Fast Search & Transfer
Encyclopedia
Fast Search & Transfer ASA (FAST) is a Norwegian
company based in Oslo
. FAST focuses on data search technologies
. It also has offices located in Germany
, Italy
, Sri Lanka
, France
, Japan
, the United Kingdom
, the United States
, Brazil
, Mexico
and other countries around the world. The company was founded in 1997.
On April 24, 2008, Microsoft closed its acquisition of FAST. FAST is now known as FAST, A Microsoft Subsidiary.
FAST offers an enterprise search
product, FAST ESP. ESP is a service-oriented architecture
development platform which is geared towards production searchable indexes. It provides a flexible framework for creating ETL
applications for efficient indexing of searchable content. Fast also offers a number of search-derivative applications, focused on specific search use cases, including publishing, market intelligence and mobile search. The Search Derivative Applications (SDA) are built upon the Enterprise Search Platform (ESP). The company is developing PHAROS
, a new European multimedia search engine
.
FAST is notable for a major ongoing investigation by the Norwegian police into accounting fraud around the inflation of revenues and profits which has led to police raids on its offices.(see below)
Some examples of their applications are:
for speech recognition and Stellent (now part of Oracle) for the conversion of different file formats.
As of 2007, FAST was being sued by a company which claims FAST, as well as Google, Yahoo, Facebook and other major web companies stole its technology.
(NTNU) and Chief Technology Officer of FAST. iAd seeks to identify opportunities and develop the next generation search engines that can extract user-friendly information from vast and complex amounts of data. iAd also facilitates interaction between international content and technology suppliers.
Norwegian partners are the Norwegian University of Science and Technology
, the University of Oslo
, the University of Tromsø
, the Norwegian School of Management
, Schibsted
and Accenture
. International partners are Cornell University
, University College Dublin
and Dublin City University
.
(EC) is funding the research project “The Platform for Search of Audiovisual Resources Across Online Spaces” (PHAROS). The mission of PHAROS is to transform audiovisual search from a point-solution search engine model to an integrated search platform paradigm, incorporating future user and search requirements as key design principles.
During 1998 and 1999, FAST announced strategic alliances with Lycos
, Dell
and TIBCO, and the first commercial launch of products took place in 1999.
(OSE) under the ticker symbol 'FAST'. The company continued over the next couple of years to announce new contracts with customers and partners such as eBay
, IBM
, BEA
, Microsoft
, Telus
, Elsevier
, and Broadvision
. FAST is ranked number three on the 2002 Deloitte Technology Fast 500
, a ranking of the 500 fastest-growing technology companies in Europe.
In 2003, FAST decides to focus on enterprise search, and sells their Internet division, including FAST Web Search, FAST PartnerSite and AlltheWeb.com
, to Overture Services, Inc. (later acquired by Yahoo!
).
The company is for the first time placed in the Leader’s Quadrant of the Gartner Magic Quadrant
for Information Access Technology in 2004, and stays in the Leader’s Quadrant over the next years as well. The company almost quadruples its revenues from 2003 (USD 42M) to 2006 (USD 162M).
FAST acquired Convera's RetrievalWare
in August 2007 for USD 23 million.
Fast's Q4 2007 Intra-quarterly update gives enterprise as 30% of its business (page 17). Its Q3 2007 enterprise licence revenues at less than $4M make it one of the less significant players in enterprise search market.
55M of Q2 2007 revenue and profitability, in a statement on the company's website it revealed revenue would be reduced to USD
35M and it would be unprofitable. According to the company it had been recognizing revenue without signed contracts using Memoranda of Understanding
. The shares fell 28% to hit a three year low.
This and other issues around lack of customer payment were raised by Goldman Sachs
in a report June 2007 by Moawalla. Finansavisen
newspaper on August 6, 2007 ran an article entitled "FAST under investigation again" reporting on an ongoing investigation by the unit of The Financial Supervisory Authority of Norway
(Kredittilsynet) that oversees all listed companies’ financial reporting. On August 8 the company reported actual Q2 2007 numbers with revenue USD
34.1M (license sales down 41% sequentially and 24% y on y) and operating loss USD
38M. As a result of this the company has announced that it will implement a layoff program of 20% of all staff, reducing the quarterly operational cost base in excess of USD
12M, as it tries to return to profitability. It expects to be unprofitable until 2008.
On September 5, 2007 FAST signed a deal with the Walt Disney Company's Parks and Resorts Online for the Fast Enterprise Search Platform including software licenses, maintenance fees and other services. On September 7, 2007 FAST informed investors in their quarterly update that the predicted losses for Q3 would rise again to over $60M and that they would be concentrating remaining resources on the 'Monetization' or ad serving business served by their Ad Momentum platform. The defocussing on their older areas and concentration on their new market area was welcomed by the financial market.
and were changing their strategy going forward.
Investors and customers were hoping that the company will announce new accounting and quality controls in its Q3 report to reverse the slide. However Fast on 30 October reported a loss of $100M (up from the expected $60M loss) in the quarter with another collapse of licence revenue down 55% year on year showing significant loss of software market share. The operation of the company as a software company rather than a services company was questioned by the gross margin falling to 67% from 83% a year earlier. The issues with customer non payment of bills by customers continued with $26M of debtors being written off.
More recently there has been controversy at the board level with one director resigning and another making public statements about other directors and major shareholders.
Fast's board member Robert Keith said in a newspaper interview , "I ought to have seen the problems in Fast earlier. And I ought to have understood that Hans Gude Gudesen
is a crazy liar. Also, I ought have shot Oystein Stray Spetalen the first time I met him. That would have helped a lot of people, says the controversial Brit to the paper Finansavisen." Spetalen and Hans Gude Gudesen are both major shareholders in Fast. Furthermore directors Keith and Fussel are allegedly being pursued by the Norwegian tax authorities for USD 50M in unpaid taxes the government says it is owed by them. In the event of non payment liability may fall on the company.
The ongoing turmoil has seen 3 directors resign from the board in the last month, the latest being Johan Fredrik Odfjell who is quoted in the company's release as saying "FAST faces many challenges and opportunities going forward".
On December 22 Orkla
, FAST's largest shareholder, demanded an extraordinary general meeting
to force Fussel and Keith off the board.
It also stated "The Search technology vendor Fast Search & Transfer have had several rounds with restating of accounts." Also after CFO Joseph Lacson some months ago declared that “everything is cleaned up”, one has found skeletons in the closet. Wednesday afternoon trading was suspended, after what the stock exchange called “certain conditions”.
Now the company flags that they will review their accounts, both for 2006 and 2007. Fast declares that they are performing a thorough review of revenue and depreciation both for closing of 2007, and adjustments of 2006 results." The shares fell around 7% on the news.
of Fast had unanimously accepted a $
1.2 billion takeover offer from Microsoft
. Microsoft has secured the backing of Fast's two largest institutional shareholder
s, Orkla
and Hermes Focus Asset Management Europe.
As of 24 April 97.37% of all Fast shares are controlled by MACS Holdings Limited, a wholly owned subsidiary of Microsoft Corp. The stock was delisted from Oslo Stock Exchange May 16, 2008.
As more information is coming to light about the major restatement of the accounts it is being reported that Microsoft may not have completed its due diligence correctly.
On 26 November 2008 it was reported that FAST Search laid off 25 employees as a result of the acquisition by Microsoft.
On 2 December 2009, Microsoft Sells Part Of Fast Search To Rocket Software. Microsoft is selling Fast’s Folio and NXT businesses to Rocket Software; the complimentary products are application suites used by businesses to publish and index reference material onto discs, network workstations, and online.
had asked the police to investigate anomalies in the FAST accounts it had uncovered.
Morning of October 13'th 2008, Norwegian Økokrim
raided Fasts offices in Oslo
Under scrutiny by the Norwegian police for possible fraudulent behavior prior to the FAST acquisition by Microsoft, former founder and CEO John Lervik resigned from the wholly owned Microsoft subsidiary on 23 January 2009. CTO and Microsoft Distinguished Engineer Bjørn Olstad will assume Lervik's duties as the head of Microsoft's Enterprise Search Group.
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
company based in Oslo
Oslo
Oslo is a municipality, as well as the capital and most populous city in Norway. As a municipality , it was established on 1 January 1838. Founded around 1048 by King Harald III of Norway, the city was largely destroyed by fire in 1624. The city was moved under the reign of Denmark–Norway's King...
. FAST focuses on data search technologies
Search engine
A search engine is an information retrieval system designed to help find information stored on a computer system. The search results are usually presented in a list and are commonly called hits. Search engines help to minimize the time required to find information and the amount of information...
. It also has offices located in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Sri Lanka
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
and other countries around the world. The company was founded in 1997.
On April 24, 2008, Microsoft closed its acquisition of FAST. FAST is now known as FAST, A Microsoft Subsidiary.
FAST offers an enterprise search
Enterprise search
Enterprise search is the practice of making content from multiple enterprise-type sources, such as databases and intranets, searchable to a defined audience.-Enterprise search summary:...
product, FAST ESP. ESP is a service-oriented architecture
Service-oriented architecture
In software engineering, a Service-Oriented Architecture is a set of principles and methodologies for designing and developing software in the form of interoperable services. These services are well-defined business functionalities that are built as software components that can be reused for...
development platform which is geared towards production searchable indexes. It provides a flexible framework for creating ETL
Extract, transform, load
Extract, transform and load is a process in database usage and especially in data warehousing that involves:* Extracting data from outside sources* Transforming it to fit operational needs...
applications for efficient indexing of searchable content. Fast also offers a number of search-derivative applications, focused on specific search use cases, including publishing, market intelligence and mobile search. The Search Derivative Applications (SDA) are built upon the Enterprise Search Platform (ESP). The company is developing PHAROS
Pharos
Pharos may refer to:Lighthouses:* The Pharos of Alexandria, a tower built on the island of Pharos that became one of the Seven Wonders of the Ancient World* The Pharos, either of two Roman lighthouses built at Dubris...
, a new European multimedia search engine
Search engine
A search engine is an information retrieval system designed to help find information stored on a computer system. The search results are usually presented in a list and are commonly called hits. Search engines help to minimize the time required to find information and the amount of information...
.
FAST is notable for a major ongoing investigation by the Norwegian police into accounting fraud around the inflation of revenues and profits which has led to police raids on its offices.(see below)
Solutions
FAST delivers real-time search and business intelligence solutions, and currently has about 3,600 implementations. They offer a core search platform, FAST ESP, and develop solutions on top of the platform. FAST’s solutions are used in three areas; external (online and mobile), internal (information access and discovery) and OEM (embedded in other vendor’s solutions).Some examples of their applications are:
- FAST AdMomentum for online advertising
- FAST Data Cleansing for cleansing multiple structured data repositories
- FAST ImPulse for eCommerce and online catalogues
- FAST Radar for dashboarding and business intelligence
Technology ownership
FAST uses complementary technologies from BBN TechnologiesBBN Technologies
BBN Technologies is a high-technology company which provides research and development services. BBN is based next to Fresh Pond in Cambridge, Massachusetts, USA...
for speech recognition and Stellent (now part of Oracle) for the conversion of different file formats.
As of 2007, FAST was being sued by a company which claims FAST, as well as Google, Yahoo, Facebook and other major web companies stole its technology.
Information Access Disruptions
Information Access Disruptions (iAD) is a Research Centre funded by the Research Council of Norway and the centre’s partners. The host institution is FAST, and the Research Centre Manager is Dr. Bjørn Olstad, adjunct professor at the Norwegian University of Science and TechnologyNorwegian University of Science and Technology
The Norwegian University of Science and Technology , commonly known as NTNU, is located in Trondheim. NTNU is the second largest of the eight universities in Norway, and, as its name suggests, has the main national responsibility for higher education in engineering and technology...
(NTNU) and Chief Technology Officer of FAST. iAd seeks to identify opportunities and develop the next generation search engines that can extract user-friendly information from vast and complex amounts of data. iAd also facilitates interaction between international content and technology suppliers.
Norwegian partners are the Norwegian University of Science and Technology
Norwegian University of Science and Technology
The Norwegian University of Science and Technology , commonly known as NTNU, is located in Trondheim. NTNU is the second largest of the eight universities in Norway, and, as its name suggests, has the main national responsibility for higher education in engineering and technology...
, the University of Oslo
University of Oslo
The University of Oslo , formerly The Royal Frederick University , is the oldest and largest university in Norway, situated in the Norwegian capital of Oslo. The university was founded in 1811 and was modelled after the recently established University of Berlin...
, the University of Tromsø
University of Tromsø
The University of Tromsø is the world's northernmost university. Located in the city of Tromsø, Norway, it was established in 1968, and opened in 1972. It is one of eight universities in Norway. The University of Tromsø is the largest research and educational institution in northern Norway...
, the Norwegian School of Management
Norwegian School of Management
BI Norwegian Business School former name BI Norwegian School of Management is the largest business school in Norway and the second largest in all of Europe. BI has in total 6 campuses with the main one located in Oslo.-History:...
, Schibsted
Schibsted
Schibsted is a Norwegian media conglomerate with operations in 20 countries, the most important being Norway and Sweden. The company has its headquarters in Oslo, Norway and is listed on Oslo Stock Exchange....
and Accenture
Accenture
Accenture plc is a global management consulting, technology services and outsourcing company headquartered in Dublin, Republic of Ireland. It is the largest consulting firm in the world and is a Fortune Global 500 company. As of September 2011, the company had more than 236,000 employees across...
. International partners are Cornell University
Cornell University
Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions...
, University College Dublin
University College Dublin
University College Dublin ) - formally known as University College Dublin - National University of Ireland, Dublin is the Republic of Ireland's largest, and Ireland's second largest, university, with over 1,300 faculty and 17,000 students...
and Dublin City University
Dublin City University
Dublin City University is a university situated between Glasnevin, Santry, Ballymun and Whitehall on the Northside of Dublin in Ireland...
.
PHAROS
The European CommissionEuropean Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
(EC) is funding the research project “The Platform for Search of Audiovisual Resources Across Online Spaces” (PHAROS). The mission of PHAROS is to transform audiovisual search from a point-solution search engine model to an integrated search platform paradigm, incorporating future user and search requirements as key design principles.
1997–1999: Development
FAST was founded in 1997, and the initiation of the company stems from the Department of Computer and Information Science at NTNU. Professor Arne Halaas at NTNU was a substantial contributor in the early days of FAST. John M. Lervik, a student from NTNU, was one of the first employees at FAST. He took his doctorate under the supervision of Professor Tor A. Ramstad and eventually became the company's CEO, until January 2009.During 1998 and 1999, FAST announced strategic alliances with Lycos
Lycos
Lycos, Inc. is a search engine and web portal established in 1994. Lycos also encompasses a network of email, webhosting, social networking, and entertainment websites.-Corporate history:...
, Dell
Dell
Dell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
and TIBCO, and the first commercial launch of products took place in 1999.
2000–2003: Commercialization
During 2000, FAST announced several new European and US customers and partners. The company’s IPO took place in June 2001, and FAST is publicly traded on the main board of the Oslo Stock ExchangeOslo Stock Exchange
The Oslo Stock Exchange serves as the main market for trading in the shares of Norwegian companies. It opens at 9:00am and closes 5:30pm local time...
(OSE) under the ticker symbol 'FAST'. The company continued over the next couple of years to announce new contracts with customers and partners such as eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
, IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, BEA
BEA Systems
BEA Systems, Inc. specialized in enterprise infrastructure software products known as "middleware", which connect software applications to databases and was acquired by Oracle Corporation on April 29, 2008.- History :...
, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Telus
TELUS
Telus is a national telecommunications company in Canada that provides a wide range of telecommunications products and services including internet access, voice, entertainment, video, and satellite television. The company is based in Burnaby, British Columbia, part of Greater Vancouver...
, Elsevier
Elsevier
Elsevier is a publishing company which publishes medical and scientific literature. It is a part of the Reed Elsevier group. Based in Amsterdam, the company has operations in the United Kingdom, USA and elsewhere....
, and Broadvision
Broadvision
BroadVision is an international software vendor of self service web applications for enterprise social software, electronic commerce, Enterprise Portals, CRM....
. FAST is ranked number three on the 2002 Deloitte Technology Fast 500
Deloitte Fast 500
The Deloitte Technology Fast 500 Awards are run and moderated by Deloitte Touche Tohmatsu Limited. They recognize the 500 fastest-growing technology companies in regions around the world...
, a ranking of the 500 fastest-growing technology companies in Europe.
In 2003, FAST decides to focus on enterprise search, and sells their Internet division, including FAST Web Search, FAST PartnerSite and AlltheWeb.com
AlltheWeb
AlltheWeb was an Internet search engine that made its debut in mid-1999. It grew out of FTP Search, Tor Egge's doctorate thesis at the Norwegian University of Science and Technology, which he started in 1994, which in turn resulted in the formation of Fast Search and Transfer, established on July...
, to Overture Services, Inc. (later acquired by Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
).
2004–2007: Expansion
In Jan 2004, FAST introduces the FAST Enterprise Search Platform (FAST ESP) to the market. During the following three years, FAST expands its geographical reach by opening new offices in Asia, Middle East, Latin America and Africa, extends its partnership relations through the introduction of the FAST X10 partner program, and introduces new solutions aimed specifically at certain business areas, like FAST ImPulse for eCommerce and FAST AdVisor for Internet yellow pages and portals.The company is for the first time placed in the Leader’s Quadrant of the Gartner Magic Quadrant
Magic Quadrant
The Gartner Magic Quadrant is a proprietary research tool developed by Gartner Inc., a US based research and advisory firm. According to Gartner, the Magic Quadrant aims to provide a qualitative analysis into a market and its direction, maturity and participants, thus possibly enabling a company...
for Information Access Technology in 2004, and stays in the Leader’s Quadrant over the next years as well. The company almost quadruples its revenues from 2003 (USD 42M) to 2006 (USD 162M).
FAST acquired Convera's RetrievalWare
RetrievalWare
RetrievalWare is an enterprise search engine emphasizing natural language processing and semantic networks which was commercially available from 1992 to 2007 and is especially known for its use by government intelligence agencies.- History :...
in August 2007 for USD 23 million.
Fast's Q4 2007 Intra-quarterly update gives enterprise as 30% of its business (page 17). Its Q3 2007 enterprise licence revenues at less than $4M make it one of the less significant players in enterprise search market.
Recent developments
On July 30, 2007 FAST announced a reduction in revenue of 40% due to changes in financial controls on revenue recognition. It had been forecasting USDUnited States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
55M of Q2 2007 revenue and profitability, in a statement on the company's website it revealed revenue would be reduced to USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
35M and it would be unprofitable. According to the company it had been recognizing revenue without signed contracts using Memoranda of Understanding
Memorandum of understanding
A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...
. The shares fell 28% to hit a three year low.
This and other issues around lack of customer payment were raised by Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
in a report June 2007 by Moawalla. Finansavisen
Finansavisen
Finansavisen is a Norwegian business newspaper with six weekly issues and published in Oslo by Hegnar Media. It had a circulation of 23,274 in 2006. It was established in 1992 by Trygve Hegnar, who is also Editor-in-Chief....
newspaper on August 6, 2007 ran an article entitled "FAST under investigation again" reporting on an ongoing investigation by the unit of The Financial Supervisory Authority of Norway
Financial Supervisory Authority of Norway
The Financial Supervisory Authority of Norway is a Norwegian government agency responsible for supervision of financial companies within Norway based on law and regulations from Storting, the Norwegian Ministry of Finance and international accounting standards...
(Kredittilsynet) that oversees all listed companies’ financial reporting. On August 8 the company reported actual Q2 2007 numbers with revenue USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
34.1M (license sales down 41% sequentially and 24% y on y) and operating loss USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
38M. As a result of this the company has announced that it will implement a layoff program of 20% of all staff, reducing the quarterly operational cost base in excess of USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
12M, as it tries to return to profitability. It expects to be unprofitable until 2008.
On September 5, 2007 FAST signed a deal with the Walt Disney Company's Parks and Resorts Online for the Fast Enterprise Search Platform including software licenses, maintenance fees and other services. On September 7, 2007 FAST informed investors in their quarterly update that the predicted losses for Q3 would rise again to over $60M and that they would be concentrating remaining resources on the 'Monetization' or ad serving business served by their Ad Momentum platform. The defocussing on their older areas and concentration on their new market area was welcomed by the financial market.
Q3 2007 Results
Fast also received a further blow when a major customer Schibsted said they had made a too risky decision in choosing to implement their own web search engineWeb search engine
A web search engine is designed to search for information on the World Wide Web and FTP servers. The search results are generally presented in a list of results often referred to as SERPS, or "search engine results pages". The information may consist of web pages, images, information and other...
and were changing their strategy going forward.
Investors and customers were hoping that the company will announce new accounting and quality controls in its Q3 report to reverse the slide. However Fast on 30 October reported a loss of $100M (up from the expected $60M loss) in the quarter with another collapse of licence revenue down 55% year on year showing significant loss of software market share. The operation of the company as a software company rather than a services company was questioned by the gross margin falling to 67% from 83% a year earlier. The issues with customer non payment of bills by customers continued with $26M of debtors being written off.
Issues with Board of Directors
The conduct of Fast's directors has been the subject of much comment in Norway. In Jan 2006 an article ran in the Norwegian IT paper that claimed that one of FAST's directors Tomas Fussel had made a 2000% markup for himself by buying a loss making company Hercules communications and selling it to the public company Fast 3 weeks later for a massive mark up.More recently there has been controversy at the board level with one director resigning and another making public statements about other directors and major shareholders.
Fast's board member Robert Keith said in a newspaper interview , "I ought to have seen the problems in Fast earlier. And I ought to have understood that Hans Gude Gudesen
Hans Gude Gudesen
Hans Gude Gudesen is a Norwegian archaeologist, scientist and inventor who has been central to the development of new technology within several fields of science....
is a crazy liar. Also, I ought have shot Oystein Stray Spetalen the first time I met him. That would have helped a lot of people, says the controversial Brit to the paper Finansavisen." Spetalen and Hans Gude Gudesen are both major shareholders in Fast. Furthermore directors Keith and Fussel are allegedly being pursued by the Norwegian tax authorities for USD 50M in unpaid taxes the government says it is owed by them. In the event of non payment liability may fall on the company.
The ongoing turmoil has seen 3 directors resign from the board in the last month, the latest being Johan Fredrik Odfjell who is quoted in the company's release as saying "FAST faces many challenges and opportunities going forward".
On December 22 Orkla
Orkla Group
Orkla Group is a Norwegian industrial conglomerate operating in the Nordic region, Eastern Europe, Asia and the US. The company's main divisions are branded consumer goods, aluminium solutions, materials, associates and financial investments.-Operations:...
, FAST's largest shareholder, demanded an extraordinary general meeting
Extraordinary General Meeting
An extraordinary general meeting, commonly abbreviated as EGM, is a meeting of members of an organisation, shareholders of a company, or employees of an official body, which occurs at an irregular time. The term is usually used where the group would ordinarily hold an annual general meeting , but...
to force Fussel and Keith off the board.
Need to Restate Accounts for 2006 and 2007
On 12 December 2007 the Oslo Stock Exchange suspended trading of FAST shares. The next morning the company announced it was reviewing the accounting utilized for the 2006 and 2007 reports with a likely outcome that this would be changed. In an article titled "Fast restates its accounts" www.dagensit.no stated that Fast's results for 2006 and 2007 may be restated in what it called "another clean up round."It also stated "The Search technology vendor Fast Search & Transfer have had several rounds with restating of accounts." Also after CFO Joseph Lacson some months ago declared that “everything is cleaned up”, one has found skeletons in the closet. Wednesday afternoon trading was suspended, after what the stock exchange called “certain conditions”.
Now the company flags that they will review their accounts, both for 2006 and 2007. Fast declares that they are performing a thorough review of revenue and depreciation both for closing of 2007, and adjustments of 2006 results." The shares fell around 7% on the news.
Microsoft acquisition
On 8 January 2008 it was announced that the boardBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of Fast had unanimously accepted a $
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
1.2 billion takeover offer from Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
. Microsoft has secured the backing of Fast's two largest institutional shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s, Orkla
Orkla Group
Orkla Group is a Norwegian industrial conglomerate operating in the Nordic region, Eastern Europe, Asia and the US. The company's main divisions are branded consumer goods, aluminium solutions, materials, associates and financial investments.-Operations:...
and Hermes Focus Asset Management Europe.
As of 24 April 97.37% of all Fast shares are controlled by MACS Holdings Limited, a wholly owned subsidiary of Microsoft Corp. The stock was delisted from Oslo Stock Exchange May 16, 2008.
As more information is coming to light about the major restatement of the accounts it is being reported that Microsoft may not have completed its due diligence correctly.
On 26 November 2008 it was reported that FAST Search laid off 25 employees as a result of the acquisition by Microsoft.
On 2 December 2009, Microsoft Sells Part Of Fast Search To Rocket Software. Microsoft is selling Fast’s Folio and NXT businesses to Rocket Software; the complimentary products are application suites used by businesses to publish and index reference material onto discs, network workstations, and online.
Criminal Investigation
On the 24th of May 2008 Norwegian news website E24.no reported that the Financial Supervisory Authority of NorwayFinancial Supervisory Authority of Norway
The Financial Supervisory Authority of Norway is a Norwegian government agency responsible for supervision of financial companies within Norway based on law and regulations from Storting, the Norwegian Ministry of Finance and international accounting standards...
had asked the police to investigate anomalies in the FAST accounts it had uncovered.
Morning of October 13'th 2008, Norwegian Økokrim
Økokrim
The National Authority for Investigation and Prosecution of Economic and Environmental Crime is Norway's central unit for fighting economic and environmental crimes. The unit, created in 1989, has its main office in Oslo....
raided Fasts offices in Oslo
Oslo
Oslo is a municipality, as well as the capital and most populous city in Norway. As a municipality , it was established on 1 January 1838. Founded around 1048 by King Harald III of Norway, the city was largely destroyed by fire in 1624. The city was moved under the reign of Denmark–Norway's King...
Under scrutiny by the Norwegian police for possible fraudulent behavior prior to the FAST acquisition by Microsoft, former founder and CEO John Lervik resigned from the wholly owned Microsoft subsidiary on 23 January 2009. CTO and Microsoft Distinguished Engineer Bjørn Olstad will assume Lervik's duties as the head of Microsoft's Enterprise Search Group.
External links
- Corporate website
- Large scale example FAST implementations