Canal's new 'Net gain

French paybox plunges into New Media

By MICHAEL WILLIAMS

PARIS -- French paybox Canal Plus will set up an Internet subsidiary called Canal New Media in September and is looking for partners before floating the company on the Paris stock exchange.

Canal Plus chairman Pierre Lescure announced the creation of the subsidiary at the Communication University media gathering outside Bordeaux on Thursday. He said Canal New Media will be headed by Alex Berger, who has been Lescure's chief adviser for several years.

E-commerce and ads

Canal Plus launched its own Web site, cplus.fr, four years ago and is also partnered with its main backer, Vivendi, as majority shareholders in Internet access provider AOL France.

With pay TV outlets in 11 countries, Canal Plus now wants to federate its different national Web sites in order to provide a pan-European market for e-commerce and advertising. Based in Paris, Canal New Media will coordinate the group's online businesses.

News of the upcoming launch comes amid increased speculation that the French giant is about to announce new partners in its Italian subsid Telepiu.

Stakes for sale?

Canal Plus owns 99% of Telepiu, although Italian pubcaster RAI has an option to take 10%. Unconfirmed reports suggest Canal Plus international senior exec VP Michel Thoulouze, is about to announce that a collection of Italian electricity, telecom and institutional companies are ready to acquire around 40% of Telepiu.

Analysts have been expecting the move for several months. Canal Plus' three-year financial plan calls for breakeven this year and a return to profits of around $160 million in 2000. It is widely believed that the profit target can't be hit if the French group maintains 90% of Telepiu.