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Wanadoo triggers ISP spill
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October 6, 2000: 7:47 a.m. ET
French Internet firm misses first-half mark, denting European Net stocks
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LONDON (CNNfn) - Shares of Europe's biggest Internet service providers retreated Friday after top French ISP Groupe Wanadoo SA fell to an operating loss in the first half of the year, fanning concerns about valuations in the sector.
Wanadoo, a 90 percent-owned unit of France Telecom, reported a first-half loss before depreciation and amortization of  57.4 million ($50 million), down from a positive 68.4 million a year earlier. Revenue more than quadrupled to 456.3 million, however.
Separately Friday, German ISP Freenet.de said it was not participating in talks about a merger or cooperation with Wanadoo. That statement came a day after the French ISP said it was in talks with MobilCom AG, Freenet's parent, about an accord.
Shares of Wanadoo (PDOO) fell 0.97, or 6 percent, to 57.03 in the wake of the earnings report, which came after the French market closed Thursday. Among other ISPs in Europe also taking a plunge were Britain's Freeserve PLC (FRE), off 4.5 percent, German ISP T-Online International AG, down 5.8 percent, and Italy's Tiscali SpA, losing 4 percent.
Freenet dropped 5.7 percent on Germany's Neuer Markt.
The French ISP, which had 1.8 million customers in France, Belgium and Spain as of April, cited deficits in its online access, portal and E-Merchant operations as contributing to the weaker numbers.
"In addition to the higher revenues and losses from Internet access, Wanadoo reported lower revenues and margins in its directories subsidiary than we expected," said Shane Leonard, an analyst with CSFB. He had forecast earnings before depreciation and amortization of 13.1 million.
Wanadoo's first-half 2000 net loss widened to 66.9 million from a deficit of 1.9 million in the same period a year earlier. The company blamed the cost of investment in France for the worsening figures.
The earnings statement was Wanadoo's first since France Telecom sold 10 percent of the company in an initial public offering in July. 
-- from staff and wire reports
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France Telecom
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