RealTime IT News

Freeserve Results Are Bullish

Top free UK Internet ISP Freeserve has announced its first set of results since listing on the London Stock Exchange, with reports show significant growth.

The number of users on Freeserve shot up 19 per cent from the previous quarter, according to the results.

At the end of August, Freeserve had 1.406 million active registered accounts, delivered 76 million page impressions from its web site during that month -- up from 64 million in May -- and saw a 104 per cent increase in turnover to £3.4 million ($5.44 million) for the quarter.

"We have made good progress in building our active user base, introducing exciting new content and establishing commerce partnerships," said chief executive John Pluthero.

"Since the holiday period, this has been reflected, in particular, in the growth in the number of users and time spent on-line."

The figure on which investment mangers and much of the media will focus, however, is the £5.0 million ($8 million) loss before taxation for the last quarter. A loss that is substantially greater than turnover is always cause for concern.

Yet despite much expressed scepticism in the press and a sharp decline in the Freeserve share price in recent weeks, the ISP has generated a steady stream of news about its activities across a broad front.

For example, it is reported to be planning the launch of a credit card, an auction service, and a portal for women during this quarter.

Freeserve is also hosting a web site for the Labour Party at labour.org.uk, gaining extensive publicity from Labours leader, Tony Blair, who explored the site during the party's annual conference this week. The partnership with the Labour Party represents a real "coup" for Freeserve, which is not only distributing 10,000 special edition co-branded "Labour.future" Freeserve disks to the delegates, but will have disks distributed to all 350,000 party members after the conference.

Freeserve's main problem remains its churn rate, losing around 40 per cent of its accounts per year, while admittedly gaining a greater number. The churn rate declined during the last quarter, said Freeserve, from nearly 12 per cent to 9.5 per cent.