Shares in some of the leading UK-based internet companies fell
dramatically this week in response to reports that Amazon.com, the
US internet retail giant, is running out of cash.
Amazon's share price fell by around 20% following the
publication of an analyst’s damning report last week. This led to
fears about the future of on-line retail stocks in general and the
effect of this was felt in the City yesterday.
Share prices in UK based on-line auction house QXL.com and
travel specialist Lastminute.com fell by 9% and 3% respectively.
More notably, shares in the UK's leading ISP, Freeserve, dropped by
19% by mid-afternoon.
Freeserve’s substantial loss has been attributed to the collapse
of talks between the company and T-Online, part of Deutsche
Telekom. It is understood that the deal was abandoned because
agreement could not be reached over management styles and rates of
pay. Despite this set back Freeserve chief executive John Pluthero
maintained, “we are still in talks with a number of others”.
It is widely believed that cable company NTL is now holding
merger discussions with the company. In the wake of this, Freeserve
released its annual results a day earlier than expected which
showed losses of £19.7m, although the number of active registered
accounts has risen from 1.2 to 1.9m.
