Mr Blow

11: Global Marketing Management: PLANNING AND ORGANIZATION

CHAPTER OUTLINE

Global Perspective: GLOBAL GATEWAYS

With their domestic market crowded with competitors, Yahoo!, Lycos, America Online (AOL), and others are rushing to establish their brands in Europe, Asia, and Latin America before local competitors can create dominant franchises of their own.

Recently, Lycos Europe, a joint venture between Lycos Inc. and Germany’s Bertelsmann AG, had its initial public offering on Germany’s Neuer Markt. Many more such offerings are expected, because U.S. Web executives and investors believe that the Internet will continue to grow faster abroad than at home. The U.S. share of Internet users fell from 42 percent in 1997 to 15 percent in 2008.

The battle has been hottest in Europe among the portals that serve as starting points for Web surfers looking for news, shopping, and search services. Yahoo! and Lycos each operates about two dozen foreign portals, most with native-language news, shopping links, and other content custom tailored to the local population. Lycos’s German site features tips on brewing beer at home and a program for calculating auto speeding fines. Yahoo!’s Singapore site offers real-time information on haze and smog in Southeast Asia. AOL has about a dozen international ventures, and Excite, the portal arm of At Home Corporation, has nine international partners.

The top U.S. players face tough homegrown competitors, who often have a better sense of local culture and Internet styles. In many countries, the dominant telephone companies offer portals, giving them a big leg up because customers are automatically sent to their home pages when they log on. Germany’s leading portal, T-Online, is run by Deutsche Telekom. In France, No. 1 Wanadoo is operated by France Telecom.

The U.S. portals risk being viewed as digital colonists trying to flex their muscles around the world, according to industry analysts. Many advise that American companies hoping to...