Comments from Sukornyk
quote.bloomberg.com
X-Stream Network's Sukornyk on Liberty Surf Investment: Comment
London, Jan. 13 (Bloomberg) -- The following are comments by
Greg Sukornyk, chief executive of the X-Stream Network, about
Liberty Surf Groupe SA's investment of $5 million for a 10 percent
stake in X-Stream.
Closely held X-Stream, founded in March 1998, was the U.K.'s
first free Internet service provider and now has 500,000 customers
in the U.K. and 70,000 in Scandinavia. Liberty Surf is France's
largest free Internet service provider and is backed by the U.K.'s
Kingfisher Plc and Bernard Arnault's Europe At Web investment
fund.
Will Liberty Surf acquire control of X-Stream?
``There's an agreement in principal for the acquisition of a
majority stake but it's subject to certain terms and conditions
and we're working through those now. It's safe to say that within
the next two months or so it should be finalized.'
Was Liberty Surf the only company that made an offer? If not, why
did you choose Liberty Surf?
``We have elicited interest from a number of other groups to
date and we've sort of steered an independent course.'
``Liberty Surf is very interesting to us really because of
the strategic fit. They're the largest free ISP in France. They've
recently moved into Germany as well as a soft launch in the U.K.
It complements nicely where we are. We're in the U.K. and northern
Europe and together we will quickly be in seven or eight
countries, which bodes well for Liberty Surf and ourselves. It's
quite obvious that there's heavy consolidation in this space. The
smaller players that don't tie up or form strategic alliances will
either get snapped up or fall by the wayside.'
How do you compete?
``Our service is quite unique because it provides for a piece
of software that delivers banner ads at the top of the users'
screen at all times when they're surfing the Internet. So our
model, more than most ISP portals, is advertising and e-commerce
driven.
``We've been, however, an independent company, a real
Internet start-up, and as such have maybe not had either the
financial or the distribution resources that the likes of a Dixons
with Freeserve. We're nonetheless No. 3 in the U.K. market and
going strong in the rest of Europe.'
``We've always tried to drive the Internet in the interests
of the consumer. One of the ways we've done that is obviously
through offering periodic 800 promotions where the user doesn't
pay for the call charge. We're able to subsidize it with our
advertising and e-commerce revenues. It handsomely covers what we
have to pay on the 0800. It's a very effective promotion in terms
of generating interest. Overall, Internet access I feel is going
to be driven towards a very low cost telephony model, or no
cost.'
So how will you make money?
``Through the advertising revenue that we receive from our
partners as well as the e-commerce transactions. And there's
certain revenue generated off content as well.' |
