CMGI said in talks to buy Alta Vista
Compaq search engine could fetch more than $2 billion
By Steve Frank
THE WALL STREET JOURNAL
June 22 — Sources have confirmed that Internet
holding company CMGI is in talks to buy the
Alta Vista search engine and other Internet
assets from Compaq Computer in a deal said to
be worth more than $2 billion. The deal would
leave Compaq with a minority stake in CMGI.
CMGI, Inc. (CMGI)
price
change
$94.94
-8.063
Compaq Computer
Corporation (CPQ)
price
change
$23.81
+1.688
Data: Microsoft Investor and S&P
Comstock 20 min.delay
RUMORS OF the possible sale were reported all day,
first appearing on the JagNotes Web site, in commentary by
Dan Dorfman suggesting that CMGI might be talking to
Compaq about buying its Internet assets, including the Alta
Vista unit.
Sources Tuesday confirmed those reports, saying that
CMGI is close to a deal to buy Alta Vista, along with
associated Internet assets including Shopping.com. A deal
could be announced by the end of the week, possibly as
early as Thursday, though it's still possible the deal could fall
through.
CMGI Chairman David Wetherell, reached by phone,
declined to comment on rumors.
CMGI shares fell Tuesday on those rumors, while
Compaq ended the day higher.
A deal would make Compaq a significant minority
shareholder in CMGI, on the order of 15 percent or more.
CMGI already owns 18 percent of search site Lycos,
as well as stakes in more than 30 other Internet companies
that offer a variety of Web-related services such as
advertising and marketing.
Chairman and CEO Wetherell owns about 19 percent
of CMGI; Intel, Microsoft, and Sumitomo also hold
minority interests. (Microsoft is a partner in MSNBC.)
CMGI, formerly CMG Information Services, was
founded in 1968 as College Marketing Group, a company
that sold names of college professors and their books to
publishers. Wetherell purchased CMG in 1986 and began
expanding the company's direct marketing efforts and, more
recently, aggressively investing in Internet companies.
There has been speculation that CMGI might have to
register as a mutual fund because of the amount of assets in
its sizable Internet portfolio. An acquisition the size of Alta
Vista could defer that type of move for CMGI, giving it a
significant wholly owned asset.
Strategically, CMGI's purchase of Alta Vista could
allow the company to channel Internet traffic from its search
site to the various Web sites it owns. CMGI could also
decide to spin off Alta Vista as a separate company at some
point, a move Compaq has also said it was considering.
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