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Burger Giant To Launch Internet Venture

By Mary Hillebrand
Jun 23, 2000 12:00 AM PT

McDonald's Corp. (NYSE: MCD) announced Thursday that it will expand its Internet presence beyond the current online brochure it maintains by teaming with Accel-KKR, Inc. to form eMac Digital, a new company that will develop Internet-related businesses.

Burger Giant To Launch Internet Venture

The Chicago, Illinois-based eMac Digital will initially focus on business-to-business (B2B) ventures that will create new markets and distribution channels to help food service companies reduce transaction costs and improve operations.

Food for Thought

McDonald's, which also owns Donatos Pizza, Chipotle Mexican Grill and Boston Market, is one of the world's largest purchasers of agricultural products. The company stands to benefit directly from new Web-based B2B operations in the food service industry by streamlining its procurement processes and reducing costs.

McDonald's operates more than 27,000 restaurants worldwide and opens an average of five new restaurants per day. The burger giant serves more than 43 million customers per day in 119 countries.

McDonald's is the first major partner for Accel-KKR. The Palo Alto, California-based company is a joint venture formed in February by venture capital firm Accel Partners and private investment firm Kohlberg Kravis Roberts & Co. to help businesses integrate offline and online operations.

Accel Partners has paired with several established brands, most recently Wal-Mart, to create Web-based businesses.

McDonald's CEO Jack Greenberg and Accel-KKR board member James Breyer will lead eMac Digital's board of directors.

More Than Burgers

McDonald's is not leaving the burger business for its new Web calling, Greenberg says, but it could not resist grabbing a piece of the fast-growing Internet business.

"We owe it to our employees, franchisees, suppliers and shareholders to aggressively pursue innovations that expand, extend and deliver value to the brand and the entire McDonald's system," Greenberg said.

eMac Digital is McDonald's second foray into e-commerce this year. In March, the fast food giant was part of a coalition of companies -- including Kraft Foods, TV Guide and Blockbuster Video -- that invested $80 million in the San Francisco, California-based Food.com, a company that offers an online food takeout and delivery service.


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