combine services. Nokia Maps will be “at the heart” of Microsoft products, such as Bing and AdCenter.

Sony realignment means Hirai could be future CEO

Sony is undergoing a major corporate reshuffle, dividing the company into two major parts and promoting two of its executives.

Sony stated these internal changes will be the backbone of the next phase of the company’s strategy to become the “leading provider of networked entertainment and solutions.”

Sony CEO Howard Stringer will oversee the realignment of the company. It will see its consumer electronics and networked service functions under the Consumer Products and Services Group and its B2B, component and semiconductor business will join the Professional and Device Solutions Group.

Kazuo Hirai, who now runs the PlayStation segment of the company, will be promoted to representative corporate executive officer and executive deputy president from 1 April. He will lead the Consumer Products and Services Group.

He is tipped to become Sony’s next CEO, succeeding 69-year-old Howard Stringer when he steps down, which he is expected to do in 2013.

Hiroshi Yoshioka, corporate executive officer and executive deputy president, could be another contender and he will be charge of the Professional and Device Solutions Group.

Forbes‘ billionaire list includes five Irishmen

Forbes magazine has released its annual list of the world’s billionaires and 2011 is a record year for the richest men and women on the planet.

At 1,210, there are more billionaires that ever before and at $4.5trn, they are also worth more combined than ever before.

Five Irishmen made the list, with Pallonji Mistry topping the pile. His $8.8bn construction wealth brings him in at 103rd. Mistry is a citizen of Ireland but resides in India.

Digicel Group chairman Denis O’Brien comes in at 254th place and is worth $4.2bn.

Campbell Soup’s John Dorrance is the third Irishman to make the list (488th), while at $1.9bn net worth, Martin Naughton is placed 651st.

Sixty-year-old financier Dermot Desmond is the last Irishman to make the list and with a net worth of $1.6bn, he makes it in at 782nd.

Overall, Mexico’s telecommunications tycoon Carlos Slim Helu heads the list again, boasting a net worth of $74bn.

Angry Birds creators Rovio swoop in on US$42m investment

Rovio, the creator of the massively popular Angry Birds app game, has raised US$42m from venture capital firms Felicis, Accel Partners and Skype founders’ Niklas Zennström and Janus Friis’ London-based Atomico.

The Finland-based company had been courted by a number of investors before accepting the Series A funding from Atomico, Felicis and Accel.

Rovio said it has ambitious plans the investors endorse and will facilitate. The investment will transform Rovio’s growth, allowing it to increase its reach internationally, and across markets, including mobile, social media and other platforms, and via merchandising and media production and partnerships.

Google acquires for stg£37.7m

UK price comparison website has been bought by Google for stg£37.7m (US$61.5m). The site allows consumers to search for and compare prices for services like insurance and utilities.

“We think this deal is a tremendous opportunity for our company to develop new and innovative options for personal finance in the UK,” said John Paleomylites, the company’s managing director.

Google’s acquisition of the company could be central to its efforts to take on players like Groupon in the market for deals and financial comparisons.

YouTube goes pro – buys Next New Networks for US$50m

Video site YouTube, which is incidentally the world’s second-largest search engine after Google, has taken its first real steps into producing its own professional content, having acquired Next New Networks for an estimated US$50m.

Next New Networks produces original programmes and helps content creators distribute films and make money.

YouTube intends to build upon the platform and open it up to content partners. Next New Networks attracts 2bn views a month.

The move could be instrumental in enabling YouTube partners to monetise online and also help the video site face off competition from popular video service rivals like Hulu, iTunes and NetFlix.

The move also signals a potential move away from the short videos that characterise most of YouTube’s content in the direction of content people will watch for hours on end, such as movies and documentaries.

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