Net Finance News: 9-15 Sept 1999


15 Sept 1999

Financial site Motley Fool has secured $26.5 million in VC funding -- the first in the company's five-year history according to the


. Brothers Tom and David Gardner plan to use the cash to launch a major ad campaign to drive more traffic to the site. Although terms of the deal were not disclosed it's understood that the new investors now have a 15 per cent stake -- valuing the company at around £200 million.

Homegrown new media company Red Eye has launched its NetOutcome product that provides customer profiling and e-commerce analysis on people who visit sites. The company said NetOutcome looks beyond the "inaccurate and over-used advertising banner click-through rates" to determine who exactly has trampled all over the site. RedEye's Clients include EasyJet, British Gas, The British Army, Mazda and BT Highway. MD Paul Cook said that the Kew-based business is currently organising another round of funding for the comapny.

Dorling Kindersley -- which prints educational books and CD-ROMs including the ever-popular PB Bear and Dig and Dug series -- is to publish books online for free. The plan is to let Net users read the books online before buying them. The initiative starts in January with a limited set of titles to begin but DK doesn't think this will discourage people from buying its books. DK reckons the cost of printing out a complete book at home is far more expensive than someone buying the book for themselves. To prove a point DK's

Star Wars Visual Dictionary

was available online for free but became a bestseller on both sides of the Atlantic, it said.

IT publisher VNU has sold its 9.5 per cent stake in the information services company Scoot for £18.5 million. In a statement today VNU spokesman Maarten Schikker said VNU sold the shares to 40 European institutional investors, but declined to name any of the companies. The £18.5 million will be entered in the books as an extraordinary gain. VNU retains its 50 per cent and 75 per cent stake in Scoot Belgium and Scoot Netherlands respectively.

In the first deal of its kind Brazil's leading ISP Universo Online raised $100m yesterday to help finance its growth throughout Latin America and to develop a range of Hispanic content, the


reported today.

Less than a week after the X-Stream Network announced it was heading north and offering its service in Norway, it's confirmed it is also launching its ISP in Sweden. X-Stream has teamed up with Sweden's largest high street electronics retailer ONOFF to offer the service. Apparently, Swedes love the Net. Three-and-a-half million Swedish surfers accessed the Net in the last 8 months.

14 Sept 1999

Electronic Data Processing PLC is to launch a new subscription-free ISP which it hopes will create a "significant new revenue stream" for EDP next year. According to


it will also offer Web hosting and portal services to the wholesale distribution industry. EDP will run the service from its base in Milton Keynes.

Top three portal Lycos and Singapore Telecommunications (SingTel) are investing $50 million to create ten new portals aimed at cashing in on the predicted growth in the Far East. The Lycos/SingTel partnership will target major markets including China, Hong Kong, India, Malaysia, Singapore and Taiwan.

Sales on the Net are expected to reach $60 billion this year and top $100 billion by 2001, according to a new report by Stamford-based Simba Information. As more homes get wired and consumers grow more comfortable with e-shopping retail revenues are expected to outgrow business-to-business sales in 2002 although this sector is still expected to reach $92.46 billion by 2003. The retail portion of the market will grow at a much faster rate with Net sales expected to hit $25.7 billion in 1999, an increase of 114 per cent compared to last year.

Jeffrey Bezos's stake in his company is worth $6.2 billion according to a report by

Inter@ctive Week

. By comparison, Bill Gates stake in Microsoft is valued at $92.8 billion.

Lycos could be about to issue shares in Lycos Europe on Frankfurt's Neuer Markt stock exchange for high-technology companies, the


reported today.

Kingfisher plc's entry into new sales channels -- including digital and Web-based services -- is expected to set it back £10 million this year, according to a review by Group CE Sir Geoffrey Mulcahy. In April the retailing giant formed a JV with the Arnault Group to form the European subscription-free ISP LibertySurf. It has also recently teamed up with Netscape Online and is also pursuing other "complementary channels" such as catalogue and interactive digital television.

British Airways has bought a five per cent stake in travel site Rosenbluth Interactive as a means of developing more online booking sales. Although BA wouldn't say how much it coughed up for the minority interest the


reckons it could be around £3 million.

Mario Tilney-Bassett has joined the Net sports media company Sportal to market and co-ordinate online Webcasts and live chats. Before joining Sportal, Tilnet-Bassett was New Media PR Manager at Foresight where he looked after clients including Disney, 20th Century Fox, and Sky.

13 Sept 1999

As the long pre-Christmas hype begins, is to launch the first European games shopping channel, in a deal with interactive TV specialists, Open. The channel will be broadcast over Sky Digital, and will sell games for the PC, Sega Dreamcast, Sony Playstation and Nintendo 64. Marketing types at are convinced that they are doing the world a favour. One wag said: "Everyone will need computer games this Christmas. We will be producing a new programme every week where people will be able to see videos of the newest games and see the latest reviews. Then if they like it they can buy it at the touch of a button…no more queuing in the pouring rain on Christmas Eve."

Virtual Technology Corporation has launched its UK-based shopping site With over 30,000 hardware products and over 100,000 software products available, the management at believes that it will be Europe's largest technology "e-tailer".

New York-base financial news site -- -- is to open up a new avenue of interest in Britain next year. will be funded with a £10.6 million investment raised by the TheStreet's existing backers. The new service will recruit around 50 people including journalists.'s former head of product development has been named as the new MD of Martin Baker, an associate editor at

Sunday Business

, has been appointed editor-in-chief. is to provide financial news and content to a network of portals and ISPs in 13 countries throughout Europe after it inked an agreement with Dutch-based World Online International (WOI). The first four money and finance channels -- which should be launched before the end of the year -- will be in Holland, Germany, France, and Denmark. GlobalNetFinancial's service will be modelled on its Web site which also services Freeserve's portal.

It's official -- e-shoppers are being fleeced by British e-tailers. A report in the

Sunday Times

revealed that consumers wanting to take advantage of lower prices on the Net were often disappointed and left with little or no cost savings. Unlike the US, for example, where there is a culture of price competition, it appears British e-tailers and suppliers are happy to keep prices at an inflated price. Toys from the hit movie

Star Wars

were twice as expensive among British e-tailers compared to US e-stores, said the


. "Rip-off Britain is alive and well on the Internet," Alan Stephens, editor of Which Online? told the



Web company is set to float on the Alternative Investment Market (AIM) in a bid to raise £4 million to develop its business. The directors of the company will stump up £750,000 leaving investors to find the rest. Once the flotation is complete the

Sunday Times

reported that the West Midlands-based company will be valued at £20 million -- with annual sales expected to hit £30 million.

One-time building society Woolwich Plc is to spill the beans about its plans to become an e-business, the

Mail on Sunday

reported. Chief Executive John Stewart will tell the Confederation of British Industry (CBI) that it intends to sell household goods as well as financial products. The Woolwich already sells cars by all accounts.

Simon Montford has stepped down as a director of online auction house icollector. There is no indication why he took the move.

10 Sept 1999

BT is to acquire a 32.5 per cent stake in I.NET -- Italy's biggest business ISP-- for £13 million, the telco said today. I.NET -- which expects a turnover of more than £13.5 million this year -- manages the Net affairs of 3,500 large and medium-sized companies including the newspaper

La Repubblica

, the Italian Stock Exchange, Benetton, and the Italian bank Banca Intesa. Pat Gallagher, president of BT Europe, said: " This is an important step towards consolidating our Internet presence in Italy, one of the fastest growing markets in Europe. As the fourth largest telecommunications market in Europe analysts predict that Net usage in Italy is expected to surge in the coming years. The number of corporate users on-line is predicted to rise from its current figure of 400,000 to around 3.2 million by 2005 -- an annual growth rate of 35 per cent.

Jason Drummond, founder and CEO of Virtual Internet and David Rowe, chairman and CEO of Easynet were both named as one of the UK's top 100 executives at the Enterprise 100 Entrepreneurs Awards in London last night. They were the only two business leaders from the Net industry to make it into the ton.

NEC said yesterday it would spend Y30 billion -- $276 million -- over the next three years on its ISP Biglobe. NEC move comes as top IT companies -- such as Fujitsu and Sony -- scramble to get a share of Japan’s ISP market. Japan’s ISP market grew 99.8 per cent to Y295.5 billion, with over 3,300 registered ISPs, in March. But larger ISPs continue to dominate the market -– with just 20 companies controlling 50 per cent of the market.

Simon Murdoch has thrown his paddle out of the canoe and decided to call it a day at According to a


report -- and confirmed by industry gossip today -- the former boss of Amazon's UK tributary has left to pursue "other interests". Murdoch was only with the company a short while -- he didn't even stay long enough to make it to his annual pay review. He'll be replaced by Colleen Byrum until a permanent replacement can be found.

Ofex-listed Ashpool -- which dabble in voice technology -- has launched its first free 'v-mail' service in Britain and expects to have 500,000 subscribers within the next twelve months. Using TaoTalk users can send and receive messages either by PC or telephone. Ashpool is currently in talks with several ISPs to develop the service and is also looking for partners in the US.

UUNET -- an MCI WorldCom company -- is embarking on a multi-million pound investment programme to create eight new high bandwidth Points of Presence (PoPs) due to go live within the next six months. The investment in Scotland, Northern England, the East Midlands and the West Country is part of a wider $2 million-a-day global expenditure by UUNET on new Internet infrastructure for business worldwide.

9 Sept 1999 Waitrose donates free ISP revenues to charity
Oftel predicts broadband boom
Argos £3 TV fiasco provokes test-case lawsuit

Disney has brought in TV heavyweight, Steven Bornstein, to round up its online interests. Bornstein -- previously a TV sports executive with ABC -- will oversee the merging of Disney's Internet assets into a single company,, to be launched later this year. The company hopes that Bornstein's appointment will instil confidence in the venture, following the recent tide of defections.

Future Network is to provide free email and eBay-style auction services through its Web site, the company announced today. Online auctioneers Fair Market and Delphi are among three US companies to join Future in the venture. Critical Path will manage the email service. This comes hot on the heels of last month's partnership agreement with


. Future's Internet division made a £870,000 operating loss in the first half of 1999. The chairman, Chris Anderson, said that he did not expect to generate profit for the next two years.

London Stock Exchange listed African Lakes Corporation PLC is seeking to raise £17.5 million to develop and extend the reach of its ISP Africa Online. Africa Online has Africa's largest territorial reach and currently operates in six countries -- Kenya, Côte d’Ivoire, Ghana, Zimbabwe, Tanzania and Swaziland -- even though it only has 18,000 users. The funding will be used to expand the service into six new African territories next year. Although only one in 1,400 people in Africa is wired -- compared to one in four in Europe and the US -- executives at Africa Online claim the potential for growth is staggering. Part of the initiative will be to establish a public access network of "communication centres" to let PC-less people access the Net.

TV company Flextech has acquired a 25 per cent shareholding in Multi Media Mapping Limited (Multimap) for £1.88 million. Multimap provides Internet mapping services and the investment will be contained within Flextech Interactive, Flextech's digital and interactive services division. Multimap provides Internet mapping services to portals, online directories and corporate Web sites across the UK and Europe.

AIM-listed Virtual Internet has appointed Richard Smith as General Manager in order to boost VI's expansion into new markets. Before the VI job Smith used to work for AOL Europe and Microsoft.

The X-Stream Network is heading north after confirming it is to launch its ISP onto the Norwegian market. As part of an agreement with loyalty scheme Domino, X-Stream will be also be distributing its CD -ROMS on the forecourts of Statoil, Scandinavia's largest network of petrol stations.

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