FRIENDS REUNITED started as one couple’s bright idea of bringing people together via the internet. As it has grown, it has also been responsible for separating many a couple, as old affections have been rekindled and current partners dumped. It no longer seems quite the cosy, touchy-feely concept that it was originally. Appropriately, it is now to be clasped fully into the corporate world.

Both Associated Newspapers and Trinity Mirror are believed to be competing to buy the site, along with some of the internet’s establishment such as Yahoo and Google. The involvement of the newspaper publishers is the latest example of the established media striving to build presence in the online world.

The newspaper is not dead but advertising on the internet is growing and established media businesses are keen to get their share of it, just as they are anxious to build customer loyalty by relating to their readers both through newsprint and online. News Corporation, parent company of The Times, has snapped up several internet businesses recently, including online games operators, and it considered taking over Skype, the voice-over internet telephone company. Friends Reunited, once the owners had let it be known that they were ready to sell, was bound to attract plenty of suitors.

The market has moved on from the heady days when Time Warner decided that it would be clever to put its traditional media business together with AOL. The hugely inflated rating of the latter meant that this turned into one of the most value-destroying deals of all time.

In January 2000, when the merger was agreed and internet stocks were at their peak, the combination of the two companies was valued at more than $300 billion. Today it is less than a third of that and aggrieved investors have been venting their wrath in the courts. Time Warner is preparing to part with about $2.5 billion (£1.4 billion) to put an end to the complaints. Dick Parsons, chairman and chief executive of Time Warner, having dropped AOL from its title, now believes the strategy is there to ensure that the two businesses do have a mutually beneficial future. But the benefits will not be in the realms envisaged by the price at the time they got together.

Since that disastrous merger, confidence in internet businesses has rebuilt slowly. Well, five years is a long time to a generation used to making things happen at the click of a mouse. Serious businesses have evolved on the net but putting a value on them still involves a degree of faith and guesswork.

There is still a risk that some traditional companies will pay too much to climb aboard the internet bandwagon but they cannot afford to be left behind as more and more traffic, including advertising, gravitates online.

Now that technological progress enables people to access the internet from almost anywhere, the growth in usage will gain even greater momentum. Jim Morrison is one of those who is putting the internet into the pockets of people who like to travel light. His company has just arrived on the Alternative Investment Market with a valuation of almost £250 million. Called i-mate — in those infuriating lower-case letters beloved of the internet generation — it manufactures mobile phones with e-mail and internet access. Mr Morrison would have been happy to have developed the product for BT, his former employer, but the company was not enthused and so he left to make his fortune rather than one for his employer.

Now companies know they cannot afford to ignore the net.

Oil should not carry the can

THAT the British economy would be adversely affected by a steep increase in the oil price is undeniably true. But that the recent rise should knock growth in the UK by more than a full percentage point this year will surprise some economists.

They will not be surprised to learn that the Chancellor is at last conceding that his forecast for growth is over-optimistic and that the outcome for 2005 is likely to be closer to 2.5 per cent than the 3 to 3.5 per cent that he has so adamantly embraced while cries of dissent from the City grew ever louder. But there will be plenty of economists who do not believe that oil alone should carry the can.

That will not concern the Chancellor. He has found a scapegoat for the disappointing economic performance. He was hardly likely to admit that he must lower his forecasts because they had been unduly optimistic in the first place. As numbers have come in from manufacturing and retail, it has been clear that the economy was slowing. As the housing market has shuddered, it was evident that the facts did not bear out Mr Brown’s optimism.

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