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---------- From: "geert lovink" <geert@xs4all.nl> Date: Fri, 26 Jan 2001 07:09:22 +1100 To: "fran ilich" <ilich@sputnik.com.mx> Subject: for nettime-lat nowEurope: City by City A city-by-city look at who's building the European Internet Thursday, January 25, 2001 FIRST GLANCE Not waiting for the little green man BIRD'S EYE VIEW A laggard ON THE GROUND e-Dreams - Location, location, location VilaWeb - Going "glocal" iSOCO - Artificial intelligence, real business Latinia.com - Rolling the 3G dice WHERE'S THE MONEY? Getting squeezed THE GURU Jose Miguel Guardia CONFERENCE BEAT Upcoming Events in Europe ACKOWLEDGEMENTS We value reader tips and contacts * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * DoubleClick: The global Internet advertising company We help advertisers and publishers make Web advertising work by successfully centralizing the planning, execution, control, tracking and reporting for high-impact, online media campaigns. DoubleClick is the industry leader at helping advertisers and publishers unleash the power of the Web for branding, selling products, and building relationships with customers. For more information, visit: <http://www.doubleclick.net> or call: +44 207 399 4400 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * __________________________________________________________________ FIRST GLANCE - Not waiting for the little green man Barcelona has that buzz. That confident energy of a city where work and play spin furiously round each other in a virtuous circle. These days, the Catalan capital is rapidly drawing companies from around the world. Some have no primary business need to be there, they simply want to be where they know they can attract dynamic young talent (see ON THE GROUND). And the more talent that floods in, the more exciting the city becomes. But make no mistake, the heart pumping inside Barcelona is not an imported one, it is Catalan. This is Spain, but the Catalan are different. Forget your southern European stereotypes of lethargic days spent napping by the Mediterranean. The Catalan are, by every account, Spain's most industrious and entrepreneurial people. Stand on a street corner in Barcelona and you'll soon note they don't wait for the little green man. And there is creativity, not only in the audacious architecture, but also in education, science and business. Consider that the Open University of Catalonia has more then 15,000 students in its online studies program, reportedly more than any other university in the world - and all studying in the Catalan language. Vicent Partal, owner of the Catalan-language portal Vilaweb, thinks Barcelona gets its drive and creativity from never having been Spain's capital. While Madrid has prospered under the security that a massive government bureaucracy provides, Barcelona, he says, has always had to fight to be an industrial and cultural center in its own right. Of course, Madrid is Spain's financial and communications center. Multinationals almost invariably start there when coming to Spain, and any Barcelona-based venture with serious international aspirations must site an office in Madrid. But in terms of business and technical creativity, and as an inspiring place to live, Barcelona leaves the capital looking like a tired old uncle. __________________________________________________________________ BIRD'S EYE VIEW in cooperation with eMarketer A laggard There's no other way to put it. In Europe, Spain is one of the laggards when it comes to Internet penetration, mobile penetration and e-commerce turnover. eMarketer estimates that at the end of 1999 only 5% of Spain's 40 million people had Internet access at home - compared to 10.7% in Great Britain - while an additional 28% had access through work or school. While the number with access has grown rapidly, in 2000 only 8.8% of Spaniards surveyed by the Angus Reid Group reported using the Internet in the preceding 30 days. Far fewer, 4.4%, claim to use the Internet for more than one hour every week, eMarketer's threshold for the "regular Internet user." Mobile phone penetration in 1999 was 26.3%, according to the European Commission, a figure that likely approached 30% in 2000. E-commerce revenues for 1999 were estimated by eMarketer at USD 620 million. That was projected to rise to USD 1.29 billion in 2000 (USD 2.09 billion, according to IDC) and to USD 16.17 billion by 2003. So far, according to Andersen Consulting, Spanish executives have moved more cautiously than their counterparts in the rest of Western Europe. Only 19% of Spanish businesses surveyed by Andersen consider their current e-commerce efforts a success. Business-to-consumer e-commerce is particularly slow developing. Less than 1% of Spaniards reported making an online purchase in 1999. These figures are low despite one of the lowest average costs for telephone and Internet access services in Europe. With 450,000 free Internet accounts in Spain, the average monthly ISP cost (according to an eMarketer study based on 20 hours online) is a mere USD 10. Including phone charges, average monthly access costs are USD 23, compared to USD 40 in Germany and USD 32 in the UK. Clearly, Spain's relatively low per capita income and high unemployment have created a drag on Internet access and e-commerce. That said, while there is little regional data available, most observers agree certain pockets of Spain, particularly Madrid and Barcelona, are significantly ahead of national averages in all the above figures. In addition, Spain represents great promise as a jumping-off point for e-commerce and content provision for the rest of the Spanish-speaking world. Spanish is the mother tongue for an estimated 360 million worldwide. It is the main language in 28 countries - chiefly in Latin America - and is the dominant second language in the US. eMarketer notes, "With a growing internet user base in Mexico and Argentina, and among US Latinos, there are opportunities for developing Spanish content websites that span the globe." * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * eMarketer -- the world's leading provider of Internet statistics - makes sense of all the numbers and provides a realistic overview of the Internet marketplace. <http://www.emarketer.com> * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * __________________________________________________________________ ON THE GROUND eDreams - Location, location, location They're young, smart and ambitious with fantastic office space overlooking Barcelona from the World Trade Center pier that juts into Barcelona's impressive port. But eDreams is also just an online travel agency. They make their money booking package holidays and taking the normal agent's commission. They introduce an interesting twist by hooking up prospective travelers with "Dreamguides," objective and informed sources who, they claim, can answer detailed questions about any particular destination within 48 hours. Still, it's going to be a long, uphill struggle to make any profit in targeting individual consumers. What's interesting about eDreams, however, is why they chose Barcelona as their headquarters. It says a lot about this magical little city, and even more about smart recruiting tactics in the highly competitive market for Internet professionals. Aside from being in one of the countries eDreams targets for customers (also Italy, France and the UK), choosing Barcelona had nothing to do with the company's business activity. "We just wanted a place that could easily bring people from other countries," says PR director Jorge Carulla on why Spaniard Javier Perez-Tenessa and American James Hare founded e-Dreams here in 1999. "The weather is great. The beaches, the mountains, great nightlife. It's secure, cosmopolitan and in fashion." Add good infrastructure, a lower cost of living than Madrid or any prominent northern European city, a local government that is surprisingly active in attracting and supporting new technology (see Law & Order section) and a local (Catalan) culture that is decidedly industrious and extroverted. It's hard to think of disadvantages to living and working in Barcelona for the IT set. Indeed, with cash for fat salaries growing thin and stock options proving less attractive these days, lifestyle can be a decisive draw for young, mobile and sought-after professionals. If eDreams can sell tour packages as smartly as they chose a home, perhaps they've got a chance, after all. <http://www.edreams.com> VilaWeb - Going "glocal" In its early days, the Internet held a hypnotizing lure for many news publishers. It offered instant, relatively cheap access to a global audience. With so much wreckage now strewn along the road to that global heaven, it's a pity more online publishers don't have the bullshit detector that belongs to Vicent Partal. As a journalist, he, too, saw great power in the Internet early on. But he also had no time for the hype that demanded a global approach. What counted to him was delivering news that was relevant. And that meant going local, not global. In 1995, Partal and his late business partner Joan Subirats launched the Catalan-language site VilaWeb (then called La Infopista). At first, it was simply a directory of Catalan sites on the web, but it quickly expanded to include a daily news roundup. Today it is a true portal, with an extensive news section and powerful search engine. VilaWeb has also franchised out more than 80 local editions covering cities and towns throughout Catalonia as well as Catalan-speaking communities in places like New York and Buenos Aires. VilaWeb is, however, not simply a collection of local newspapers on the web. Indeed, very little of it is original reporting. It's more an extensive news round-up with a heavy emphasis on links, not only to other online periodicals, but to primary sources of information. As Partal wrote in a recent column, "The journalists at VilaWeb concentrate not so much on reporting the news as on indicating where it happens." "We're sending people out of the site all the time," Partal says. "And that's good." Partal calls his formula - thinking local and using the global tool that is the Internet - "glocal" journalism. And it's working. In Catalonia, VilaWeb is the third most popular electronic news source, with nearly 400,000 original visits every month. Vilaweb is outpaced only by web sites published by Catalonia's two largest print newspapers, "La Vanguardia" and "El Perioódico de Catalunya." But it is the most popular site purely in Catalan. Admittedly, 400,000 is not huge. But consider that only 10 million people speak Catalan (it is not close enough to Spanish to be easily read by Spanish-only speakers). In addition, Partal has managed to make VilaWeb profitable from its inception. In the first 11 months of 2000, VilaWeb had earnings of USD 275,000 on USD 830,000 in turnover. In earlier years, revenues came largely from contracting out web design. But that is fading. Now advertising and local edition franchising fees make up the lion's share. By why not greatly expand his potential readership and publish in Spanish, also? VilaWeb doesn't actually define itself as a Catalan-language site, says Partal. VilaWeb is about news and information for Catalonia, where people happen to speak Catalan. Until VilaWeb is something more, providing its "glocal" approach for people outside Catalonia, Catalan is just fine. <http://www.vilaweb.com> <http://www.vilaweb.com/english.html> <http://www.partal.com/welcome/glocal/english.html> <http://www.vanguardia.es> <http://www.elperiodico.es> <http://www.ojd.es/ingles/indice.html> iSOCO - Artificial intelligence, real business At a brand new office complex on the grassy outskirts of San Cugat, a suburb of Barcelona, a clutch of former university researchers are taking the corporate plunge. Their company, iSOCO, specializes in applying artificial intelligence to make web sites and Internet-related software smarter. Clearly, these PhDs do not relish the management side of their venture. "I prefer to stay focused on the technology," Jesús Cerquides Bueno, iSOCO's chief technology officer, admits shyly. But with the help of hired guns for management and financial tasks, as well as a nascent sales staff, these scientists are charging ahead. And that's a welcome sign when corporate and academic/research communities across Europe often still find themselves on opposite sides of a massive cultural chasm. Indeed, Barcelona's universities, urged on by local and regional governments that see them as magnets for investment and employment, are positively encouraging the transfer of know-how and technology to the private sector. Speaking of employment, since springing from a research institute connected to the Universidad Autonoma de Barcelona in 1999, iSOCO has grown from its 10 core founders to 260 employees, with offices also in Madrid and Valencia. iSOCO applies itself to several artificial intelligence tasks, most of them commissioned by outside clients, to solve specific problems. Their scope is not limited to Internet-related projects, but the Internet is proving a huge engine for artificial intelligence research. "When you look to the Internet in this field, that's where you can find projects and financing," says Bueno. Current projects range from web site personalization technology for General Electric, to smart software that will allow an insurance company to customize and price policies sold on the web with as few questions for the customer as possible. At this point, iSOCO is still attracting clients by word of mouth and just starting to build a traditional sales network. Yet they were attractive enough along to bag USD 13.8 million in September 2000 from investors, including Spain's largest banking group, Banco Santander Central Hispano (BSCH). There's nothing artificial about that. <http://www.isoco.com> Latinia.com - Rolling the 3G dice Francisco Badia, 30, wants his company to be THE 3G interactive content provider in Spain. What that content will be, or how exactly it will be used by customers, he has no idea. Of course, third generation wireless, technically known as Universal Mobile Telecommunications System (UMTS), doesn't yet exist. Spain has licensed four providers, who are required to begin offering service this August (though, they may miss their deadline). Yet, no one is quite sure how consumers will react to broadband wireless, exactly what they will use it for, how they will use it, or, most important, where it might drive commerce. If things were easily predictable, we'd all be ordering flowers and making dinner reservations on our WAP phones by now. So, how to get a step on the field? For Badia and Latinia.com, the strategy is as simple as it is wishy-washy: Establish your company as the best known brand in wireless content, then pounce in whatever direction the consumer takes you. Latinia have taken a step toward accomplishing the first goal by offering services available over Short Messaging Service (SMS), the phenomenon no one predicted. In addition to offering PC-to-phone and phone-to-PC messaging, Latinia also offers information services exclusively through an SMS interface. Customers can order up sports scores, weather reports, horoscopes, the joke or poem of the day, et cetera. After four months on this path (they started as an Internet portal), Latinia has 300,000 registered users in Spain. They also have services running in Italy and Portugal. Revenues? Forget it. Mobile phone companies, like traditional phone companies, don't share revenues created by extra traffic with content providers. But Badia is betting on a major change when it comes to UMTS. UMTS operators, he says, are going to have to gather a critical mass of content fairly quickly to justify the enormous investment in infrastructure and licenses (though, in Spain regulators performed a "beauty contest" tender, rather than an auction). That means, he hopes, sharing revenues with content providers or seeing 3G follow in WAP's dismal footsteps. So far, Latinia is merely being brave with USD 5 million gathered from family and friends by the company's founder, 28-year-old Marsal Gifra. In February, Latinia will try to tap institutional investors for USD 20 million. If revenue sharing arrives, then Latinia are positioning themselves well. But that's a big "if" when you're looking for USD 20 million. <http://www.latinia.com> <http://www.jang.com.pk/thenews/aug2000-daily/23-08-2000/business/b21.htm> __________________________________________________________________ WHERE'S THE MONEY? Barcelona is feeling the great pinch. "It's very difficult to raise money," says Alejandro Olabarria, a partner in the venture capital firm, Kalonia. "The correction was good, but now it's an overcorrection." Of course, finding money is hard everywhere, but Barcelona, like other secondary cities on the banking map, is suffering more than the financial centers. Olabarria's firm, for example, hardly makes any investments in Spain, never mind Barcelona. Though he tracks the local market, his clients are mainly interested in US investment opportunities. Kalonia caters to wealthy individual investors and has USD 25 million under management. Only one of its investments, Latinia.com (see ON THE GROUND section), is in Spain. And for investors more actively targeting Spain, Madrid is the usual starting point. Local start-ups, like iSOCO (see ON THE GROUND section) often establish a Madrid presence, in part, to help them obtain financing. Not long ago, investors were "trying to cover as many geographical areas as possible," says Jordi Vilanova, director of Granville Equity Partners Spain, part of a multinational group with USD 920 million under management, including USD 32 million in a Spain-targeted fund. Not any longer. "I wouldn't say it's because of anything in particular in Barcelona. Investors are refocusing" and drawing back to their core markets, he says. Vilanova and Olabarria are both still bullish on Catalonian talent. Barcelona has no shortage of ambitious, risk-taking entrepreneurs. And, they say, it is also home to Spain's finest business university (Instituto de Estudios Superiores de la Empresa - IESE). And with a solid idea and - more importantly - a good management team, start-ups can find cash if they know where to look. Vilanova says 15% of investments made to date by Granville's Spanish fund has been made in and around Barcelona. And for investors, while exits are now the problem, finding quality start-ups with realistic valuations has become easier. Indeed, Olebarria believes some VCs have gone too far in pressing valuations down, serving only to discourage entrepreneurs. "I don't think it's healthy to squeeze them too much, and there are plenty who are doing that." <http://www.kalonia.com> <http://www.granvillebaird.com> __________________________________________________________________ THE GURU Jose Miguel Guardia Engaging and good-humored, Jose Miguel Guardia does not seem a man easily agitated. But there is something that gets under his skin. "It's irritating," he says, "to see people with good ideas who spoil everything because they don't know how to run a company, and don't even cry for help until it's too late." If you haven't guessed, Guardia is a consultant, though he also dubs himself an Internet, media and new technology analyst, as well as author, columnist and commentator. Well respected in Barcelona's financial community, Guardia runs his own small firm advising Internet and new technology start-ups. In many ways, Guardia is a perfect representative of Barcelonan business. Though trained as a lawyer, he has roots in one of Catalonia's most traditional industries, and is now firmly ensconced in the new economy. His father owns a successful textile trading company. As a youngster, says Guardia, he took business lessons "with my glass of milk every morning." When his father fell ill in the 1980s, Guardia, just 26, took over. The company continued to prosper under his leadership, but when his father returned, there was only room for one boss. So, Guardia struck out on his own in 1990, forming Silver Disc, a CD media venture. He sold the company in 1996, seeking even more independence. Ever since, he has operated solo, spreading his expertise across several local companies. He also writes a regular column for the online publication Baquia.com. Barcelona, he says, has no shortage of young, ambitious entrepreneurs. "A lot of people are willing to take risks," he says. "It's just that many of them don't know they're reinventing gun powder." Guardia is also confined to a wheelchair due to a childhood bout with polio. But he is clearly far less phased by this fact than those around him in public. It is almost not worth mentioning his disability, as it does nothing to define him, except that it reinforces just how otherwise irrepressible Guardia is. <http://www.guardiasociadas.com/eng.htm#Artículos> <http://www.baquia.com> <http://www.blink.com/members/joseguardia> LAW & ORDER Barcelona Activa Something very strange is happening here. Politicians and bureaucrats talk about fostering business development and growing a knowledge-based local economy. And - here comes the weird part - they're actually doing it. The city's business promotion agency, Barcelona Activa, is an impressive venture, drawing a regular stream of investment to the city. It is also involved in planning two substantial projects that could cement Barcelona's place as one of the most dynamic and forward-looking cities in Europe. It wasn't always that way. According to Oriol Balaguer, 42, the decidedly energetic director for promotion of economic activity and employment at Barcelona Activa, the city's great wake-up call came with the 1992 Summer Olympics. Barcelona's politicians, says Balaguer, realized that the Olympics were "a very nice excuse to rebuild the city," and made sure investment created by the games would serve the city long after the Olympics closed. When the torch moved on, Barcelona was left not only with new sports facilities but vastly improved infrastructure, a vibrant international image, and, perhaps most important, sky-high self-confidence. The city has never looked back. Barcelona Activa plays a crucial role in running a long list of business support services and promotional activities. They include subsidized office space (within the Activa business incubator) for local start-ups, but also for international companies testing the Barcelona waters. Other services include a range of consulting and training options for small and medium-sized ventures, a stake in a private venture capital firm and employment services for companies and job-seekers. There is also Barcelona NetActiva, an online extension of services for small and medium-sized companies not under the Activa roof. Two grand projects, meanwhile, are in the works. In 2004, Barcelona will host the United Nations Conference on Peace, Culture and Sustainability, a six-month extravaganza of meetings and celebrations on a scale only the UN could get away with. Barcelona, following the Olympic example, will use it to attract investment for an enormous river reclamation and development project. The second project is 22@ (22 is the number of an administrative categorization referring to existing industrial activity). 22@ will rejuvenate an industrial quarter just north of the city center, transforming 117 blocks, many of them now vacant and dilapidated, and creating 3 million square meters of new commercial and industrial space. Builders will be allowed to exceed existing height restrictions so long as the companies they contract to move in are the type Barcelona Activa wants to attract, i.e. hi-tech and info-tech. Not to be forgotten (though Activa is not directly involved) are two additional infrastructure projects. First is a new logistics port planned for a site between the airport and the marine port. Next are two TGV stations that will position Barcelona along an extension of France's high-speed rail that will end in Madrid. What is it, then, about Barcelona, about these Catalans? To Balaguer, it's simple, Barcelonans are prouder of their city than they are of their country, and willing to work for it. "We have a passionate team here at Barcelona Activa," he says with a proud smile. "In the private sector we could earn more money. But here we have the possibility to create something, to invent things for our city." That would sound like PR fluff somewhere else. But here, in Barcelona's electric atmosphere, it somehow has the ring of truth. __________________________________________________________________ CONFERENCE BEAT We welcome reader recommendations for upcoming European conferences mailto:conferences@noweurope.com Feb 10-14, 2001: Milia 2001, Cannes, FR; MILIA attracts new media decision makers from over 50 countries. In partnership with Forrester Research, the Think.Tank Summit Conferences put today's content business into perspective. Register before 12 Jan: FFR 5,245 (EUR 799,60) + 19.6% VAT. <http://www.milia.com> March 13-14, 2001: Internet Content Europe 2001, Monaco. Featuring all the European content industry big hitters, innovators and venture capitalists, this event will provide a forum where the future of European Internet Content Provision will be defined. Cost: EUR 1,345 (+ 19.6% VAT) <http://www.internetcontent.net/events.shtml> Upstart Power Days: BARCELONA, March 13; MILAN, March; 20, Hosted by Tornado-Insider, Power Days feature startup and investor workshops, panel discussions, and networking opportunities for the key players in Europe's high-tech entrepreneurial environment. (No price listed) <http://www.tornado-insider.com/upstart/> May 7-9, 2001, Disneyland Paris, FR. Tornado-Insider's 2nd annual premier event for entrepreneurs, venture capitalists and investment bankers in Europe. The event is a three-day entrepreneur conference, featuring specialized startup and investor workshops and networking events. (No price listed) <http://www.tornado-insider.com/upstarteurope> __________________________________________________________________ ACKNOWLEDGEMENTS nowEurope would like to thank the following people for their help in preparing this issue: Jose Miguel Guardia <joses@guardiasociados.com> and the First Tuesday Barcelona team __________________________________________________________________ MASTHEAD Copyright 2001 nowEurope Publications Published by Steven Carlson <steve@noweurope.com> Edited by Christopher Condon <chris@noweurope.com> Sponsorship enquires: Buba Dolovac <buba@noweurope.com> Please forward this newsletter in its entirety. nowEurope: City by City is a sister publication of the nowEurope discussion forum, serving European Internet professionals since 1995. The nowEurope archives are located at: <http://www.topica.com/noweurope-digest/read> For your FREE subscription, send a blank email to: <mailto:noweurope-digest-subscribe@topica.com> To unsubscribe: <mailto:noweurope-digest-unsubscribe@topica.com>. Be aware that if you're subscribed under an old email address that is forwarding to your present address, the above address won't work. In dire need, please contact Steven Carlson at <mailto:steve@noweurope.com>. ____________________________________________________________ T O P I C A -- Learn More. Surf Less. Newsletters, Tips and Discussions on Topics You Choose. http://www.topica.com/partner/tag01 _______________________________________________ nettime-lat mailing list nettime-lat@nettime.org http://www.nettime.org/cgi-bin/mailman/listinfo/nettime-lat