Net Finance News: 15-21 Aug 1999
Cash Register 21 Aug 1999 Bertelsmann has teamed up with fellow German publisher Gruner+Jahr to run online auctions. The European Internet auction market will be worth $1.6bn, according to Bertelsmann -but it doesn't say when. Neither does it reveal how it will fund the new business, called Andsold.
Scoot.com the world's most boring Internet company, merits a buy (47.5p) recommendation from Merrill Lynch, Investor's Chronicle reports. Before Scoot was a boring Internet company it was a boring telephone directory outfit called Freepages. It is 40 per cent owned by Dutch publishing giant VNU. According to the Merrill Lynch analysis (as conveyed by Investors Chronicle) Scoot.com is "more than a simple listing-based directory service. It has grown into a sophisticated transaction-based business model on many interactive platforms. It's now the number one fixed-lined telephone, mobile and Internet service based on consumer and subscriber revenue". Merrill Lynch thinks Scoot's shares are worth 87p. So when's it going to make some money then?
20 Aug 1999 Texans sink $6m in Blackstar
Lycos announced yesterday that it had defied analysts predictions, and had shown a profit in its fourth quarter. Wall Street had predicted that the Internet group would break even. Net income was $605,000, from $703,000 loss in the period last year. Revenue was up from both advertising and e-commerce to $45.1 million. "We are extremely proud to have achieved profitability ahead of schedule," said Edward Philip, chief financial officer at Lycos. He said the company had shown growth in all the important areas: "...revenue, operating results, traffic, unique users and reach." After one-off fees of $2.5 million incurred when the company merged with USA Networks and other non recurring expenses, the net loss was wider than last year.
Photo-Me International of photo-booth fame, is discussing ramping up its online presence with the help of leading US music companies. It is the second Internet announcement from the company inside four months, the first being a deal with BT for Internet access from inside its photo booths. Details are sketchy as negotiations are in the final stages, but Photo-Me's chief executive said that the deal would be "a pure Internet venture in the domain of digital music." Sales in the company's digital booths have outstripped those from traditional machines, and the company said that it will increase it digital presence. Shares in the company rose 25 pence on the back of the news to £12.271/2.
Swedish Internet services company, Framtidsfabriken, has bought its French counterpart Wcube, as part of its ongoing push to grow in Europe. The company provides internet services to big-name Swedish companies like Volvo and Ikea. Framtidsfabriken, which means 'future factory', is buying 95 per cent of the French company. Neither party would discuss financial details. The company said that Wcube would provide an ideal base for its southern European operations. Wcube is the third Internet services company that Framtidsfabriken has bought this year. Previously it acquired Danish Networker' and UK based Vivid Edge. It floated on the Stockholm stockmarket last year, and it is now valued at 2.82 billion Krona.
Another free Internet portal is set to grace the fibre optics, following an announcement from Swedish giant, Investor. The company says it will fund the European launch of the Spray portal site to the tune of $60.3 million in return for a 25 per cent stake in the company. The company is trying to build its presence in the fast growing IT sector. Chief executive Marcus Wallenburg described the Internet as "highly interesting", saying that the company would continue to research the area. Spray said that the funding would boost the European headstart it had from its experience in Sweden. The plan is to launch Spray on the international stock market next year. Spray will be launched in Germany next month.
Internet Technology Group (ITG) has confirmed it is in talks with another company regarding a possible take-over. But a spokesman for ITG said he was unable to comment further on the reports and had nothing further to add. News of a possible deal sent shares skywards. They rose almost 22 per cent yesterday and are currently resting at 203p -- up from 166.5p.
IPC could be about to join rival publisher EMAP and launch a subscription-free ISP. The publisher of lads' mag Loaded said yesterday it was keen to generate e-commerce opportunities after it announced it was to invest £25 million in its new Net division IPC Electric.
Yet another subscription-free ISP is offering shares to Net users who stay loyal to its service. Blue Carrots joins Themutual and Totalise in its bid to reduce churn and build a solid customer base. Net users who sign up early will receive 1,000 units which can be exchanged for ordinary shares if the service is eventually floated.
Boo.com - the European online retailer backed by Benetton and Bernard Arnault - is still not ready to open its e-doors to e-shoppers. It was due to open in May but the FT reported today that it is unlikely to be open for business for another couple of months or so. The company is blaming ongoing software problems for the delay.
News International said yesterday it had committed A$480 million (£190million) in forming epartners, a new media venture capital fund. Speaking at the publication of it Q4 results, Rupert Murdoch said the fund would help the media company react more quickly to new ventures and opportunities. "We have been extremely aggressive in seizing opportunities in the new media world," he said, "not only in the United States, but in other markets such as the UK, Australia, and Asia. Our News AmericaDigital Publishing division continued to develop and expand our Fox-branded Internet sites while taking strategic stakes in exciting start-ups."
19 Aug 1999 NetNames is to offer its domain registration service on Tiny Computers' portal (www.tinyonline.net). Tiny launched its subscription-free ISP at the end of March. Since then it has attracted 115,000 users and predicts that at current rates, it will have as many as 400,000 users by the end of the year.
Cable operator NTL posted Q2 losses of $348 million yesterday, yet managed to remain chirpy about the future. Sales more than doubled to $360 million and it now has a customer base of two million, it said. NTL is set to buy the consumer cable telephone, Internet and television operations of Cable & Wireless Communications for £8 billion, a move that would make NTL the largest cable telephone and TV company in the UK and Ireland with around 3.2 million customers.
UK-iNvest.com, the British arm of GlobalNet Financial.com and supplier of financial information to the Freeserve portal, has increased traffic to its site by 533 per cent. Page views increased from 525,000 in May to 2.8 million in July.
18 Aug 1999 Online bookseller BOL is stepping up its aggressive sales campaign by offering cut-price books. The new titles include Point of Origin by Patricia Cornwell, Sebastian Faulks' Charlotte Grey and Blast from the Past by Ben Elton. Part of BOL's Summer Reading promotion the books will be priced at either £2 or £3.
Freeserve has added yet more content to bolster its mushrooming portal. The pioneering ISP is offering users the chance to trade online in securities after signing a deal with GlobalNet, First Marathon Inc and Mesirow Financial. The joint venture will provide online securities and brokerage to retail investors in the UK although there is the possibility that the service could be expanded to the EU in the future.
17 Aug 1999 Net fuels home shopping boom
Easynet SA has been awarded an International Facility Based Telecommunications Licence by the Secretary of State for Industry in France. The licence will enable it to interconnect with other French telecoms operators and provide voice and data services across the public switched network, the company said in a statement today.
Clackmannanshire-based Incorporated Technologies is investing £1 million to launch its sleek and portable Net-enabled multimedia kiosks. Gordon Venters, MD of the Scottish company, told the Telegraph that before long, they'll be springing up in shopping centres, petrol stations - anywhere where there are people who want to access the Net. Venters reckons his e-Point kiosks will dominate a marketplace predicted to be worth £600 million.
The CE of Arcadia predicts that the Net will generate a quarter of the group's sales - and soon. John Hoerner told the Sunday Times: "If you knew how soon I think it will happen, you would fall off your chair." Hoerner said his websites were responsible for generating half of all clothes sales in the UK last year. Arcadia includes leading high street brands Top Man, Top Shop, Miss Selfridge and Dorothy Perkins in its portfolio. Arcadia recently launched its one-stop-shopping portal Zoom.
Former FT hack Bernard Gray has joined United News & Media as Director of Group Strategy. Reporting directly to group chief executive Clive Hollick, Gray will be responsible for the group's Internet strategy.
Online shopping mall Jungle.com (Story: 3i drums beat for Jungle Online) is luring punters to its site with the offer of a £10 million freebie bonanza, according to a report in the Sunday Times. Due to open on August 30, e-shoppers will be able to buy computers, games and a whole load of other gear 40 per cent cheaper than the normal retail price. And if they're lucky, they'll win prizes such as holidays to Borneo… ®
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