Pierre Paperon, AltaVista Europe's new president, has said that the European arm of the company can be profitable by the end of this year, and should be floated separately from its US parent.

"When you look at what has happened over the last two months on Nasdaq, it is putting a lot of pressure on internet companies to go for profitability," he said, speaking to vnunet.com today. "Things are coming back to earth. We are trying to lead the pack in reaching profitability."

Paperon said he wants to float AltaVista Europe despite the US parent aborting its initial public offering last month.

Each country in which AltaVista has a presence was this week given profit targets, in contrast to previous revenue targets, although more recent launches, such as three-week-old AltaVista Italy, will be allowed to make a loss for the time being.

"It was a kind of joke rule that Amazon's market capitalisation was a multiple of its losses, but that's not a viable long-term proposition," said Paperon.

Currently, about 75 per cent of AltaVista Europe's revenue is from advertising, with the rest coming from business solutions such as licensing the AltaVista search engine.

Paperon said he hopes to reduce the dependence on advertising to around 30 per cent, with a similar percentage coming from strategic deals in which the company will take a cut from transactions.

Speaking of potential areas to be exploited, Paperon said: "Clearly you've got jobs, books, other cultural areas, travel, domain name registration, and perhaps 20 other micro-sectors."

If allowed to float separately, AltaVista Europe could use its shares to acquire companies in areas of particular European interest, Paperon added. "If you take Wap, I'm not sure that the US will be interested in that. It may be far easier to do that at a pan-European level."

The company intends to expand to provide a full portal in more countries. It currently operates such sites in six countries, and will add an Iberian site by the end of the summer, said Paperon.

The German site has achieved 45 million pages served per month, with France's reaching 30 million. The UK site will be 15 million to 20 million this month, but will reach 25 million to 30 million in June, Paperon added, saying that the relatively small size of the page is a major factor in its growth.

AltaVista is a high-traffic site in many European countries. It is the tenth most popular site in the UK, fourth in Spain, eighth in Germany and seventh in Sweden, according to research by NetValue, Sifo Interactive and EGM.