Egg took its first step towards the international stage yesterday, forging a strategic tie-up with the US software giant Microsoft.
The partners will initially provide an online fund supermarket for UK investors via the MoneyCentral channel on the MSN website. The online bank, however, confirmed it is developing plans to extend into other financial products and from the UK on to the Continent. The company is also continuing to look at other potential partners, including 3G licence holders, retailers and portals.
Egg's share price rose 7p yesterday to 167p, a year high for the company that floated on the stock market early last year after it was spun off from Prudential. Last year Egg, in which the insurer still holds a 79 per cent stake, made losses of £155m but expects to break even by the end of the year.
Currently MSN has 41.5 million users throughout Europe and the Egg chief executive, Paul Gratton, said: "Microsoft is a fantastic partner in terms of reach, scale and reputation."
The fund supermarket is due to launch early next year after pilot tests this autumn. Further details of when other financial services will be rolled out has not been released and Mr Gratton remained tight-lipped on the financial aspects of the deal ahead of Tuesday's interim results. He said only that the service would be "competitive" and "revenue-sharing".
Gareth Arnold, head of personal finance for Microsoft UK, said the priority is to get the fund supermarket right in the UK before looking to Europe and possibly further afield. "It's really about what we can bring to the table and what we need in various locations."
According to Egg's forecasts, fund supermarkets will hold 275bn euros in assets across Europe by 2005. But Colin Hector from Lehman Brothers said that although the alliance was positive news for the loyal band of Egg investors, there was increasing industry scepticism over figures for the take-up of online services over the next few years.
Robin Down, an analyst from Morgan Stanley Dean Witter, added: "At this stage it is not a big deal but it has the potential to be. The issue is if Egg gets other products on to the MSN website."Reuse content