BUSINESSWEEK ONLINE: JUNE 12, 2000 ISSUE

INTERNATIONAL -- EUROPEAN COVER STORY


Bruno Bonnell (int'l edition)

An avid marathon runner, Bruno Bonnell knows the value of endurance. Seventeen years ago, Bonnell and a college buddy scraped together $10,000 to start Infogrames Entertainment, a software company in their hometown of Lyons, France. Today it's Europe's biggest electronic games publisher and No. 2 worldwide. Infogrames expects to post $1 billion in sales this year, fueled by such bestsellers as fantasy-adventure game Alone in the Dark and such hot new offerings as Ronaldo, a game where players assume the role of the Brazilian soccer star. With imagination and savvy marketing, the 42-year-old Bonnell has grabbed an impressive share of a global industry whose $20 billion in revenues now rival Hollywood's.

Bonnell isn't slowing his pace. To capitalize on the spread of digital television, he's teaming up with leading European TV companies to offer interactive games on TV. He's also investing $200 million to develop game-playing sites on the Internet. Making a push across the Atlantic, he has just acquired New York City-based GT Interactive Software, one of the biggest U.S. game publishers. And he's still shopping, with an estimated $500 million at his disposal. Among the properties he's considering: the games division of troubled toymaker Mattel Inc. ''This industry is consolidating fast, and everyone has to wonder about being either prey or hunter,'' Bonnell says. ''We will not be prey.''

GLOBAL FUN. With his shaved head and impish grin, Bonnell is clearly having fun as he pursues his global ambitions. At press conferences, he likes to entertain journalists with dance moves. His aides still talk about a 1998 sales meeting where he donned a leotard and performed a trapeze act before several hundred employees. Traveling constantly between Infogrames' Lyons headquarters and its fast-growing operations in California, Bonnell relaxes by trying out new games with his three teenagers and keeps up his energy by jogging.

He'll need plenty of stamina for the road ahead. As a new generation of game consoles, such as Sony Corp.'s PlayStation 2, come on the market this year, he and other publishers are under pressure to develop games with snazzier audiovisual effects. Developing a new game can cost $4 million or more. At the same time, publishers such as Britain's Eidos PLC have seen their profits plunge as customers anticipating snazzier audiovisual effects have quit buying once-popular titles. Infogrames--offering a wider variety of games than many publishers--is so far riding out the turmoil, with profits up 81% in the second half of 1999, to $18 million. But it has been hit hard by falling tech-stock prices, with its shares dropping more than 21% this year.

Bonnell also has to prove his mettle in the U.S., the world's biggest games market, where Infogrames remains well behind industry leader Electronic Arts and its sales of more than $1.4 billion. ''To be profitable in this market, you have to have a few big hits. Infogrames has had tremendous success in Europe, but they haven't had any real hits here yet,'' says Kevin Hause, a games-industry analyst at International Data Corp.

HE'S GAME. But Bonnell stands a chance; he's already come a long way. In 1982, after working as a computer salesman, he teamed up with a former college classmate from Paris, Christophe Sapet, to write a how-to book for novice computer users. Sales of the book generated the $10,000 with which they started Infogrames in 1983. Their first game, Autoroute, featured a frog trying to cross a busy highway. In 1984, they scored a huge hit with Alone in the Dark, a game targeted at teenagers that has sold 3 million copies to date.

Bonnell has ridden out several boom-bust cycles in the industry by focusing on marketing to expand his customer base. ''Our business has grown from a niche market for young boys and teenagers to a much broader audience, with many more adults playing,'' he says. ''People will [soon] play games as simply as they watch TV.''

Most homes today lack the broadband Internet access that's necessary to support high-end interactive games. That will change over the next decade. Infogrames is now developing Web sites tailored to its current titles--so that, for example, someone could download a new model of sports car for use in an Infogrames racing game.

More challenges lie ahead as game-playing moves onto the Internet. For Bonnell, the game is only beginning.



Anne Asensio (int'l edition)

She made such a splash in Europe with her auto designs that General Motors Corp. has just hired her away. Anne Asensio, 37, is the woman behind Renault's Megane Scenic compact minivan. The rounded, high-topped model was voted European Car of the Year in 1997 by the Continent's car journalists, and it has been a huge moneymaker for the French company. Asensio designed the concept car that became the top-selling Megane Scenic back in 1990. She was just starting work on the next generation of Meganes when she got the call from GM.

Asensio will inject European style and create new, distinctive identities for GM's Chevrolet, Buick, Saturn, Oldsmobile, Cadillac, and GMC models. ''I'm ready for a change, for the adventure of it,'' says Asensio, who is eager to try out her design talents on bigger American vehicles.

GM has had its eye on Asensio for years. The daughter of a fashion designer and an engineer, she studied in the mid-1980s at the Center for Creative Studies in Detroit, which has a prominent automotive design program. She was courted by GM in 1987, but Asensio had already promised to work for Renault. There she rose rapidly. Indeed, before her move, she was tipped to become the successor of Renault Chief Designer Patrick Le Quement. Watch for her touch in U.S. showrooms.



John de Mol (int'l edition)

John de Mol doesn't fit the image of a media mogul. He works out of a pristine white office building in the quiet Dutch city of Hilversum. He dresses in sober business suits. And even as his fame grows, de Mol remains uncomfortable giving interviews. ''John hates the limelight,'' says Thomas Notermans, a close adviser.

But the 45-year-old Dutchman, founder and chairman of the Continent's largest TV production company, Endemol Entertainment Holding, is proving that a European can challenge America's giant studios. Over the past two decades, Endemol has opened subsidiaries in 15 countries, taking individual programs and adapting them to suit Europe's varied national tastes.

Now de Mol is crossing the Atlantic with his most popular show. Big Brother sets up a group of strangers to live together and films their ensuing conflicts. The show will premiere on July 6 in the U.S. on CBS--one of the first times a European TV program has been picked up by an American broadcaster. ''Big Brother comes very close to the audience because what happens there is real. If somebody laughs, he or she is really happy and if somebody cries, the tears are real,'' says de Mol.

Spain's Telefonica agreed to pay $5.4 billion to buy his company in March and will likely name de Mol top creative executive for its media and Internet properties. He'll stay behind the scenes. ''The front of the stage is for other people,'' he says. ''I like to eat a hamburger at McDonald's without being pointed at.'' Now this quiet man will bring a little more European flavor to American television.



Stefan Röver (int'l edition)

Stefan Röver returned to Germany after a few years in Silicon Valley a changed person. A common tale these days perhaps, but Röver was only 14 at the time and had just finished eighth grade. Instead of preparing for a career at one of the country's conglomerates, such as Siemens, Röver did something that was very un-German in 1982: He founded his own software company. ''Back then it wasn't the thing to do,'' says Röver, now 35.

Röver has stayed ahead of the curve ever since. That first entrepreneurial step led him to establish Internet software developer Brokat Infosystems in 1994 with four partners. It was a risky step, since Röver and his partners had to come up with their own $25,000 in startup capital. But it has paid off in spades. Röver now oversees an industry leader in providing software solutions for e-commerce and electronic financial services. Brokat's client list includes the likes of America Online and Deutsche Bank. Since listing on Frankfurt's Neuer Markt in 1998, the company's stock has soared nearly fivefold, making Röver a millionaire.

Röver's ambitions don't stop there. He plans to turn Brokat's authentication software into the industry standard for secure e-commerce transactions. ''We want to make Brokat one of the household names in the software world,'' he declares. If he has his way, Germany may have its own Microsoft.



ONLINE ORIGINAL: "'M-Commerce' Will Be Bigger Than the Internet"

Stefan Röver, 35, is CEO and co-founder of German software company Brokat Infosystems. Brokat, which specializes in e-commerce solutions, was started in 1994 with a $25,000 investment and is now one of the blue chips on Germany's Neuer Markt tech-stock exchange with a market cap of $1.75 billion. The company has yet to turn a profit, but sales more than doubled last year to about $25 million. With a customer list that includes the likes of AOL and Deutsche Bank, Brokat appears to be a force. BW Germany Correspondent Matthew Karnitschnig spoke with Röver at Brokat headquarters in Stuttgart. Here are edited excerpts of their conversation:

Q: What's the biggest challenge Brokat faces over the next few years?
A:
To manage the transition toward "m-commerce" [e-commerce done via mobile devices] I think this will be even bigger than the Internet. You are going to be able to reach a much larger group of people and can reach them in any context. We're focusing on transforming phones into digital passports. Mobile authentication of transactions are what we are concentrating on. Phones are very good devices to address the issues of "who am I dealing with" and "are they allowed to be doing this?"

Q: One feature of m-commerce is the use of voice commands. Why do you think users will be more inclined to speak commands into their phones than to tap them into a computer?
A:
By making services more conversational, you give people more flexibility in what they are doing.

Q: You have spent a lot time in the U.S. including your early teenage years in Silicon Valley. Why did you decide to start a software company in Germany, where the info tech sector is much less developed than in the U.S.?
A:
I thought Germany presented a better opportunity. In the U.S. I would have been just one of many. Another thing is that workers are more loyal in Germany and don't switch jobs often.

Q: What's the biggest danger Brokat faces in an m-commerce world?
A:
The biggest danger is that we could lose ourselves in a second-tier role and not get out anymore. We need to continue to grow very, very quickly.

Q: What's your ultimate goal?
A:
We want to make Brokat one of the household names in the software world.

Q: What's the secret to your success thus far?
A:
A willingness to think big. Most people don't like to think big.



Marc Lassus (int'l edition)

Marc Lassus doesn't take ''no'' for an answer. In the 1980s, his engineering team at France's Thomson Semiconductors developed a prototype ''smart card'' with a microchip to store data and record transactions. But he couldn't persuade his bosses to manufacture it. So in 1988, with Thomson's blessing, he started his own company, Gemplus. Today, it's the world's biggest manufacturer of smart chips, used in everything from cell phones to credit cards. Sales topped $817 million last year.

Lassus, 61, is now developing chips for computers and Web-enabled cell phones that will carry out e-commerce transactions and prevent fraud. To finance his ambitions, Lassus recently snared a $500 million investment from the Texas Pacific Group, a private equity firm.

His challenge is to keep smart chips from becoming a low-margin commodity. ''The key is to develop value-added products,'' he says. ''And if we don't do it, somebody else will.'' Lassus should know: After all, Gemplus got its start by grabbing an opportunity that Thomson passed up.



Kari Stefansson (int'l edition)

Kari Stefansson, the outspoken president and CEO of deCode Genetics Inc., has turned his native Iceland into a massive science lab to discover the genetic cause of diseases. Last year, Iceland's government gave his biotech outfit an exclusive 12-year license to create and manage a national database of the country's medical records.

Stefansson, a 51-year-old neurologist, believes deCode will be able to determine how diseases such as Alzheimer's are passed from one generation to the next. He'll do that by cross-referencing medical data with DNA samples and geneological records of Iceland's population. Iceland boasts the world's most homogeneous gene pool because there has been little immigration since the country was settled 1,000 years ago. ''Genetic information will give us the chance to alter our lifestyles to prevent disease,'' Stefansson says. Swiss drugmaker Roche Holdings Ltd. has granted deCode a $200 million contract to investigate the genetic basis of 12 diseases.

A former Harvard University professor, Stefansson has traced his roots to the ninth-century Viking poet Egill Skallagrimsson. Like his ancestor, Stefansson is known for his take-no-prisoners style and love of poetry. Fiercely competitive, he loves to debate literature and play basketball. But between solving genetic mysteries and preparing for deCode's upcoming initial public offering, free time is one thing Stefansson doesn't have.



Ferran Adria (int'l edition)

When French food-lovers want something new, they flock south to Spain and sample Ferran Adria's creations. ''He's doing the most exciting things in our profession,'' says Paul Bocuse, the legendary chef.

Adria, 37, has built a reputation as one of Europe's most successful--and outrageous--chefs. At his Barcelona restaurant, El Bulli, rather than using tomatoes to make gazpacho, Adria freezes them into lollipops. Pasta is made from fresh mango. ''I'm not confined by French techniques,'' Adria says.

El Bulli is open only six months a year: Adria devotes the fall and winter to experimenting with new dishes. The average bill comes to about $100, reasonable for a three-star meal. ''You don't do this just for money,'' says his business partner Julio Solar. Maybe--but El Bulli is packed every night.



Tim Jackson (int'l edition)

No one can accuse London native Tim Jackson, 35, of being afraid of change. In the 14 years since he graduated from Oxford, he has transformed himself from journalist to Netrepreneur to venture capitalist. His latest move came in March, when he became a managing director of Carlyle Internet Partners' $730 million Net fund--among the largest financers of Net startups in Europe.

Jackson paid his dues to get where he is today. After graduation, he became a business and technology journalist, eventually moving to the Financial Times to write a weekly column about the Web. That took him to Silicon Valley, where he caught the entrepreneurial bug. ''It got to the stage where I no longer wanted to be a spectator but a participant,'' Jackson recalls.

So, in the spring of 1997, he used his life savings to start QXL.com, an online auctioneer. Business was slow at first and financing tough to come by. Jackson almost shut down in Dec., 1997, but then the online auction site took off. The business did so well that QXL's IPO on Nasdaq last fall valued the company at $350 million.

Jackson doesn't want to run the company day to day anymore, however. He's brought in managers from America Online and scaled his role back to ''special advisor.'' Now, through the Carlyle fund, he wants to help the next wave of Netrepreneurs. He also wants to spend more time with his wife and his four young children. His 17.5% stake in QXL, worth $180 million at current prices, ought to help.



Tom Ford (int'l edition)

Tom Ford's hip-hugging, glam-rock makeover at Italian design group Gucci has catapulted the 37-year-old Texan to celebrity status. Widely viewed as Europe's No. 1 designer, Ford took over at Gucci Group in 1993 and transformed a bankrupt leather and shoes house into the world's hottest ready-to-wear brand name. Last year, Gucci broke $1.2 billion in sales, far above the $203 million recorded in 1992.

Now fashion mavens and analysts are waiting to see if Ford can author another head-to-toe remake at Yves Saint Laurent's decidedly faded ready-to-wear business. Gucci acquired the Parisian house last year while fighting a hostile takeover by French luxury goods kingpin Bernard Arnault. Ford aims to reinvent the French group's ready-to-wear image completely for the year 2001. ''He starts designing a new collection by moving away from whatever has become boring,'' says one Gucci insider. Ford was the first to break with the minimalist style of the 1990s by remaking 1970s fashion with a happy, hedonistic twist. The fashion and retail worlds are eagerly waiting to see what trail he'll blaze at YSL.



Mike Lynch (int'l edition)

The recent downturn in tech stocks hasn't bothered Mike Lynch, the 34-year-old chief executive officer of British software company Autonomy Corp. Founded in 1994, the company raised $275 million in May through a secondary-share offering on Nasdaq. The company's shares already traded on Brussels-based Easdaq, where their value has spiked--from $150 million in 1998 to more than $5 billion today.

Autonomy's track record has helped it to escape market jitters. The company's roster of 160 customers ranges from British Aerospace to Merrill Lynch & Co. And Autonomy's software is unique: Lynch, a mathematician with a PhD, developed it while at Cambridge University. It uses mathematical algorithms to scan text and sort the information by context and meaning. No other software can do it like Autonomy's, industry experts say.

Lynch has come a long way since he borrowed $3,000 from an eccentric he met in a pub to start his company. But Britain's first Net billionaire still comes across as low key. When not in Autonomy's Cambridge headquarters or checking out its Silicon Valley operations, Lynch likes to hang out at his home in the countryside--and play with his otter hound, Gromit.



Mathias Entenmann (int'l edition)

If there's such a thing as The Right Stuff for New Economy entrepreneurs, Paybox.net founder and CEO Mathias Entenmann has it. In little more than a year, the 33-year-old former captain of Germany's national rugby team has turned his vision of mobile commerce into reality. The concept: A customer decides to buy something, but instead of giving a credit card, gives out his cell-phone number. Merchants--either in stores or online--dial up the Paybox.net line or Web site and enter the customer's mobile-phone number and the amount to be charged. The customer's phone rings and an electronic voice asks for a PIN to approve the transaction. The merchant then receives confirmation that the money has been debited from the customer's bank account.

In the U.S., where everyone has a wallet full of credit cards, this innovation wouldn't be needed. But Germans don't like credit cards. They love their mobile phones, though, and seem eager to use their handsets to buy stuff when they don't have the cash. Entenmann, who worked once as a telecom specialist for Arthur D. Little Inc., wants to expand his idea to encompass everything from taxi fares to Internet commerce.

Paybox.net, which began operating in May, has already seduced some of Germany's biggest retailers and shown its promise in the world of e-tailing. Karstadt, the department-store chain, offers Paybox.net payments on its Web site, as does the popular sex-shop operator Beate Uhse. Anyone with a mobile phone, no matter how old or new, can use the service. ''The independence of our system is what's unique,'' says Entenmann.

Still, Paybox.net's future could be rocky. Mobile-phone giants Nokia, Ericsson, and Motorola also see the potential for commerce based on the mobile phone, and agreed in April to work on a joint standard. But Entenmann argues that by the time the industry has its system running, Paybox.net will have established itself as a reliable service, with a base of 100,000 customers and 1,000 merchants by yearend. ''There's a big pot of gold at the end of the rainbow,'' Entenmann says, grinning. And it's just a phone call away.





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Empire Builders
Innovators
Bruno Bonnell
Anne Asensio
John De Mol
Stefan Rover
+ Q&A
Marc Lassus
Kari Stefansson
Ferran Adria
Tim Jackson
Tom Ford
Mike Lynch
Mathias Entenmann
Agenda Setters
Dealmakers
Turnaround Artists
Challengers


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