Compaq has put an end to months of speculation when it revealed last week that it is spinning off its portal operation, Alta-vista, as a separate company.
Eckhard Pfeiffer, chief executive of Compaq, said Altavista, which was acquired as part of last year's purchase of Digital, would be established as a publicly traded company with the aim of becoming the leading portal on the internet.
He said the move would allow Altavista to focus on improving user experience on the Net.
Pfeiffer said: 'We see this as a significant opportunity for Compaq to expand its share of the rapidly growing internet market for content and services. The e-commerce market will be worth an estimated $170 million by 2002 and now Compaq is in a strong position to get a huge share of this.'
An agreement between Compaq and Microsoft was also announced which will result in the software giant making a Microsoft-branded Altavista search engine for the Microsoft Network. In return, Altavista will make an Altavista-branded version of Microsoft's hotmail available to all its users, along with future Microsoft instant messaging technology.
In addition, Pfeiffer named Rod Schrock as president and chief executive of Altavista. Schrock was formerly senior vice president of Compaq's consumer products.
He was also responsible for Compaq's move last month to purchase the e-commerce company Shopping.com.
Schrock revealed that Compaq would fully capitalise Altavista for the first year, but the company would certainly be independent: 'Proceeds from the IPO will fund acquisitions and expand the company. After that we will be in a negative position for a couple of years, but will then show profits.'
COLOUR-SCREEN PDA RIVALS PALM PILOT
Compaq will launch Aero next month, its first palm-sized PC targeted at the personal digital assistant (PDA) market.
No details have been made public yet, but sources close to the company indicated that the Aero will be priced at about #400. It will also come with a high-quality colour screen and 8Mb of Ram - upgradeable to 32Mb.
Neil Dagger, product manager at Compaq, revealed: 'It is all the Palm Pilot is and more. There will be two models plus an accessories range. We estimate the battery life to be between two and three weeks, based on 30 minutes use per day.'
Aero will be aimed at mobile professionals, but the company is also hoping for strong sales from the consumer market. Dagger described the screen as 'amazing', claiming this would be a strong selling point to customers.
Martin Reynolds, analyst at Dataquest, agreed, noting that the colour screen and wider variety of applications could now tip the balance in favour of Windows CE machines, away from the currently dominant Palm Pilot.
'The screen is so attractive from a user point of view. As soon as you see a colour screen on a PDA you wonder why you ever wanted a Palm Pilot,' he said.
The Aero will also come with infra-red wireless capability, docking cradle with battery charger, Lithium Ion battery, record and play capability and external speaker. The screen will be a touch-sensitive TFT display.
Reynolds expected Palm Pilot prices would be forced down by the number of PDA products arriving on the market, but said there was plenty of room for price cuts, given that it takes less resources to produce one PDA machine than a Windows CE device.
By Bart De Landtsheer and Jonathan Lambeth.
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