After taking nearly $1 billion in charges for merger-related costs and devalued Internet investments, it lost $886 million.

Besides the tax implications, the company has been banking on the Internet investments to provide its direct marketing business with information about people surfing the Web.

In the past year, jumping in has meant, among other things, Internet investments.

Company documents show that Pearson lost $431 million on Internet investments alone from 1999 to 2002.

"We do have businesses, and we have a huge pipeline of Internet investments."

Some of the money went into a venture capital fund that has made a number of Internet investments, whose value will become clear only with time.

But analysts were more interested in its decimated portfolio of Internet investments, while journalists questioned its credibility.

The results of his Internet investments have been mixed.

But Mr. Middelhoff's Internet investments and other deals have apparently run through that fund.

Mr. Middelhoff's other Internet investments have also met with mixed results.