Anglo-Dutch publisher Reed Elsevier has announced major long-term investment plans in the internet.

The business information group said it had earmarked �750m for investment over the next three years, most of which would go on internet projects.

"Capitalising on the potential of the internet will be the key driver of our strategy," said Crispen Davis, company chairman and executive.

Reed Elsevier has set a sales target of 1.6bn euros from the internet by 2002, generated from putting its publications on the web and new products.

The company will slash its planned dividends to finance its plans, unleashing an estimated �115m annually.

It also plans to spin off its non-core operations, such as its travel directory OAG Worldwide, and concentrate on science, business and law.

Shares fall

Reed Elsevier's shares, which are traded on both the London and Amsterdam stock exchanges, initially jumped on the news. But they then slumped as the company's plans raised doubts among some investors.

Analysts said the publisher needed to be more aggressive in selling off its other non-publishing businesses and in defining its future strategy.

"I would have preferred to hear a statement about where the company is strong and where it is weak and had hoped to hear more news of disposals," said David Adair, HSBC analyst.

Reed said its planned to get rid of some non-core businesses would slightly dampen future profits, but it was aiming for double digit earnings growth by 2002.

It said last year's pre-tax profits fell to �710m from �773m the previous year. It also issued a profit warning for the current year.