Dialog deal gets backing from Blair

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The Independent Online
DIALOG CORP, the troubled on-line information group, was thrown a lifeline yesterday in the form of "a multi-million pound" technology licensing and distribution pact with Fujitsu, the Japanese technology company that owns ICL.

The deal received surprisingly enthusiastic backing from Prime Minister Tony Blair, in whose Sedgefield constituency Fujitsu has a soon-to-be mothballed semi-conductor plant. But the alliance with Dialog, which will see Fujitsu deploy the UK firm's Infosort software in existing and future products and services, will not provide any direct benefit to the PM's constituents.

"I am particularly encouraged by this news, not only because of the immediate benefits that will accrue to a British company, but also because Britain's reputation for innovation and competitiveness in information technology will be greatly enhanced in Japan and around the world," Mr Blair wrote in a letter appended to the company's announcement of the deal.

A source familiar with the situation said Mr Blair was happy to back the deal as Dialog has seconded a senior executive to assist the Department of Trade & Industry's Action Japan trade programme. They also stressed Downing Street's interest in all things related to information technology.

"It's an `information age' business," said the source. "If it had been a steel issue there would have been a letter from the DTI."

The Downing Street press office seemed unaware of the letter. "We usually don't comment on that sort of thing," said an official.

Investors welcomed the deal, billed as the largest ever software export by a UK firm, marking up Dialog shares 11.5 pence to 121p in heavy trade of 7.4m shares. That continues last week's partial recovery for the stock, which sunk to 91p after reporting disappointing results last month.

Created by the pounds 261m reverse take-over of Knight Ridder Information by Maid in 1997, Dialog has sought alliances and licensing agreements to increase the number of customers able to access its on-line databases. A growing number of on-line information aggregators and the ubiquity of information available over the Internet has also hampered the company's ability to grow its customer base.