Shares in Dialog Corp Plc rose 9.6% to 164p over the past two days after the UK online information provider said its internet revenues had doubled in the first half of 1998. Dialog, formed from the merger of MAID and Knight-Ridder Information last year, reported over $50m in internet-related revenues for the six months to June. Dialog says it expects to break through the $100m internet revenue barrier before the end of this year. We view the explosion in the commercial and consumer use of the internet as a fundamental, long-term growth driver for our company, says Dan Wagner, Dialog chief executive. MAID launched an internet interface to its flagship Profound database in March 1996. Following its $420m takeover of Knight-Ridder Information in November 1997, the company now offers internet interfaces to three other databases: DIALOG, DataStar and DialogSelect. Broker ABN AMRO, which has issued a buy notice on Dialog, is particularly impressed by Dialog’s acquisition last August of Muscat, a Cambridge, UK-based search engine developer. It compares Muscat favorably with UK internet agent developer Autonomy Corp Plc which has just floated on the Brussels-based Easdaq market capitalized at over 100m pounds. On the same basis and assuming sales of 1.7m pounds, Muscat could be worth around 30m pounds, equivalent to almost 15% of Dialog’s stock market value, ABN AMRO says, Dialog would appear to have secured an extremely favorable deal with significant embedded value.
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