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Leaves On The Line One?
UK-Netmarketing Weekly Round-up - December 8, 2000

The news that BT Openworld and United News & Media were pulling out of Line One and putting the ISP up for sale got tongues wagging. More doom and gloom in the ISP sector or a great opportunity for someone to snap up 1.4m subscribers?

Silas Denyer kicked things off, asking, "Well, interesting as the news of LineOne's For Sale board is, its quite amusing to look at the news behind the news, as it were. ... Look at eVerger.co.uk (whose CEO also happens to be LineOne's founder) & note that, despite having already invested $12m in e-marketing startups, their site is hosted at http://website.lineone.net/~everger ... LineOne were unavailable for comment..."

Sara Waller replied, "Yes, LineOne were unavailable for comment, but if you were in the Express Building (we are based opposite) would you want to raise your profile at the moment ? Line One are just up for sale - not involved in the messy United fallout as express online are. Also they are part of Xilerate who have retained Megastar too, so it seems safe. I have pals involved in the online fallout at Express. Its bizarre enough for them to see the OK 'gals' move in (not an 'Asian Babe' in sight) on their motley Megastar tits'n'lager crew ... then a week later they get redundancy!"

Lois Grayson agreed with Sara's view, adding, "It's true, I reckon, it's getting tougher all round. And the ISPs are beginning to struggle; last year the iGroup (the eBusiness consultancy I worked with) calculated that the minimum regular user base an ISP needed to be 'real' and sustain a business model was c250,00 - so when I was mailed an IPO for an ISP boasting an established base of just 140,000 last week the bin got a snack.

Last year I had a stand up row with a marketing person at (mobile network) who told me that 'the internet was the future' (too many seminars love) and that they 'had to' launch an ISP - my response was that to be an ISP you had to provide services; hardly (mobile network)'s forte even in their own field. This is the central problem - anyone with a sizeable database thinks they should *own* their customers on the net too. There are just too many ICDTs* [I can do that's] and not enough pie - and several that are clinging on should go back to what they're good at and leave the 'true' ISPs to carve it up. Or someone new to come in and break the category."

Tim Howard emailed, "I'd like to add to this that although there are a few 250,000 ISP's out there, all new entrants to the market will need to rely upon the systems and bandwidth of the IP backbone providers. These are the guys making the real money - sod being an ISP, it's just customer technical support and poxy mailbox administration."

Line One wasn't the only large ISP causing speculation. It's been well known that Freeserve has been looking for a buyer ever since talks broke down with T-Online earlier this year. The rumour mill was cranked up to full speed when Freeserve's shares were suspended pending an announcement that they were being bought by France Telecom's ISP, Wanadoo.

Melanie Beech added a tactical perspective, "...the French move, Wanadoo buying Freeserve, was probably a tactical move by France Telecom who own Wanadoo, and who equally own the search engine Voilà. Clearly, by taking over Freeserve, they also hope to increase awareness of and traffic to Voilà, which arrived quite late in the UK market, and so taking over one of the largest of the UK's ISPs made sense for number of reasons from their perspective.

Given the above, I think it unlikely that the French are considering this as a short term move, selling on to someone else in a couple of years, but potentially more as a long term move into the UK telco market."

Leslie Bunder continued speculation on France Telecom's moves on Freeserve, "and given that France Telecom now owns Freeserve and also Orange, might we be seeing some interesting synergy between these two over the coming months?"

David Cabrera shed some light on France Telecom's strategy, emailing, "France Telecom also own Orange. Their intention is to make Orange World a significant global internet player (see current issue of Marketing Week/www.mad.co.uk)

Freeserve and Wanadoo as brands will require a lot of investment and major brand re-engineering if they are ever to become global players. Orange on the other hand has a brand personality that can easily work across the globe hence France Telecom deciding to rebrand it's various mobile networks in Europe and South East Asia as Orange. Therefore is there a plan to merge the operational resources of Wanadoo, Freeserve and Orange World in the short term before, in the longer term, dropping the Wanadoo and Freeserve brands and then channelling all content, marketing and distribution resources into Orange World. Could make sense with the arrival of GPRS next year and G3 in 2002/3".

Freelance Contracts

Making sure your legal i's and t's are crossed is particularly important when using freelance staff. Michelle Green asked for help on finding a standard contract, "We are going to be commissioning our first regular freelance web contributor. I thought surely there must be a fairly standard set of terms around for this sort of thing. But no, I've searched on the web but the only contracts I can find are book publishing contracts, mostly complex things involving revenue share. Any pointers?"

Alex Chapman suggested, "We sell them online for £75 plus VAT (blatant plug I know - but you did ask ;-)) http://www.briffa.com

This is our general site but we are also due to launch a couple of others soon with more focussed information, contracts and advice notes.

http://www.gameslaw.com for the computer games industry and
http://www.justadlaw.com to look after online advertisers and the like."

Val Stevenson added, "Try New Media Knowledge (part of the European AAPT programme): http://www.nmk.co.uk"

LINKS OF NOTE:
A quick round up of interesting, funny, useful and other links gleaned from the uk-netmarketing list, office gossip and other nefarious sources...we take no responsibility should you chose to click...basically, it's not our fault. Enjoy:

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