CB, great news. That is good enough for me. Now, how about some more Freeserve news to make it more interesting. I trust X-Stream will give us XSNI shareholders priority rights in their IPO, Too!! Thanks again, Jeff
Dixons Plans to Give Priority Rights for Shares to Freeserve Users in IPO
By Bundeep S. Rangar
Dixons Plans to Give Priority Rights to Freeserve Users in IPO
London, June 16 (Bloomberg) -- Dixons Group Plc, the U.K.'s
largest electronics and appliances retailer, is considering
giving priority rights to existing users of its free Internet
service, Freeserve, to buy shares in its initial sale next month,
people familiar with its plans said.
Freeserve, the U.K.'s largest Internet provider, will
probably list on the London Stock Exchange and Nasdaq, selling a
minority stake of about 25 percent, the people said. The company
is valued by analysts at $1.6 billion, or $1,230 for each of its
1.3 million users.
Selling priority shares would let Freeserve identify its
users, gather information about them and potentially bill them
for transactions. This would help it generate revenue from the
trading of goods and services on the Internet, a market that
Forrester Research Inc. expects will grow to $13 billion in the
U.K. by 2001 from $260 million last year.
''They want to preserve their lead on the market and
maintain user loyalty,'' said Stephen Ford, an analyst at Collins
Stewart Ltd. ''What better way to do that than making them
shareholders and giving them a vested interest?''
It took only three months last year for Freeserve to become
the top Internet access provider in the U.K., stealing the lead
from America Online Inc. Its runaway success has made it the
U.K.'s third-most visited portal site. Such sites typically
provide Internet searches, free electronic mail, news,
entertainment, weather and other information popular with Web
users. Yahoo Inc. leads as the U.K.'s most popular portal site.
Users spend an average of 16 minutes per day using Freeserve
service. That does not imply, however, that they spent that time
on the Freeserve Web site. They could easily have moved on to
another site after logging on to the Internet.
More Advertising
Information about users, such as background and time spent
online, is also important for Freeserve to market its Web site to
Internet advertisers. U.K. Internet advertising spending will
grow to $440 million in 2002 from around $42 million last year,
according to London-based market researcher Datamonitor Plc.
Since Freeserve's debut, dozens of businesses ranging from
phone companies to retailers and sporting clubs have rushed to
offer free Internet access and muster enough users to attract
advertising money and make sales through their sites.
It now faces competition from companies such as British
Telecommunications Plc, which is also offering fixed-rate weekend
telephone charges, and Tempo, a U.K. retailer offering free
evening and weekend phone access to complement its free Internet
access offerings.
Dixons stock rose 160 percent between last September and
April, fueled by investor enthusiasm for Internet shares, but has
since slipped back 26 percent from its high as more competitors
have offered free access services. It fell 11 pence yesterday to
1,150p, compared with its April 12 high of 1,564p.
Dixons uses its Dixons, Currys, PC World and The Link retail
chains to distribute its Freeserve sign-up software.
Free Access
The free Internet access model works in Europe because phone
companies share revenue from local phone calls. A local phone
company retains between 33 percent and 60 percent of the charge,
with the balance going to the network operator, which shares its
revenue with the free ISP.
Users in the U.K. pay between 1 penny and 4 pence per minute
in local phone charges.
Credit Suisse First Boston and Cazenove & Co. will be the
global coordinators and brokers for the Freeserve sale. Dixons
and the banks declined to comment.
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