AltaVista readies 'intelligent' search engine

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Altavista Europe is to turn up the heat on the scramble to net online customers this month with plans to launch a new generation search engine.

The US-owned company, that is considering a listing on the London Stock Exchange, is developing an internet facility that gives enhanced access to audio and video media.

The company is expected to reveal the plans in two weeks, and the new engine will be operational by the end of the year. The move is part of a strategic shift for the group. In March it became the first company in the UK to offer un-metered internet access. But it is understood to have been staggered by the explosion in similar offerings and now believes that the search engine is its biggest cash cow.

As well as accessing different forms of media, AltaVista is also expected to launch a service where dedicated news and features is sent directly to its customers for an additional fee, expected to be up to £50 a year. AltaVista is also expected to announce a joint venture with a telecoms company for its un-metered internet access offering.

The new bundle of services will initially be restricted to customers in the UK. If successful, it will launch similar offerings in Europe.

Andy Mitchell, AltaVista's UK managing director, said: "The internet market and the competition has shifted significantly. We will be announcing a new direction in a couple of weeks' time."

Sarah Skinner, European internet analyst at Durlacher, said: "What AltaVista is proposing makes a lot of sense. Information is worthless unless it is focused."

But Ms Skinner said that the partnerships it forms "will be absolutely key" because AltaVista will face stiff competition from AOL, Yahoo and T-Online.

Meanwhile, Mike Lynch, billionaire founder of software group Autonomy, is hoping to repeat the trick with a new search engine. NCorp, spun offfrom the same parent company, Neurodynamics, as Autonomy, has developed a product which works like an intelligent, on-line shopping assistant. Called Perspective, it is designed to find a range of possible purchases for customers even if none of them exactly fits the suggested description.

By establishing the relationship between data, it is designed to be a more intelligent search engine than its forebears, which have tended to use the more crude method of hunting for particular words.

NCorp has won £5m of backing from Apax Partners, the venture capitalist. Its technical director is Dan Marsden, a protégé of Mr Lynch.

The Cambridge University researchers who founded Neurodynamics in 1991 will be hoping that their latest spin-off will prove as successful as Autonomy, which recently floated on America's Nasdaq stock market.