Google blow for Infoserve

British online marketing firm Infoserve today revealed it is to lose a reselling deal with internet giant Google.

Resellers are authorised to set up accounts for businesses which want to post adverts in Google’s search results.

But Leeds-based Infoserve said it will stop acting as a reseller for Google AdWords from January 7.

The group sought to assure it would not “materially” affect daily operations, revenues or customer services, while adding that costs would be reduced.

“The group will continue to offer its small and medium sized business customers a full range of online services, including organising Google AdWords campaigns as part of its overall portfolio,” said Infoserve.

The firm declined to comment further.

It also announced today that it had agreed an £800,000 (€889,000) loan from major shareholder and non-executive director David Hood.

He already had £3.52 million owed to him by the firm, but has agreed to accept equity in return for some of the outstanding loans – a move taking his shareholding from 47% to 83%. Shares in Infoserve plunged 17% today.

The company was launched in 1999 providing online search specialist services for small and medium firms.

It employs 150 people across its head office in Leeds and sales office in Darlington.

The group said last month that, while trading had started to improve, it was being hamstrung by a lack of financing. Infoserve said it needed funding to “be able to grow at its present rate”.

It is due to report interim figures in December, but said in its latest trading update that a tight control on costs would see it move out of the red with a small underlying earnings profit for the six months to September 30.