The digital business week

9 Aug 2010

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

3 becomes primary sponsor of Irish football team

Mobile operator 3 Ireland has announced it will be the primary sponsor of the Irish national football team as well as all international squads in a four-year agreement worth more than €7.5m.

The sponsorship agreement will not just see 3 working with the Football Association of Ireland for the national team but also involve sponsorship at “grassroots” level, ie, involving football clubs and leagues throughout the republic.

As primary sponsor, 3 will have premium branding rights for the Irish team’s training and game gear and kit, as well as branding on tickets and pitch-side at the Aviva Stadium.

“We are delighted to announce this major sponsorship, and see this as a strong strategic fit for our business to drive awareness of our brand amongst supporters of the No 1 sport in the country. Football fans will be at the heart of 3’s sponsorship strategy and we plan to launch a range of exciting new initiatives, including priority ticket bookings for 3 customers,” said 3 CEO Robert Finnegan.

The new strip with 3 branding will be available from autumn onwards, and 3 customers will have privileged access to tickets and other as-yet unannounced initiatives.

Senior Irish international manager Giovanni Trapattoni said the partnership is “good for the game at all levels” and that it will help the FAI develop and grow the sport.

FTC settles case against Intel

The US Federal Trade Commission has reached a settlement with Intel over allegations the semiconductor giant illegally stifled competition in the market for computer chips.

According to the FTC, Intel has agreed to provisions that will open the door to renewed competition and prevent Intel from suppressing competition in the future.

The FTC settlement applies to central processing units (CPUs), graphics processing units (GPUs) and chipsets, and prohibits Intel from using threats, bundled prices, or other offers to exclude or hamper competition or otherwise unreasonably inhibit the sale of competitive CPUs or GPUs.

The settlement also prohibits Intel from deceiving computer manufacturers about the performance of non-Intel CPUs or GPUs.

The FTC settlement goes beyond those reached in previous antitrust cases against Intel in a number of ways. For example, the FTC settlement order protects competition and not any single competitor in the CPU, graphics and chipset markets.

IT spending rebounds, but industry fears double-dip recession

Strong PC shipments and enterprise IT spending saw overall IT spending rebound in the first half of 2010, with emerging markets leading the way. However, the shadow of a double-dip recession lurks and IDC has prepared a scenario for the IT industry.

IT spending rebounded quickly in the first half of 2010, led by capital spending on new hardware infrastructure as businesses, governments and consumers took advantage of a stabilised economy to work off pent-up demand for new PCs, servers, storage and network equipment, according to IDC.

Emerging markets led the way, with the economic recovery driving a new wave of intense IT investment in countries such as China, India, Brazil and Russia.

As a result, IDC has raised its projection for annual IT spending in 2010 to US$1.51trn, representing growth of 6pc in constant currency.

Hardware spending will increase by 11pc to US$624bn, while software and services spending is set to rise by 4pc and 2pc, respectively.

Avaya to cut 64 jobs in Dublin, 34 to transfer to Galway

Telecoms equipment and software player Avaya is to cut 64 jobs at its operations in Sandyford, South Dublin, as part of its plans to consolidate with the operations of Nortel in Galway.

In September, Avaya emerged as the winner of a bid to acquire Nortel’s Enterprise division for US$900m and the deal was closed in December, creating a new Avaya with 21,000 employees worldwide.

Avaya is a key player in the Irish unified communications market and employs 200 people in Sandyford, where it has a major R&D operation. Avaya bought Irish technology firm Spectel in 2004 for US$103m.

Nortel, which has been in Galway for 37 years, employs 300 people in the city.

Staff in Sandyford have been told they would be paid statutory redundancy and would lose their positions on the last day of September.

Facebook IPO not happening until 2012

Facebook is not planning to IPO until 2012 in order to give itself more time to grow its user base and grow sales, according to reports. The company, which has revenues of US$800m, recently secured its 500 millionth user.

According to a Bloomberg report, three people familiar with the subject said the company intends to use the time wisely, to grow sales, resolve the plethora of privacy issues and ultimately gain more users.

Judging the pace of growth, allied with the growth of the internet and the spread of smartphone devices, it is likely that in two years’ time social-networking giant Facebook could reach the one-billion user mark.

It is envisaged that in terms of sales – from online advertising with major brands, classifieds, branding opportunities for businesses via Facebook Marketplace, the Facebook Credits currency and, of course, the rise and rise of social gaming – Facebook could boost sales from US$800m this year to US$1.4bn next year.

The company, which was started by Mark Zuckerberg six years ago on the Harvard University campus, has become the second most-visited site on the internet and is to be the subject of a movie, The Social Network, which will debut in October.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years