Will an ownership struggle slow FAST's ascent?

By Stephen Arnold at 2005-12-05 16:36:00 |

Last week in London at the VNU Online show, faces at the FAST Search & Transfer ASA stand were smiling. FAST Search has been on a roll in 2005. The company reported record growth and netted some significant accounts for enterprise search. Dow Jones will use the FAST Search technology in a bid to breathe new life into the company's online capabilities.

But an innocent question about the looming battle between shareholders changed the smiling FAST Search staffers to a more guarded expression. The reason? A critical shareholder meeting on the horizon. Control of the fast-rising enterprise search vendor may be at stake.

Unraveling the ownership of the company is not easy. Opticom, another Norwegian company, spun off FAST Search but retained a stake in the company. Opticom's other ventures have floundered (no pun intended). But sharp MBAs saw Opticom's stock as a cheap way to get a piece of FAST Search.

Opticom's chairman (Robert Keith) and Opticom board member (Thomas Fussel) owned about 25 percent Opticom. Financial pressures forced a sale of their shares. Unknown investors hooked those shares, leaving Keith and Fussell with reduced holdings.

In the midst of this activity, another Norwegian company Orkla has taken a five percent stake in FAST Search. Those shares may be in play.

Charges and counter-charges are flying among the parties. FAST Search bought 1.574 million shares in Opticom to make sure it gets a seat at the conference table among the various parties.

Among the rumors roiling the waters of the Online show in London were:

• Yahoo! wanted to acquire FAST Search. (Yahoo! owns 3721.com, Inktomi, and Stata Labs search technologies, along with the former FAST Search Web index AllTheWeb.com.)
• Unknown investors from the Pacific Rim want to get control of FAST Search in order to accelerate its growth outside of North America and Europe
• An American buy-out firm seeks to gain control of FAST Search, boost marketing, and accelerate the company's growth.
• FAST Search's management is engineering the deal to increase the firm's reputation as the "Google of Scandinavia."

Which, if any, of these opinions is informed or uninformed is difficult to say; Forbes argues that current FAST Search shareholders will be the big winners regardless.

On December 7, 2005, Opticom will hold a shareholder meeting, with FAST Search holdings on the agenda.

Pending the outcome of the meeting, FAST Search may emerge unscathed from the tangled lines of these financial arabesques. Of course, as Enterprise Search Report readers know, other competitors have tangled ownership as well, most notably Convera.

Indeed, the whirlpool of activity surrounding FAST Search climaxes a year of upheaval in the enterprise search arena. Google's Appliance matured from a colorful toy to a solid search choice. Acquisitions (Autonomy-Verity, IBM-iPhrase, Oracle-TripleHop) signaled at least some consolidation had begun. Cut-throat marketing allows a customer to get enterprise search without charge under generous trial programs. Microsoft's strong emphasis on dominating search means a $36 billion gorilla will be in the sales jungle to stay.

Search is no longer a doormat technology. Search has become the launch pad for expectations of enormous financial gain.