A French Company That Needs a Break

SAN FRANCISCO (01/04/2000) - Agence France-Presse, one of the world's leading wire services, is trying to move decisively into the Internet age, but it keeps running into obstacles.

A five-year plan, under discussion since April, was supposed to give AFP a taste of the online success that has greeted competitors like the Associated Press and Reuters. But unlike those privately owned news services, AFP is quasigovernmental, and is overseen by a board of three government officials, two AFP staffers and three media company representatives. The agency is subject to arcane bylaws that prevent it from raising public capital.

Now AFP is trying to change those bylaws, but it faces a strike threat from its unionized reporters. According to a company official, the staff objects to raising money from private companies and worries that a commercial interest could threaten the integrity of their reporting.

"They want to have a guarantee of independence," says AFP spokeswoman Agnes Caradec. "They were afraid that if there is one big owner they won't have freedom."

The wire service hopes to win approval for its plan sometime in 2000, Caradec adds, and will hold further discussions on the private-investment issue in the interim. "If we want to make developments, we are obliged to raise money," she says.

Presented in September, the development plan contained provisions to in-crease staff size and push the agency further into Internet and multimedia efforts. In that vein, AFP announced last week it had partnered with Nokia in Europe to provide online news for cellular phones via the Wireless Application Protocol.

But Eric Giuily, AFP's chairman, has expressed concern that unless the wire service can step up the pace of its technological developments, it will lose out to more tech-savvy competitors. Both Reuters and Bloomberg, for example, have made significant investments in their own branded Web sites and are rapidly cementing partnerships that will push their news onto as many sites as possible.

Giuily, who was brought on board in March to revitalize the wire service, wants to increase its budget, primarily to invest in technology - from 1.4 billion francs ($222 million) to 2 billion francs ($317 million) over the next five years.

Although he would like to raise the money through private investors, Giuily is prevented from doing so by law. Giuily has presented a bill to the French National Assembly to change the 1957 statute, which prohibits AFP from creating partnerships with private companies; however, the move provoked a strike threat by journalists in September.

In response, Giuily agreed to hold more internal discussions and make a final decision on the plan in December. But he missed that deadline and employees are still unhappy.

Although AFP maintains several Web sites, including a joint-venture financial news service with England's Financial Times, it still lags behind competitors.

Giuily is determined to get his plan passed, and Caradec asserts that employee opposition will not hold up the development. Other aspects of the five-year plan will be put into place, she says, and the agency's governing body will continue to negotiate with the journalists.

Setting up a means to attract private investment will be key for AFP to maintain its current status as the No. 3 wire service after Reuters and the Associated Press. Currently, 43 percent of its budget comes from government coffers; the rest is from client news organizations that use AFP's reporting.

Neither of those sources of revenue can support Giuily's desired budget increases.

But the union has proven that ideological interests don't back down easily, either. AFP's journalists have already held up the five-year plan once, and they have plenty of time to force further delays.

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