News International has pulled out of online service Line One, its joint venture with BT and United News and Media, to form its own Internet division.
The new division, called News International Digital Publishing (NIDP), will be responsible for bringing the company?s offline brands to the online marketplace.
There has been speculation for months that the media giant?s interest in Line One was waning due to its own plans to launch a free ISP. While Line One repeatedly denied its decision to drop its #9.99 a month subscription charge was fuelled by competition from within, the Sun newspaper launched its Currantbun.com free Internet service two weeks ago. The Sun is owned by News International.
Line One also slashed nearly half its workforce two months ago, fuelling more speculation that it was in financial trouble. see Newswire 15 February.
The Line One service eventually went free two weeks ago and the company says it now has over 150,000 users - still significantly less than competitor Freeserve?s million plus customers. News International will continue to supply Times Newspapers content to Line One.
Line One?s other parent companies, BT and United News and Media, have taken up the remaining share for an undisclosed sum and invested an extra #12 million to radically redesign the site to compete in the fickle free access market.
This will include more content and what a Line One spokesperson described as a ?new initiative with a major ecommerce partner? to be announced shortly.
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