An Australian-founded internet technology company is rumoured to be set to sell out to foreign investors for a cool $285 million.
Sharinga Networks, the company behind the technology powering free internet service provider FreeOnline, is believed to be in negotiations with an unnamed global telecommunications company to sell up to 50 per cent, according to the Australian Financial Review.
Sydney Low, co-founder of Sharinga Networks and FreeOnline, would not confirm nor deny the report, but said, "there is no transaction to announce yet".
Sharinga has developed consumer marketing technology that allows the creation of customised corporate-branded internet access services for users of retail ISPs and virtual ISPs. FreeOnline, one of Australia's successful free ISPs, was created by Low and Sharinga co-founder Bill Lang to become Sharinga's first customer and testing site. Unlike other free ISPs, FreeOnline does not rely solely on advertising revenues, but uses Sharinga's technology to earn revenue by charging traffic fees from co-branded sites and private access services.
According to the AFR, Low and Lang stand to make up to $285 million if they choose to sell their control of the technology company. It is believed the founders are in negotiations to sell an initial 25 per cent stake in Sharinga for $US62 million, with an option to sell another 25 per cent for $US92 million.
Regardless of the reported deal, Low said the plan had always been to take Sharinga global. "The two companies were set up around the same time to build a business in Australia that was intended to be global. We always knew FreeOnline wasn't going to exist anywhere else in the world . . . but it was the most effective way to test the technology and business model that Sharinga was developing," he said.
Low admits the path to success for Sharinga may have been shorter without FreeOnline, but at the same time he acknowledges the importance of FreeOnline in the technology development and deployment cycle. Without FreeOnline, Sharinga would not been able to test its technology thoroughly, he said, adding that the Australian ISP marketplace was at the time limited to large telecommunications players such as OzEmail and BigPond.
"It's been a symbiotic relationship . . . FreeOnline will continue to play an important role although its role will change now that we have got the technology out the door," he said.
According to Low, this week FreeOnline is expected to launch a new capability from Sharinga, which allows users to personalise a selected navigation bar for surfing.
FreeOnline and Sharinga attracted $17 million in investment capital 18 months ago. Investors included the Australasian Media and Communications Fund, BancBoston Capital, PSINet, Flinders Capital and National Australia Bank.
Courtesy of The Industry Standard