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To: S.C. Barnard who wrote (10668)	6/22/1999 8:21:00 PM
From: Jenne	Read Replies (1) \| Respond to of 19700

CMGI may buy AltaVista, CNBC says Compaq may sell Internet unit later this week By Janet Haney and David Callaway CBS MarketWatch Last Update: 8:01 PM ET Jun 22, 1999 NewsWatch PALO ALTO, Calif. (CBS.MW) -- CMGI is in talks to buy Compaq Computer's AltaVista search engine business for as much as $3 billion, CNBC reported, citing unidentified sources close to the companies. The deal could come as soon as this week and follows speculation all day Tuesday that Compaq and CMGI were in some sort of sale discussions. Compaq (CPQ: news, msgs) shares rose 1 11/16 to 23 13/16 while CMGI (CMGI: news, msgs) shares declined 8 1/16 to 94 15/16. The speculation was started after financial columnist Dan Dorfman reported the story in his column on jagnotes.com Jim Fialaw, a spokesman for Houston-based Compaq, said the company never comments on "rumor or speculation." A spokeswoman for CMGI did not return phone calls. The speculation comes less than a week after Compaq issued its second earnings warning in two months and said it would reorganize itself and cut up to $2 billion in costs in its most sweeping restructuring since 1991. See related story. "I guess that giving the overhang of Compaq's overall situation that I can see some justification for them pursuing a sale," said Daniel Kunstler, senior equity analyst at J.P. Morgan. Compaq's AltaVista unit, which acts as a search engine, features language translation services, chat rooms and online shopping, among others. AltaVista became part of Compaq last year after Compaq bought Digital Equipment Corp. It became a wholly-owned subsidiary of Compaq in early 1999 after the personal computer giant folded in several of its other online businesses, according to Hoover's Inc. Compaq had planned to spin off the business by taking it public.