Interim report Euroseek AB January €August, 2000

Interim report Euroseek AB January -August, 2000 Continued traffic increase and growth in order stock for Euroseek portal and access business. * 53 % increase in unique users between April and August. nd st * 8 % increase in number of visits in 2 quarter compared to 1 quarter, nd and 150 % increase compared to 2 quarter, 1999. * Growth in order stock for access business from August. Examples of orders: Ekerö Bostäder (700 tenants), Avesta Bostäder (700 tenants) and wireless surfzone, Forresta Hotel. * Portal design and licensing contract for two Scandinavian hotel chains. Full contract value: SEK 2.5 million installation fee + SEK 2.5 million yearly operating fee. Development of operations per business area Access st The business area Euroseek Access was formed during 1 quarter 2000 to offer customers both wireless high-speed access and other Internet access solutions. The integration of Infranet and Netpoint into Euroseek Access and the forming nd of an access/portal sales force has been a key issue during the 2 quarter. During July and August, the order stock has increased significantly, with mainly business customers. Market interest in the combined offering of access and portal services has been high and a number of new contracts are under negotiation Euroseek Access has organised its sales department to work with three types of customers; single corporations, hotels and apartment buildings. Since last report, orders have been received and installations started for: a number of corporations and two tenement buildings, Ekerö Bostäder and Avesta Bostäder (totalling 1,400 tenants). Also the first wireless surfzone has been installed at Foresta Hotel in Stockholm. Portal nd During the 2 quarter, Euroseek has continued its activities to improve content, thereby increasing traffic to the Euroseek portals. Euroseek has acquired the local Swedish portal Tjohoo.se, whose business idea the company intends to develop for all the Scandinavian countries. A number of new content agreements have been made for the Euroseek portals, such as Europages, Global Market Insight, Best Win, Europe Business Link and Egmont. Since April, Tjohoo has developed its entertainment pages focusing on providing film, music and entertainment news as well as top charts. During the autumn, product sales will start in connection with these top charts. Negotiations with companies for different multimedia products to be launched on the portals during autumn, such as live Internet radio and video-on-demand are in progress. An agreement has been signed with Tjohoo to create the internal portal and supply content to two Scandinavian hotel chains. Full contract value is SEK 2.5 million in installation and an annual operating revenue of SEK 2.5 million. In August, Pehr Bohman previously CEO of Tjohoo and Mediasvar AB, was appointed new Business Area Manager of Euroseek Portal and part of the Euroseek Management Group. A number of development projects have been initiated. The portal design and content strategy is being revised, to enhance stickiness. The revised portal will be presented beginning of next year. The search engine is being developed together with the linguistic scientists from Royal Institute of Technology (KTH) to become even more efficient. The concentration on both Portal and Search Engine has had effect. Euroseek Portal has shown a steady growth in the number of visits. Traffic has nd st increased by 8 % in the 2 quarter in comparison to the 1 quarter this year (see graph below). The largest growth area is in Western Europe, which also accounts for a large proportion of the total traffic (55 %). This increase has continued during July and August. [Removed Graphics] E-commerce Euroseek co-operates with e-commerce companies for sales via the Euroseek portal, but the main focus of Euroseek's e-commerce activities are to initiate sales via the Portal for small and medium-sizes "traditional" companies. Therefore, a cooperation with the Swedish company Easytrade.net was signed in September to offer the customers of their netshopping platform the Euroseek portal as a marketplace. Euroseek will also offer its users the Easytrade platform. Euroseek are negotiating with a number of other netshopping suppliers for similar cooperative agreements. Key financial figures Revenue generation has been lower than planned, due to a delayed integration nd process of the three acquired companies during the 2 quarter. During July and August this situation has been reversed and sales increase is larger than before. Heavy investments to grow the Euroseek business explain the large difference nd nd between 2 quarter 1999 and 2 quarter 2000. Depreciation for goodwill is 20 % of the negative net income of SEK 71.2 nd million 2 quarter 2000. Goodwill, due to acquisitions, is now reaching up to SEK 98.1 million (5 year depreciation period). The balance sheet contains hidden value in the form of a 17 % shareholding in room33. In accordance with the latest room33 issue of new shares in February, this indicates a value for Euroseek's holdings of SEK 170 million. st Euroseek had, as of August 31 , 2000, cash and bank balances of approx. SEK 9 million, and is currently pursuing additional funding ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/09/28/20000928BIT00230/bit0001.doc The full report http://www.bit.se/bitonline/2000/09/28/20000928BIT00230/bit0002.pdf The full report