German Marketeers to Focus on Net

1&1 Aktiengesellschaft & Co. KgaA, the German company that marketed IT trade show CeBit ’99, has decided to delve further into its new focus on Internet services following the success of its most recent marketing efforts.

“Now that a market share in the mass market is up for grabs, we must be there,” said board chairman Ralph Dommermuth.

After a few months, 1 & 1 has already shown results, with more than 150,000 customers using the company’s Internet services. The board credits low costs, easy-to-use technology and added value as critical factors to its rising status.

“The rapid growth of our client base shows that we have mastered the rules of the online game,” added Dommermuth.

1 & 1 saw its sales grow by 27.6 percent in the 1998 financial year, reaching DEM 172.9 million(US$ 95 million) and realizing a profit of DEM 8 million (US$4.39 million). The issue price of their shares one year ago was 40.90 euros (US$ 42.83) and at the end of 1998 it had already reached 84.87 euros (US$ 88.89). By May 1999 it was 115 euros (US$ 120.45).

The results gave a green light to the new Internet and marketing programs. The Internet value-added program was revamped and redistributed across five areas of business, covering IT/ telecoms, marketing, customer care, Internet providing, online marketing and Internet participation.

“This provides our investors with a new and more transparent structure and our growth potential is easier to see,” said Dommermuth. “In addition to the Internet business our marketing services will also be an important part of the company’s base.”

At CeBIT, 1 & 1’s Software Center for SMEs and at its Internet Park, there were special SME shows that are now, one year later, firmly established.

The Internet services and the customer care segments play a key role in the company’s ambitious plans for the future. The company expects growth of around 50 percent above DEM 50 million (US$ 27.5 million) for the customer care sector. Internet providing will grow by more than 200 percent to DEM 67 million (US$ 81.7 million), whereas on line marketing is expected to quadruple to over DEM 20 million (US$ 11 million).

When the figures are topped up by participation in new successful Internet firms, the company expects to conclude its 1999 financial year with sales of around DEM 280 million (US$ 153.85 million).