The darling who crashed to earth

The founders remain bullish as they reflect on their fame and difficulties in the wake of the hi-tech slump
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The Independent Online

Their faces have appeared in newspapers and even business magazine covers. They've been the darlings of the British New Economy, showing that the UK can "" just as well as the US. Perhaps one of the proudest achievements for Martha Lane Fox and Brent Hoberman is that a survey last Christmas found that was the second best-recognised online brand, after Amazon, the bookseller.

But since their shares hit the stock market, media coverage and investor sentiment has turned as cold as the weather. First, private investors were outraged after seeking hundreds of shares but getting just 35, worth £133; then they were told they could not trade the shares for at least a week and had to watch as the stock rocketed from 380p to 555p and then fell below the offer price - a guaranteed instant loss. Then refund cheques bounced. And on Tuesday the market collapsed and was down to 195p. Yesterday, they broke a self-imposed silence to talk about what has happened in the past three weeks.

A gut-wrenching time for the two of them, surely? Not at all, says a bullish Ms Fox. "I don't think about what my shares are worth. I love and we have worked bloody hard for two years to build it up. And I can honestly say that I have never been so busy in my entire life as in the past three weeks. I've been working 14-hour days without a day off." She has recently shunned media exposure, including an offer to comment on the Budget on Sky TV.

Mr Hoberman claims to be just as unfazed by the markets: "To be honest I just read the daily updates of the price."

For anyone who's interested - which apparently doesn't include the duo - their personal values peaked at £50m for Ms Fox and £80m for Mr Hoberman. Now, those are £18m and £27m respectively, though neither can sell for at least six months, and neither intends to for rather longer.

Have they allowed themselves to any indulgences since the flotation? They pause to think. "No," each answers. Hoberman has had one day off since the flotation - treating himself and his girlfriend to a night in a country hotel.

But they are aware that a media spotlight is always on the company and its share price, as one of the biggest British dot.coms on the market - and that its light is increasingly harsh. "We do feel like there's a lot of attention on us," says Mr Hoberman. "The flotation was very high profile. But there's this crazy inconsistency where people say it's a fantastic business one day, then suddenly the next day announce that it isn't."

Do they feel as though the media and markets have turned them first into poster kids, and then into whipping boys? "You wouldn't believe me if I were to say that I haven't been disappointed by some of the commentary about the company," says Ms Fox. "But I remain enthusiastic about the Web and its potential; and if we have attracted attention to the Web in the process, that's good."

Certainly the duo were hard to miss in the run-up to the flotation, adorning newspapers and magazine covers, including Business Week. But as the Interactive Media in Retail Group, which focuses on digital businesses, comments in its latest newsletter: "The point is that Brent Hoberman and the super-photogenic Martha Lane Fox have demonstrated that the Silicon Valley business model can be applied here in Europe."

Yet they say much of the media seemed focused on personality rather than business plans. "I do ask myself a lot why that happens. We want intelligent coverage about the business. Yet a lot comes out that's personality-driven," says Ms Fox. "We've never done personality interviews. We're not interested in it. The press create those stories by clipping stuff together."

Was she upset or annoyed by a Daily Telegraph article that criticised her fashion sense and pasted her head on to models' bodies? "I don't take that very seriously. I read the serious stuff that I need to know for my business, and skim the rest."

They have also noted something of a backlash, such as in the "personalised" coverage of last week's trouble, where cheques returning funds to some investors bounced. The cheques were issued by the registrars, not lastminute: "The company has £240m from the flotation in the bank, enough to fund a lot of expansion for quite a while," says Mr Hoberman. "Actually, the stuff about the cheques is a good illustration of how some people want to portray us as incompetent. It's like blaming your bank because the stock market [computer system] wasn't working today. The registrars made some mistakes, and admitted it, but the press would like to take that as meaning that is unable to do anything right."

The duo insist they are getting a lot right, and the plunging stock price does not reflect what is happening inside the business. "Lots of dot.coms are below their issue price in the US and here," Mr Hoberman says.

Yet there is still clearly bile on the part of investors who feel that the company somehow manipulated the share price, and are angry at having been unable to exploit its rise. One bitter investor commented on an investment chat board: "I used to think that was original, young and enthusiastic. Instead, I have found that they are a bunch of yuppies willing to jeopardise their potential investors and customers by stitching them up."

Ms Fox rebuts that vigorously. "We could have given people more [than 35] shares but we hoped that people would want the long-term benefit rather than [selling] on the first day. Bear in mind that with Yahoo!, if you had put in $7,000 at the start your shares would now be worth $7m."