Freeserve, Britain's largest internet service provider is planning a buying spree using its soaring share price as currency.
The company, valued at £1.5bn when it floated last year, is now worth nearly £8bn - more than British Airways. Its share price has risen from 150p at its launch to 769p at close of trading on Friday.
In reports over the weekend, chief executive John Pluthero said the decision to float had been a deliberate strategy to fund an acquisitions spree. Dixons, which has an 80% stake in Freeserve, is understood to have declined to put any more money into the operation.
"We floated to get a currency we could use. With the shares getting to the kind of value they are now, we can use that currency to put together the properties and elements we need," Mr Pluthero told the Observer.
He declined to name targets but said several were under consideration. "We've identified a number of areas where we want to acquire the right kind of capabilities. Sometimes they're quite small and sometimes they're pretty big."
Separate reports speculated that the German internet service provider, T-online which will be spun off from Deutsche Telekom this spring, could be Freeserve's first purchase. T-online already owns Club Internet a French ISP, and an alliance would make Freeserve the largest ISP in Europe.
Mr Pluthero said yesterday that content was a big concern in its acquisitions strategy, pointing to the huge AOL-Time Warner deal as a model. "It was a smart move. When you put content and platform together you create an even richer seam."
Last month Freeserve played down reports that it had been in talks with the troubled children's publisher, Dorling Kindersley. Freeserve's current offerings include travel, insurance, books, electrical goods and an auction site.
Mr Pluthero's other ambitions include introducing unmetered Internet access to the UK, along American lines. "I'm sure we'll get to the position soon where poeple are being charged between £10 and £15 for as much Internet access as they want."
BT has already announced it plans to introduce an unlimited internet access provider in the spring.
Launched in September 1998 as part of Dixons, Freeserve now has nearly 1.7m registered users. In January it produced the strongest set of figures in its short history, but like almost all internet companies, it is still trading in the red.
Pre-tax losses in the quarter to November stood at £3.6m on a turnover of £3.8m.
Analysts say a strong brand and its distribution network through Dixons helped it bounce back from the turmoil in the hi-tech stock market at the beginning of the year. Dixons preloads about 90% of its PCs with Freeserve's software, with the result that it is the ISP on almost a quarter of all new PCs in the UK.
Mr Pluthero said that the company is planning anadvertising campaign next month, including using television spots for the first time.
The company has also signed a deal to provide internet services to the new wireless application protocol mobile phones, (Wap) phones, due out soon.
