Saturday November 25 12:28 AM EST A Mini Yahoo By Bruno Giussani
(The Industry Standard)
There will be an unusual union in Paris this week. Yahoo, the quintessential Web company, will launch a service for customers of Minitel, a national computer system in France, which uses old-fashioned technology that was supposedly made obsolete by the Internet.
Yahoo has not yet announced the service, but it's set to begin quietly operating this week, making Yahoo the first top-tier international portal to create a site for Minitel. Initially, Yahoo will provide e-mail accounts for people who use Minitel terminals located in homes and offices across France. Later, it plans to introduce other content, such as news and online chats.
Yahoo's move is much more than another content deal. It counters widespread and inaccurate perceptions of Minitel as an antiquated system.
Ever since vivid graphics appeared on the Web six years ago, Minitel has been regarded as a technological relic. Its "dumb terminals" can present information only in text format. That means no charts, no photos and none of the cool graphics that have become mainstays of the Web.
But that is only half the story. Launched in 1982, Minitel was intended to replace phone books and to allow access to information services. It quickly grew into the world's first electronic marketplace. Thanks to Minitel, France is the only country in which both executives and farmers have been banking and transacting online for almost 20 years.
An estimated 25 million people - nearly half the French population - currently use the 9 million Minitel terminals to buy train tickets, check stock quotes, access news, send e-mail messages or enter chat rooms. All those activities generated more than $1.8 billion in revenues last year.
A key attribute of Minitel is its billing scheme. Users sign in at the various terminals and pay for the time they use the system at rates up to $20 per hour. In most cases, the invoice comes along with a person's phone bill - and France Telecom (NYSE:FTE - news) takes a lofty commission as the collector.
The prevalence of Minitel gives French people a way to conduct their business online and has slowed Internet adoption there. On the other hand, the network has created a high level of online literacy in France, in turn creating opportunities for Internet companies.
Yahoo, for example, generates more revenue from classified advertising on its regular Web site in France than it does in many other countries. "People here have been familiar with online classifieds for years," says Philippe Guillanton, managing director of Yahoo France.
So, why did Yahoo wait until now to create a customized site that is accessible from Minitel terminals? Guillanton says at first the company didn't want to tinker with its user interface, which is an important part of the company's success. But that taboo was removed when Yahoo recently created a modified site for people using mobile phones to access the Web. Once that happened, the company decided to create another customized site for Minitel. Like other Minitel sites, Yahoo will collect usage fees via France Telecom.
Other prominent Internet companies may follow. Even if they don't, Yahoo already has validated the much-maligned Minitel. Minitel may use outdated technology, but it's an online service with a solid business model. That's more than most Internet companies can say.
--------------------------------------------------------------------- Bruno Giussani is the European editor of The Standard.