Both le Freeserve and Wanadoo suffered at the stock exchange (London and Paris, respectively) yesterday. Freeswerve put a brave face on its results - highlighting that operating loss was lower than last quarter but glossing over the fact that pre-tax losses had rocketed - but shares still fell 3.6 per cent.

Its parent Wanadoo suffered worse - seeing 6.7 per cent wiped off its share value.

Freeserve's results are put out of kilter by a big one-off write-off of Net investment losses and a bit of a reshape - both included as a result of Wanadoo's recent acquisition of it for £1.65 billion. That, combined with the new influence of Wanadoo, well, France Telecom - a notoriously hands-off company :-) - makes Freeserve's situation difficult to ascertain. Hopefully, the next set will enable us to see through the fog.

Wanadoo has also just purchased Spain's Indice Multimedia, and is offering new shares with a bit of cash to cover the £220 million deal. It's not a bad deal, but people are getting nervous. The City is still trying to work out patterns of instability in Internet companies. None (well, none that work) have emerged as yet, but a Net company buying out other Net companies can get hands shaking. ®

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