Saturday, September 16, 2006

Closing the chapter on World Online, at last

Last night after the closing of the Amsterdam Stock Exchange, KPN send out a press release that it was acquiring the Dutch part of Tiscali. Such an announcement is a big announcement, given the seize of Tiscali in the Netherlands and the emotional background of Tiscali in the Netherlands.

KPN is buying customers. From the acquisition of Tiscali, KPN will get almost a quarter of a million ADSL customers and about 126.000 dial-up customers. KPN will also take over the infrastructure and networks which Tiscali has built over the last years. KPN has a number of services and did have about 1,8 million ADSL customers in total last June. With the addition of the Tiscali subscribers KPN will cross the 2 million milestone of the 6,9 million households.

It is clear that KPN is intensifying its strike force. The more ADSL subscribers it has the more it will be able to put up competition against the cable companies. For KPN it is not important to sell the ADSL connection, but it is important to sell the extra services if television, interactive television as well as teleshopping. In 2007 there will be the battlefield between the KPN and the telcos like Tele-2/Versatel and Scarlet and between KPN and the cable operators. The cable operators have an advantage as they have a network and television services. Both companies have had roughly access to the same client base. Now households will have to choose. In the case of KPN they will have to choose extra services next to the fixed line telephone link. In the case of the cable operators they will have to choose extra services next to the television provision. So buying a quarter of a million Tiscali ADSL clients and some 126.000 dial-up clients is not a bad move.

With the acquisition of Tiscali in the Netherlands, KPN also get the 267 employees. But more important is that they also buy the name of Tiscali as a movie sponsor. Tiscali was very early in the market with video. It offered paid movies when KPN just started to think of the offer. It streamed the Sail events in Amsterdam. It screened the Submission movie of shot movie maker Theo van Gogh. The company has built a considerable marketing experience with video as well as technical experience which even KPN can use.

KPN will be happy to have pushed Tiscali out of the Dutch market. Last year KPN already took over 60.000 subscribers from Tiscali; this time it was not a hostile move for which KPN is known. Tiscali offered KPN the 60.000 subscribers as they were still using the KPN infrastructure. For Tiscali it meant some revenue, which they could be used to lower the debt.

If you mention Tiscali in the Netherlands, people automatically say World Online. This Dutch ISP has been the symbol of the largest Amsterdam Stock Exchange disaster in the Dutch history. World Online was going to be a share of the people, which was part of the new economy. World Online had gone to the Stock Market in order to cash. The company was led by Nina Brink, an overambitious business woman. The company cashed billions as did Nina Brink. But when the market learned that Nina Brink had cashed before the IPO, the market crashed and Tiscali could pick up World Online for a song. Many people had lost their appetite to buy shares after that happening.

In the general policy of Tiscali, the Dutch branch had to go. The global company is still loosing money and needs cash to keep floating. The Dutch company did not make money either. Besides there was always trouble. After the acquisition by Tiscali, Mr Ruud Huisman became the general manger. One of the first moves was to get rid of employees. After that Mr Huisman was promoted to be the CEO of global Tiscali, a function he left after big internal fight. His departure was surrounded by articles about conflicts of interest and his love life with the CEO of the Dutch Tiscali company as well as his not spotless record in the broadcast world before World Online.

All in all, the names World Online and Tiscali can be buried after this acquisition in the Netherlands.

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Blog Posting Number: 510

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