Europe's second largest internet service provider (ISP) Tiscali has cut its losses in the first quarter and has a confident outlook after boosting revenues through a number of acquisitions.

The Sardinia-based company said its first-quarter loss before interest, tax, depreciation and amortisation fell to 58.1m euros (�35.8m) from 140m euros in the last quarter of 2000.

Fast-expanding Tiscali also reported that revenues grew by a substantial 383% to 110m euros compared with the first quarter last year.

The figures exclude recent acquisitions such as Liberty Surf, Planet Interkom, surfEU and Line One.

If those were included, first quarter revenues would have risen to 167m euros, it said.

Operating costs fell 35% after marketing was cut by 150% to 30m euros, while staff cuts reduced the wage bill by half to 26m euros.

The results boosted the company's shares, which rose by 2.5% at the start of trade in Milan.

Fast expanding

Like Europe's other big online players - France's Wanadoo, Spain's Terra Lycos and Deutsche Telekom's T-Online - Tiscali has fast been absorbing smaller rivals.

It added 350,000 new users in the first quarter, bringing its total to 5.25m, including those of Liberty Surf but not the other acquisitions.

With the rest of its purchases, Tiscali said it had 7m users.

The company has now spent over 4.1bn euros to become one of Europe's largest internet service providers.

Last month it snapped up pan-European ISP SurfEU and Line One in the UK.

In January, Tiscali bought France's Liberty Surf and last year took over troubled Dutch provider World Online.

Now Tiscali itself is rumoured to be a takeover target of its key competitor AOL.

Germany's T-Online is Europe's largest ISP with 9m users.