AltaVista Technology and Compaq Computer have made a record $US3.35 million deal for the rights to the altavista.com Internet domain name.
Jack Marshall, president of AltaVista Technology, a small digital imaging firm, paid $100 for the domain name four years ago. Digital Equipment , which launched the AltaVista search engine in November 1995, was swallowed by Compaq last month in a $9.6 billion deal.
In June 1997, Digital scrapped plans to take its AltaVista unit public and decided to leverage its search engine's brand name. The AltaVista Technology Web site receives 500,000 page views daily, a spokesman said. The AltaVista search engine logs 12.5 million unique users on a monthly basis and 530 million monthly page views, according to Compaq.
A spokesman for Houston-based Compaq wouldn't comment on the deal, but did say the company was "looking forward to a positive resolution for both sides and expected an agreement to be announced in the next couple of weeks."
Chad Hill, a spokesman for AltaVista Technology, also refused to confirm the deal but said a pact would benefit both firms. "It will also be good for the average 'Net user because it's obvious that (the domain name issue) was really confusing. I think everyone's going to win," he said.
Mike Bernstein, an analyst at GartnerGroup in Stamford, Connecticut, said that if the $3.35 million figure is true, it would be the highest amount ever paid for a single domain name.
But is that a smart buy for Compaq? Paul Sonderegger, an analyst at Forrester Research in Cambridge, Massachusetts, thinks so. "AltaVista (search) at one time was the predominant search engine on the Web, and it still is a valuable 'Net property," he said. "It has brand-name equity, so to have altavista.com is a matter of proper brand management. They needed this."
Bernstein, however, said that AltaVista Technology already had a prominently posted disclaimer on its Web site, which tells online visitors that it isn't affiliated with the search engine. The site also provides a link to Compaq's AltaVista search engine at http://www.altavista.digital.com/, he pointed out.
"It doesn't seem to make very clear business sense right off the bat," Bernstein said. "That's a lot of money to spend on a name."
A source close to AltaVista Technology suggested that Compaq might have been facing a larger problem than simple confusion over the domain name. "More than one big-name search engine firm" had approached the company over the past few weeks with offers to buy the altavista.com. domain name should the Compaq negotiations break down, the source said.
The source also said that AltaVista Technology will officially change its company name to PhotoLoft.com on August 31. The company's new site, which is already live on the Internet at http://www.photoloft.com/, greets viewers with the phrase, "Welcome to Jack Marshall's PhotoLoft."
According to a news release on the site, PhotoLoft.com will offer free Internet "photo album" and multimedia digital imaging services. And although it has yet to launch officially, according to the source, PhotoLoft.com's first customer is a biggie: The Walt Disney Co. has a deal with the site to promote its upcoming animated film, "It's a Bug's Life."