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

To: robbie who wrote (45040)	1/25/1999 8:38:00 PM
From: David B. Higgs	Read Replies (2) \| Respond to of 97611

Compaq to Announce Spin Off of AltaVista, Person Familiar Says Bloomberg News January 25, 1999, 4:39 p.m. PT Compaq to Announce Spin Off of AltaVista, Person Familiar Says Houston, Jan. 25 (Bloomberg) -- Compaq Computer Corp., the world's second-largest computer maker, is expected to announce plans to sell or spin off part of its AltaVista web site in a public offering, a person familiar with the company's plans said. Compaq, which acquired AltaVista in its $9 billion purchase of Digital Equipment Corp. in June, is expected to make the announcement at a press conference with Chief Executive Eckhard Pfeiffer in New York tomorrow. Details of the transaction weren't available. Compaq declined to comment. Analysts had been expecting Compaq to spin off AltaVista, the No. 11 web site. It uses technology allowing users to search for subjects using simple questions. Compaq has been souping up the site with its acquisition of Shopping.com and struck a deal with Microsoft Corp. to feature AltaVista on its MSN site. ''They're investing heavily in it -- a spin off would be very likely,'' said Paul Deninger, chairman and chief executive of Broadview International, a small investment bank in Ft. Lee, New Jersey. Houston-based Compaq is likely looking to capitalize on the rich valuations given to Internet-related companies selling shares in recent weeks. MarketWatch.com Inc., which offers real- time news and financial programming on the Internet, saw its shares rise more than fivefold in the first day of trading. UBid Inc., an online auctioneer of computer goods, more than tripled in its first day of trading, and commands a market value of $601 million. Recent mergers also have heated up competition for Web companies. Excite Inc. agreed to be acquired by At Home Corp. last week for $7.2 billion and America Online Inc. plans to buy Netscape Communications Corp. for $4.2 billion. ''There's no doubt they'd get a better valuation for AltaVista if they spun it off,'' said Lisa Rapuano, portfolio manager at Legg Mason Inc., which owns 5.8 million shares of Compaq. ''It doesn't really fit with their core hardware business -- it's an underutilized asset.'' Shares of Compaq rose 1/2 to 46 11/16. --Molly Williams in San Francisco (415) 912-2993/pkc