Instead Friday was an unmitigated disaster for ESI's chairman, Hermann Hauser, and his team. The London Stock Exchange had already told ESI it could not offer live prices after all; now the company was informed that it had broken its confidentiality clause by talking to the press. The exchange withdrew all co-operation - removing ESI's raison d'etre and threatening the pounds 2m invested in the company. Then Mr Hauser got toothache, and had to rush out of the launch party for an emergency filling.
ESI was set up in early 1994 by a team led by Mr Hauser, founder of Acorn Computers, and the electronics entrepreneur Jack Lang. They believed the Internet was an ideal conduit for share price information, if not for actual trading, and joined up with David Jones, founder of the discount stockbroker Sharelink. The idea was that Internet users could watch prices in real time on their computer screens, then ring Sharelink to buy and sell.
ESI and Sharelink signed agreements with the exchange in March and June this year to allow them to carry real-time price information as part of a pilot scheme. Before this, the exchange had insisted prices could be carried only at midnight after trading: these prices were, and are, available via on-line services such as CompuServe.
On 31 August the two companies received a letter from the exchange saying it had changed its mind and that the real-time service, scheduled to start on Friday, would be withdrawn on 30 October. But they believed that they could still go ahead using CRS-Lynx, an alternative stock exchange subscription service.
Then on Wednesday another letter arrived, making it clear the exchange would not allow real- time pricing in any form. ESI/Sharelink had two launch parties scheduled - in Tower Bridge on Thursday night and at the London Internet cafe Cyberia on Friday morning. At least they could demonstrate the service, even if it would last only two months. "They must be like Canute trying to hold the tide back," Mr Lang was quoted as saying on the news wires. "It's a clear exploitation of their monopolistic position." The exchange clearly took exception, sending off a recorded letter to say everything was off because ESI had talked to the press.
The Cyberia launch did go ahead, because the plug had not yet been pulled. But the companies assume it will be tomorrow and, they say: "We are currently seeking legal advice as we believe such a unilateral alteration is an unfair contract alteration, and a restriction of trade in breach of UK and European law."
The exchange will not comment, which is consistent given its accusation that the companies have broken the terms of their contract by talking to the press. But it said in its original letter that it had "reviewed its strategic position'' and had decided stock prices should still be available only after midnight.
It is only possible to guess at the exchange's reasoning. It is conceivable it became concerned at the security implications of putting real-time share prices on the Internet. Although the prices are protected by a sophisticated encryption system, they could theoretically be tampered with by a hacker. But the same is true of the electronic price distribution systems used in the City.
The electronic community sees darker reasoning. It feels the exchange is protecting a monopolistic position that will be undermined eventually. Nasdaq is already established in the US as an all-electronic stock exchange, while an electronic Bulletin Board is also used to post bids and offers for shares of tiny companies. "It looks as though they're living in the stone age, and that's not good for innovative British companies looking to use technology to the full," says Danny Bowers, editor of Internet "magazine" MoneyWorld UK.
o The ESI/Sharelink page is on the Worldwide Web at http://www.esi.co.uk.Reuse content