"Pointless": The verdict on Tiscali's buyout of Excite

Tiscali's acquisition of the last piece of Excite Italy is not enough to turn it into a leading European ISP.

Tiscali today completed the E2.985m (£1.83m) purchase of the remaining 30 per cent of Excite Italia it didn't already own. The deal gives it complete control over the brand in Europe and its portal technology.

However, Forrester Research analyst Helen Omwando told silicon.com the acquisition is "pointless".

Omwando said: "This doesn't evolve Tiscali to a top tier position in Europe at all. Tiscali is ranked second in Italy but the top Italian ISP Virgilio dominates with 60 per cent of the market."

However, CEO of Tiscali UK Sergio Cellini said: "It made a lot of sense to purchase the remainder of Excite Italia from Excite@home as we owned most of it anyway. We are particularly interested in its portal technology which will be used for Tiscali. The brand is an add-on that we may or may not use."

Tiscali has been involved in heavy ISP acquisition activity across Europe over the last two years and is now gearing up to publicly consolidate its holdings under the Tiscali brand.

Omwando disagreed with the company's tactic: "Tiscali's spending spree has been misguided. It's acquired second tier ISPs in Europe that were generally bleeding funds dry by using free internet access business models. It's now trying to consolidate a pan-European presence without having much of a footprint."

Ovum digital media analyst Dario Betti agreed with Omwando: "Up until now Tiscali's had a big mouth and eaten more ISP brands than it can successfully turn around."

However, Cellini said: "In terms of EBITDA we are in a much better shape than all of our European competitors, be they Wanadoo or T-Online."