BusinessWeek Oct . 18 Part II
ANSWERING CALLS. To see where Europe could be heading, take a look at Scandinavia. Engineering students in Stockholm used to head for the laboratories of Ericsson and Nokia after graduation. Now they're setting up companies, signing development agreements with the phone giants, and answering calls from eager venture capitalists, including foreigners such as Britain's 3I and Alta Berkeley Associates. 'Companies that would have had trouble raising $1 million a year ago are raising $10 million today,' says William Cardwell, managing director of Eqvitek Advisors in Helsinki.
One hot Swedish startup is Melody, founded a year ago by 25-year-old Per Mosseby and financed in part by Norwegian telephone company Telenor. Mosseby, who dropped out of a master's program in computer science to start his business, now has a 21-person team developing phone Web pages for Scandinavian businesses. Eventually, Mosseby hopes to pioneer 'location technology' that will help local businesses such as corner sandwich shops grab customers by sending messages to their phones as they pass by. 'I want to hire a CEO,' he says, 'so I can focus on business creation.'
Melody's older competitors are already debuting on the northern stock exchanges with an eye to listing later on Germany's Neuer Markt and Nasdaq. Nocom, a Stockholm company that prepares mini corporate Web sites for transmission on cell phones, listed its shares on the Stockholm exchange in January. The stock has jumped from $5.35 to $16.25. 'We want to be up and running with mobile sites before November,' says CEO Anders Jonson. The next step: follow partners Nokia and Vodafone into global markets.
These Scandinavian successes are already spilling over into the rest of Europe. French startup Webraska sells up-to-date images of Paris' traffic jams, which pop up on commuters' cell-phone screens. Ubiquity, a Milan developer, is equipping Italian banks with bank-by-cell-phone software. This march to the mobile Internet, says Tim Sheedy, a telecom analyst at International Data Corp., 'gives Europe the opportunity to catch up to the U.S.' in tech-related fields.
Of course, the Europeans face stiff competition from the Americans, the reigning kings of the Internet. From Cisco to 3Com, they're maneuvering to grab big chunks of the global mobile business. In early October, 3Com signed a deal with Amazon.com Inc. to develop wireless shopping for Palm Pilot--one of the strongest competitors Europe's smart phones face.
Perhaps the biggest battle will rage over the so-called mobile portal. This is the online screen that phone users go through as they hunt for information, from sports scores to movie listings. Phone companies are angling to control the portal, an advertising gold mine. But here they face competition from cash-rich U.S. titans Yahoo! Inc. and America Online Inc., which are already developing phone offerings. They know that in a few years the number of cell phones tied in to the Internet could far exceed online PCs.
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