rudedog: CPQ appointed an interim team to analyze the opportunity with AV. Rod Schrock was head of CPQ's consumer group. He was primarily responsible for the development of the spin-off plans and the deal with CMGI and was one of the few at CPQ who understood how to extract value from the property.
Schrock is still in charge of Alta Vista. Therefore, as I said, the guys who were running Alta Vista for COMPAQ are still running it now.
I could say "case closed", but to tidy up the plural in the word "guys": in addition to the pre-Compaq Alta Vista team (the staff people who were running it for DEC) Schrock also took some bright lads and lassies with him to Alta Vista from the COMPAQ consumer division. I hadn't heard that all the pre-Compaq group and those from Compaq had left. Despite your information, I would be very surprised if they had, even if some of them have, and even if their ranks have been augmented by new people including CMGI people. Of course Alta Vista has staff turnover and of course it will make this deal and that: we will never know if it would have made similar or better deals under COMPAQ's majority control. In fact the CMGI deal has had the effect of postponing the IPO by about 8 months. Yes, there is a case to be made that Alta Vista needed to flesh itself out before an IPO. But there is also a case that the criteria of "readiness" for an "internut" type of company is not as stringent as for other types of companies. Alta Vista could have come to market this Fall, it could have raised the same amount of money it will raise in its CMGI enhanced version this coming Spring, the prospect would have saved the COMPAQ stock price from descending to $18 or even the low $20's, and would have prevented some of the serious damage that has occured to COMPAQ's reputation. The proceeds from the floatation would have boosted the COMPAQ balance sheet and allowed Alta Vista to make the moves it is making now, and COMPAQ could have spoken with greater conviction than it does now about being an "internet company" and it would have had a powerful platform to launch its products and negotiate and do deals. If it wanted - at some future point - to concentrate on its "core" - although I think its core was supposed to evolve towards the internet - then it could have sold off its holdings in an enriched Alta Vista to a CMGI or to an Amazon or to the Peoples Republic of China. You will never convince me that the AV was anything other than a bad Rosen mistake - an investment banker's decision -rather than a profound strategic decision of an entrepreneureurial industrialist. EP may have been slow to execute (and maybe he was being held back by Rosen and the Board) but in my view he was right and Rosen was wrong on this matter. |
