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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: Nelson Chang who wrote (10785)	6/23/1999 8:08:00 PM
From: keta	Respond to of 19700

CMGI would do well to buy AltaVista - analysts Wednesday June 23, 7:36 pm Eastern Time By Tony Munroe BOSTON, June 23 (Reuters) - A purported deal by CMGI Inc. (Nasdaq:CMGI - news) to purchase the AltaVista internet search engine from troubled Compaq Computer Corp. (NYSE:CPQ - news) makes plenty of sense for CMGI, but less for Compaq, analysts said on Wednesday . ''If you just look at it from a strategic standpoint, it's very much their style,'' said analyst Karen Ficker of ING Barings Furman Selz, speaking of CMGI, which has major stakes in numerous Internet firms. ''Every business that they have ties into (an Internet) portal.'' For Compaq, such a deal could fetch $2 billion to $3 billion in CMGI stock, according to a report in Wednesday's Wall Street Journal, and allow the Houston-based firm to focus on fixing its struggling PC business. But selling AltaVista could also blow an opportunity for Compaq to generate e-commerce from its millions of PC customers, one analyst said. ''I'd rather see them move more quickly to capitalize on it, but not get rid of it,'' said analyst Art Russell of Edward Jones. One industry source told Reuters on Wednesday the companies had held talks but had not reached a deal. Another source close to AltaVista said a deal was expected within days. But a CMGI spokeswoman termed as ''rumors and speculation'' reports that it will buy AltaVista, Shopping.com and Zip2.com from Compaq for up to $3 billion in stock. Compaq, the world's second-largest computer maker, which has had a turbulent time in recent months, also declined comment on reports it would sell AltaVista, which it acquired as part of its purchase last year of Digital Equipment Corp. ''We don't comment on industry rumors,'' said AltaVista spokeswoman Eileen Quinn. Compaq has previously considered spinning off AltaVista through an initial public offering, but some industry observers believe the undermarketed but powerful search engine missed the ideal time for an IPO. AltaVista, meanwhile, had this week called a press conference for Monday to announce a new business strategy. Analysts said the sale of AltaVista would be a curious move for Compaq, which needs the diversification that its Internet properties give it. But they said Compaq could also use the proceeds from a sale. ''Anything that creates an infusion of $2 billion is good news for Compaq, given the dire straits they are in,'' said Terry Shannon, publisher of the Shannon Knows Compaq newsletter in Ashland, Mass. Edward Jones's Russell said a sale of AltaVista would make more sense if the deal were structured to allow Compaq to maintain an ongoing relationship with AltaVista users. Compaq last week warned of a second-quarter loss due to pricing pressures. In April, Eckhard Pfeiffer quit as president and chief executive after Compaq said first-quarter earnings would be half of Wall Street's expectations. For CMGI, which holds major stakes in numerous on-line firms, an acquisition of AltaVista would be intriguing when combined with its other properties, analysts said. CMGI is also under pressure to acquire an operating company to avoid being classified as a mutual fund, said analyst Abhishek Gami of William Blair & Co. The match would be even more attractive, analysts said, if CMGI were also to acquire Internet portal Lycos Inc. (Nasdaq:LCOS - news), a move the Journal said CMGI has been discussing in recent weeks. CMGI is the biggest shareholder in Lycos with 18 percent, although analysts said CMGI would be hard-pressed to buy both AltaVista and Lycos. Lycos did not have immediate comment on the report. ''Strategically, if they were to acquire AltaVista and at some point in the future acquire Lycos, it would be a killer combination,'' said Ullas Naik, an analyst with First Albany. ''It would immediately launch CMGI into the uber-portal ranks, and it would have a ripple-effect throughout their portfolio.'' But, Naik added, ''it would certainly be a very, very large acquisition if they were to do it.''