A Weekly Digest of The World's Financial Press

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The Independent Online
Business Week

How no-fee Internet service providers may now be getting it right in the United States

THE ALLURE was almost irresistible: "Free Internet access for life," the ads promised. What they didn't say was that this meant "free for the life of the company". Free Internet service providers such as BOSnet, USFreeway and CyberFreeway have folded, leaving tens of thousands of Americans with useless e-mail addresses. But a couple of new companies are trying again - and this time they may get it right. Unlike in earlier tries, NetZero is outsourcing its network to Level 3, AGIS and GTE, saving millions on infrastructure costs. And it isn't charging a start-up fee, making the service virtually risk-free.

The Economist

Two-thirds of Britain's economists polled said that they were in favour of joining the euro

WE, AT any rate, were a bit surprised. On the standard tests, which look at factors such as trade and the cross-border mobility of labour, the answer is no. To conclude that Britain and the euro zone should merge their currencies, you need to deploy other arguments. A few emphasised the benefits of exchange rate stability - greater now than allowed for in standard theories. Others said that a non-euro Britain would be at a disadvantage in the competition for international investment. Another theme was the spur to competition among European producers that would come from greater transparency in pricing.

Far East Review

On Hong Kong tycoon Dickson Poon's restructuring of his Dickson Concepts International Group

DICKSON POON has made shareholders an offer he hope they won't refuse. Under the plan DCI would sell its non-Asian assets - majority stakes in London department store Harvey Nichols and luxury-goods maker ST Dupont - to Poon's private company for $195m (pounds 122m). In return shareholders would receive a special cash dividend. They could keep their shares in the scaled-down DCI, or sell them to Poon. That would give them a 42 per cent premium on the price of DCI shares before the deal. Sounds generous? Yes, especially to Poon. Critics say it would give him top-notch assets for bargain-basement prices.

The Washington Post

On China's moves to open its markets in return for membership of the World Trade Organisation

IN THE past few weeks, China has made a series of bold commitments to US negotiators. Those commitments would move China's economy to a rules- based system and end most forms of state control within roughly five years. A few critical issues remain, but we are on the verge of an agreement that could yield revolutionary change in China. What must the US give away? Nothing. The only act necessary on our part is passage of legislation making normal trade relations with China permanent. Such legislation would also put an end to another sterile debate - that on annual renewal of China's normal trade status.

Financial Times

On the prospects for Compaq, US computer-maker, after it ousted its chief executive Eckhard Pfeiffer

BEN ROSEN, Compaq's chairman, clearly hopes a change will revive Compaq's fortunes. It won't; not by itself. Compaq's fundamental dilemma is strategic. It is transforming itself from an assembler to a service and solutions provider. But it's been caught half way by plummeting prices in its original PC business. Compaq's response, to adopt a hybrid of part-direct, part-indirect sales, has angered established distributors without lowering costs. Since PCs are becoming commodities, Compaq has no choice but to grind on with its transition. It now owns most of the relevant pieces but knitting them together will take time.

Barron's

On how Wall Street investors are buying cyclical stocks such as farm equipment and coppers

ALONG WITH Kosovo, last week's big news was Wall Street's stunning rediscovery of the 99 per cent of the market that isn't hi-tech or Web or even big-cap. Is the emergence of cyclicals a fluke? We think not. Instead, we envision that last week's action will turn out to be a precursor; that the show of interest in the out-of-favour masses of stocks will expand and deepen and extend itself. What we're postulating, in short, is that this most unusual bull market will end, ironically, in a most usual way - with every sector getting its dutiful spin and with small- caps, at long last, enjoying an explosive burst of speculation.

Fortune

On whether BNP's hostile bid for two rival banks heralds Anglo-Saxon capitalism in France

IT IS easy to ridicule a country that has so many demonstrations in its capital each day that they're listed in the newspapers. But France is clearly doing something right: its 3.2 per cent GDP growth last year outpaced every G7 nation except the US, and inflation was below 1 per cent. But it's not clear what the lasting effects of France's March madness will be. The mega-merger proposed by BNP would not be accompanied by layoffs or any other measures usually required to make a merger pay off. So as Paris tries to be Wall Street on the Seine, the French should remember that there's more to succeeding in the global economy that spending money.

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