Battle For Eyeballs Rages Between European Portals, IDC Says

COPENHAGEN — OCTOBER 13, 2000 — Consumer portals are fighting their battle for eyeballs from more angles and against more competitors than in most other markets in Western Europe. Over the last couple years, the European portal markets have become extremely competitive, according to IDC.

Global portals such as Yahoo!, MSN, and Lycos have made serious marketing investments looking to secure market share in Europe expecting virgin soil to expand on. "However, there was already competition there," said Stefan Elmer, an analyst with IDC's European Internet research group. "Local players, many of which started in the same garage-like fashion as Yahoo!, have become well-know national brands, and these portals have been increasingly able to attract the attention of financial investors. In this way, they have secured their audiences through continuous development and stronger marketing."

Unlike the United States where small upstarts such as Yahoo! and AOL were able to establish significant brands before larger players realized they were losing out on a major opportunity, European IT, telecom, and media companies have had more time to contemplate their options. As a result, a number of strong players with Pan-European ambitions such as Deutsche Telekom (T-Online), Telefonica (Terra), and Spray have upped the ante in the region.

"There is still lots of room for change in Europe," Elmer said. In the next three to four years, IDC expects to see continuous consolidation in the European portal space as well as a number of less successful general portals specializing in specific market segments.

IDC's new report, European Consumer Portals – Attention Brokers in the New Economy (IDC #I05G), defines and characterizes the multifaceted portal concept.

Opportunities, threats, and future directions in the European portal market are outlined, and the numerous business models present in the market are segmented according to their competitive strengths and weaknesses. The key strategic areas for Internet portals are then identified and a number of effective approaches suggested. Finally, 10 of the most successful international and local portal players in Europe are profiled and their strategies reviewed in consistency with the previous chapters. This report is available for purchase from your local IDC office.

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