Fourth Room splits from US Interactive

The Fourth Room has separated from parent e-business group US Interactive, which acquired it last July.

Reported staff cuts at the brand consultancy’s London base have not been confirmed.

In a deal late last week, The Fourth Room announced that it “has ended its relationship” with US Interactive. This latest move follows the recent slowdown in client work for US e-business groups, and the subsequent revision of share prices by Wall Street.

This situation will have cost the London group dearly. Although the financial details of the July deal were not disclosed, it is thought to have been largely an exchange of stock.

Fourth Room chief executive Piers Schmidt suggests that the original fit of the two groups was affected by conditions in its parent’s sector.

“Initially, [there] was a perfect fit with US Interactive, which was looking to grow its Internet solutions business in Europe. However, the current global market turbulence has seen US Interactive refining its focus to middleware solutions and so our relationship didn’t make practical business sense,” he explains.

The Fourth Room had planned to open an office in the US, but these plans have been reversed.