Compaq goes Net shopping

Compaq surprised analysts last week by making a bid for e-commerce site Shopping.com to integrate with the AltaVista portal site it acquired along with Digital.

The hardware supplier offered $19 per share in cash for the company, valuing it at $220 million, maintaining it had already come to an agreement with shareholders holding 27 per cent of the firm. Completion of the transaction will depend on at least 90 per cent of shares being tendered.

Barry Parr, director of internet and e-commerce strategy at IDC, stated: 'We had been expecting Compaq to sell AltaVista and I still think that's going to happen in the longer term.' But he added: 'This has made me look at AltaVista in an entirely different way.'

Jim Balderston, analyst at Zona Research, also sounded a cautiously optimistic note: 'This is a first step for Compaq. It indicates a potential direction, but it has to follow up with other steps.'

Shopping.com claims that it sells about two million brand name products from vendors ranging from computer hardware and software to books and CDs.

Rod Schrock, senior vice president of Compaq, said: 'Our intent is to make AltaVista the leading guide for information and e-commerce on the internet.'

He added that Shopping.com's e-commerce functionality would be integrated into AltaVista.

Until Compaq's move, most observers considered AltaVista to be an also-ran in the portal space. The site was respected for its technology, but Digital had not made the same levels of investment as rivals Yahoo and Netscape Netcenter.

The online organisation was also hampered by a dispute over the 'www.altavista.com' Web address, to which it finally won the rights following a settlement last year.