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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (43017)	1/11/1999 3:24:00 PM
From: SS	Read Replies (2) \| Respond to of 97611

Monday January 11, 3:02 pm Eastern Time INTERVIEW - Compaq eyes chunk of e-commerce pie By Eric Auchard NEW YORK, Jan 11 (Reuters) - Compaq Computer Corp.'s (NYSE:CPQ - news) move to buy online retailer Shopping.com advances the top personal computer maker's role as a major Internet force , a Compaq executive said on Monday. The acquisition, which would allow Compaq to reach fully one-third of the Web audience, also reinforces Compaq's efforts to remain a dominant supplier of PCs and consumer electronics in the Web era, Rod Schrock, senior vice president and consumer products unit general manager, said in a phone interview. Schrock said Compaq planned to link buyers of its easy Internet access PCs and visitors to its busy AltaVista Internet search site directly to the Shopping.com site, multiplying the Internet retail site's potential base of customers. Earlier, Houston-based Compaq announced that it had agreed to buy Shopping.com (OTC BB:IBUY - news) in a cash deal, valued at about $220 million, that will thrust Compaq further into the consumer Internet and electronic commerce markets. The deal builds upon Compaq's initital foray into the consumer Internet business with last summer's acquisition of Digital Equipment Corp. and its AltaVista Web search site. With Shopping.com, Compaq will be able to provide shoppers access to a range two million products and services from 1,000 merchants. ''We definitely plan to turn Shopping.com into a premiere shopping site on the Internet,'' Shrock told Reuters. ''In our estimation, Shopping.com has one of the most state-of-the-art shopping capabilities'' of any site on the Web, he said. The acquisition gives Compaq, the world's leading consumer PC supplier, the means to offer a comprehensive set of Internet looking and buying services with unparalleled distribution to new computer users. The deal is the latest consolidation move to take place among popular Internet media sites following America Online Inc.'s (NYSE:AOL - news) $4.2 billion deal to buy Netscape Communications Corp. (Nasdaq:NSCP - news), expanding AOL's already vast audience reach. With such deals, the once wide-open Internet appears increasingly to be fenced-off into territories major industry players can use to corral and herd potential customers along a single avenue of shopping storefronts and other services. Such links effectively lock in potential buyers to what previously has been a medium of transitory window shoppers. ''By the end of the year, we could be driving 10 to 25 times more traffic to Shopping.com'' by closely coupling the retail site with existing Compaq products and services, Shrock said. He said Compaq planned to begin a tender offer Monday to acquire all of the outstanding shares of Shopping.com for $19 per share in cash, or $220 million in total, a premium of nearly $6 to Shopping.com's closing price on Friday. Shopping.com, of Newport Beach, Calif., has 120 employees and is headed by Frank Denny, a veteran retail executive and founder of what has become Builder's Square, the U.S. home improvement chain. All employees would remain under the deal. Shopping.com uses a sophisticated retail computer network to contact suppliers who ship orders directly to its customers, eliminating the need to warehouse inventory, slashing capital requirements compared with traditional storefront retailers. The online retailer counts 100,000 customers who have made purchases at its site in the past 15 months. One-third of sales were for computers or consumer electronics. Among its 63 shopping categories are books, music and home improvement products, cars and phone, travel and financial services. Shrock said Compaq planned to expand Shopping.com's workforce as part of an effort to integrate the retailer with its AltaVista Internet media site, the 10th most visited location on the Internet according to November industry data. The easy-to-remember Shopping.com (http://www.shopping.com) brand will remain a distinct property within the Compaq constellation of Internet sites, he said. Shares of Newport Beach, Calif-based Shopping.com, rose to $18.53 by early afternoon Monday, up $5.34 from the opening on the over-the-counter bulletin board. Compaq added $1.31 to $46.69 in New York Stock Exchange trading, where the stock was the third most active issue. Following Compaq's announcement, other leading Internet names continued to rally, including potential Compaq rivals AOL, up $12 on the day at $156.97, and Amazon.com (Nasdaq:AMZN - news), up $13 at $173.25.