Penetrate the European Internet Markets Now or be Shut Out, Roland Berger Study Warns 5/6/00 Companies seeking to expand into the European Internet space need to know that the business models that worked in the USA will not necessarily work in Europe. This is one of the key findings from a recent report by international strategy consultants Roland Berger. The study presents the results of a survey of more than 80 leading Internet companies based in the USA and in 15 European countries. According to Eric Kintz, head of Roland Berger's e-commerce practice in the US, "The European Internet space has radically transformed itself in the past six months and is now operating on Internet Standard Time. Europe is adding its own flavour to the American model that made Silicon Valley successful: venture capital, IPOs and an appetite for risk." Roland Berger has identified several key success factors for "going to Europe," including: Expand in Waves: The traditional country-by-country approach is a recipe for failure. Internet companies must penetrate Europe in waves, beginning with concurrently establishing a base in the U.K., Germany and France, as 63% of the survey respondents are doing now or within the next six months. That sets up a second wave of expansion into Italy, the Netherlands, Spain and Switzerland, as 52% are planning to do within the next 12 months. Go Multi-channel: Given Europe's lead over the USA in the development of wireless and interactive digital TV, companies must embrace a multi-channel strategy and adapt to the dominant channel in each country rather than limiting themselves to the PC. 42% of European respondents (vs. 17% of American) estimate that more than 10% of their revenues will be generated through wireless devices. When in Rome: With 13 different languages in Western Europe, numerous regulatory systems and business styles, the successful company must gain a thorough understanding of local purchasing patterns in each country that will be far more relevant than mere language translation. Eat or Be Eaten: The study shows the growing importance of acquisitions in Europe: 65% of the respondents foresee using mergers and acquisitions when expanding into new countries. In addition, the European Internet Space is rapidly consolidating, particularly within online financial services and online auctions. Expanding on these points, Mr. Kintz noted that "Europe is a far more complex environment than the U.S., with multiple languages, cultures, Internet development stages and Internet access channels. The winners will be those who can quickly achieve scale on a pan-European basis, while adapting to local needs and specificity."