Tiscali settles Globalnet suit with £500k pay-off
Cheaper than going to court claim
In October 1986, Jeffrey Archer, the disgraced Conservative politician, paid prostitute Monica £2000 for not sleeping with her; in July 2001, Tiscali, the leading ISP, paid Globalnet Financial £500,000 for its subsidiary World Online not fibbing over membership and page impression numbers.
Globalnet Financial, the now moribund online financial information service, last month filed a £10m writ against Tiscali, claiming that World Online had failed to deliver promised 'eyeballs' to its continental European sites. Globalnet says it built a substantial overseas network on the back of assurances received from World Online.
Tiscali has briefed The Financial Times over its decision to settle. "This was to avoid the costs asssociated with a protracted legal case...the claim was not well-founded", the company insists.
Hmm. Half a million quid seems an extraordinarily high amount to pay to avoid a legal battle, doesn't it?
It would have been very interesting to have compared and contrasted World Online's stated subscriber numbers and active users at the time of the Tiscali takeover last year.
Any disappointment that Tiscali may have felt will surely have been tempered by the access it gained to World Online's huge cash pile, amassed in happier times through an albeit controversial IPO.
Once upon a time, GlobalNet Financial had a pretty useful cash pile of its own. It has burned its way through this until there is now just enough money to pay for the closure of its web sites.
New owner, the VC house New Media Spark is buying the business for shares it owns in other dotcom concerns (including New Media Spark). The half million pounds from Tiscali will come in handy in the financial re-engineering. Any sympathy that one may feel for Globalnet's treatment at the hands of World Online will be tempered by incredulity that the company squandered so much money on the back of a distribution deal with a decidedly flaky ISP. ®