Freeserve, Barclays team up

Freeserve, the UK's largest internet service provider, is moving into the provision of services for small businesses.

The company is launching a joint venture with Barclays Bank to provide a small business portal on its website.

The portal will offer information for small businesses on matters such as ordering office supplies and legal documents, advice on sales and marketing, e-commerce, and employment issues, and access to financial information for those who hold accounts with Barclays.

The site is targeted at the bank's 450,000 small business customers, of which only one fifth bank online.

Freeserve already has about 300,000 small business and home-office customers among its 1.9m UK users.

Significant move

The two firms say the deal is a significant step for both companies, with e-commerce set to grow sharply over the next few years.

Freeserve has a far smaller market share of the small business internet access market than it does of the home subscriber market.

It is also facing a threat from other ISPs who are offering free internet access without the telephone charges that Freeserve relies on for much of its revenue.

Under the deal, Freeserve will also offer internet access to Barclays' customers.

Barclays, which has 640,000 online customers, has been criticised along with other high street banks for having a monopoly on the small business market.

The site will launch in May 2000.

Freeserve shares, which have fallen sharply over recent days, rose on the news of the deal.