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By Suzanna Kerridge, 1 November 2000 17:00

NEWS Forrester Research predicts that Terra Networks, T-Online and Wanadoo are the only European portals which can compete against US players AOL and Yahoo, as their parent companies - all of which are telcos - are uniquely placed to bankroll their future. Helen Omwando, analyst at Forrester Research, said: "The strongest players have pan-European ambitions for scaling and this is critical. They need a name in Europe to continue and need the financial ability to build this, so the telco connection is very important - they have the right partnerships and financing." Even supposed big guns such as Altavista, MSN and World Online are likely to lose out as they have failed to secure financing for expansion, according to Forrester. Omwando explained: "The top tier players have the advantage of money and traffic. Advertising money is particularly important as you cannot survive on traffic alone and it follows that the one with the most money generates the most audiences." It is Omwando's view that other European portals suffer from undifferentiated offerings and lack first-mover advantage. "MSN will not be a dominant player. Even though it is a global site it has not managed to leverage itself to anything other than a UK player. Given its pan European partnership with Microsoft, it should have grown to be more of a significant force," she said. Merc Fleishhacker, director of product development at Altavista, agreed the space in the portal market is limited. He said: "If we were to remain in the portal business instead of moving direction to search engines then I would agree with the comments. But there is concrete evidence that we are changing and what you see on some of our sites represents the past not the future. "I believe that you have one or two top international brands that are recognisable and have quality of content. You only have one or two local heroes, which are either backed by telcos or publishers," he continued. But Jeremy Stokes, managing director of consumer services at World Online, claimed his company is well funded and telco backed. He said: "We have $1.5bn of cash, so should be associated with the top tier companies."