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FRENCH GIANT SCOUTS U.S. ONLINE BUSINESS MATRA HACHETTE SEEKS AD AGENCIES' ADVICE ON MARKET RESEARCH

By Published on .

Matra Hachette, the giant French communications and industrial conglomerate, is looking to enter the crowded U.S. online services market.

Details are sketchy, but the company is known to be talking with ad agencies including Bozell, New York, as well as interactive consultancy Jupiter Communica- tions Co. about doing market research and other projects.

"Matra Hachette has a keen interest in online services," said Philippe Bouissou, senior VP at Matra Hachette Multimedia, the new-media arm of Matra Hachette. Mr. Bouissou said the company is talking with U.S. online service providers but hasn't yet signed any deals.

It's unclear whether Matra Hachette wants to start its own service or buy into one. The company is known to be interested in acquiring all or part of Ziff Communications, a New York-based publishing company that is close to launching its own online service, dubbed Ziff Interchange.

Setting up another new service could be risky because the online field is already dangerously close to being overcrowded. In addition to Ziff's plans and Apple Computer's recently unveiled eWorld service, Microsoft Corp. is known to be talking to content providers and others about an online network code-named Marvel. All would compete with established players like Prodigy, CompuServe and America Online.

Still, Matra Hachette could be a formidable player in the online market. Its diverse worldwide businesses include aerospace, telecommunications, automobiles, magazine and book publishing and TV production.

The company also is getting serious about new media, with Matra Hachette Chairman-CEO Jean-Luc Lagardere installing his son Arnaud as chairman-CEO of Matra Hachette Multimedia.

Matra Hachette holds a 15% stake in Europe Online, a joint venture among several European publishers and bankers and U.S.-based Meigher Communications. Europe Online is expected to start up in a few months with about 60,000 subscribers.

In the U.S., Matra Hachette's magazine publishing arm, Hachette Filipacchi Magazines, this year put five magazines, including Car & Driver and Road & Track, on America Online with plans to add five more. Matra Hachette also has a joint venture with multimedia developer Voyager Co., and its Grolier U.S. publishing division has been active as a content provider for CD-ROMs and online services for several years.

"What we are investigating are the possibilities to keep on being on the leading edge ... to be aware of what's happening in the U.S. market, to react if need be," said Fabrice Sergent, exec VP-business development at Matra Hachette Multimedia.

Matra Hachette makes it clear ads will be a part of any online service it does.

"If you look at our traditional magazine business, advertising is a key element," Mr. Bouissou said. "We think that advertising will be a key element in multimedia programs and online services we are developing now."

Asked what would happen to the current Hachette magazine offerings on AOL if Matra Hachette started its own service, Mr. Bouissou said, "There wouldn't be a conflict with AOL."

"Whoever gets involved with [Matra Hachette] is going to have to do a major fact-finding job," said an executive familiar with the company's plans. "That includes across-the-board research [and an] analysis of the [online] marketplace."

For an agency, that could translate to a few hundred thousand dollars in project work and, possibly, a multimillion-dollar product launch, the executive said.

Perhaps to test the waters, Matra Hachette Multimedia is bringing out a CD-ROM this fall that will have online connections, similar to Microsoft Corp.'s "Complete Baseball" disc issued earlier this year. The disc is believed to be based on a Hachette magazine.

For Matra Hachette, extending its properties across print, CD-ROM, online, traditional TV and, eventually, interactive TV, is a strategic priority.

"We have what we call a multidelivery mechanism strategy," Mr. Bouissou said. "We deliver our products and services across different technologies."

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