Freeserve drops on news of next year losses
£60.9 million in the red for 2001
Freeserve shares fell five per cent in early morning trading following a report that losses are set to increase next year. The British dotcom's broker, Credit Suisse First Boston, estimates that Freeserve will run-up pre-tax losses of £60.9 million in 2001 and £40.7 million the following year. The losses are significantly higher than market speculation. Which put this figure at between £25 million and £40 million.
CSFB blames increased spending technology, which would include the development of its broadband service, and a drop in revenues from call charges for the bigger-than-expected losses.
A number of industry watchers have tutted loudly and shaken their heads over the news warning that the dotcom could be in need of a sugar daddy with deep pockets to keep its momentum going. No doubt this will renew speculation that Freeserve is once again in talks with German ISP, T-Online. Whether this is true or not, one thing seems clear. By looking for a buyer, Dixons, which owns 80 per cent of Freeserve, has already signalled that it's not prepared to bail out the company indefinitely.
AOL just doesn't stop. While Time Warner was saying it thought its "merger" with AOL would go ahead, the online giant was busy doing something and
announced a deal with Citigroup where it will make the group's financial products available over its various portals. It also said it was in negotiations with Italian magazine publisher Mondadori to build an italian ISP. Mondadori controls most of the consumer magazine market and has a heavy direct marketing business.
Deutsche Telekom has agreed to sell its stake in Italian mobile phone company Wind to France Telecom and Italian company Enel. Enel will hold a
majority share. France Telecom's is paying two billion euros (£1.25 billion) for the extra 19 per cent stake. The sale is thought to originate from a
fallout between the heads of France Telecom and Deutsche Telekom when the German firm put in an unexpected bid for Telecom Italia last year.
UK retail company Tesco and online women's network iVillage.com have embarked upon a joint venture to launch a UK presence of the online community. Tesco will provide $18million in cash over the next three years while iVillage will share its online experience and intellectual property in developing the new site. Scheduled for launch in Q4 this year, the site will be called iVillage.co.uk.
France Telecom has stuck its neck out by pricing shares in Wanadoo at €19. This is at the high end of the expected price bracket but didn't make it to
the top of the range, despite being 16 times oversubscribed by institutional investors. This pricing values the telecom company's Internet subsidiary at €19 billion.
Cable & Wireless yesterday said it had bought five European Internet companies for $100 million cash. The firms are based in France, Germany, Spain, the Netherlands and Belgium, and add $40 million in annual revenues and 30,000 business customers to the telecoms giant.
More stories from the Bubble Economy can be found at Cash Register. ®
Sponsored: Benefits from the lessons learned in HPC