BUSINESSWEEK ONLINE : MAY 1, 2000 ISSUE
SPECIAL REPORT Europe Swoons for Voice-on-the-Net Cyril Dupas, speaking from his call center in Paris, describes the moment of surprise. It comes when French Web surfers click on an icon on the Capitol.fr page. Suddenly, without cutting off the computer and dialing the phone, they find themselves speaking to Dupas. ''Most of them are new to the Internet, and it takes them a moment to collect themselves and speak to the computer,'' he says. Talk about getting cozy with customers. Dupas, who works for Capitol, a new French online brokerage, uses Internet telephony to guide prospects, sometimes click by click, through the Web site. He shows them the portfolio information at hand and soothes concerns about hackers intercepting online transactions. Dozens of times a day, he and his 11 colleagues in the call center bring the deal to a close, leading new Netizens to open accounts at Capitol. So far, the sole French brokerage using Internet telephony has more than met its goals for signing up new customers. While its current 4,000 clients is tiny by American standards, the goal was to land 7,000 or 8,000 by the end of the year. ''Now we're expecting twice as many,'' says company President Dominique Velter. MARKETING TOOL. While Europe is a year or two behind the U.S. when it comes to exploiting the Internet, voice on the Net holds true appeal for the Continent. For starters, it promises relief from phone bills, which are on average 40% higher in Europe than the U.S. ''For now, price is the key selling point,'' says Stefan Krook, founder and CEO of Sweden's Glocalnet, one of Europe's Net telephony pioneers. But in the coming year, many European companies like Capitol are likely to hitch the computer to the phone and employ it as a marketing tool. For Velter, voice-on-the-Net offered a solution to a thorny dilemma. As a marketing director at institutional brokerage Viel & Cie, she persuaded the board a year and a half ago to let her start up an online brokerage to make the Paris firm's first push into the French consumer market. Trouble was, her target population was one of Europe's slowest in embracing the Net, with only 15% of the population online even today. Worse, the French have long shied away from equity investments, seeing them as schemes that enrich insiders while fleecing novices. Only 12% of French adults own stocks, compared with about 50% of Americans. Velter had to reach customers through machines they didn't understand to sell them products they feared. ''We had those two things going against us,'' she admits. Enter Olivier Hersant. The former Cisco Systems Inc. executive had a Net telephony startup, called NetCentrix, based in the French city of Caen. Looking for financing, Hersant was eager to come up with a corporate customer. His ''talking computer'' technology appealed to Velter because it would help her market Capitol. Better yet, it could be put into place quickly. She counts on her fingers. ''We were up and running in a matter of months,'' she says. ''And when we move to bigger offices, the system just moves with us.'' She won't disclose the cost of the system or detail savings, but she says that the marketing advantages far outweigh the expenses. IN A SNAP. Now that she has linked Capitol's computers to the phones, Velter is planning to make a host of financial information available to customers on their cellular telephones. Capitol is testing chat programs that will permit users to scan their portfolios while talking with a broker--all on their mobile phones. With time, she sees Capitol barging straight into the mobile-phone business, too. The plan is simply to buy wireless capacity from an established carrier and provide Capitol's own telephone service to customers. ''Offering phone service will be a great way to keep customers loyal,'' she figures. For now, she's concentrating far more on marketing than on the savings from cheap phone calls. But those savings will become more important if Capitol spreads, as planned, across Europe in the coming two years. If voice-on-the-Net works as promised at Capitol, the technology could be used in the trading operations of its parent company, $310 million Viel & Cie. There, telephone bills account for more than 10% of total costs, second only to salaries. And traders should take to the new technology in a snap. Unlike Capitol's customers, they're old hands on computers--and they even know a thing or two about stocks. By Stephen Baker in Paris _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The Talking Internet TABLE: Birth of a New Communications Network CHART: Booming Voice on the Net TABLE: Telephones on Steroids Yahoo! Look Who's Yakking Away Europe Swoons for Voice-on-the-Net Where the Money Will Be CHART: Investing in Voice on the Net TABLE: Stock Stars INTERACT E-Mail to Business Week Online

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