Yahoo! opts for a Yell on its portal instead of a Scoot

Yahoo! has dropped Scoot.com, the troubled directory business that epitomises last year's dotcom hype, from its UK and Ireland internet portal.

This was another blow to the company which is perilously close to running out of money, and whose shares have lost 99.5 per cent of their value since March this year.

Yahoo! has replaced Scoot with Yell.com, the internet directory service created by BT. That was sold in May to venture capitalists Apax Partners and Hicks, Muse, Tate & Furst. A Yahoo! spokes- woman said: "Yell better fits our needs. The directory is much more comprehensive."

Yell and Yahoo! are working on plans to launch a directory service for internet-enabled phones.

Companies have to pay a fee to appear on Yahoo!'s site. Scoot claimed that it was dropped by Yahoo! because it could not match the money offered by Yell. "We were outbid; it was as simple as that," said a spokeswoman for the company. She also said that since losing the Yahoo! deal, Scoot has secured a similar arrangement with Lycos.

But, as the Independent on Sunday went to press, Scoot was not listed on the portal and Lycos's telephone directory service was powered by UKphone-book.com.

Losing its partnership with Yahoo! represents a major blow to Scoot. Yahoo! is one of the most popular websites in the UK and Ireland. And Yahoo.co.uk generated 563 million page visits in June, says ABC, the circulation auditing company.

Scoot's troubles were fully exposed last month when the company sold its continental European business to France's Vivendi Universal for just 61p. The deal included operations in France, the Netherlands and Belgium and included £92.5m of liabilities.

Scoot also warned that it would need a new injection of cash if it was to trade beyond the end of August. The month before, the chief executive Robert Bonnier and chief finance officer Ronald Dorjee had resigned.

And Tiny Computers, the UK's largest personal computer manufacturer, has agreed to sell its internet service provider business to Italy's Tiscali for £8m. The service provider, Tiny Online, has just fewer than 700,000 subscribers.

As part of the deal Tiny has signed an agreement to install the service provider software on all its new computers.

Tiscali has established itself as Europe's most aggressive internet provider, having bought a series of rivals, including the UK's LineOne from BT and United Business Media. Tiscali has two million internet users in the UK.