CEO Teddy Bengtsson periodically sends out “state of the business” updates which I always find interesting. I asked him if I could pass along his note and he said yes.

Here is what he had to say…

So – now that we are a couple of months into 2010 – can it be said we are past the worst in terms of the global financial crisis?  Too early to tell I think, but there are some signs suggesting there may be cause for modest optimism.  Up until the end of 2008, the effect of the crisis on IFL’s financial performance had primarily been that revenue growth was slowing down or come to a standstill.  The situation got worse during the first half of 2009, with year on year revenues down by 10-20% over the two quarters.  This pattern continued in the third and fourth, but for the latter it was only marginally down when comparing year on year and we saw a 12% growth compared to the third quarter (despite a seasonally slow December month).  I expect the first quarter of 2010 to be a turning point and we will see positive year on year revenue growth for the first time since 2008.  Naturally, this is partly due to the easier comparisons as the crisis was starting to bite for real early in 2009, but nevertheless significant in terms of direction.  Looking beyond pure financials, we are also seeing increased recruitment activity, growth in some existing client business and new customer acquisitions, adding to the reasons for a cautiously positive sentiment.

Several general and market specific factors continue to be very challenging however.  Price pressure remains as intense as it has been, but I get the impression that the industry is starting to realize it is being pushed too far.  We are seeing instances of returning accounts, i.e. business lost to cheaper suppliers is coming back to IFL as clients realize that a lower price does not mean lower total cost.  In fact, almost without exception the opposite is true as increased management overheads and post-processing costs quickly accumulate to eat up the superficial advantage of a word rate that is a cent or two lower.  Not to mention the truly high cost caused by late and/or sub-standard quality deliveries!  IFL neither can nor want to compete on price alone with the many agencies in our region operating with minimal infrastructures, but I remain confident that service quality and reliability will ultimately generate the true value that makes a partnership sustainable and mutually rewarding.

Market factors in our local production environments tend to be in stark contrast with most parts of the world.  In these times when deflation, salary reductions and declining property markets seem to be the norm, Argentina continues to run its own very different race.  Private consultants estimate that Argentina’s inflation in 2009 was the third highest in the world – only behind the Democratic Republic of Congo and Venezuela – strongly contesting the cosmetically enhanced official number below 8% and stating the real figure as somewhere between 15-18%.  As you can imagine, this puts local companies servicing global clients looking for price reductions in a near impossible situation.  Especially larger companies like IFL with a high number of permanent employees, as we cannot simply pass the resulting problems further down the supply chain.  A saving grace has been the easing of the local currency by around 10% against the USD.

Inflation is less of an issue in Brazil, IFL’s other production location.  Although not inexistent – it was close to 5% in 2009 – the bigger challenge here has been the strengthening of the local currency.  When we saw the Brazilian Real going in the opposite direction in 2008, predictably we came under pressure to reduce pricing accordingly.  Unsurprisingly, few are equally eager to suggest that we now increase rates to compensate…!  Seriously though, a pricing correction of 20-25% from January 2009 levels would be perfectly logical from strictly an economic data perspective.  Furthermore, Brazil’s growing stature as a global power is making it an even more attractive target for international companies seeking alternatives to their existing, often troubled, markets.  This is becoming evident in increased competition for the relatively scarce competent translation/localization resources, so my recommendation is to expect to pay reasonable rates and make sure to find a partner you can trust.

But I guess I should expect nothing less from one of the world’s largest translation agencies.

Lionbridge wants to know what social media you use.

If you enter your email address, you’ll get the results.

Here’s the link.

PS: I just took it and it did take only 5 minutes. But it’s a rather clunky survey. At first I thought the only sites it would ask me about were Facebook, MySpace, Twitter and LinkedIn. I had to click through to the next page where I found the “global” list of social media sites, which will be much more relevant to folks in, say Germany (Xing) and Brazil (Orkut).

London-based Today Translations is doing just that — offering a Name Audit Service for soon-to-be parents.

Do you think Tom Cruise and Katie Holmes would have chosen Suri for their daughter had they known it meant “pickpocket” in Japanese?

Makes you think, doesn’t it?

According to the agency’s web site:

Name changes later in life can be embarrassing, expensive and riddled with hassle. That’s why we offer a Name Translation Audit designed to help you consider the multilingual implications of giving your baby an unusual name.

For just £1,000, our brilliant team of 2600 linguists will check the meaning of baby names in 100 languages. Better safe than Suri.

Isn’t your baby worth it?

The post I wrote on the Google Translation Center has been the most-visited page on this blog over the past month. Clearly, Google has struck a nerve in the translation industry — and its service is not even live yet.

The Translation Automation User Society does not appear to be as welcoming as I am of the Google Translation Center. A new essay on its site says:

Private companies will always seek world domination and customer lock-in. As a professional in the translation industry, the Google Translation Centre may help you on the short-term, but you only help Google long-term and you don’t help the world at all. Ultimately we pay the price for putting all translated words and sentences in the possession of a single company.

There is a distinct “evil empire” tone to this essay, which is understandable to a point. Google appears to be entering that evil empire stage of its development. Though I still use the search engine.

And the last I checked, Google’s “terms and services” page for the Translation Center had been taken down. So I can’t really say what Google’s policy will be regarding the translation memory (TM) that it may or may not leverage from this Center.

But it is no coincidence that TAUS is planning to develop a massive database of TMs of its own. I’m sure it wants readers to come away thinking that TAUS is going to be far more open with its TMs than Google will be.

TAUS says that its TM database will be free to the world for the looking up of translations of terms and phrases. But you’ll have to be a member to actually have access to the database (on a reciprocal basis) and membership is not free. I’m confident that this database will be of the highest quality as TAUS has some impressive corporate members, such as Intel, Microsoft, and Oracle (Google does not appear to be a member).

Personally, I’m glad to see both services emerging — as well as services from Asia Online and Language Weaver (which is now offering a Web-based SaaS translation service). We are entering uncharted waters and it’s important to have a mix of large and small players, as well as a nonprofit, to keep everyone on their toes.

Is there a risk to the world if Google owns the world’s largest TM (which it might have already accomplished)?

Perhaps.

TAUS raises important questions. The answers have yet to emerge.

But here comes Google…

According to Blogoscoped, Google is about to launch the Google Translation Center.

This is an exciting development, though I don’t expect everyone to suddenly ditch ProZ for Google. Why? Because much of the appeal of ProZ is the community, which Google does not appear to be trying to support. Still, freelancers will certainly want to investigate this potential new resource.

I’ve called out ProZ as one company under threat from Google Translation Center. But EVERY translation agency needs to keep a close eye on this service. It could be a threat. It could also end up being something translation agencies use themselves — instead of paid platforms from SDL. Naturally, for this to happen this new platform has a lot of evolving to do. Still, I can’t help but wonder.

There is no mention of whether or not Google will support machine translation and/or translation memory. I’m assuming they will.

I have LOTS of questions and this service isn’t even live yet. So we shall see what happens. But this is big news, no question.

I wrote awhile back, that the translation industry as we know it is over. The technologists have taken over and they’re bringing brute force computing and massive networks to the table to reduce costs and increase time to market. This is just another sign of this macro trend.

What do you think? Is Google going to disrupt the translation industry or is this new platform going to fall flat?

(Thx Chris for the heads up!)

Update: I just read an insightful article on this Google’s service at GigaOm…

So after a slow start upgrading to the iPhone 2.0 OS on Friday, I’ve since had a chance to review a number of the apps and have been very impressed so far (though a few did cause the iPhone to crash).

As I reviewed the Apps in the iTunes store I began to notice that they were available only in English. Here is a screen grab from the AOL IM app:

Just to be sure about this, I also visited iTunes Spain and looked up the same AOL IM App. And as you see here, it is available only in English:

As far as I can tell, the only iPhone App currently available in a language other than English is Apple’s own Remote App, available in these languages:

I know it’s early yet. But keep in mind that the iPhone launched globally on Friday, which means there are a lot of markets that have a localized iPhone but only one fully localized iPhone App to use on them.

This means there is a HUGE opportunity for the software localization vendors of the world to help these software developers take these apps global. Apple says it sold one million iPhones over the past three days — and 10 million apps.

Here are some of the companies that currently offer non-localized apps: eBay, MySpace, Bloomberg, Travelocity, MLB.com, Oracle, and Salesforce.com.

If you spot any iPhone Apps that have been localized outside of English, please let me know. This will be very interesting to follow…

UPDATE: Adam Houser just alerted me to  Anime Match by Jirbo, shown here:

This app is available in Japanese. It’s a catchy little game actually — and free!

Here are the details:

Web Globalization Trends to Watch
Wednesday, July 9, 2008 at 1:00 PM ET / 10:00 AM PT

To register, click here.

And if you can’t make the call, it will be recorded for playback.

The topic is global navigation — why it’s so important and how to improve upon it. I wrote an ebook about this topic two years ago. Since then, geolocation and language negotiation have become more commonly used and an increasing number of companies have launched splash global gateways — like Intel, which launched its first splash gateway just last week.

If I have time, I also plan to talk about IDNs — internationalized domain names — and why companies will need to register them (and may in fact be required to register them).

See you on June 3rd!

And mark your calendars for June 3rd, when I will host a second webinar, also sponsored by Lionbridge, to discuss the many aspects of global navigation — from splash global gateways, to country codes, to geolocation. I’ll include lots of real-world examples.

The Webinars are sponsored by Lionbridge.

Mark your calendar for May 7th at 1 pm (EST), when I will present the first Webinar — The Best Global Web Sites (and why) — which focuses on key findings from The 2008 Web Globalization Report Card.

The Webinars are free and open to executives who manage global Web sites, or have plans to do so.

To register, visit the Lionbridge site here.

MySpace is also busy building localized Web sites.

I reviewed both Facebook and MySpace for the 2008 Web Globalization Report Card, as part of the newly added Social Networking category. Also included in this category were Orkut, Last.fm, and a company based out of Germany called XING.

XING supports 15 languages, not including English, and an impressive language navigation interface. Which is why XING emerged on top of the Social Networking category. Facebook finished in last place.

But I should stress that Facebook and MySpace are only just getting started. Next year, we could very well see a different leader emerge.

SDL has posted an FAQ page about the deal here — but the list is absent a question I recently posed:

Does this acquisition mark the beginning of the end of SDL being a translation services provider?

I think it does. Or, at least, I think it should.

I haven’t received an official answer from SDL to this question. My guess is that SDL will say that it has many clients who want a full-service solution and that it will continue to offer these customers a full-service solution.

Nevertheless, SDL is much more of a software company these days than a translation services company. SDL has been gobbling up software companies over the past year and now owns some of the best translation workflow and content management tools on the planet, most notably Tridion and now Idiom. At some point it will have to ask if the benefits of providing translation services are outweighed by the negatives, which become more acute with the Idiom acquisition.

Idiom, as many folks in the industry know, had been living on borrowed time for quite some time. It was subsidized by the investment community going back 10 years. These investors wanted a return on their investment and Idiom needed a buyer who could give it a larger infrastructure and sales team.

Early last year, I heard from two up-and-coming translation agencies that were taking a hard look at buying Idiom. That SDL would buy Idiom can be viewed as much as a defensive move as an offensive move. And I think the timing is good because Idiom finally hit its stride in 2007.

I attended the Idiom Summit in 2007 and there was a real sense of excitement and optimism in the air. I wrote about the company in October, noting two developments in particular:

The “Full-Service” vs. “Freedom of Choice” Divide Widens
Idiom has been steadily positioning itself against SDL. Where SDL may call itself a “full service” solution, Idiom calls itself a “freedom of choice” solution. That is, SDL can provide you with CMS software, translation memory (TM) software, and actual translation services.

Idiom, on the other hand, provides only globalization management software, leaving the client free to select translators (or translation agency), CMS tools providers, and so on. Some clients may want to stick with separate vendors for different products and services — which benefits Idiom — while others may want a full-service SDL solution. This positioning makes good sense because it makes things clearer for clients who are often very confused by the array of products and terminology.

Demand for On-Demand Growing
Idiom thought that its On-Demand software would appeal mainly to small customers, but a number of large customers are now using it, such as Bank of America and HP’s internal translation group.

One interesting reason that Web-based software has been popular with some companies is that you don’t need to dedicate an IT team to getting started. Ironically, we have found that marketing executives in large companies with very skilled IT departments often feel as if they have very limited IT support because they must “take a number.” The Web-based solution allows a marketing team to bypass IT almost entirely. Even if they want to buy the software, they can use on-demand as a run-up to it. Idiom reports that 50% of its sales pipeline is devoted to Idiom On-Demand.

What happens when a “full service” company buys a “freedom of choice” company?
Right now, SDL says that Idiom is going to remain an autonomous company. And I suspect that many Idiom clients won’t particularly care if SDL is the new parent — and may actually be quite happy to get translation services from SDL.

But what about Idiom’s very popular “LSP Advantage Program” — in which it basically gave away its software to a large network of translation agencies. These agencies had played an important role in Idiom’s growth, functioning as a channel sales partner.

I spoke to the owner of a smaller translation agency — and Idiom partner — last year and mentioned that there was talk about Idiom being acquired by a larger translation agency. He was not at all happy to hear this. It’s safe to say that none of these translation agencies are happy with SDL owning their workflow software.

I’m not surprised to see this press release from across Systems today. Thebigword is promoting an alternative to Idiom as well. Meanwhile, Translations.com is marketing a “safe passage program” for clients who want to migrate away from SDL/Idiom.

SDL surely expected this reaction from its competitors. And all this confusion could actually help SDL sell more translation services as the smaller agencies find themselves migrating to new software tools. At a minimum, the next year promises to be very chaotic in the mid-tier of the services market, which could bode well for the leaders, which includes Lionbridge.

I believe that Idiom is an excellent acquisition for SDL, provided that SDL can hold onto Idiom’s network of supportive and enthusiastic translation agencies. If not, SDL risks giving rise (and momentum) to a “son of Idiom” in the years ahead.

I think SDL would be best served to focus fully on software — on streamlining its large and complex portfolio — and in letting the translation services vendors do what they do best. A SDL Services spin-off would make sense as well.

Perhaps SDL is already planning this. I hope to hear more from them in the days ahead and will keep you posted as I do.

Lionbridge evaluated the sites of Clinton, Obama, and Edwards on the Democratic site and Romney on the Republican side. It appears that Huckabee and McCain have more or less given up on the Spanish vote, as they offer no Spanish content.

The Clinton site offers 210 Spanish language pages versus 2,482 English language web page — 8.4%.

I know, this doesn’t sound like much, but it’s well ahead of Romney’s site, with just 4% translated content, and Obama’s paltry 1%.

What about Edwards? Edwards offers only one page of translated content, what I typically call a “local façade.”

I realize that language is a thorny issue these days, as it calls to mind thornier issue: immigration.

Nevertheless, Hispanic voters make up 9% of the electorate and could play a large role later this year in picking the next president.

Lionbridge also commented on several other issues, like quality, content, and navigation. Speaking of navigation, I like how Lionbridge notes that placing the “Español” link in the upper right corner is a best practice. This is something I have advocated for a number of years and I’m happy to say that more and more companies (and candidates) are placing their global gateways in this general vicinity.

To learn more, check out the press release.

• Arabic/Spanish
• Arabic/French
• French/Spanish
• Danish/English
• Greek/English

What’s interesting here is that Language Weaver is moving beyond language pairs that include English.

English is the “pivot language” of the translation industry, in which content either begins in English or is converted into English on its way to its target language. Taking English out of the equation isn’t easy, because there is often a smaller translation corpora to build upon, but it is ultimately where companies want and need to go to accelerate translation and improve quality.

Says the Language Weaver press release:

In international markets, companies want to be able to translate directly between any two languages. Despite the fact that some of these languages are spoken and written by multi-millions of people, very often English is used as a pivot language for the translation. For example, for an Arabic to French translation, a company might first translate the information from Arabic to English, and then from English to French; this two step process slows the translation down considerably.

Translation software offerings operating directly between languages such as French to Spanish or Arabic to French are less commonly available. However, Language Weaver’s statistically-based approach to translation allows it to quickly develop translation systems between any two languages without using English in the translation process. These less-common language combinations save a step in the translation process and give companies timely access to information.