Bizwatch

Betting on Consolidation
After e-commerce boom and bust comes merger mania: that was the sense last week as online travel firm lastminute.com — the money-losing, London-based icon of the Internet frenzy — agreed to a $1.1 billion takeover by Texas-based Sabre Holdings, owner of rival Travelocity.

The grounds? While there’s room for growth in Europe ‘s Web-based travel sector — as little as 10% of trips are currently booked online in the region — there’s no longer room for everyone. Price pressure from major hotels’ and airlines’ own online operations means Web-based operators “need to be big,” says Evolution Securities analyst Robin Chhabra. “Scale is very, very important.” No need to remind Sabre’s rivals. U.S. firm Cendant, which swallowed up U.K.-based ebookers last year, and Expedia’s parent IAC/InterActiveCorp could yet come up with counterbids for lastminute.com.

Also in line to team up are American online stockbrokers. Sliding trade volumes and fierce competition for fees point to “further consolidation” among America’s online brokerages, Joe Ricketts, chairman of Ameritrade Holding, admitted last week. Ricketts hailed his firm as “a leader in consolidating this industry.” But not everyone agreed. Hours after Ricketts’ forecast, rival E*Trade Financial confirmed it had placed an unsolicited $6 billion bid for Ameritrade — but to no avail. Ameritrade “is not for sale,” Ricketts said. So where else might online firms be looking to unite? Expect a shake-up of the Internet gambling market, says Chhabra. Gibraltar-based PartyGaming, the company behind the world’s largest online poker firm, PartyPoker.com, last week beefed up its management ahead of a rumored $10 billion flotation.

Rivals Cassava Enterprises and Betfair are also reportedly considering a listing. Could the cash injections mean smaller players will soon be engulfed? Place your bets. — By Adam Smith

Counting The Hours
British workers on average put in 217 hours per year more than the Germans, 220 more than the French and 319 more than the Dutch, but their heavy workload may be about to lighten. Last week the European Parliament voted to scrap a British exemption to E.U. rules that limit the workweek to 48 hours. Employers complained that such restrictions could undermine the British economy’s strength.

“Here we are with the most successful economy in Europe, we’ve got the most flexible labor market, people earn good money — and Brussels is trying to do away with it,” griped Digby Jones, director general of the Confederation of British Industry. But the vote was widely welcomed in France , where the official workweek is just 35 hours. The U.K. government will try to block Parliament’s move at a meeting of E.U. labor ministers next month, and may get support from as many as eight other countries, including Germany and Ireland , who want the E.U. to focus on boosting sluggish economic growth rather than tightening social protection. — By Peter Gumbel