Don't know if this AV piece has been posted as yet. I picked it up at the Yahoo Zoo. El
Compaq's Alta Vista strategy emerges
By Jim Hu
Staff Writer, CNET NEWS.COM
January 12, 1999, 11:25 a.m. PT
It's been a long and winding road for AltaVista, but a direction for the once
up-and-coming portal may finally be coming into view.
Parent company Compaq Computer made a long-awaited but clear indication yesterday of
its plans to build AltaVista into one of the most trafficked sites on the Web after acquiring
online retailer Shopping.com for $220 million in stock.
With the acquisition, Compaq will incorporate Shopping.com's services into AltaVista to
further beef up its e-commerce strategy. For example, if a user conducts a search on
AltaVista, the results also will provide a link toward the purchase of relevant products,
according to Compaq senior vice president Rod Schrock. Though there will be a link to
Shopping.com from the AltaVista site, it won't always be apparent whether a user is
buying from Shopping.com or completing a transaction through AltaVista.
"The Internet is really quickly becoming a transaction medium as well as a content
medium," Schrock said in an interview with CNET
News.com. "We want to make AltaVista the leading guide
for both information and e-commerce on the Internet."
A Compaq spokesman added that, under Compaq's
consumer products division, which is headed by Schrock,
AltaVista will become an additional feature on its "Internet
PC" initiative. This will allow Compaq users to access
AltaVista or Shopping.com e-commerce services simply by
pressing a single button on the PC keyboard.
"AltaVista is a key part of that overall Internet strategy," said the spokesman.
However, analysts and observers remain skeptical about Compaq's intentions for
AltaVista. Many wonder whether Compaq's efforts now are too little and too late to catch
up with the portal heavyweights, especially in light of the apparent evolution taking place in
that sector as traditional media companies such as Disney and NBC jump into the fray
through joint projects and acquisitions.
Do you want to know more?
View story in The Big Picture
Go to Message Boards
Search News.com
Since the company completed its acquisition of Digital Equipment, many analysts have
wondered whether Compaq has the resources and expertise to run an Internet media
company. Many also speculated that the computing giant would sell the service after
polishing it up by adding more portal features.
Recently, Frank Gens, an analyst with market research firm International Data
Corporation, predicted in his 1999 report that Compaq would probably sell its AltaVista
stake.
However, in an indication that AltaVista was significantly ramping up its portal efforts, the
site last year began to partner with content providers such as ABCNews.com, InteliHealth,
and TheTrip.com, later launching a redesign that featured content organized into channels.
Building blocks for what?
And in May, Yahoo ended its two-year licensing contract for AltaVista's search engine by
signing on search technology firm Inktomi. Yahoo attributed the contract's dissolution to a
conflict of interest, noting that AltaVista has been stepping up efforts to pursue a portal
strategy that would compete with Yahoo's.
But despite the ongoing efforts from Compaq, Forrester Research analyst Chris Charron
said the computer giant's efforts have been slow at best--underscoring
the vagueness of Compaq's AltaVista strategy.
"I think the AltaVista train stalled over the past six months while
Compaq was figuring out what to do with it," he said. "That uncertainty
about AltaVista's future certainly had an impact on AltaVista employees and potential
partners, and especially its users. With that uncertainty, partners are less apt to do
business where there is so much fluidity in the people and the vision."
Charron added that AltaVista once competed with Yahoo and Excite, back when both
were merely search engines. Due to stagnation, however, Yahoo, Excite, and other
portals have taken an astounding lead in audience growth and revenue.
"At one point, AltaVista was an underdog and a competitor in the space," he said. "But
right now it's fallen too far behind to compete with the Go Networks and Yahoos of the
world."
The need for media savvy?
As a solution to competing with the heavyweights, Charron said AltaVista is in need of
media-experienced management, similar to the core management teams within other
portals.
"As a signal that they could take [AltaVista] to another level, they should hire some
stronger managers and give them the independence and cash to make this a strong
media company, and not just an appendage to the Compaq PC business," Charron said.
Currently the site's day-to-day operations are managed by Compaq vice president Kurt
Losert, who reports to Schrock. Losert replaced Bob Hult, formerly AltaVista general
manager under Digital, who left the company after the close of the acquisition in June,
according to the spokesman.
Nevertheless, surviving under Compaq's wing has its advantages. Despite doubts over
Compaq's ability to run a Web portal, some analysts disagree with the notion that media
types are the necessary means to an end.
"I don't think the differentiation between a hardware company and an Internet media
company is unrealistically dramatic or unrealistically wide," said Anya Sacharow, an
analyst at Jupiter Communications. "I think there's a possibility for those two cultures and
businesses to understand each other." |
