Global Brain back on market after huge losses at US owner

By CHRIS BARTON and AGENCIES

Christchurch-based Global Brain is once again up for sale after the demise of its owner NBCi - the loss-making internet subsidiary of US media giant NBC.

But this time around the sale price is likely to be at bargain basement levels rather than the reported $US50 million NBCi paid when it acquired the company in May last year.

"It's most likely we'll be sold as a going concern," said Global Brain founder Dr Grant Ryan.

He said half the 300 staff at NBCi would be made redundant today, but the 25 software engineers at NBCi New Zealand (formerly Global Brain) would not be among them.

"That gives us a small window to market ourselves to someone else," said Dr Ryan.

The company's website (www.globalbrain.net) has been made over to carry a description of assets, including the patented search technology used by NBCi's Snap search engine.

General Electric's NBC unit announced on Tuesday that it would acquire the two-thirds of NBCi it does not already own for about $US86 million and fold the struggling web service into its other operations.

The purchase places a value of about $US150 million on the internet subsidiary. That is a far cry from the roughly $US5.7 billion value that investors assigned to NBCi back in January 2000, when its shares closed at a high of just above $US100.

"We are disappointed," said Dr Ryan.

"We chose to sell to NBCi because they were backed by NBC and General Electric. We thought that would count. But sometimes it doesn't work like that."

He said NBCi had struggled by being late to the party and facing stiff competition from more established search-engine portals such as Yahoo, Google, AltaVista and Excite. NBC's chief financial officer, Mark Begor, said the sharp declines in the internet advertising market convinced the company not to pursue a portal strategy.

Along with GlobalBrain, the fate of about a dozen companies, including Flyswat and AllBusiness, acquired for stock by NBCi over the course of a $US500 million buying spree is still to be decided.

NBCi has been losing a staggering amount of money. In the three-month period ended in December, it posted a net loss of $US245 million on revenues of $31 million. Excluding asset write-downs or restructuring charges, it would have lost $47 million for the quarter.

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