The costs of localizing in several countries, however, can drive companies out of business. Take the now-collapsed Boo.com's brash bid to simultaneously launch sites in 14 countries. "We probably should just have had skeletal staffs in the U.S., Germany and Sweden," says Ian Tester, a former Boo business development manager. "But our game was this complete landgrab."

DressSmart, the European clothes-shopping portal founded in Sweden, also expanded quickly around Europe. "All the VCs told DressSmart, 'Go Pan-European! Go all the way!'" recounts Forrester Europe analyst Abigail Leland. "Then when the next round of financing came, the rug got pulled out from [under] them." The VCs had decided DressSmart was spread too far. The company ran out of money this summer.

Lastminute's Pan-European push has certainly been expensive, with operating costs rising an estimated 800 percent since it began its expansion last year. Yet its most recent earnings reports had the U.K. operation still accounting for 89 percent of the company's revenues. Though Lastminute had $164 million in cash reserves in June, if its expected expansion revenues fail to materialize, Lastminute's burn rate could sink the company.

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Like many companies, Lastminute didn't have a well-defined Pan-European strategy from the beginning. "When I originally sketched out Lastminute, it was focused on the U.K.," says CEO Brent Hoberman. "I wouldn't have dared to think so ambitiously as the whole of Europe." Though the business model that eventually scored funding had international components, he says venture capitalists probably discounted the European projections. Yet Hoberman is very much the cosmopolitan European. Tall and dark, he has lived in Paris, the south of France and Berlin; his mother lives in Portugal, his father in New York. With this background, it seems unlikely that any company Hoberman cofounded would confine itself to one country. And then there's ambition. "My very simple grounding in economics tells me you should build barriers to entry to your competitors," he says. "And entering new markets makes you very hard to follow."

With $62 million raised from its initial investment rounds, Lastminute slated its first expansion for fall 1999; another $176 million brought in from its March 2000 initial public offering fueled the continuing effort. Based on numbers for Internet penetration, travel and overall e-commerce, Lastminute decided on its first three countries - economic powerhouse Germany, surging France and Net-crazy Sweden. Holland, Italy and Spain would follow.

After setting up shop in London, eBay (EBAY) and Amazon.com (AMZN) also used Germany as a beachhead for entering the continental market. Germany's lure is its 82 million residents, relatively strong Net usage and high levels of disposable income. Scandinavia has a fervent Internet-user population, but relatively small market. France, Italy and Spain have major potential markets, but relatively low Net penetration.

For Lastminute, the basic plan for all these countries was the same: set up an intensely localized operation headed by a native entrepreneur. "We're about what's hip in each country, so if we sent an idiot American like me into Paris or Barcelona, they'd fail," Virden says. "We need a national running things locally, someone who's talking the talk and understands the [cultural] subtleties." Each local outpost would control its site's content, tone and marketing, while London would control the technology and finances.

But Lastminute would find that localization is easier said than done, particularly when it comes to tailoring offerings to customers in different countries. Typically, Germans assiduously plan their trips ahead, often wanting to know each detail down to the contents of the hotel minibar. Spanish customers, meanwhile, are used to paying extra for their notorious spontaneity. The Dutch prefer to drive their own cars on vacations, while the British fly. And prior dealings with their own travel industries strongly shape each nation's customers. "The Dutch expect a very honest description: 'Lively beach resort' means lots of discos; 'former fishing village' means it's a mess," explains John Nijhof, who manages hotel offerings for Lastminute Spain. "But the British expect exaggerated wording. So you can't just translate the copy, because customers from each country would understand the same descriptions differently. It's like star ratings - three stars in Spain is a pretty good hotel; in London, it's often crap."

Likewise, Lastminute had to tone down its signature flippant British humor for Germany and Spain, where such an attitude can offend customers. Cultural issues arise, even with payment methods. "In the U.K., 98 percent of our sales are with credit cards," says Philipp Montgelas, the co-managing director of Lastminute Germany. "But in Germany, many people don't have them, or are afraid of online fraud. We had to develop direct-debit and invoice systems. Sometimes we're still getting deutschmarks by mail. That's not optimum for an Internet site."