ISP moves further into PC arena
- 08 September, 1999 12:56
In conjunction with its listing on the Australian Stock Exchange last Tuesday, Internet service provider (ISP)-cum-PC company Eisa detailed plans to expand its cheap PC and Internet bundling initiatives as well as its more traditional ISP business.
According to Eisa's CEO, Damien Brady, the $57 million generated from the float will be put towards expanding its present core competencies. "We will expand our PC range into a number of retailers, develop the content side of our business with the alliance with Excite and move more into e-commerce," outlined Brady.
He anticipates this will catapult Eisa from an $18 million company this year to a $75 million company in the year 2000 and will increase Eisa's current subscription list of about 60,000 to over 200,000.
In a bid to tap into what Brady sees as an expanding market, the pioneer of bundled PC and Internet deals is offering retailers several models through which to sell the packages. "I would expect that in the near future 20 per cent of all PC sales will be made through some sort of subsidised deal," said Brady.
Presently, Eisa addresses this need by providing retailers with a range of Edge Group PCs and other selected brands. "We are working on signing agreements with two more vendors to use their PCs. Retailers then bundle the PC together with Eisa Net access which they pay in instalments over 24 months," Brady said.
The new strategy announced last week involves Eisa subsidising the sale of any brand of PC through its retail channel. "We are working with the top five retailers who can sell any brand of PC they want and we provide a form of subsidy so they can reduce the cost," said Brady. This means customers can buy a PC at a very low cost as long as they also sign up for Eisa Internet access. Eisa will then pay the retailer the difference between the usual cost of selling the PC and the bundled cost.
Eventually Eisa will extend this offer to more retailers and then resellers. In terms of its ISP services expansion, Eisa has also detailed plans of its relationship with portal company Excite Australia. The two will combine to create a "co-branded portal" said Brady. This will offer a number of "ISP services, some of our PC product will be made available on their [Excite's] site and we will create personal sites once subscribers give us demographical information," he explained.
However, Eisa's Internet focus will move beyond content and its tradit-ional ISP heritage and into the realm of e-commerce.
"We are expanding our e-commerce initiatives through theshop.com which at the moment sells our PCs and peripherals but will soon sell CDs and flowers as well," said Brady. theShop.com will sell directly to consumers, with selected Eisa distributors supplying products rather than the channel. "I don't see a conflict between the traditional channel and theShop.com. If people started buying from the Internet rather than stores we can track them and then determine why this is happening," reassured Brady.
Fellow Internet company LibertyOne, which also listed recently, will be "doing a number of things with Eisa, such as developing other sites", although Brady was not forthcoming with more details.
At press time, Eisa's share price was 87 cents, 13 cents off its $1 issue price.