Italy created opera, popularized olive oil and gave birth to Michelangelo--but it hasn't done so well with the Internet.
The problem: Only 15 percent or so of Italian households have PCs, so there is little incentive for Italian companies and developers to create compelling local content.
Enter The STET Group, the $25 billion Rome-based telecommunications giant, which just started a venture capital initiative to export Silicon Valley Web smarts to the shores of the Mediterranean Sea.
STET announced it will invest in hot Silicon Valley Internet properties with the lure of lira--offering $1 million to $10 million investments for minority positions.
It has already sunk $35 million into three venture capital funds and in two private companies: network provider Concentric Network Corp., of Cupertino, Calif., and three-dimensional animation developer Protozoa Inc., of San Francisco.
In addition to money, STET offers its portfolio companies an insider's knowledge of European markets, as well as experience gained with its 25 million telephone customers, said Umberto de Julio, director general.
"They were looking for some adventurous content," said Brad deGraf, president of Protozoa. "And they are a nice relative to have over there."
DeGraf said Protozoa may license software or characters to Italian partners.
STET is particularly interested in hooking up with providers of online travel and games content, and "enabling services" such as electronic commerce, video streaming, and chat and push expertise, said Martino Marsan, president of STET's venture arm, Stream USA.
De Julio said the primary objective is to drive more traffic on Italy's telephone system by creating compelling content.
STET also is looking to fund alternative Web access endeavors such as Internet TV and phone devices.
"We need more applications, services and content," said de Julio.
STET is a holding company that includes Telecom Italia, the world's sixth largest telephone company, and Telecom Italia Mobile.
Stream USA is located in San Francisco.