Online sale sees Tiny reach for SMEs

PC builder uses Tiscali cash to build system business.

PC builder and retailer Tiny will use the funds raised from the sale of its ISP arm, Tiny Online, to increase its market share and push into the SME sector, the company claimed last week.

Tiny Online was sold for £8m to Italian internet specialist Tiscali at the beginning of this month.

Tiny's managing director, Andrew Walwyn, said the sale would help the company's restructuring and growth plans.

"Now we have some investment behind us, we can begin to look at relocating some key stores and also at future acquisitions," he said.

The company also plans a push into the SME sector and to "invest heavily" in ecommerce.

"We are selling twice as many PCs in the UK than anyone else in the industry," Walwyn said. "We are not only pushing for more government and service sector contracts, but are looking to increase our SME reach."

Since it was set up in 1999, Tiny Online has attracted almost 700,000 subscribers. Although Walwyn claimed the venture had been successful, he said it wasn't a core part of Tiny's strategy and did not "add value".

As part of the deal, Tiscali UK will become Tiny's exclusive ISP provider for all Tiny stores and PCs. Last year Tiny sold more than 400,000 PCs, and now has 143 retail stores.

Renato Soru, chairman of Tiscali, said: "This agreement is a big growth opportunity in the UK, which is a crucial market for Tiscali's European strategy."

Walwyn also said no jobs will go because of the sale, and that ISP staff will be transferred onto Tiny's online retail site.

The firm has already axed 80 jobs from its Surrey headquarters this year. In June, it predicted a 40 to 50 per cent growth over the next 12 months for its professional solutions business.

Chris Jones, senior analyst at Canalys.com, said focusing on SMEs was a good move because the consumer market had seen a "dip" this year.