then he says the opposite in WSJ...
Compaq Computer Expected to Spin Off
All or Part of AltaVista Search Services
By GARY MCWILLIAMS
Staff Reporter of THE WALL STREET JOURNAL
Compaq Computer Corp., hoping to cash in on the stock market's love affair with Internet companies, Tuesday is expected to disclose plans to spin off all or part of its AltaVista Search Services, according to people close to the company.
The plans are expected to include a new management team for the Palo Alto, Calif., unit that includes the naming of Compaq Senior Vice President Rod W. Schrock, the highly regarded head of its Consumer PC Products Group, as chief executive officer of the new entity. The spinoff, likely to take the form of an initial public offering, could value AltaVista at $2 billion, estimated Piper Jaffray Inc. analyst Ashok Kumar.
Compaq, the world's largest personal-computer maker has scheduled a morning news conference in New York with Mr. Schrock and Eckhard Pfeiffer, Compaq's chief executive, on the service's future. A spokesman declined to comment on the announcement.
Analysts say the company last year rebuffed several offers to buy the Internet search service, believing it could remake the site into a highly valued Web "portal," complete with services such as shopping and news, similar to Yahoo! Inc. and Excite Inc. Indeed, it recently agreed to pay $220 million for Shopping.com, a Corona del Mar, Calif., company that runs an electronic-commerce service.
Compaq also has been angling to find content and distribution partners-but so far to no avail. It held discussions with Yahoo, Time Warner Corp. and Microsoft Corp., according to industry executives.
Stephen Mucchetti, chief operating officer at electronic-commerce consultants Scient Corp., says a spinoff could help AltaVista by giving it its own stock for making acquisitions, and, just as important, independence. "With its freedom from a computer-products company, AltaVista may [reach deals] more easily with network providers and portals," he said.
Insiders say company executives had been reluctant to spin off the business. But with the huge run-ups in valuations for Internet stocks, they decided the business needed to be separate to better compete with the consolidation now taking place among Internet-service companies.
"Clearly, they need an approach to move AltaVista toward becoming a portal," said Mr. Kumar at Piper Jaffray. According to the latest results from researcher Media Metrix Inc., AltaVista (www.altavista.com) ranks as the 12th-most-visited Web site.
Still, a spinoff would be an ironic footnote to Compaq's $9 billion purchase of Digital Equipment last year. Digital executives had once scheduled an initial public offering for AltaVista but canceled the offering, believing AltaVista's name recognition helped the company sell its computers and services.
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