By Kevin Murphy
Dell Computer Corp is expected today to announce a range of corporate servers designed around search engine technology, to allow companies to quickly search and index databases and local networked data. The launch follows Friday’s announcement that Dell and Lycos Inc will together buy equity stakes of up to 19% in Norwegian search engine developer Fast Search & Transfer ASA, as ComputerWire revealed last month. The total possible value of the deal is around NOK1bn, or $128m.
The new product, to be called Dell Fast Search Server according to sources, will be targeted at the corporate market, and will run the search engine technology behind Fast’s alltheweb.com web search site. Fast claims alltheweb, with 210 million listed pages, is the internet’s largest search service, although its strategy is to focus on selling its technology to portal OEMs, such as in a recent deal with LookSmart Ltd. That the engine runs on dozens of clustered Dell servers is crucial to its speed, according to Fast.
In addition to the servers, the two companies will negotiate to include Fast searches in Dell’s web sites. Thomas Fussell, chairman of Fast, told ComputerWire he hopes to have the technology included in DellNet sites, as well as on Dell.com features, such as the Premium Pages preferred customer site. Lycos already uses Fast in its multimedia searches.
Under the terms of the investments, Lycos will take an initial 5% stake in Fast for around NOK263.7m ($33m) with the subscription rights for another 10% at the same share price, 5% of which is conditional on certain terms being met, making a total possible investment of $99m. Dell will buy 2.1% of the Norwegian firm for NOK116m ($14.6m), with the options to double up to 4.2% at the same price.
Both companies are getting a good price – NOK140 per share compared to the price on Oslo’s over-the-counter market yesterday of around NOK470. Unsurprisingly, Fast has undertaken to list on Nasdaq some time next year, and is currently consulting merchant bank Thomas Weisel Partners LLC on the move.
