A week in tech, February 6-12

A roundup of the latest tech news.

Masayoshi Son, president of Softbank Corporation, has started discussions with Jerry Yang about MicrosoftÆs proposed acquisition of Yahoo. Softbank owns a stake in Yahoo. Son declined to elaborate on his role in the talks or the possible outcome. He also denied he was thinking of making a counter offer to buy Yahoo but noted that Yahoo and Softbank have two important assets in common - Yahoo Japan and Chinese search engine Alibaba Group. Revenue related to Softbank's one-third stake in Alibaba was a major boost to its October-December profit, lifting it more than six-fold to Ñ46.73 billion ($438.8 million) from Ñ7.49 billion. Softbank booked a Ñ57 billion ($535.2 million) one-time gain from the listing of affiliate Alibaba.com in Hong Kong last year.

A new website will be launched by Japan's three major newspaper publishers: Nikkei, The Asahi Shimbun and The Yomiuri Shimbun Holdings. The site will allow viewers to compare the content of their news in a bid to create new value and to increase their influence on the Internet. The move comes as the industry faces difficulties maintaining an extensive home delivery system, particularly in remote areas where the population is dwindling. Japan is one of the few developed nations to have seen only a slight drop in newspaper circulation over the past decade. The partnership, which plans to turn a profit through advertising, hopes to go into the black in its third year.

Sony will delay the Japan launch of Skype on PSP due to technical problems. The company said in January that it would start offering Skype software for downloading onto the latest PSP model, enabling PSP users to make free web-based phone calls to other PSP users and to users of PCs equipped with Skype software. However, Sony disclosed that a microphone it planned to start selling in Japan for the new service did not meet Skype specifications, forcing the delay.

Microsoft will start selling a cheaper model of the Xbox 360 video-game machine in Japan to woo Japanese gamers. The entry-level offering goes on sale March 6 for about $260, which is about one-fifth less than the least expensive Xbox 360 in Japan. The stripped-down version went on sale in the US last year for $280. Microsoft has sold 17.7 million Xbox 360 machines worldwide, while Nintendo has already sold more than 20 million of its newer Wii machine and Sony has sold 10.5 million PlayStation 3 machines.

Toshiba Corporation is slashing the prices of its HD DVD format players by 40% to 50% as major Hollywood studios move to embrace Sony's Blu-ray format high definition DVDs. The price-cut took effect in January 2008 and is aimed at boosting the adoption of its next-generation DVD players by mainstream consumers after what it said was a successful fourth quarter in terms of unit sales. Toshiba's players will now start as low as $149, going up to $399 for the top-of-range player.

Media, Entertainment and Gaming
GONZO Rosso K.K., an online game operator within the GDH group, has closed a licensing deal to promote Korean online game NOSTALE in Malaysia and Singapore. The game will be published via its subsidiary GONZO ROSSO Malaysia following closed beta tests in mid-March. NOSTALE is a massively-multiplayer online roll-playing game (MMORPG) developed by Entwell that was first launched in Korea in 2006. Characters take players into the adventure-filled fantasy world of a fictional continent called Eastmile. The game has enjoyed international popularity through its launch in Japan, Taiwan, Hong Kong and Europe.

Capcom, which publishes the ôResident Evilö video games, has reported a 4.8% increase in sales for the nine months ended December 31, 2007 compared to the previous year. However, net income fell 18% to Ñ3.57 billion ($30.5 million) and operating profit declined 8.2% to Ñ6.1 billion. Sales of video games for Xbox 360, PlayStation 2 and Nintendo's Wii, helped raise revenues in the game video unit by 23% to Ñ30.9 billion for the nine-month period and operating profit rose 38% percent to Ñ6.04 billion. Revenues from its game arcade operations dropped 0.5% to Ñ9.58 billion and operating profit in this business dropped 62% to Ñ573 million. Thanks to better-than-expected sales of game software, Capcom raised its full-year revenue and operating profit forecasts. Operating profit is now expected to rise 20% to Ñ11.5 billion, a 15% increase from its previous forecast and above the average estimate of Ñ11 billion by 17 analysts tracked by Bloomberg. Revenue is expected to increase by 9.5% to Ñ81.6 billion this year, beating the company's earlier target of Ñ78.0 billion and the Ñ79.6 billion forecast by analysts. Capcom left unchanged its forecast of a 5.9% improvement in net income to Ñ6.2 billion, citing a strengthening yen.


Naver is launching an IPTV service that includes the company's own real-time search function and a fully-fledged interactive web service via KT's MegaTV platform. The service will include Naver Instant Search, which allows users to use the search service while watching MegaTV, and the Naver Channel Service, which lets users confirm Naver's exclusive online TV portal through MegaTV's separate channel.

The launch of a Korean-language version of YouTube has failed to attract a significant increase in the number of users. This is the most recent example of how imported web services are struggling to compete against locally grown sites. It also reflects the image of Google, which owns YouTube, in Korea, where the firm has received government subsidies by promising to make contributions to the Korea IT industry. According to Rankey.com, an Internet traffic monitoring firm, the number of daily visitors to the YouTube English and YouTube Korean sites soared to 382,000 on January 23, the day the Korean version opened, which is more than three times its daily average. But the number began to ebb away the very next day and by January 31 was back to the normal level of 115,000.

The Electronics and Telecommunications Research Institute claims to have developed a mobile communications technology that allows data transmission seven times faster than what is currently available. The technology, jointly developed by Samsung Electronics and KTF Corporation, is called the "3.9-generation" mobile communications technology, or 3.9G. It enables people to use various multimedia services at a high data rate of 30 megabits per second, while moving at a speed of up to 120km per hour. This development is expected to help Korea occupy a favourable position when the competition to standardise 4G starts.

LG Philips LCD is planning to change its name and reshuffle its board as LG Electronics takes a leading role after stake sales by joint venture partner Philips. LG.Philips was expected to drop Philips from its name and appoint a new chief financial officer and vice president representing LG Electronics. The company will seek approval for the changes at its upcoming shareholders meeting on February 29, 2008.


Alibaba.com extended its stock market gains as investors remain excited about MicrosoftÆs offer to acquire Yahoo, which owns 33% of Alibaba Group. Analysts expects a Microsoft-Yahoo deal to benefit Alibaba.com because of the possible synergies. Microsoft, which has agreed to retain Yahoo's relationships with all of its Asian affiliates, is also likely to reap rewards from an association with Alibaba.com. According to Deutsche Bank, Alibaba.com and its unlisted group peers may offer the combined Microsoft-Yahoo entity the best leverage in achieving a previously largely elusive foothold in the China market.

Sohu.com's unaudited results for the fourth quarter and fiscal year ended December 31, 2007 shows brand advertising revenues of $32.2 million, up 46% year-on-year and 8% quarter-on-quarter. The results exceeded the companyÆs raised guidance. With the Beijing 2008 Olympic Games drawing closer, the Sohu brand has broadened its media reach to penetrate the Olympic audience. Sohu expects the continued expansion of the total Chinese internet population, combined with advancements in technology and its Olympic sponsorship, to help it to further increase its market share among internet users. Total revenues for the fourth quarter were $65.3 million, a 26.8% and 89.8% growth from the previous quarter and previous year, respectively. Net income was $15.1 million, or $0.39 per fully diluted share. Advertising revenues accounted for 52% of total revenues.

According to Chinabyte.com, Alibaba will seek cooperation with well-known international venture capitalists to provide capital to help the partners of its business software unit Alisoft to solve fund shortages and even help them get listed in Asia or overseas. Alisoft is an internet-based business management software company targeting SMEs in China. Alibaba has formed an alliance with Microsoft, Cisco, IBM, Sun, Oracle, Dell and Huawei and has released the first software inter-link platform in Asia through which corporate users can obtain Software-as-a-Service. Alisoft's goal is to become the largest software operation platform in the world. Alibaba has already formed an internet marketing platform based on Alibaba.com, Taobao.com, Alipay and Alimama. Alibaba spends over Rmb100 million ($13.9 million) every year on system development to offer its users better experiences.

Google is trying to strike up deals with the worldÆs largest music companies in an attempt to compete with Baidu.com to offer free music downloads in China. Baidu.com is the upstart search engine which dominates the Chinese market and gets a large proportion of its traffic from users searching for illegal music. This move is also a response to the possible tie-up between Yahoo! and Microsoft, which will endanger GoogleÆs market share in the West.

China removed 200 million harmful pieces of online information in 2007. The local branches of the National Office for Cleaning Up Pornography and Fighting Illegal Publications also cracked down on more than 4,000 pornographic messages and 150 kinds of pornographic publications, cell phone novels and Internet games.

American recruitment service provider Monster.com said that it will pay $200 million to $225 million in cash to the shareholders of Chinahr.com to acquire the 55% of the company it doesnÆt already own. In February 2005, Monster acquired a 40% stake of Chinahr.com for $50 million and agreed to purchase more than 51% of the company if it could not get listed within three years. In January 2006, Monster acquired another 5% stake of Chinahr.com.

Apple and China Mobile have called off talks to launch iPhones in China. Apple's iPhone faced a spate of technical and fee issues unique to China, including a standard revenue-sharing agreement that China Mobile disliked. No further information regarding the failed agreement was disclosed.

According to Sina.com, six mobile phone manufacturers have obtained 3G network licenses in China, which make them eligible to attend the bidding for China's TD-SCDMA. The names of the six manufacturers have not been disclosed. To obtain the TD network access license, mobile phone manufacturers need to pass both an indoor and outdoor test. The indoor test was completed before the end of 2007, and the outdoor test has just been finished. More than 20 types of brand mobile phones both in China and abroad were said to be participating in the outdoor test in Qinhuangdao, which involved more than 500 complicated items. According to a representative of a TD-SCDMA manufacturer, China Mobile will announce six winners of the TD-SCDMA mobile phone bidding and will publish the results.

According to electronics research company Isuppli, Chinese cell phone shipments are expected to slow considerably this year due to lower consumer confidence. Handset shipments last year reached 229 million units, a 76.2% increase from the 130 million units shipped in 2006. This year, however, the rate of growth is expected to fall to 19.7%, representing a total of 274 million units. Hampering handset sales this year will be increasing inflation, rising housing prices and major stock market fluctuations, all of which are expected to shake consumer confidence in China and elsewhere. In addition, there are no popular features to drive new sales. While new phones will ship with personal navigation systems and mobile TV, those handsets are expected to be too expensive to rise above niche products.

Huawei Technologies has been chosen by China's Railway Ministry to construct a communication system for a stretch of railway in the country's south. The telecoms gear maker will provide a system for the high-speed passenger transport railway, which runs from the southern city of Guangzhou to Hong Kong, via Shenzhen. No financial details were provided in the statement.

Comtech Group expects to expand revenue and earnings by 25% to 30% annually over the next five years. The strategy for the company is to sustain its current growth pace despite a sharp deceleration in US IT spending as it has little exposure to that market. It plans to continue focusing on China, where the economy is still growing at 10% a year. The company wants to expand through acquisitions this year, focusing on digital media as well as new businesses, including automobile electronics and energy saving applications.

Chinese solar wafer maker LDK Solar has warned that first-quarter revenues will be below Wall Street analysts' estimates due to severe winter weather that disrupted shipments to its customers. Despite the revenue shortfall, LDK gave an earnings forecast that was in line with analysts' expectations. According to analysts, weather was still impacting companies in China's Jiangsu province, including Canadian Solar, Suntech Power Holdings, Trina Solar, Solarfun Power Holdings and China Sunergy. LDK forecasts first-quarter revenue of $195 million to $210 million, below Wall Street's average estimate of $228.5 million, according to Reuters Estimates.

AMD, the worldwide semiconductor manufacturer, will set up a sales and R&D centre in Chengdu. In recent years, AMD has been deciding among the three western cities of Chengdu, Chongqing and Xi'an as the location for its new marketing and research platform. A company representative said AMD would push forward with its strategy in Chengdu step by step and would first set up a sales management centre in the Wuhou District. AMD would also locate its second largest R&D centre in China to Chengdu where the Company is responsible for supplying chips to over 55% of the internet cafes and DIY computer installation centres.

Media, Entertainment and Gaming
CDC Games, a business unit of CDC Corporation, has increased its investment in BBMF Group, a 3G content provider in Japan. CDC now owns about 20% of the company with a total investment of approximately $10 million. According to CDC Games, BBMF has grown rapidly in recent years. During December 2007, BBMF's mobile comics paying subscriber count surpassed 566,000, which represents a year-over-year growth rate exceeding 350%. Also during December 2007, mobile online game paying subscribers grew more than 400% year-over-year to approximately 107,000. The investments in BBMF are part of the $100 million Online Games Developer Partner Program of CDC Games Studio. The program was established to invest in strategic game development partners to accelerate the development of new and original online games for the China market and additional target geographies including Japan and the US.


Hon Hai Group, a Taiwanese electronics gear maker, said it expects sales to grow 30% in 2008 to NT$2.6 trillion ($81.3 billion) although the final outcome of the US subprime meltdown remains an uncertainty. The company expects solid US demand for electronics products as consumers, hurt by the declining housing and auto markets, spend more time at home. Share prices of Hon Hai and many other Taiwan technology firms, which depend on the US market as their top export destination, have dropped in the past few weeks amid investor concerns that the subprime mortgage fallout would cast doubt on their outlook.
Hong Kong

Talent2 has been selected to provide a centralised onsite recruitment solution, shared by all UBS business groups in Hong Kong and Singapore. The solution comprises outsourcing of selected recruitment services to provide UBS with additional capabilities and capacity to complement its existing recruitment centres in Hong Kong and Singapore. Talent2 will manage the end-to-end recruitment services for certain roles and functions for the client in these two locations, and provide recruitment administration.

Outblaze, an online service platform providing white label email, collaboration, security and social media services, has entered into a strategic partnership with Turner Entertainment Holdings Asia Pacific. The joint venture, Turnout Ventures, will leverage the web expertise of Outblaze to launch highly interactive community networks customised around Cartoon Network's extensive library of established brands and characters. Outblaze will enhance Cartoon Network's portals in Asia to be more interactive and support user-generated content. Services including blogs, games, instant messaging and a full suite of video creation, editing and sharing capabilities, will be customised to the look and feel of Cartoon Network. The joint venture will serve to strengthen Turner's digital and online assets in the region and give Outblaze an opportunity to leverage its robust and scalable infrastructure to grow its business.


Globe Telecom, the second largest phone company in the Philippines, said its net income increased by 13% in 2007 and revenue reached Ps13.3 billion ($327 million) as promotions helped boost sales. Fourth-quarter profit increased 50% to Ps3.6 billion as customers made more calls and sent more text messages during the Christmas holidays. Revenue from calls and text messaging rose 11% to Ps16.1 billion. Globe had 20.3 million cell phone subscribers at the end of 2007, a 30% increase from a year before. Globe declared a semi-annual cash dividend of Ps37.50 per common share, or a total of Ps5 billion, for shareholders on record on February 18, 2008. This is consistent with the company's dividend policy of distributing 75% of the previous year's net profit and represents a 14% increase over the previous semi-annual dividend of Ps33. For 2008, Globe is allotting about $400 million to $450 million for capital expenditure, compared to last year's total capex of $341.7 million. Most of this year's budget will be invested in its cell phone and broadband segments. GlobeÆs CFO also told reporters that the company may raise as much as $300 million, in pesos or dollars, through bonds or loans, to help pay for its capital spending this year.

Information Technology
JG Summit Holdings (JGSHI), one of the countryÆs largest conglomerates, has hired HP Philippines to provide IT infrastructure management and solutions across its business portfolio. HP will consolidate and construct a new data centre to centralise and standardise IT services for JGSHIÆs operations. The shared services infrastructure is in line with JGSHIÆs overall business strategy to improve its services and facilitate the acquisition and merging of new businesses at a technological level.

According to a study conducted by the London Business School and global economic consulting firm LECG, the Philippines is still considered deficient in terms of Information and Communications Technology (ICT) usage and infrastructure. The study made a "connectivity scorecard" to analyse not only a nationÆs ICT infrastructure but the effectiveness of its use. The Philippines placed seventh, just slightly ahead of India and Nigeria, with a score of 2.38. Neighbouring Malaysia finished a strong second with a score of 5.82. Meanwhile, the study ranked the US first in a group of 16 innovation-driven economies (as defined by the World Economic Forum), albeit with a score of only 6.97 out of a possible 10.0.

Globe Data Center has recently achieved its ISO 9001:2000 certification for management systems to ensure reliability, consistency and commitment to quality service delivery. It is the only multi-site data centre service in the Philippines, with five data centres spread out in Luzon and Visayas. The ISO 9001:2000 certification covers all sites, which offer over 2,600sqm of total commercial data centre space, the largest in the country. Globe Business offers a wide range of outsourced data centre services and solutions including co-location and hosting services, business continuity and recovery services, managed security services, and network connectivity.

IBM has launched a new centre in India to meet robust global demand for outsourcing. The facility in Noida, an information technology hub on the outskirts of New Delhi, will provide application services to IBM's global clients. IBM will also open another centre in the vicinity that will be fully operational by mid-year. The two centres will house about 3,000 employees. India's low-cost, English-speaking engineering workforce has attracted a slew of global companies such as IBM and Accenture, which outsource services such as supply-chain management, payroll processing and financial analytics.

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