11/18/99 USA TODAY 12B (See Bold)
USA Today
Copyright (c) 1999 Bell & Howell Information and Learning Company. All rights reserved.
Thursday, November 18, 1999
MONEY
Internet brings European change E-commerce alters economies
Beda Romano
Special for USA TODAY
MILAN, Italy -- Sardinia is known for its beautiful beaches and
its good food, but hardly for high-tech.
However, the Mediterranean island is home to one of Europe's most
successful Internet companies: Tiscali.
A 20% stake in the company, part telecom and part Internet service
provider, was sold to institutional and retail investors in October.
On the first day of trading on the Milan stock exchange, the shares
jumped as high as 73.5 euros, up from the offer price of 46.
Wednesday, it closed at 123.30 euros, or $128.40.
Last week, European Internet travel firm ebookers.com, offered
shares for sale in New York and Frankfurt. The stock, priced at $18,
opened at $36, touched a high of $43, and then closed at $26 5/8.
Wednesday, it closed on the Nasdaq at $23.
Tiscali and ebookers.com are examples of how the Internet is
changing European financial markets -- and the European economy.
"There is huge liquidity flowing in the European Internet sector.
The tide will lift all boats," says Peter Bradshaw, head of Internet
research with Merrill Lynch in London. "There will be great winners,
but also a lot of wreckages."
Still, for now, "The momentum for Web companies in Europe is
tremendously positive," he says.
"And Tiscali is one example of a successful company."
The firm was founded in June 1997 by Renato Soru, a 42-year-old
Sardinian entrepreneur with a degree from Milan's best-known business
school, Bocconi University.
At first, Tiscali's market was limited to Sardinia, but the firm
took advantage of a wave of deregulation and started offering
competitive prices for phone calls in Rome and Milan.
Following the example of another Internet pioneer, Britain's
Freeserve, Tiscali shook the cozy Italian telecommunications market
in March by offering free-of-charge Internet access. The company
grabbed 250,000 new customers in less than 20 weeks. And telecom
giants such as Telecom Italia, Infostrada and Wind had to play catch-
up.
"Our goals are simple," says Luigi Filippini, Tiscali's chief
operating officer. "We want to improve our portal by offering the
best possible content and expand internationally, promoting both
Internet and telecommunications services."
The company hopes to become profitable in 2001, although Soru says
it may be possible to break even next year.
Ebookers.com started life in November 1996 as the Web site of
Flightbookers, a travel agency offering air tickets with discounts of
up to 65%.
It was founded by Dinesh Dhamija, who previously worked at IBM and
Royal Nepal Airlines.
The decision to spin off the Web site and float it was made in
July. But before the Nov. 11 IPO, Dhamija had to turn the company
from a Britain-based travel agency to a pan-European business. So he
bought a travel agency in France and opened offices in four other
European countries.
Dhamija said recently that his company wants to be a European
leader in the online travel booking business and will move into 12
other countries soon. Ebookers.com posted $5.7 million in revenue
during the first six months of 1999 and a net loss of $2.2 million.
"It's clearly an interesting company," says Merrill Lynch's
Bradshaw. "The travel business is the one which will be disrupted the
most by the Internet in Europe."
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