JANUARY 31, 2000

Prost and Yahoo

PROST GRAND PRIX launches its 2000 challenger on Tuesday this week in Barcelona - although the new Prost-PeugeotÊAP03 actually ran for the first time in a private test last Thursday at Magny-Cours - and we hear that the team has signed a major multi-year sponsorship deal with the Internet Search Engine company Yahoo Inc.

A report in The Sunday Telegraph in England suggests Yahoo will replace Gauloises as the team's title sponsor but this is not likely to happen immediately as Prost still has one year to run on its current three-year deal (1998-1999-2000). TheÊFrench tobacco company has supported the team (when it was known as Ligier) since 1976 and has enjoyed considerable influence over the team, notably in its insistence that Prost has to sign a French driver every year. Prost has always said that he wants to be an international team with a French flavor and a deal with Yahoo would help him get away from overt FrenchÊinfluence.

Yahoo Inc. can certainly afford it and it makes a lot of sense for the company as it expands internationally. At the moment Yahoo's non-US activities account for only 13% of the revenue but the company says that it wants to be "the only place anyone in the world needs to go to find information, get connected to anyone or to buy anything". Yahoo had revenues of $588m in 1999 but these are increasing at a dramatic rate as e-commerce becomes more popular. The company is enjoying particular success with its online auctions but is also doing well in online banking with new services recently introduced in France, Germany and Italy.

Founded in 1994 by David Filo and Jerry Yang, Yahoo was one of the first Internet companies to be floated and is currently valued at $28bn. It is headquartered in Santa Clara, California and is already involved in a couple of major international sponsorship deals, notably with the New York Yacht Club's "Young America" Challenge for the 2000 America's Cup and the United States Postal Service cycle racing team. It is also involved with Pagan Racing in the Indy Racing League. Representatives of the company are believed to have attended the Italian GP in September last year.

It is believed that Prost's financial advisor Julian Jakobi of CSS Stellar plc may have been behind the deal. His organization recently opened an office in San Francisco with the intention of developing sponsorships amongst Silicon Valley high technology companies.

The money from Yahoo is expected to replace the deals with Alcatel and Canal Plus.

The Prost team has already announced its drivers Jean Alesi, Nick Heidfeld and test driver Stephane Sarrazin. The new Alan Jenkins-designed Prost-Peugeot AP03 will feature an all-new Peugeot V10 engine but it remains to be seen whether the team will continue with Peugeot. The French car manufacturer has not impressed in F1 and we hear that Prost's long-term plan is to pull together a deal to use year-old Mercedes-Benz V10 engines. It remains to be seen whether these will be badged Mercedes but as Prost has recently begun a long-term relationship with the luxury brand company Louis Vuitton Moet Hennessy it is safe to assume that the Mercedes image will be more useful as a marketing tool than would be the case if the team raced Chrysler engines...