Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Trey McAtee who wrote (6427)	6/29/1999 3:49:00 PM
From: Dolfan	Read Replies (1) \| Respond to of 8358

OK Compaq were ready! :-) CMGI inks AltaVista deal In $2.3B buyout of search engine, CMGI weds its fortune closer to Compaq June 29, 1999: 1:09 p.m. ET NEW YORK (CNNfn) - Internet investment firm CMGI Inc. said Tuesday it would buy Web search engine AltaVista from Compaq Computer Corp. for $2.3 billion, part of a wider deal that closely links the two high-tech companies' futures. Finding a new home for AltaVista has been a goal of Houston-based Compaq, whose leadership in the personal computer market has come under intense pressure in recent months. Aside from that swap for AltaVista, the deal ties together the fortunes of CMGI and Compaq. CMGI will land AltaVista-related web sites Shopping.com, an online retail site, and Zip2, a web directory. The deal puts AltaVista in the hands of an expert Internet company, but allows Compaq -- which had planned to take the search engine public -- to keep one foot planted in the Internet space. That's because the deal gives Compaq a 16.4 percent stake and a board seat at CMGI, and a 17-percent stake and a board seat in AltaVista. With its leadership in PCs coming under fire, Compaq is reeling. The company in April ousted Chief Executive Eckhard Pfeiffer and recently said it would post a loss this quarter. For CMGI, fresh off scuttling a buyout offer for its top asset - an 18 percent stake in the web portal Lycos (LCOS) -- the deal cements its status as a independent Internet operating company. U.S. Securities and Exchange Commission rules have put CMGI, whose assets include many stock holdings, on the brink of being listed by the SEC as a mutual fund -- and not an operating Net company. "The threshold in assets for companies, generally, is about 40 percent," to avoid being considered a mutual fund, said John Heine, an SEC spokesman. The deal with AltaVista, which is not publicly traded, should add the concrete assets for CMGI to maintain its operating company status. By the numbers In the accord, which was anticipated after reports last week, CMGI will receive a 83 percent stake in AltaVista. Compaq becomes the search engine's largest outside shareholder, holding the other 17 percent. Also as part of the deal, Compaq will receive 19 million common shares and preferred shares worth 1.8 million common shares of CMGI, giving the PC maker a 16.4 percent ownership in the Net venture firm and a seat on the CMGI board. Based on CMGI's Monday closing price of $97.6875, the stock portion of the transaction carries a value of more than $2 billion. CMGI will issue a $220-million, three-year note to Compaq, lifting the deal's total value to about $2.3 billion. Investors appeared to log on to the deal. CMGI (CMGI) stock was up 13-5/16 to 111 on Tuesday afternoon, while shares of Compaq Computer (CPQ) rose 1 to 23-5/16.