Weekend news roundup

14 Mar 2011

A quick trawl through some of the weekend’s technology stories in the newspapers, including how the internet spells the end of the traditional bookies, Google’s location-based strategy, the ongoing feud between bloggers and journalists, iPad 2’s selling out within hours and Education Minister Ruairi Quinn’s decision to resign from a venture capital firm.

The death of the bookie’s shop

The Sunday Independent had an interesting take on where bookies Paddy Power is heading next and argued the bookies’ future is most certainly online and not on the high street. The bookies’ 2010 results, published last week, show that Paddy Power is now mainly an online company, with the vast bulk of its business and profits coming from its internet arm. With its UK retail business inherently unprofitable and betting well down at its Irish shops, maybe it’s time that Paddy Power went exclusively online.

The company had an outstanding year in 2010. Its operating (pre-interest) profits soared by 56pc to almost €104m. However, the 2010 results were very much a tale of two contrasting businesses.

Even when one excludes Paddy Power’s Australian operations, of which it took 100pc ownership for the first time last year, online operating profits increased by 20pc to €57.5m.

Throw in the Australian business, which is exclusively online, and online operating profits were up by 54pc to €77m.

Meanwhile, Paddy Power was finding the going much tougher on the high street. Operating profits at its Irish shops rose by just 8pc to €17.6m.

Across the water, profits at Paddy Power’s UK shops rose by 350pc to €7.4m. However, these numbers were flattered by the €24.2m that was earned from in-store one-armed bandits. Without the slot machines, the UK shops would have lost almost €17m in 2010.

Working in the Irish shops’ favour has been the rapid reduction in the number of shops servicing the market, with the total number falling from a peak of 1,365 in 2008 to its current level of 1,140.

Google’s drive to be at the heart of new business revolution

A war of words appears to have broken out over allegations by business review services that Google is eating their lunch. The Daily Telegraph reported Saturday that Marissa Mayer, Google’s vice-president of consumer products, has dismissed claims that the company has issued an ultimatum to business review services, such as Yelp and Trip Adviser.

Jeremy Stoppelman, CEO of Yelp, told The Telegraph earlier this month that he was unhappy with the way Google took reviews from Yelp users to display on its Google Places results. He said he had asked Google to stop this but was told the only way would be for Yelp and similar services to be removed from Google’s search index entirely.

Speaking at the South By Southwest (SXSW) technology conference in Austin, Texas, Mayer said: “We actually send a lot of traffic to Yelp and Trip Adviser and other review sites.”

She said Google had not issued an ultimatum but that the search giant has “one core index for all our locations”. She added: “It is very difficult to take them out of one index and not another because those indices are actually the same.”

In her presentation on the future of mobile and location, Mayer said that around 40pc of all Google Maps use is mobile. She said every day around 35m miles are driven by motorists using Google Maps navigation.

She said that in future, Google will be able to go much further, particularly using “contextual discovery”. Mayer gave the example of a smartphone that would consult your calendar to suggest possible flights you could take for a forthcoming business trip, deliver the weather forecast and even consult live travel updates to tell you when to leave for the airport.

Bloggers vs journalists … that old chestnut

In its coverage of the South by Southwest Interactive conference, The Observer brought up the battle between traditional journalism and the blogosphere over who makes the news. Six years ago, Jay Rosen wrote an essay arguing it was time to abandon the sterile opposition between blogging and traditional journalism. On Saturday at SXSW, he was still trying to convince us. “It’s one internet. The news system now incorporates the people formerly known as the audience.”

Rosen had sharp words for the partisans on both sides who were determined to keep the feud alive. The aggression many bloggers still direct at mainstream journalists “preserves some of the ragged innocence (of blogging) by falsely locating all power in big media.” But in fact “the press is us, not them.”

For their part, mainstream journalists were guilty of claiming a monopoly on tradition when in fact bloggers were the true heirs to great muckraking reporters, such as Lincoln Steffens. “Bloggers are closer to Tom Paine than Bob Woodward is.”

Rosen contrasted Steffens, who once declared, “I did not want to preserve, I wanted to destroy the facts”, with the contemporary Washington Post, whose social media guidelines warn its journalists: “Nothing we do must call into question the impartiality of our news judgment.”

Running out of iPad 2s

The Financial Times reported that many retailers and Apple stores ran out of the computer company’s second-generation iPad tablet within hours of its first availability, suggesting that initial sales could well surpass those of the first version.

Queues at Apple stores in New York, San Francisco and elsewhere wrapped around city blocks, with some people waiting for hours only to find that iPad 2 supplies were gone or limited to the more expensive models with wireless service from carriers AT&T or Verizon.

“I’m getting one mainly because it is lighter and because it is faster,” said Lars Trieloff, 30, a software product manager from Berlin who queued at a San Francisco Apple store. Like many first-day buyers, Trieloff said he already owned last year’s model.

Apple sold 300,000 of the 2010 edition in the first 24 hours, including weeks of online pre-orders, a strong early showing that helped it sell 1m in a month and nearly 15m in the first three quarters. This year, Apple was helped by much wider distribution channels, including Walmart, and both of the biggest US telecoms carriers’ outlets.

New education minister quits job at venture capital firm

The Sunday Independent reported that barely a wet day in the job and the new Education and Skills Minister Ruairi Quinn has already written a letter of resignation — so he can step down from a firm that funds university research.

Quinn has been chairman of the fund advisory committee of the 4th Level Ventures University Seed Fund for about four years.

This fund supports start-up companies that are set up using research by universities, hospitals and institutes of technology.

Quinn wrote a letter of resignation last Thursday.

“I have resigned, in writing, from my position as chairman of the fund advisory committee of the 4th Level Ventures University Seed Fund,” he said last Friday.

Quinn’s decision to step down from 4th Level Ventures is understood to have been taken to alleviate any concerns that may have arisen about a possible conflict of interest had he continued in his role with the company while Education Minister. The state agency Enterprise Ireland is a major investor in 4th Level Ventures.

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