While the Internet has its roots in the US, there are those who believe the new opportunities in Web-enabled commerce will come from Europe. One such advocate is the US-based Monument Funds Group which last month set up the Monument EuroNet Fund, the first mutual fund in the US to focus on European Internet stocks.

Last week, participants on a conference call organised by the Monument Funds Group debated whether the EU would overtake the US on the Web.

Participants were Mr Cyrille Vernes, chairman of Financiere Rembrandt in Paris, which manages assets of $1.2 billion, Mr Thierry Roussilhe, asset manager at Financiere Rembrandt and co-manager of the Monument EuroNet Fund in Paris, and Mr Bob Grandhi, co-manager of the EuroNet Fund and chief investment officer of the Monument Funds Group in the US.

Mr Grandhi said three factors might make it possible for Europe to catch up to and even pass the US in Web-enabled commerce.

The first is the emergence of a new global economic force: the European Lion, presumably a close relation to our own Celtic Tiger. With the European economy growing at a faster rate than the United States's, Europeans can now afford to spend money on Internet-related products, such as personal computers, Web-enabled mobile phones and personal digital assistants.

Lower interest rates, falling inflation and expanding markets in Europe all position the EU to mirror the type of growth the US witnessed in 1998 and 1999.

The second factor that may give Europe the edge is the takeover of North American Internet companies by Europeans. With more capital flowing in to the US from Europe, the EU is planting its flag firmly in the US. Recent activity includes: Alcatel of France, which bought Newbridge Networks and Innovative Fibers, both of Canada; Baltimore Technologies, which bought GTE Cybertrust; Terra Networks of Spain, which bought Lycos; and Deutsche Telekom, which has put in a bid for VoiceStream Wireless.

The takeovers give the Europeans access to new markets for their products as well as the expertise of the US companies to give a better service to their customers back home.

The third European advantage is in mobile commerce. In the US, the emphasis is on e-commerce but Europe's focus on m-commerce means that people are more likely to use their mobile phones to access the Web.

Since phones are less expensive than PCs, m-commerce could overtake e-commerce in the future. By 2005, it is expected there will be 250 million mobile phone subscribers in Europe.

Looking at Europe today was "like going back two to three years to recapture the big run up in Internet stocks", Mr Grandhi said. "Investors can now get in at the ground floor in Europe rather than in the US."

The euro had brought stability to the 11 member-states that were tied to that currency, Mr Vernes said. Because the world's economies were becoming global, European corporations had become more aggressive.

In addition, "there is a new entrepreneurial spirit among young people in Europe. Venture capitalists have started funds and put money to work in new technologies. The new generation of managers in Europe is coming of age," he said.

In the past three to four years, venture capital business angels were not available in Europe, so big corporations and wealthy individuals often financed new companies and brought them to market. Now, several major US investment banks, like Morgan Stanley Dean Witter, Goldman Sachs and Lehman Brothers have begun to increase their presence in Europe and Asia. They are competing for a piece of the lucrative initial public offering craze in Europe. This year alone, France will have 50 initial public offerings of stock.

By coming late to the game, Europe has had the advantage of watching the mistakes US companies have made. Many European companies have mature technology that is now in demand.

Mr Roussilhe singled out some European companies that he believed have built a strong presence in the Internet sector. These include Alcatel, Baltimore Technologies, Sonera SmartTrust of Finland, Brokat Infosystems of Germany and the two Scandinavian mobile phone operators: Nokia and Ericsson.

"European Internet Service Providers are strong because often they are spin-offs of large, national telecommunication companies," Mr. Roussilhe said. "They are well structured and financed and in a strong position to compete against ISPs in the US."

He sees international deals continuing, particularly between those companies in the ISP and Internet security space. "In new technologies and the Internet, we expect to see further acquisitions in the US from European companies," Mr Vernes said.