Compaq Spins Off AltaVista

Compaq has created a wholly owned subsidiary for its AltaVista Internet search site and plans to take the subsidiary public.

AltaVista will become the cornerstone of The AltaVista Company, according to Compaq executives.

"We're taking a major step to leverage one of the premier assets" Compaq acquired when it bought Digital, said Eckhard Pfeiffer, Compaq's president and chief executive officer.

Having a separate subsidiary for AltaVista will help it focus on making the search and navigation site a key destination for Internet information and electronic commerce, Pfeiffer said. Rod Schrock will be its president and chief executive officer, he said. Schrock was most recently senior vice president of Compaq's Consumer Product Group.

Compaq also announced a technology-sharing agreement with Microsoft. Compaq will make an AltaVista-branded version of Microsoft's Hotmail service available to AltaVista users, and AltaVista will be the primary search engine for the Microsoft Network, according to Compaq. The companies will also team on other Web-based communications and community-building services, Compaq said.

Compaq executives outlined their plans for AltaVista in rather broad terms. The new company will focus on making its site run faster and on integrating electronic commerce into the user experience, according to Pfeiffer. The vast majority of people who use AltaVista do so to search for specific product information, and Compaq's recent acquisition of online retailer Shopping.com opens up many possibilities for AltaVista to integrate e-commerce, he said.

Compaq decided to spin out AltaVista because the search engine is "fundamentally a different business than the computer business of Compaq", Pfeiffer said. AltaVista will go public to raise the money an independent AltaVista will need, he said.

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