A fierce rivalry between French business tycoons Francois Pinault and Bernard Arnault has spread from the designer clothes arena to Internet investments, with both looking to add to recent purchases.
The "no prisoners" battle between two of France's richest entrepreneurs, backed by large teams of international investment bankers, lawyers and private investigators, started with the long fight for Italy's Gucci, recently won by Pinault.
Now they are fighting it out for Internet presence. Pinault intends to transform Gucci into a multi-brand group with ecommerce offshoots. He has bought Alibabook.com, a fledgling French style Amazon.com, which Amazon itself had contemplated buying.
Pinault said he would fold Alibabook into his subsidiary, Fnac Direct, the online branch of his nationwide Fnac chain that offers 250,000 book titles and 150,000 disks for sale online. Fnac has invested $35 million to develop its online activities and has had some 120,000 customers. Fnac estimates it will break even on ecommerce before 2003.
Pinault, who owns the Printemps store group, the Redoute mail order house as well as Christie's auction house in London, has also recently bought Mobile Planet, which sells software online.
French laws against book discounting prevent Fnac from selling books cheaper online, but the Belgian site Proxis is circumventing this and is rumoured to be a target for a French takeover.
Meanwhile Arnault, who controls Dior and the world's largest luxury goods empire, has invested personally in free Internet access in association with the Kingfisher store group, bought Icollector, an online auction house in France and invested $170 million in Datek, an online broker, together with Microsoft co-founder Paul Allen.
"All these investments", said independent analyst Herman Coster, "set a pattern and have been made through Arnault's personal holding company, not through his main LVMH luxury group."
Alapage and Furet are two book companies said to interest the French tycoons.
This cyber-spat, given the pair's huge war chests, has led other groups, notably the Bertelsmann-Havas joint venture BOL, and the Hachette publishing empire, to strengthen their positions in the nascent French ecommerce sector, particularly amongst online booksellers.
Marc Piquemal, general manager of iBazar, a leading person to person Web auction site, said: "We are doubling business each month and this is attracting all kinds of interest. The big players are very active across a range of sites."
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