A US based start up intends to acquire 10 European Web companies with venture capital secured in its domestic market in an attempt to become a major ecommerce service provider in Europe.
Richard Kozak, Galileo Communications? president, said the company will coordinate, not integrate, its purchases through a European Research Facility, which will gather the best methods and systems that each company has developed and redeploy them elsewhere.
For example, a health application developed in Italy could be used as a template for hospitals and health companies in other countries.
Kozak claimed that the firm?s attempts to become a one stop shop for connectivity technology, Web hosting and systems integration differentiated it from connectivity competitors such as MCI WorldCom and British Telecom.
He also attested that by reselling bandwidth and acquiring ecommerce shops according to the US model, Galileo could become a European market leader by the end of the year. He believes that the European ecommerce market is two years behind the US.
But Kozak also maintained that Galileo would be a: "European company selling to Europeans, with Americans only at the top supplying capital and setting strategy. We won't be trying to merge different languages, cultures or business traditions. Corporate executives in Europe now recognise the need to develop ecommerce capabilities, but don't know what to do or how."
He expects to generate revenues of $49 million for 1999, expanding to $160 million in 2000, and $448 million by 2002.
And according to his calculations, a two to eight year old profitable Internet company with an established customer base and growth rates of more than 100 per cent annually, can be bought for about $2 million in cash and the same amount in stock.
International technology venture capital company, Atlas Venture, which recently raised $200 million to invest in Europe, estimates that European venture capital investments in the technology sector were about $2.76 billion in 1997, or a quarter of the total.
This compares with US technology investment last year of $11 billion, or three quarters of a total $14 billion.
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