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 Internet gateways partner for survival Centrum.cz hopes regional alliance will boost chances By Lisa Gonderinger As the world's euphoria for dot-coms chills, the country's third-largest Internet portal is stretching its fingers into Central Europe, hoping to survive an inevitable shakeout. NetCentrum, owner of the centrum.cz Internet portal, is forming an alliance with similar companies in Hungary and Poland. The deal will allow the three firms to get instant contacts, market research and insight into each other's countries. They also will share software and ideas, and save expenses with joint advertising. "It will give us all a better chance for survival," said John Gridley, NetCentrum's director of finance and strategy. The Czech Republic and its neighbors have seen an explosion of Yahoo wannabes in the last year. They're all fiercely competing for a piece of the small but growing pie of Internet users, as well as the advertisers that want to reach them. Fewer than 10 percent of Eastern Europeans have Internet access, compared with 50 percent of Americans and 25 percent of Britons. High access fees and the price of computers relative to income are the main deterrents. The numbers are expected to grow when telecommunications monopolies disappear, and access prices fall. The impending boom has drawn a flurry of investment in the last 12 months, with Czech Internet service providers, portal owners, e-commerce sites, technology companies and consultancies being snapped up. NetCentrum was part of the wave, taking on Intel Capital and Barings Communications as minority shareholders this spring. Intel is also an investor in NetCentrum's two new partners, Poland's Wirtualna and Hungary's index.hu. All three are among the top three portals in their countries. Sixteen months ago, there were only two Czech Internet portals, Seznam.cz and Atlas.cz. Since then, Centrum and at least three others have launched. Major players are getting in on the game, including Cesky Telecom's quick.cz, and Contactel's redbox.cz. Both companies have ambitions to bump Seznam out of the market's top spot, launching major ad campaigns to promote their sites. Experts agree each country will be able to support only two or three portals. The rest are expected to shut down or change their focus after the money runs out. Some say it could come in the next six to 12 months. Though pioneer Yahoo has a single portal with links to translations in other languages, Gridley said the three Eastern European partners aren't talking about following suit. "You have to be really careful," he said. "Something that's not homegrown and run by natives is really going to lack an understanding of people's preferences." Lisa Gonderinger's e-mail address is lgonderinger@praguepost.cz More Business and e-World stories Protests, land deals give foreign investors headaches Carp farmers turn to electronics and exports to offset falling prices Revitalization Agency proved too inefficient More retailers taking credit cards, but trust still keeps usage low e-World Internet offers growing options for independents Kal's Korner |
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