Feeds

Four reasons why T-Online doesn't bark

This ain't going to be a dog stock

  • alert
  • submit to reddit

Mobile application security vulnerability report

T-Online is to price its shares at €35-50, valuing the ISP anywhere between €39-55 billion (£24-55 billion), according to "people close to the share issue" cited by the FT. This will make it easily Europe's biggest Internet player. Only nine per cent of T-Online's shares will be released for IPO, and 60 per cent of this is reserved for retail investors.

The huge pricing range reflects the "volatile performance of ISP stocks", reports the FT (which really means 'Internet' when it refers to 'ISP'). We agree. But we think that T-Online is a cut above recent high-profile European IPOs. Reports that the mania for Internet stocks is waning in light of the recent poor performance of shares from Lastminute, World Online and Lycos Europe are a bit premature.

It could be that European investors are becoming more discerning when it comes to Internet shares, but don't expect them to pan everything related to the Internet. There are other reasons why these Internet stocks performed poorly in the first days of trading. Aggressive pricing is at least partly to blame. Lastminute shares were priced by Morgan Stanley Dean Witter at the high end of the scale, leaving little upside after IPO day.

Furthermore, the lack of a ballot or lottery meant that each retail investor had too few shares from which to profit (something that T-Online will probably avoid, see T-Online puts IPO to the ballot). Aggressive IPO pricing may be a factor with World Online and Lycos too (traditionally, in Europe IPOs are priced conservatively to help along a first day ramp.) Expect T-Online to fare a bit better than the rest for the following reasons:

  • T-Online has massive market share in one country, at least five million subscribers in Western Europe's biggest and richest country. World Online is supposed to be the second biggest ISP in Europe, but its subscriber base is scattered across several countries and its market share where it operates is more typically 10-15 per cent.
  • The giant German ISP has home banking, a sticky application. T-Online subscribers have been accessing their bank accounts for years using the old videotext network and upgrading to T-Online when the banks Web-enabled their banking apps). T-Online also recently bought equity in online bank Commerzbank, one of the country's pioneer direct bank and brokerages. Commerzbank is also, naturally, selling shares in T-Online.
  • T-Online knows how to market, market, market... For the upcoming IPO, the company has turned on a massive and comprehensive corporate communications machine. Other European IPO candidates could learn a lot from Big Pink's (pink is Telekom's Corporate ID colour, actually it's a purply pink but not quite magenta) marketing program. Its investor relation’s web pages, for example, link users to direct banks and traditional banks selling shares.

    There is a discussion forum for T-Online investors, plus pages of information and hotline numbers for even more information. Another Web site feature is a Germanic-looking avatar called Robert T-Online who takes visitors on guided tours of the company's site. In the month leading up to the IPO, T-Online also conducted a "customer satisfaction" survey, guaranteeing anyone who completed the survey access to shares. The resulting legal proceedings, initiated by AOL Germany, has not hurt either.

  • And T-Online has sex. Revenues from T-Online's numerous erotic channels helps the ISP's bottom line, as it were. T-Online was one of the first ISPs to implement micropayments to ensure that revenues from pay-as-you-go services i its sex channels, which T-Online calls "lifestyle" channels - did not decrease when it shut down the old videotext network and ported all the content to the web a few months ago. ®
  • T-Online - some facts and figures
  • Customers: 5 million (at Feb 2000)
  • Sessions per month: 184 million (as of December 1999)
  • Employees: 1000 (as of Jan 2000)
  • Location: Darmstadt
  • Foreign holdings Austria: 51 per cent of T-Online.at Internet Service GmbH, Wien
  • Shareholdings: 25 per cent of Infoseek.de, 25 per cent Online-Buchshop Booxtra
  • Portals: www.t-online, shopping.t-online.de, www.t-online.de/broker, fun.t-online.de, regional.t-online.de, www.t-online.at

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.