BT grabs portal space with Excite share deal
Telecoms giant invests $10 million in US search engine company.
BT has taken a 50 per cent share in the UK arm of internet search engine company Excite, signalling a move into the internet portal space.
The $10 million investment will help the telecoms giant generate online advertising and transaction revenues. From the search engine vendor's point of view, teaming with a local UK partner will help it extend its brand outside the US.
This was the first deal of its kind between a UK company and a leading US-owned portal.
John Swingewood, internet and multimedia director at BT, said: 'This demonstrates BT's commitment to the internet industry and underlines our ambition to help expand the market and improve our position in it. BT has already announced a number of industry alliances and will continue to seek out further strategic partnerships.'
He added that, while the telco had experience of internet access, it recognised that e-commerce and advertising offered alternative and more lucrative revenue streams.
BT will use the deal with Excite to promote e-commerce activity and launch products through the Excite portal.
Excite also unveiled last week the immediate availability of Excite Click, a pay-as-you-go dial-up Net access service. BT recently announced an identical service with search directory Yahoo. There is no registration or monthly subscription fee, with users just paying a penny per minute above the local call charge.
Swingewood shrugged off any possible conflict between Yahoo and Excite following the Click deal. 'We don't regard Excite as a search engine.
We will continue to enter other distribution contracts,' he added.
Excite UK will join the growing BT portfolio of consumer internet services, which includes LineOne, BT Click and BT Internet. Swinge-wood said BT would continue to market all the brands and that they would collaborate in relevant areas - for instance, LineOne and Excite on content.
For Excite, the investment from BT will allow it to extend its brand internationally, while giving it increased resources to extend its personalisation features to consumers and advertisers.
FIBRE-OPTIC TO EASE THE TRAFFIC
BT last week purchased advanced fibre-optic network equipment from Ericsson, as it bolstered its network to cope with the ongoing voice and data explosion.
Financial details were not released, but a BT representative described the deal as 'significant'.
BT has ordered add/drop multiplexing, cross-connect and network management systems, as well as emerging dense wavelength division multiplexing (DWDM) technology.
Ericsson's DWDM technology will be used on BT's international connections with Europe and the US, where the growth of data and internet traffic is strongest.
'DWDM helps solve bottlenecks on international routes, caused by more and more datacomms traffic,' said Carl-Magnus Hallberg, DWDM programme director at Ericsson.
In the UK, BT has two DWDM pilots running - one between Belfast and Carlisle using technology from Lucent Technologies, and one between Edinburgh and Newcastle using Ericsson technology.
In May, BT earmarked #800 million to upgrade its UK network using optical fibre technology, including DWDM. The vendor has about 3.5 million kilometres of installed optical fibre that is DWDM-ready. DWDM is widely used in the US to expand the capacity of existing fibre lines to carry almost unlimited bandwidth. DWDM splits the light passing through existing optical fibre into individual wavelengths and uses each as a separate channel.