Telescan Climbs After AOL Deal

Under the agreement, the Houston-based company will offer a number of services to AOL.

Author:: Kevin Max
Publish date:: Dec 8, 1999 3:38 PM EST

Shares of

Telescan

(TSCN)

staged a moderate rally Wednesday after the company signed a three-year deal to provide

America Online's

(AOL)

personal finance channel with stock-screening tools based on the company's ProSearch technology.

By late afternoon, Telescan's stock was up 1 1/2, or 5%, to 30. (Telescan closed up 1 3/8, or 5%, to 29 7/8.)

The terms of the alliance were not disclosed.

Telescan offers financial information services and hosts Web sites.

"AOL's selection of Telescan confirms our position in the forefront of creating industry leading tools for the individual investor," said David Brown, Telescan's chairman and chief executive. "AOL is uncompromising in its efforts to offer simple, easy-to-use, and effective financial products to its members."

It's a "big deal" for Telescan, according to Kevin Berg, an analyst at

First Albany

who rates the stock neutral. "It speaks to the quality of their products, and gives them more visibility." First Albany has neither underwritten offerings for Telescan nor AOL.

Under the agreement, the Houston-based company will offer a number of services to AOL including ProSearch for stock screening and D-cipher, a stock and portfolio analysis tool with real-time commentary and analysis based on current and historical data.

"Telescan has proven that it can create Web-based products that simplify complicated financial material and at the same time deliver solutions that can empower a broad range of investors," said Rob Shenk, executive director of AOL's personal finance channel. "We look forward to providing our members with such useful and convenient applications.''

Berg said Telescan is not paying AOL, as most deals are structured with the Internet mega-portal, but will share advertising revenue.

While the structure of the deal may be unusual for AOL, it is not for the Houston-based technology company. Telescan struck a number of similar arrangements with financial Web sites including

CNBC.com

and

wallstreetcity.com

NBC

and its parent

General Electric Equity

(GE) - Get Report

followed these arrangements up with a $25 million investment in Telescan in July, making it a 14.2% shareholder.

Software of the financial information business can also be found within the computer systems of

American Express

(AXP) - Get Report

and