Europe: The Net's New World

So you thought European business was staid and conservative. Vodafone AirTouch PLC, a company that didn't exist a decade ago, offers $107 billion for Mannesmann, which only six years ago was a money-losing maker of pipes and auto parts. It's exhilarating--and scary.

Vodafone's bid, which will only get richer as the takeover battle unfolds, goes far beyond the present value of Mannesmann's telephone holdings in Europe. It's based on the premise that mobile phones will become mostly Internet devices by around 2004, lucrative platforms for multimedia, e-commerce, and information. What's frightening is that those services aren't even developed yet. But that's true of half the business plans on the Nasdaq. What's exciting is that this is happening in Europe, long a New Economy laggard. U.S. phone companies take note. Europe probably has a two-year lead in the technology to make mobile phones into data portals.

Most significant: The industry is being driven by a classic New Economy alliance of technology and risk capital. It's moving with un-European speed, challenging U.S. supremacy in all things Internet while shaking Europe's own traditions. However the takeover battle concludes, it will rattle the established order. And that's almost always good.

Before it's here, it's on the Bloomberg Terminal.