SEARCH engine group Infoserve yesterday raised £2m from a stock market flotation which will help fund 150 new jobs on Teesside.

The West Yorkshire company, which has the majority of its operations in Stockton, Teesside, started trading its shares on London's junior stock market Alternative Investment Market (AIM) yesterday.

The float valued the company at about £6m - £3m less than originally forecast due to volatile stock market conditions.

Infoserve chose to press ahead with its float despite other companies - including Darlington care home company Southern Cross - pulling out of planned flotations this month, due to plunging stock values in recent weeks.

Despite Infoserve, which employs almost 100 staff at a sales centre in Stockton, being worth slightly less, chief executive Steve Barnes said he still wanted to press ahead with plans to create another 150 jobs in Teesside within 18 months to two years.

The company was founded in 1999 by Mr Barnes and David Hood, the entrepreneur behind Pace Micro Technologies, which makes digital set-top boxes for television.

Its product is a hybrid of a local search engine and online business directory, and its key market is small and medium-sized businesses which find it difficult to gain prominence with search engines like Google.

Major clients include the Metro free newspaper, the 192 directory, the Football League, the Daily Mail and the Daily Telegraph.

Infoserve charges about £200 for businesses to be listed in a local search. It has focused on the local search market since 1999 and has a database of 2.7 million business records which are listed across a network of 280 websites.

The company set up www.cityvisitor.co.uk, one of the early online business directories in the UK in 2000, and in 2004 it opened its sales operations in Teesside.

Its founders are expected to keep an 80 per cent stake in the firm, despite yesterday's flotation.

The cash raised is more than enough to fund the company's business plan, and Mr Barnes said they would only go back to the market if he needed to make acquisitions.