Tiscali Makes Dual Purchase; Claims Euro Number One ISP Spot

26 April 2001

In increasingly expansive mood, Italian internet service provider Tiscali has made its second purchase of the week, buying smaller British rival LineOne for E100 million.

The latest acquisition follows the purchase of German portal and ISP surfEU for around E70m in stock and cash on Tuesday.

Tiscali is handing over E80m in shares and E20m in cash for LineOne, formerly owned by United Business Media and British Telecommunications.

Tiscali chairman and founder Renato Soru claimed that these two new acquisitions, which between them increase Tiscali’s subscriber base by around one million to a total of seven million, make Tiscali the top European ISP: “Only the big American portals have more users in Europe than we do,” he enthused. However, these claims are far from universally accepted – German rival T-Online, which Tiscali claims to have displaced from Europe’s number one spot, uses a different statistical method to work out users, keeping it in first place with 8.7m subscribers.

Statistics aside, Soru declared that the acquisitions would help Tiscali reach profitability this year. “Internet lives by big numbers and the economies of scale,” he explained. “We’ll never reach break-even if we don’t grow.” By way of an example, he forecast that the LineOne purchase alone would produce net savings of E20m per annum.

Tiscali is aiming to enter the top three ISPs in every nation in which it operates. The surfEU acquisition has fulfilled this dream in Germany, propelling it into third place, while in the UK Tiscali has edged into fourth place with the LineOne purchase.

News source: Wall Street Journal