BUSINESSWEEK ONLINE : FEBRUARY 19, 2001 ISSUE
BUSINESSWEEK E.BIZ -- EUROPEAN COVER STORY Surfing by Boob Tube (int'l edition) Joseph Haddad settles comfortably into the white leather couch in his office just outside Paris, picks up a wireless keyboard, and starts typing. A telephone line connecting to the Internet crackles, and soon he's clicking through the pages of Amazon.com Inc. (AMZN) But there's no computer in sight. Haddad is linked to the Web via a thin black box sitting by his television. ''This is the future,'' he declares. At least that's what Haddad is betting. As CEO of Netgem, the 41-year-old Haddad has a big stake in seeing that cybersurfers get online using TVs rather than computers. Netgem produces a browser and other software that links set-top boxes to the Net and reformats Web pages to fit TV screens, so Net-loving couch potatoes can read them while relaxing on a sofa two or three meters away. Without software such as Netgem's, Web pages get cut off or look out of focus when viewed on a TV. That's one reason many interactive television efforts so far have focused on a limited menu of services that doesn't require linking to the wider Web. The other reason is that broadcasters don't want subscribers wandering freely through cyberspace. I-TV heavyweights British Sky Broadcasting Group PLC (BSY) and France's Canal+, for example, want to keep control of their subscribers, so they aren't buying Netgem's browser. If viewers stay inside their proprietary systems, broadcasters can grab part of any sales of food, clothing, or services. Once subscribers get out onto the Web, the broadcasters won't be able to demand a piece of the pie. ''We prefer to keep our relationship with our customers rather than launch them onto the Internet,'' says Tony Ball, CEO of BSkyB. That leaves Haddad counting on I-TV upstarts. He has won over smaller players such as Italy's Freedomland and Internet Ireland. And last year, five-year-old Netgem got a breakthrough contract with BSkyB rival ONdigital. Netgem ''was the first product we saw that made Net surfing on the television as attractive as on the PC,'' says ONdigital's technology director, Simon Dore. ONdigital signed up 20,000 viewers for its Web service using Netgem's browser within two weeks of its launch. That deal helped Netgem nearly quintuple sales last year, to $103 million. Netgem's initial public offering last April raised $65 million, and shares now trade at $20, about 20% over the offering price. Haddad has always had an eye for what looks good on a screen. As a student at France's elite Ecole Polytechnique, Haddad used an early version of Lotus 1-2-3. He liked the spreadsheet but not its graphical interface--the way it shows up on screen. So he made a better interface--and soon sold it to Lotus Development Corp. But the entrepreneur in him got restless, so he started looking for another idea for a business. He turned his eye toward the growing world of the Internet and soon settled on a project for linking televisions to the Web. What better way to get online, he thought, than via the TV set that sits in nearly every household in the developed world? ''It's inevitable that someday, TV will become one of the most important ways to reach the Internet,'' Haddad says. Until big players such as BSkyB change their tune, he may have a rough time fulfilling that prophecy. But in the meantime, he's ready to launch their viewers onto the Net--straight from their living room couches. By William Echikson _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Europe's I-TV Advantage (int'l edition) TABLE: I Want My I-TV (int'l edition) ONLINE EXTRA: Q&A: BSkyB's Tony Ball: "We Will Compete with the PC Screen ONLINE EXTRA: Q&A: CanalSatellite's Bruno Delecour: "Our Digital Customers Spend Much More" I-TV's Software Upstart (int'l edition) ONLINE EXTRA: Q&A: Andre Kudelski: "Our Independence Is Our Strongest Force" Surfing by Boob Tube (int'l edition) ONLINE EXTRA: Q&A: Netgem's Joseph Haddad: "The TV Is a Simple Multimedia Device" INTERACT E-Mail to Business Week Online

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