Pearson - whose interests span education, books, magazines and TV - saw its shares jump over 7 per cent after the group said it had signed an online education deal with Internet giant AOL and sealed alliances with three online education houses.

Pearson said its pre-tax profit before exceptional and goodwill rose to 402 million pounds ($635 million) in 1999 from 350 million in the previous year. Analysts had been forecasting a figure between 390 and 413 million pounds."This year has begun pretty well as well. Education and the FT group will be the main drivers for this year too and we'll start to see online activities making more contribution," Pearson finance director John Makinson said in an interview.

Pearson shares - which are set to be listed in New York as well as London - climbed as high as 7.7 per cent on the day after the results before settling back to trade 4.82 per cent up at 24.14 pounds at 1050 GMT. "There's the new partnership with AOL, good figures and a positive statement. What more do you need?" said the head of equity sales at one leading brokerage.

Pearson, the world's largest education publisher, said a wider agreement with AOL - which is merging with Time Warner Inc - was possible but was not being contemplated at the moment. Pearson's CEO Marjorie Scardino sits on AOL's board.

"There are other content sets we could look at but there are no conversations going on at the moment and there is nothing being contemplated. We have an enormous amount to do in the education area both on our own and with AOL and that will be our focus for the next few months," Makinson said. Pearson said the new relationship with AOL envisaged Pearson's education network - a new online consumer portal due to be launched this summer - as the preferred supplier of educational content and online learning tools. "This is more than a supply or carriage deal. We will be working with AOL to develop technology tools, curriculum architecture and cross promotion from AOL into the network," Makinson said.