When Anglo-Dutch publisher Reed Elsevier announced it planned to invest £750m into migrating its business on to the internet the market reaction was surprisingly adverse.

This was February after all, a month before the correction which took place and when the mere whiff of the internet was enough to set a rocket under a share price.

Reed though was in the unfortunate position of being the latest in a series of companies which had made similar noises, including Reuters and Pearson. Reed shares had already been ramped in expectation and when chief executive Crispin Davis began talking about three year programmes the "hot" money looking for instant fixes such as spin-offs or flotations got out. The share price plunged from a peak of £6.66 to less than £4.

Yesterday, though, Reed began to provide evidence that the turnaround has begun in earnest.

Profits were down 5% as a result of the increased investment in online activities, but were better than most analysts expected at £351m for the first half of the year. Online revenues are running at £400m, keeping the group on course for its £1bn target in 2002.

In a climate of growing cynicism over the ability of the internet to make money, Reed is well placed. The group is focused around the legal, science and business-to-business publishing and information sectors, much of which can be sold via the internet on the more surefire subscription model.

The company has been building its content-base through an aggressive acquisition policy and that is unlikely to stop. Mr Davis said the company has "run its slide rule" over US textbook publishing business Harcourt International put up for sale in June.

Shares in Reed, which is dual listed in London and Amsterdam, were among the best performers in the FTSE-100 yesterday, closing 7.4% higher at 566p.