Following is a good interview that Stockhouse conducted with Steven Stout and Steve Harpur.
stockhouse.com
An Interview With Steven Stout, President of GlobalStore.com, Inc. & Steve Harpur
President of Global Ecomm Ltd.
• • •
When you click onto the GlobalStore site (http://www.globalstore.net) you are presented with a sampling of items
that beckon you to "Embrace the World…Collect its Treasures" With a variety of high-end merchandise,
GlobalStore, together with Global Ecomm, its operating subsidiary, plan on being a niche player in a very
competitive market. Having recently signed a joint venture with Bid.Com (http://www.bid.com) which gives Global
Ecomm a license to use their patented auction software, the auction market is heating up and moving global.
In an exclusive interview, StockHouse spoke with Steven Stout, President of GlobalStore.com as well as Steve
Harper, President of Global Ecomm. In the discussion, we spoke about their unique marketing ideas, their
partnership with the Bank of Bermuda, their application for a NASDAQ listing and their stake in Broadcast
Music.com. (www.broadcastmusic.com/) which could have incredible growth potential for the company in the future.
StockHouse: Tell me about your recent licensing agreement with Bid.Com.
Steven Stout: What we've done with Bid.Com is basically formed a joint venture with them to operate an online auction, using their
patented software and it will be co-branded with the GlobalStore brand as well as the Bid.Com brand. We will use that platform as
another exciting and interactive way to move our merchandise. I think Bid.Com was interested in our Bermuda capabilities, and the
fact that they are interested in expanding their markets beyond the bounds of North America and into Europe. They saw this as a
win-win situation.
StockHouse: What will be the marketing strategy for the auction?
Steven Stout: We're going to leverage the traffic that we get on our static site through all the marketing alliances and the advertising
we're going to do there. We will leverage that in terms of informing people that we have the auction sites and letting customers know
that there is this other platform out there.
StockHouse: This is the Global Auction Service?
Steven Stout: Correct, and that's just the generic name, we haven't branded that yet with a permanent name.
StockHouse: You have an agreement with the Bank of Bermuda as well?
Steven Stout: Yes we do, we settle all our transactions there with the Bank of Bermuda through their e-commerce department.
They are looking at expanding and getting into the e-commerce industry in a significant way and we are their first significant partner
in that arena.
StockHouse: Is their credit transaction, via the Internet, system safe?
Steven Stout: It's extremely safe. The Bank of Bermuda is a legitimate bank as there is, off shore. From a banking point of view, it's
very safe, if you're talking about the electronic transaction aspect of the credit card.
StockHouse: There has been some concern with encryption technology in the past.
Steven Stout: The encryption technology is getting better and better all the time. Most credit card fraud occurs not by some hacker
getting into the Internet, rather by some clerk that you hand your credit card to. Doing a transaction over the Internet is safer than
handing your card to a clerk in a store, who will take it and run it through the card reader which goes out over the phone line anyway.
Steve Harper: There are two issues here; number one, we are using Verisign, which is the industry leader, and our site is Verisign
approved. Number two, if you do not wish to enter your credit card, we're installing a toll free number.
Steven Stout: You can always call up and place your order over the phone, just as if you were calling a traditional mail order
catalog retailer.
StockHouse: How does GlobalStore plan on staying dynamic in this increasingly busy, online auction market?
Steve Harper: With regards to that issue, it's a matter of the content, which you choose to auction. Amazon has chosen to
auction brand name, commodity-type items and does it with massive volumes in an attempt to gain majority market share. When
you're selling books and CDs, that's exactly what we don't plan to sell. We have for example, limited edition, PGA licensed,
autographed sports memorabilia from all the major golf tournaments. For example, the winner of the Masters, we have signed prints
that have club heads embedded into the whole framing, that's autographed and they're limited edition. We have hand made
mountaineering sports performance clothing that has been featured on PBS television. We're going very high quality, high-end
merchandise. You will never see us selling commodities. We're not going to go out and sell CDs for $9.99.
Steven Stout: That was another factor that attracted Bid.Com. That's what they're doing, selling computers and commodity-type
things on the Internet. They were interested in the fact that we were bringing in additional kinds of content, more upscale, higher end
content which lends itself well to the auction, particularly in the areas or art and collectibles where there are limited quantities.
StockHouse: I know Bid.Com is getting more into audio-cards, which seems to fit into the niche you're looking at?
Steven Stout: Bid.Com was interested in expanding into that area because of the margins, so I think they found us interesting in
that regard because of the content that we bring. We compliment them, as opposed to competing with them because we're not
going to be selling most of the other things they're already auctioning on their Bid.Com site.
StockHouse: What future strategic alliances can we expect from Global Store?
Steven Stout: We've got some exciting plans in that area. We're working aggressively to bring on more vendors and more products.
We're also working aggressively on two other fronts; one is to secure alliances with advertising outlets and other Internet companies
that can bring traffic to our site. We're trying to do this on a win-win, zero-cash basis.
Steve Harper: We plan on having significant presence in the US. We own roughly 5% of a broadcasting company called Broadcast
Music.com. (http://www.broadcastmusic.com/) This is very much an integral part of our future success in that when we originally
formed Global Ecomm, it was formed to pursue GlobalStore and Global Ecomm had also acquired a small music site called
virtualjukebox. With the acquisition of virtualjukebox, we started looking at ways to increase the sales that it had, and we quickly
realized that it was an extremely expensive proposition to get sponsorship by syndicated radio programs. We looked at it and
quickly realized that if it was so expensive to buy it, why should we not be selling it? We went out and negotiated a contract with a
large syndicated radio producer called Super Radio Inc. We bought a contract, which gave us the right to broadcast the John
Garabedian Open House Party. 1 ½ million people on 110 radio stations in the US twice a weekend listen to this broadcast. We
negotiated the exclusive live webcast rights to that for 2 years.
As we started to look at music more closely, we realized it didn't fit with our GlobalStore model and we vended out that contract to a
US company, and called it Broadcast Music.com. With the vendout of that one contract, money was raised at 10 cents a share, and
we had ourselves 300,000 shares for $30,000. The new management team took that one broadcasting contract and turned it into an
audience of 31 million listeners. In addition, they obtained the right to be the exclusive web broadcaster for 180 radio stations in 6
countries, which on a numeric basis, we believe makes it second to Broadcast.com which was just bought out for $5.7 billion by
Yahoo. That company will start broadcasting at syndicated programming in two weeks. It has contractual relationships with
RealNetworks, MCI and it also has several revenue producing entertainment sections within the company. When we got involved we
had a $30,000 investment on our books. We now have a US$600,000 investment on our books.
When we vended out the contract to Broadcast Music, we protected ourselves from a marketing point of view and we obtained the
rights to be their official supplier of goods to the site. So we are the merchandising outlet and under the terms of that contract, we
have a homepage banner link for 10 years. They are estimating 100,000 unique site visits per day, once all 180 radio stations are up
and running in the 3rd quarter of this year. If 5% of those people were to click through to GlobalStore, you can see the value on a
daily basis, several thousand dollars of free advertising for 10 years. That is a major value-added part of GlobalStore going forward.
StockHouse: You're looking at co-branding possibilities?
Steven Stout: Yes, co-branding with an Internet Service Provider (ISP) or a cable network.
Steve Harper: It's our objective going forward to partner with cable companies and ISP's as gateways to the Internet, so that the
members of the ISP's and the viewers of the cable station, which many times are the same individual because the cables have large
ISP divisions, would have incentive to shop at GlobalStore. We're working aggressively and meeting with numbers of parties and I
think it's fair to assume that we will be successful on that front.
StockHouse: How did the recent private placement go?
Steve Harper: It was largely oversubscribed. Originally there was a $1 ½ million placement, we increased it to $2 million and it was
still way oversubscribed. Steve Stout: We should actually close that today or tomorrow.
StockHouse: How many shares are outstanding right now?
Steve Harper: Currently a little over 13 million, of that 13 million, there are just under 6 million that are free trading, fully diluted just
over 18 million. With the full dilution, we would have over $6 million in cash.
StockHouse: Have you issued stock options?
Steve Harper: They're closing this week, there is a new issue of about 1.3 million new options, included in the 18 million. Every
employee of GlobalStore has options.
StockHouse: Are there US-based shareholders?
Steve Harper: We are not eligible to elicit or solicit US buying. We are currently working on a Section 20-F
registration to allow us an OTC listing. We think that should go through rather fluidly.
StockHouse: Thank you both.
Barrie Einarson
Globalstore.com On-Line Investor Relations
mailto:ir@globalstore.com
Phone: 1-877-736-7570 (Matt Fleming) |
