France Telecom Makes Surprise Purchase of Alapage

Moving to solidify its position as France’s leading Internet company,
France Telecom this week made the unexpected acquisition of Alapage, a successful online vendor of
Francophone cultural products.

France Telecom purchased the company for an undisclosed sum through its
multimedia subsidiary.

“Alapage will allow France Telecom to offer editorial and bibliographical information to Net users and will give it a successful platform from which to handle online sales and distribution via e-commerce,” an FT spokesperson
said. Alapage also brings 10 years of know-how in database-management
systems, she added.

A star among French e-merchants, Alapage.com averages more than 600,000 site
visits and 14,000 orders per month from its 700,000-item catalog, including
books, magazine subscriptions, multimedia, video games and show tickets.
Some 800,000 sound clips allow customers to sample tracks before buying
music CDs and LPs.

With 1600 affiliated e-commerce sites to date, including major French
museums, Alapage expects this year’s sales of FF20 million (U.S. $3.3 million), up more than 450 percent from last year’s FF3.5 million (U.S $600,000) mark.

Some 40 percent of orders originate outside France, accounting for 60 percent of sales,
said Beatrice Serfass, a spokesperson at Alapage.
The company plans to add toys to the catalog via its recently purchased
TeachandToys site.

Before this week’s merger, FT’s venture-capital subsidiary, Innovacom,
already owned a 15 percent stake in Alapage, which now becomes a wholly owned
subsidiary of France Telecom Multimedia. Created as a Minitel company by
Patrick Magnard in 1987, Alapage launched its site in 1996 and later became
a pioneering partner with FT’s Voilà.fr portal. “We decided to join a big group in order to benefit from increased financial
support for expansion and from a dominant position on the market,” she said.
The company will reportedly retain its independent management and brand
name.

France Telecom estimates that its Internet-related sales reached 380 million
euros (U.S. $362 million) in the first half of this year, up from 140 million euros
(U.S. $133 million) in the first six months of 1998.