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Score One More for the Web

Company Sleuth rings up a scoop on the MCI-SkyTel merger.

Someday, when they look back at the war between the Web and the world that preceded it, last week's coverage of the

SkyTel

(SKYT)

takeout should be noted.

I was sitting at my desk just after the close Friday when the news flashed across the wire that

MCI WorldCom

(WCOM)

was buying paging company SkyTel for $1.3 billion in stock and debt. Didn't I read in

The Wall Street Journal

that MCI WorldCom denied those rumors? I turned to the tube to watch

CNBC's

Joe Kernan express similar surprise. "Didn't I just read in

The Wall Street Journal

..." said Kernan, his voice trailing off.

What I

should

have read was Tuesday's scoop from the

Company Sleuth

. The site, which sifts through the Internet for tidbits of corporate info, reported that MCI WorldCom had registered the domain "skytel.worldcom.com." This followed media speculation that MCI could be one of the likely acquirers of SkyTel.

Investors drove up shares of SkyTel Tuesday after the Company Sleuth report, as volume tripled. In a story the next day in the

Journal

, MCI WorldCom skillfully issued a bogus excuse, chalking it up to an overzealous employee. "From time to time, MCI WorldCom employees, sometimes acting on their own initiative, register domain names they believe may be potential targets of domain-name squatters," the company said in a release. "The action is not an indication of any official company intention." It's the old nondenial denial. ("Senator, were you with the cheerleader last night?" "Sir, that's an

outrageous

accusation.") The

Journal

, meanwhile, dismissed Company Sleuth's findings as one of the "scoops" -- patronizing quotation marks included -- garnered by "a new breed of Internet sleuth."

For Company Sleuth and its parent company

Infonautics

(INFO) - Get IHS Markit Ltd. (INFO) Report

, it was a rare moment in the limelight. "We've been flooded with congratulatory emails and phone calls," says CEO Van Morris. "After you get mentioned in the

Journal

TheStreet Recommends

, well, traffic to the server and registrations were up quite significantly."

Last year, Infonautics did $14.9 million in revenue, but Company Sleuth represented less than 10% of that. Infonautics' main business is a database product called

Electronic Library

, which is sold to schools and universities. The Web business is a little tougher. Infonautics has been laboring hard to bring users to its site, even paying its "affiliates" 50 cents for every new registered user to Company Sleuth.

Shares of Infonautics have struggled under 10 for most of the past two years. Last November, as the company's net tangible assets evaporated, the company was on the verge of being removed from the

Nasdaq

before winning a delisting hearing. But then the stock got a welcome boost. On April 12, the company announced that it had hired

Latitude90

to sell ads for its sites. Investors were thrilled with the notion that Company Sleuth was shifting to an advertising-supported model, and they bid the stock up from 4 1/8 to 10 1/4. Since then, the shares have sunk, closing Tuesday at 6 13/32.

Company Sleuth was developed from an in-house tool used to keep track of competitive products. "We set up intelligent agents to go out across the Web to track our competitors," says Morris. "We started tracking patents, when

Infonautics co-founder Josh Kopelman was playing around with

Internic

and he noticed that

the powerful law firm

Skadden Arps

had registered

DaimlerChrysler

(DCX)

. We figured people would like to know about things like that."

Infonautics is hoping that what was once an internal tool will become popular among consumers rabid for information -- much as the fact checker's "500" list at

Fortune

magazine became an institution of its own. Says Morris: "This is just another valuable note proving that that tracking the digital paper trail is valuable in and of itself."

But it also proves that the dead-tree press is dying on the vine. The

Journal

offered little clarity on this story -- some kind words for Company Sleuth and credence to the obfuscation from MCI WorldCom. But for the Internet investors researching their investments on the Web, Company Sleuth provided a powerful, profitable service.

Company Sleuth, for its part, is slow to criticize coverage of the story. "Let's put it this way: The old media is rapidly being forced to recognize the new media," says Morris. "Whether or not they get

the Web shows."

"The world in general is divided by people that get it and those that don't," he adds. "Like anywhere, the

Journal

is a collection of individuals -- some truly get the Web."

You wonder if the dead-tree guys are reading between the lines of that compliment.