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. Last Updated: 07/27/2016

Krasota.ru Wins $20,000 Prize

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Good looks won out in the end.

Out of four finalists in the Internet Olympiada held Friday, Beauty Online (www.krasota.ru) beat out the banker, the tech geek and the oil baron.

Judged by their business plan and investment opportunities and chosen from more than 700 e-businesses and entrepreneurs from around the CIS, Beauty Online got unanimous support from the five-member jury panel that included venture capitalist Esther Dyson and search engine Google president and co-founder Sergei Brin.

"I like their business model," Dyson said. "Ultimately their site will be able to be franchised by the beauty salons, so they're helping the little guys get online."

The other three finalists were www.fin-trade.com, a business-to-business site for financial information and transactions, www.virtusphere.com, producer of animated multimedia content for computer and television, and www.russianoilandgas.com, a B2B marketplace for equipment and industrial services.

Beauty Online director Andrei Zhukovsky, who brings home a $20,000 check, said his business could grow on its own and survive without investors, but not if competition were to surface.

"That's why we need some money to push our business forward."

He couldn't yet pinpoint where the fresh cash would go, but did mention a possible upgrade from the company's basement office .

"You know, Sergei Brin and his Google started in a garage. We don't sit in a garage, but in something close to that," Zhukovsky said.

Sponsored by Arthur Andersen, Monitor Group, Rambler Group and Sun Microsystems, the first-time cyber-Olympics awarded the winner with a hefty check and a free trip to Harvard University to learn from e-business experts how to succeed online. The three runners-up will also head off to Cambridge, Massachusetts, in January for a week of guidance.

"Why was Krasota the clear winner? It is a real Internet project ... a portal with extended service," said Alexei Polyakov, director of brokerage Killiney Investment S.A., which runs www.fin-trade.com. "We are not an Internet project. We are an Internet-related project in the field of financial services," Polyakov said.

More a process than a one-time start-up, Beauty Online began offline three years ago selling software to the city's beauty salons. It came out with CD-ROMs and software that, for example, let salons' customers view themselves digitally with different haircuts and makeup.

This year the company consolidated its activities on a web site that calls itself an e-zine, or "an Internet guidebook for the world of beauty," and caters to both businesses and consumers. Now it is expanding its B2B solutions by signing up local salons — some 500 so far — that will be hosted for free on Krasota.ru and will have e-mails ending in @krasota.ru.

"You could say, why invest in beauty salons? I mean, it's like, talk about useless," said Dyson, an e-investor who is active in a handful of Russia-based startups. "But I see this investing not just in women looking good, but in the little businesses that are employing people, that are startups."

A contest with a purpose, organizers and judges want to dress up their winners' bright ideas to make the investors come courting.

Bruce Allyn of Monitoring Group said their goal of sending the finalists to speak with top e-strategists is to "systemize their thinking in a way that will speak to Western investors."

Polyakov of Fin-trade.com agreed: "We have software product and we need to learn how to market it."