Weekend news roundup

12 Sep 2011

A trawl through the weekend newspapers’ technology news coverage, including how an Irishman has just sold his online car auction company for a cool €150m, how Michael Dell is on a mission to Ireland today and a counter argument emerges to Thomas Friedman’s ‘The World is Flat’ theory.

Irish dotcom entrepreneur makes €150m

The Sunday Independent reported that Roscommon man Peter Kelly has sold his US-based online car auction firm Openlane for a cool €150m in one of the biggest windfalls for an Irish entrepreneur this year.

Last month, rival auction firm KAR – which is valued at €1.8bn – agreed an all-cash deal to buy the California-headquartered firm.

The deal, which is expected to close at the end of September, will see Openlane join KAR’s Adesa unit.

Kelly, from Castlerea, helped found the Silicon Valley firm, which was recently ranked as one of the 1,000 fastest-growing companies in North America, thanks to a series of mergers and buyouts of other wholesale car auction firms, during the first dot-com boom.

Kelly studied engineering at UCD before joining UK firm Taylor Woodrow, where he ran major projects for eight years. He worked for management consultancy firm McKinsey ahead of helping to set up Openlane.

The company is expected to shift 300,000 cars this year – which is around the same number of cars that have been sold in Ireland since March 2008. Openlane is forecast to generate sales of more than €71m this year, with earnings of up to €18m.

Online-only magazines are thriving

USA Today reported there’s a new trend in the magazine world: the online-only model. Leading the pack in this area are online magazines, such as Rue and Matchbook. Then there’s Lonny, the most successful of the bunch.

Lonny, which got its start two years ago, is turning heads in the magazine world. Its founder, Michelle Adams, was a former assistant at Domino who founded Lonny after Domino and 11 other shelter magazines folded.

Adams and her partner Patrick Cline set out to fill the void left in the shelter category.

“When people approach newsstands there’s that barrier to picking up an issue,” Adams said. “Whereas with Lonny, full access of our content is free.”

Lonny now boasts readers in every continent, 30m page views per issue, and 200,000 unique visitors per month. It’s also garnered attention from artists and designers like John Derian, as well as celebrities like Gwyneth Paltrow.

Michael Dell visits Ireland

According to the Sunday Independent, the head of Dell, Michael Dell, will visit his Limerick plant today for the first time since the multinational company closed its entire Irish manufacturing operation, leaving 1,900 workers redundant.

However, Dell employees can rest easy, as Dell is expected to address workers on the future plans for the Irish operation of the US company.

In January 2009, the midwest region was dealt a hammer blow with the announcement that Dell was closing its Limerick-based manufacturing operation in favour of a cheaper workforce in Lodz, Poland.

The move affected many more subsidiary industries and workers who relied heavily, if not entirely, on Dell for business.

Dell remains one of the country’s biggest employers, with 2,300 people working at its plants in Cherrywood, Dublin, and Raheen, Limerick. About 1,000 staff work in Limerick in service and support and 1,300 work in direct sales and telephone-support operations.

Maybe the world is not so flat?

The Observer had an interesting take on the whole start-ups issue. Normally, articles would be calling for more start-ups as a way of salvaging the economic futures of nations and a lot of these articles would be name-checking Thomas Friedman, author of The World is Flat. But the Observer’s John Naughton, a technology writer, writes that Friedman is wrong to suggest we put our faith in new technology companies.

Naughton points out: “Of course it’s a long time since Apple was a start-up, but the iPhone still refutes Friedman’s hypothesis. And it applies with even greater force to start-ups – a point that Andy Grove, the former CEO of Intel, made recently in a forceful article. ‘Friedman is wrong,’ says Grove. ‘Start-ups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.’”

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

editorial@siliconrepublic.com