Terms of the transaction weren't disclosed, but PPR chief executive Serge Weinberg said the price is "a fraction of annual sales, not a multiple of sales." Based in Los Angeles, MobilePlanet had 1998 sales of $12 million and expects to boost revenue to $20 million this year. The company posted a small net profit, equivalent to about 2 per cent of sales, in 1998.

Weinberg says it's the rapid growth potential of sales of portable computing products like PalmPilots that made MobilePlanet an attractive acquisition for PPR. Some studies estimate that palm-size machines could outsell laptops by 2002. Weinberg says PPR will allow MobilePlanet to expand internationally, chiefly in Europe. MobilePlanet's two founders, Casey Power and Matt Kramer, will remain with the company, but PPR, which is controlled by Frenchtycoon Francois Pinault, will strengthen its management.

The acquisition is part of PPR's efforts to expand in online sales to complement its retail activities, which include the Printemps department stores, book and record retailer FNAC, mail-order business La Redoute, the Conformana furniture chain, as well as a host of business-to-business distribution activities. PPR's main focus is to add an Internet activity to its FNAC and La Redoute franchises, but it's also interested in selective acquisitions like MobilePlanet.

The Wall Street Journal