should be positive for cybersurf
Sunday October 3, 4:15 pm Eastern Time
Bell Canada, Quebecor joust for
Internet dominance
By Patrick White
QUEBEC CITY, Oct 3 (Reuters) - In a flurry of recent deals,
publisher, printer and broadcaster Quebecor Inc.
(Toronto:QBRa.TO - news) appears to be challenging BCE Inc.
(Toronto:BCE.TO - news) unit Bell Canada, the country's largest
telephone carrier, for dominance in Canada's fast-growing Internet
sector.
On Thursday, Montreal-based Quebecor, parent of Quebecor
Printing Inc. (Toronto:IQI.TO - news), the world's largest
commercial printer, launched a French-language version of its
national Internet portal ''Canoe.ca'' to complement its existing
English service.
Quebecor also agreed Thursday to sell its Web unit Intellia to Quebec City-based electronic
commerce company Informission Group Inc. (Toronto:IFN.TO - news) in return for a controlling
stake. Quebecor plans to inject C$40 million (U.S. $27 million) cash into Informission.
Internet users often chose a Web portal as their home page because they provide a variety of
services such as news and information and electronic commerce in a single location. Bell Canada --
partly owned by U.S. phone giant (NYSE:AIT - news) -- and Quebecor are clearly the two leading
contenders in the battle for Web portal dominance in Canada, said Mark Quigley, analyst at Yankee
Group, an Ottawa-based consulting firm.
''Things are looking very good for Quebecor and Bell Canada on the Internet market. The
announcements made by Quebecor kind of strengthen the argument that the Internet is an area that is
being strongly looked at by the economic muscle in Canada,'' Quigley said.
Industry studies show the potential for growth in Canada's Internet subscriber base and electronic
commerce market. Surveys indicate that 3.3 million of Canada's 30 million people will be Internet
subscribers by the end of 1999.
''It is a 29-percent penetration of households, growing to 34 percent in 2000 and it keeps up
climbing,'' Quigley added.
Notwithstanding Quebecor's brashness and Montreal-based Bell Canada's heft -- its parent BCE is
Canada's most widely traded company and is flush with C$5 billion (US$3.37 billion) of cash from
its sale in June of a 20 percent stake in Bell Canada to Chicago-based Ameritech Corp. (NYSE:AIT
- news) -- they do not stand alone on Canada's Internet battlefield.
Yankee Group analyst Quigley cautions that Sprint Canada (Toronto:CN.TO - news), AT&T
Canada (NYSE:T - news) and BCT.Telus are upcoming, well-capitalized players.
''You are probably going to see those folks start to push things a little more as well,'' he said, adding
portals and electronic commerce are the way of the future.
Industry analyst Quigley said there was speculation in the stock market that Bell Canada could forge
an alliance with American Online (NYSE:AOL - news).
On Friday, Toronto's Globe and Mail newspaper reported that the Bell Canada was poised to take
up full ownership by year-end of MediaLinx Interactive LP, which owns the ''Sympatico.ca'' Web
portal, Canada's most popular national Internet access service, with 70 million page views each
month.
Full control of MediaLinx, which is 16.2 percent owned by rival telecommunications group
BCT.TELUS Communications Inc. (Toronto:BTS.TO - news), would allow Bell Canada to pursue a
tie up with a big U.S. Web site.
Bell Canada officials would not comment on this, but they noted that Sympatico already offers its
600,000 subscribers more than just a Web portal site with information content, Internet search tools
and electronic commerce.
Marie-Eve Savard, Quebec manager for Bell Canada, told Reuters the company was adding new
features to its French-language Sympatico Web site. Those include live business news and quotes
from Quicken (NasdaqNM:INTU - news), the intelligent search engine Copernic and an interactive
link with Rona, the largest hardware store chain in Canada's mainly French-speaking province of
Quebec.
QUEBECOR SAYS CAN DRAW ON MORE MEDIA CONTENT
Quebecor also has other Internet arrows in its new media quiver. The company became Canada's
second-largest newspaper chain behind Southam Inc. (Toronto:STM.TO - news) in January with its
bold acquisition of tabloid publisher Sun Media Corp.
''We have more content Web site projects,'' Quebecor President and Chief Executive Officer
Pierre-Karl Peladeau told Reuters in an interview.
''The idea is to use our two other large units, Quebecor Printing and Sun Media newspaper group.''
Last July, Quebecor Printing Inc. (Toronto:IQI.TO - news) became the world's No. 1 commercial
printer when it purchased U.S. firm World Color Press Inc. (NYSE:WRC - news) for $2.7 billion.
As an example of what Quebecor may be planning, in mid-September it launched ''Archambault.ca,''
an electronic commerce Internet site for records and book sales. Its Groupe Archambault unit is the
largest Quebec-owned distributor and retailer of recorded music compact disks, books, newsstand
publications, musical instruments and sheet music.
Peladeau said the bilingual (English-French) ''Canoe.ca'' Web site, staffed by 150 personnel, is
clocking some 55 million page views a month.
''Just on the Archambault site alone, we have had 1.5 million hits over the past two weeks and sales
of C$50,000 ($33,780),'' he said.
Peladeau, whose family controls Quebecor, said he thinks the ''Canoe.ca'' portal can generate more
news content for its media group and better use the parent company's assets to produce more
business opportunities.
''We have got to capitalize on this to make sure we can help grow the clientele on another medium.
The Internet can bring us clients in the printing industry we do not have now,'' he said.
CANADA'S ELECTRONIC COMMERCE MARKET UNDERDEVELOPED
Quigley also thinks that Canada's Internet advertising market is underdeveloped because it does not
have strong Internet portals such as Amazon.com Inc. (NasdaqNM:AMZN - news), eBay
Inc.(NasdaqNM:EBAY - news) or eTrade.
''Most e-commerce dollars generated by Canadians tend to be spent on U.S. entities largely
because Amazon.com and those folks have been around much longer,'' he said.
Quebecor's Peladeau agrees with that appraisal.
''Competition is now split on the Internet. It is Web sites such as iVillage.com and Amazon.com,
Yahoo! (NasdaqNM:YHOO - news) and AOL,'' he said. ''Our competition is not local, but global.''
($1=1.48 Canadian dollar) |
