Purchase of web software maker boosts Prokom on line
The deal, announced last week, saw Prokom pay zl. 1 million ($250,000) for the Krakow-based maker of web software. This move comes on the heels of Prokom's purchase in August of a 25% stake in Wirtualna Polska (www.wp.pl), one of Poland's most visited web portal sites.
"The investment shows Mr. Krauze (Prokom CEO Ryszard Krauze) wants to keep cutting-edge software development in Poland," said Stanislaw Lewak, TPG's president.
Lewak is a "returned Pole," whose parents fled or were exiled from Poland during WWII. He came back to Poland in the early 1990s and founded TPG in 1993, choosing Krakow for the company's headquarters because of the number of technically skilled graduates coming out of the city's many colleges, universities and polytechnics, Lewak said.
Prokom aims to use its new acquisition to "provide our present and future clients with sophisticated internet solutions," said Maciej Wantke, assistant to Krauze. He said Prokom plans a joint press conference this week at which Krauze, Lewak and WP President Marek Borzestowski will outline the company's joint internet strategy.
Analysts agreed that the acquisition was a smart move.
"For the medium term it is a very good step for Prokom," said Johannes Weyringer, a financial analyst covering Central and Eastern European IT and media for Raiffeissen Capital and Investment in Vienna. "Prokom has started buying up small, well-developed IT groups, with the strategy of reducing their dependence on one large contract and diversifying into a total IT company."
Prokom's cash will allow TPG's team of about 30 programmers, graphic designers and hardware specialists to expand into new markets and develop new software applications, said Andrzej Niedzialkowski, TPG's vice president for engineering.
TPG specializes in profiling, privacy and web-enabled applications. Its software is used by Reuters news terminals, and is also used by Netscape clients, Lewak said. It has also been licensed to the Firefly Network, which was subsequently sold to Microsoft, which has incorporated TPG's software into some of its applications, Lewak said.
"It's similar to what you see on Amazon.com," he said, referring to software that allows a web site's operators to track, record and predict the preferences of visitors to the site.
The company's flagship product, called Grendel, is used by CR Media to target web banner ads displayed to individuals browsing such popular Polish sites as Chip Online (www.chip.pl).
The company uses TPG's Grendel software to serve up 1 million banner ads per week on 13 of the most visited Polish web sites, Niedzialkowski said. A visitor to the site will see different banner ads depending on what the software predicts are her preferences, based for example on other sites she has visited or data she has requested from the site, Lewak explained.
With the Prokom investment, TPG plans "to expand both within Poland and abroad," Niedzialkowski said, refusing to be more specific.
The company has a lot of ground to make up domestically: 98% of its sales are now directed abroad, mostly to the United States, Ireland, Belgium and Switzerland, Niedzialkowski said.
TPG was ranked the 13th largest software exporter in 1998 by Computer World Polska. The company had total revenue of zl. 2.6 million ($1.4 million), of which zl. 2.3 million ($1.08 million) came from exports, according to the Computer World ranking.
One likely area of synergy is between TPG and Prokom's other internet property, Wirtualna Polska. The Gdansk-based portal site would be "a natural partner," Niedzialkowski said, but refused to detail the plans that the two companies have in common.
But TPG's new colleagues at WP are apparently still reading from a different playbook. A company spokesman said, "We don't need (TPG software), we already have our own."
In the first half of this year, Prokom saw revenue more than triple to zl. 313 million ($78.3 million), while net profit doubled to zl. 54.46 million ($13.6 million). Prokom is the largest IT company traded on the Warsaw Stock Exchange (WSE) and has a market capitalization of zl. 1.2 billion ($300 million).
"The investment shows Mr. Krauze (Prokom CEO Ryszard Krauze) wants to keep cutting-edge software development in Poland," said Stanislaw Lewak, TPG's president.
Lewak is a "returned Pole," whose parents fled or were exiled from Poland during WWII. He came back to Poland in the early 1990s and founded TPG in 1993, choosing Krakow for the company's headquarters because of the number of technically skilled graduates coming out of the city's many colleges, universities and polytechnics, Lewak said.
Prokom aims to use its new acquisition to "provide our present and future clients with sophisticated internet solutions," said Maciej Wantke, assistant to Krauze. He said Prokom plans a joint press conference this week at which Krauze, Lewak and WP President Marek Borzestowski will outline the company's joint internet strategy.
Analysts agreed that the acquisition was a smart move.
"For the medium term it is a very good step for Prokom," said Johannes Weyringer, a financial analyst covering Central and Eastern European IT and media for Raiffeissen Capital and Investment in Vienna. "Prokom has started buying up small, well-developed IT groups, with the strategy of reducing their dependence on one large contract and diversifying into a total IT company."
Prokom's cash will allow TPG's team of about 30 programmers, graphic designers and hardware specialists to expand into new markets and develop new software applications, said Andrzej Niedzialkowski, TPG's vice president for engineering.
TPG specializes in profiling, privacy and web-enabled applications. Its software is used by Reuters news terminals, and is also used by Netscape clients, Lewak said. It has also been licensed to the Firefly Network, which was subsequently sold to Microsoft, which has incorporated TPG's software into some of its applications, Lewak said.
"It's similar to what you see on Amazon.com," he said, referring to software that allows a web site's operators to track, record and predict the preferences of visitors to the site.
The company's flagship product, called Grendel, is used by CR Media to target web banner ads displayed to individuals browsing such popular Polish sites as Chip Online (www.chip.pl).
The company uses TPG's Grendel software to serve up 1 million banner ads per week on 13 of the most visited Polish web sites, Niedzialkowski said. A visitor to the site will see different banner ads depending on what the software predicts are her preferences, based for example on other sites she has visited or data she has requested from the site, Lewak explained.
With the Prokom investment, TPG plans "to expand both within Poland and abroad," Niedzialkowski said, refusing to be more specific.
The company has a lot of ground to make up domestically: 98% of its sales are now directed abroad, mostly to the United States, Ireland, Belgium and Switzerland, Niedzialkowski said.
TPG was ranked the 13th largest software exporter in 1998 by Computer World Polska. The company had total revenue of zl. 2.6 million ($1.4 million), of which zl. 2.3 million ($1.08 million) came from exports, according to the Computer World ranking.
One likely area of synergy is between TPG and Prokom's other internet property, Wirtualna Polska. The Gdansk-based portal site would be "a natural partner," Niedzialkowski said, but refused to detail the plans that the two companies have in common.
But TPG's new colleagues at WP are apparently still reading from a different playbook. A company spokesman said, "We don't need (TPG software), we already have our own."
In the first half of this year, Prokom saw revenue more than triple to zl. 313 million ($78.3 million), while net profit doubled to zl. 54.46 million ($13.6 million). Prokom is the largest IT company traded on the Warsaw Stock Exchange (WSE) and has a market capitalization of zl. 1.2 billion ($300 million).
