The digital business week

31 May 2010

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

Electronic Arts to create 200 new Galway jobs

Computer-games company Electronic Arts (EA) is due to create 200 jobs in Galway as it establishes a European customer service and operations centre in the city.

As many as 200 jobs are expected to be created through the major IDA Ireland-supported investment, with the new centre for EA’s BioWare studio due to be fully up and running by 2011.

As well as supporting customers, the new Galway centre will also be involved in developing online games.

The company has begun recruiting for the new Galway centre. For more details, visit

Welcoming news of the announcement, the Taoiseach Brian Cowen TD, said: “EA is the global leader in interactive entertainment and a very important addition to the thriving games industry in Ireland.”

Spangenberg: ‘Apple vs HTC suit is really about Google’

Patent investor Erich Spangenberg, one of the most feared men in Silicon Valley and the automotive industry globally, told that he believes the current lawsuit between Apple and HTC is in reality a case about Google and Android.

Spangenberg was in Dublin recently and is preparing to do due diligence on the work of an Irish PhD graduate whose intellectual property (IP) he may invest in.

The reason why Spangenberg is feared in Silicon Valley is because of the number of patent suits he and his wife Audrey, through various companies such as TechDev, Orion and Gemini, have filed against hundreds of companies, including Google, Cisco, HP, Daimler-Chrysler, Mazda and Hyundai.

It is estimated that the Dallas-based Spangenbergs have scored more than US$72m in such suits since 2007. It is also estimated he owns 65 patents.

Birth of a next-gen travel business

The chairman of Irish Life & Permanent (IL&P) Gillian Bowler has launched a new travel company aimed at the Irish market –

The Budget Travel founder’s new venture, which went live on Friday, allows people to package their own holidays. Users can either buy all or parts of their package holiday such as flights, hotels and transport from the website, which will offer scheduled as opposed to charter flights.

The company will cater for a range of sun destinations, including Spain, France, Portugal, Madeira and the Canaries. It is aiming to offer its services to as many as 10,000 holidaymakers this year. claims to offer holidays at prices that are 33pc lower than those for the same holidays offered by other leading travel companies in Ireland at present.

While the company is an online one, it said staff will be on hand at its office in Dublin to deal with customer enquiries seven days a week. It also said it will have local representatives at each of its selected locations so holidaymakers have someone to go to in case of problems or emergencies.

Government asked to intervene in venture funding crisis

An overwhelming majority – 88pc – of venture capitalists polled believe some form of State intervention is needed to help increase the supply of equity finance and stimulate the venture capital market.

Two years after the Government unveiled its smart economy vision and promised a €700m Innovation Fund would be available to support start-ups, it is clear all is not well in the equity business.

It is clear that high-growth entrepreneurial companies will lead Ireland out of recession. However, lack of funding, particularly at an early stage due to banks not lending and Government cutbacks, will take a serious toll on the recovery.

Attendees at last week’s InterTradeIreland conference called for an urgent increase in the supply of equity finance available to seed and early stage companies if Ireland is to deliver economic growth strategies, North and South.

Some 88pc of investors attending indicated that Government intervention was essential in order to stimulate the venture-capital market.

Venture-funded companies outperform non-venture companies by six times and with current levels of demand not meeting supply, the need for further Government support is vital.

Eircom revenues down 7pc – telco accelerates job cuts

By the end of 2010, upgraded broadband speeds starting at 8Mbps will be available to 1 million households, Eircom CEO Paul Donovan promised. He said the rebuilding of Eircom is under way and the company is accelerating its 2011 headcount reduction target.

Group revenue at Eircom for the first quarter came in at €455m, down 7pc on the previous year. Fixed-line revenues were down 7pc and mobile revenue was down 5pc.

Adjusted group EBITDA (earnings before interest, taxes, depreciation and amortisation) was down 4pc to €170m.

Eircom Group’s operating costs were down 8pc, reflecting reduced labour costs and non-pay expenses.

Capital expenditure in the past nine months was €218m with spending committed to fixed and mobile next-generation networks.

Cash on hand at the incumbent telecoms operator at the end of the first quarter was €265m.

“Building upon the shareholder stability achieved with the arrival of STT as a strategic shareholder in January, we are continuing to actively rebuild Eircom for the future,” Donovan explained.

Venture capital raised by Irish tech firms plummets 50pc

Some €27m in venture capital funding was raised by Irish technology companies, down 50pc on last year. The Irish Venture Capital Association (IVCA) says deal sizes have fallen and the situation may worsen.

“While this is disappointing, the positive news is that the number of companies raising funds (32) is the same,” commented John Tracey, chairman, IVCA and CEO, TVC Holdings plc.

“Individual activity has kept up but average deal size has fallen.”

This is partially reflected in the fact that first-round funding was 39pc of funds raised, compared to 30pc in the first quarter of 2009.

“While early stage funding has held up, we would be concerned that Government cutbacks at Enterprise Ireland may endanger this later in the year,” added Regina Breheny, director general, IVCA. Amounts raised in the first quarter ranged from €100,000 to €4m.

Photo: Gameplay from EA’s popular Mass Effect 2 computer game

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