Accoona picks City for $700m market debut

US search rival to Google comes to London

An American search engine set to challenge the supremacy of Google is to make its market debut in London after turning its back on New York.

Accoona, a New Jersey company that has developed a search engine based on artificial intelligence, is to seek a listing on the Alternative Investment Market that will value the company at up to $700m (£350m). That would make it the most valuable technology float in London since chip company CSR floated in February 2004.

Accoona has already raised more than $100m from private investors and Chinadaily.com, the most popular English-language website in China.

Accoona is chaired by Eckhard Pfeiffer, the former chief executive of Compaq Computer, and currently a director at Ericsson, General Motors and Deutsche Bank.

Cenkos, the stockbroker started by City veteran Andy Stewart, will begin marketing the offering on 12 February and shares should begin trading in early March.

Accoona aims to raise between $50m and $70m in the offering, which will see it sell up to 10 per cent of the company. It has developed a search engine based on artificial intelligence and a "lead-generation programme" that it bills as a step up from Google's pay-per-click model.

"Once this starts to make waves, it will be bought by a Yahoo or a Google," said a source close to the company. It also runs an "etailing" operation expected to generate up to $200m this year in sales of products such as plasma televisions.

The company has caught the attention of some prominent people. The 2004 launch party was capped by a speech from former US president Bill Clinton. Last month, the company unveiled a new search function that separates results into three different tabs - business, news and web - at the UN in New York. Among the guests were former UN secretary-general Kofi Annan and Mr Clinton.

The decision to list on AIM, the London Stock Exchange's market for smaller companies, rather than Nasdaq, the American exchange just down the street from Accoona's headquarters, is a fresh blow for Wall Street.

Accoona is thought to have opted for London not only to avoid the onerous Sarbanes-Oxley regulations, but also because of its connections with China. London is seen as a less politically sensitive home for the company than the US.