Global Brain still searching for its saviour

By PETER GRIFFIN technology writer

Time is running out for Christchurch-based Global Brain as its US owner, media giant NBC, struggles to find a buyer for the internet technology company.

Global Brain, which develops internet search engines that learn from their users' searching habits, was sold to US network giant NBC in May last year in exchange for NBC shares believed to be worth tens of millions of dollars.

NBC quickly put the company's search engine technology to work in its internet subsidiary NBCi, but the demise of that unit in April cost 300 jobs at NBC. Global Brain, renamed NBCi New Zealand, was then put up for sale.

Global Brain's founder, Dr Grant Ryan, said the company was given two weeks to find a buyer when NBC pulled the plug in mid-April. Six weeks on, the company is still without a buyer and its 25 staff will lose their jobs if a rescue package is not arranged soon.

Dr Ryan and other shareholders will receive a cash payout for the NBC shares they possess.

He said the company was on the market for "orders of magnitude" less than NBC bought it for. While discussions had begun with six companies, that number has been whittled down to two interested parties.

If a buyer is not found for Global Brain, the sophisticated intellectual property that won it international recognition could go unused.

NBC has signalled it does not intendusing the search engine technology, geared towards consumer portals, in its other net operations.

"They're not using any of the NBCi technology at all. It was all developed around the model of a consumer portal and they've worked out they cannot survive in the consumer portal market," said Dr Ryan.

An alternative would be for Global Brain to buy back the intellectual property it developed and rebuild its business with new partners.

"It is a possibility, but the main market for our technology has collapsed."

The firm has been talking with several large portals, but the desire of Global Brain's key personnel to stay in New Zealand and the short time frame to conclude a deal meant several potential buyers had withdrawn their interest.

Dr Ryan said NBCi had been a victim of the consolidation taking place in the portal market in which there will be a few major survivors.

"It's going to be AOL, Microsoft and Yahoo, and even Yahoo! is on shaky ground at the moment," he said.

The sale of Global Brain had nothing to do with the liquidation of Global Brain Ltd - a company set up well before the alliance with NBC and one that had no creditors, he added.

The demise of NBCi could also have a knock-on effect for TVNZ's online news portal NZoom. The website has a licensing deal with NBCi to use the Snap search engine using technology developed by Global Brain.

But TVNZ is believed to be looking for a substitute to take over where NBCi has left off.

NZoom's general manager, Simon Aimer, would not confirm if a replacement for NBC's services had been settled on, but said NZoom was generating interest from players keen to fill NBCi's shoes.

"We've been approached by a number of the major players in the portal market, largely in the wake of the Xtra-MSN partnership," he said.

That $300 million partnership, sealed last month, will merge the website of internet service provider Xtra and Microsoft's MSN portal, in an arrangement similar to that of NineMSN, the union of Microsoft and Australian broadcaster Channel Nine.

Already the alliance's main competitors are looking to meet the challenge of the new portal, expected to go live within three months, in moves to make themselves more attractive to online advertisers.

Mr Aimer said a planned collaboration between NZoom and the Herald Online would see financial news and share services, supported with reporting and streaming video updates.