Future

Why French Internet Companies Keep Selling Off To Foreigners

Indom, leader of domain names in France, is bought by its British counterpart in the latest ceding of French control online

One French web success sold abroad flickr

Nicolas Rauline

PARIS - The list grows longer. After a Japanese purchase of France's e-commerce site PriceMinister and Axel Springer's takeover bid for Paris-based real estate portal Seloger.com, French domain-name manager Indom has been bought by a foreign competitor.

Counting half the top-listed "CAC 40" French corporations as customers, Indom, founded in 1999, was sold last week for 16.9 million euros to its bigger British counterpart, the NBT Group.

The latest news comes after German publishing behemoth Axel Springer made a public offer last month for the fast-growing French property website company SeLoger.com. That followed the June sale of another online success story in France, PriceMinister, for an estimated 200 million euros to Japanese retail giant Rakuten.

"Without a doubt, France has been slow. For years, we have lacked support from the business community here," says Stéphane Van Gelder, co-founder of Indom, who is now director of of NBT Group, France. "It's changing, but it will be difficult to catch up, especially compared to the Anglo-Saxons."

Indom's three co-founders had a majority share in the company, while AXA Private Equity held a 15% stake. "Our intention was to give Indom true strength," says Van Gelder. "With this operation, we join the European leader. For us, it was impossible to continue to grow while remaining all-French."

NBT Group, one of the pioneers of the Internet in Britain, was founded in 1995. It has gradually expanded its activities to now include such areas as registration of domain names, hosting and so-called "e-reputation" brand building. Well-established through Europe, but also present in the United States, NBT employs 300 people and reached a turnover of 49 million euros in the 2009-2010 fiscal year ended Sept. 30. For its part, Indom should post a turnover of just under 8 million this year.

Indom plans to continue to focus on its core business. "For the moment, there are no plans to do anything beyond than business services sector " says Van Gelder. NBT Group will benefit from Indom's work on developing new extensions linked directly to brand names such as ".cannon" and city names such as ".paris'. Van Gelder was elected head of the GNSO body of Icann (the association in charge of domain names) that is studying how to create these new extensions.

Read original article in French

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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