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Europe's answer to everything
Euro909.com (ENON-NASDAQ) is Europe's answer to the United States' Network Solutions -- the domain name registering giant. (By the way, NSOL trades at a market cap of US$3 billion versus ENON's waif-like market cap of US$80 million.)
A Danish holding company, Euro909.com operates as an Internet solutions integrator, Internet service provider, and a telecommunications and entertainment company. It's a one stop and shop Internet service company.
Here are some of the services Europe909. com does or will provide:
- Domain name registration. Euro909.com began registering domain names in 1996, becoming one of the largest domain name registrars in Europe. While the current focus is mainly on Scandinavian markets, Euro909.com plans to leverage its market share by expanding domain name registration throughout Europe.
- E-commerce. Euro909.com successfully launched its first e-commerce site with a CD music shop. In seeking to further penetrate the e-commerce market, ENON plans to implement an "Internet shopping mall" strategy. Though this has been successfully implemented in the United States, it is still a new concept in Europe. Already the existing CD music shop receives more than 15 million page impressions per week.
- Internet access and e-mail services. As an ISP, Euro909.com provides its customers access to the Internet and e-mail services. To guarantee the quality of the service, ENON established a relationship with MCI Worldcom (WCOM), through which it is able to either co-locate its web servers within WCOM facilities or utilize surplus server space on an as-needed basis to handle peak traffic and business needs.
Industry and competitors
Since 1993, Network Solutions (NSOL-NASDAQ) has been the only company in the world that has had the right to register the ".com," ".net" and ".org" domain names on the Internet.
This exclusive monopoly has been vigorously opposed by other organizations. Euro909.com is one of only 64 companies world-wide able to enter this important marketplace.
The vast majority of companies in Scandinavia and throughout Europe still need to register their corporate name online, and Euro909.com is positioned to ride the wave of this trend.
Up until recently the Scandinavian telecommunications and Internet markets were dominated by government-imposed monopolies.
The markets have subsequently been deregulated and, according to IDC research, Scandinavia now has the world's highest percentage of online users per capita and is one of the fastest-growing regions for Internet usage and domain name registration.
Euro909.com anticipates that an increasing number of smaller to mid-sized firms will be looking at Internet access and e-mail services as replacement options for local area networks.
It is estimated that most business and consumers in Europe are generally in the same position as their counterparts were in the United States 30 months ago.
If this is true, Euro909.com is situated to take advantage of the coming explosive use of Internet and dramatic need for Internet services in Denmark, Scandinavia and the rest of Europe.
Providing a one stop shop for a wide variety of Internet and communication products, this company has the potential to generate increasing and recurring revenue streams from its growing pool of corporate and consumer clients, as well as establish itself as one of the leading Information Age enterprises in all of Europe.
My recent trip to Europe was like stepping back four years in the United States. It was not until the Internet started generating significant revenue growth that investors starting nibbling on Internet stocks.
In 1996, the Internet generated about US$500 million in combined online sales. In 1997 that number spiked to US$3.5 billion -- an increase of +600%.
Last year, sales on the Internet grew to a staggering US$7.5 billion. The numbers fueled the Internet bull market that started in the summer of 1998.
Currently, there is no Internet bull market in Europe. But when the numbers start to come in -- verifying wide-spread use of the Internet -- you can bet the European Internet bull market will begin. And as a microcap investor, I recommend buying Euro909.com up to US$12 a share. At a market cap of US$80 million, ENON trades at a price-to-sales ratio of about 11. (That's on revenues of US$7.4 million.)
I consider ENON a long-term hold -- at least three years. If the Internet bull market takes root in Europe the way it did in the United States, ENON could trade in the US$20 level within 24 months.
Please read on...
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