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By Sonya Rabbitte, 6 July 2000 00:25

NEWS Orange has bought internet news service Ananova in a £95m cash deal. Ananova - an animated online newscaster providing news and entertainment bulletins - was launched by the Press Association (PA) in April. But PA has now decided to bid Ananova farewell to concentrate solely on creating content for its news and information services. Some industry watchers have questioned how Orange will exploit Ananova, as it is a high-bandwidth multimedia application. But the 100 or so staff that come with the deal, as well as the search and text-to-voice technology which underpins Ananova, will add to Orange's armoury as it tries to diversify its operations. Hans Snook, CEO of Orange, said: "Ananova is a key element of our plans to develop our overall portal platform, which will take wirefree communications beyond what is available today." Consolidation between infrastructure suppliers and content providers is a growing trend. Dale Vile, analyst with Bloor Research, claims it will be a natural evolution as companies like Orange create mobile applications with better content capacity. Vile said: "There is a natural tendency to think of mobile phone players focused as traditional providers of devices. But the market is confused between the WAP phone and the devices that will be around in two years time. They will be much more sophisticated devices. If companies can own content delivery, they have better leverage over their customers." Nigel Deighton, research director on mobile telecoms at Gartner Group, said: "I think it's symptomatic of the developments in the market, but it doesn't have to be a blow to existing content providers. It can provide them with an opportunity to partner with mobile operators on content provision." Vile believes that further mergers and acquisitions are likely in this sector. He said: "The two will have to merge at some point. I can't possibly see groups like AOL ignoring them. It will be interesting competition but it's not sustainable in the long run, because if I'm an AOL subscriber I'll want to access my account through my PDA. We'll see some competition but then consolidation. "