No mention is made of whether CMGi got Millicent in the deal (!?), but
they did get shopping.com and zip2.com ... I should note that CMGi now
owns portions of Amazon, Yahoo, Lycos, and AltaVista, as well as all of
an in-house portal (www.planetdirect.com) and all or part of 40 other
Internet companies. The Berkshire Hathaway of the Internet age? Perhaps...
[Completely unrelated: Rohit, are you watching HSAC? Trading in the
Internet sector went nuts again today. Apparently no one gives a flying
boink what the Fed decides to do... the mania lives on :]
Here's the release from the CMGI site:
http://www.cmgi.com/press/99/altavista.htm
> Compaq and CMGI Form Strategic Internet Partnership; CMGI Acquires
> AltaVista Team to Deliver End-to-End Technologies And Enterprise
> Solutions; Partnership to Define Future of Consumer Internet PC Market
>
>
> Editor's Summary:
>
> CMGI takes majority stake in AltaVista; Compaq to be CMGI's largest
> outside shareholder
>
> CMGI's Internet leadership and resources to accelerate AltaVista's move
> to world-leading portal network
>
> Compaq named a premier IT partner to CMGI; CMGI to be a premier Internet
> technology and solutions supplier to Compaq
>
> CMGI to collaborate with Compaq's world-class research labs and business
> groups to develop and rapidly deploy next-generation Internet
> technologies
>
>
> HOUSTON, TX and ANDOVER, MA mpany, today announced a comprehensive
> strategic partnership that will enable both companies to aggressively
> pursue Internet-related business and market opportunities.
>
> The strategic partnership is aimed at providing the best Internet
> services and solutions to both businesses and consumers. The two
> companies will drive the Internet PC market by combining Compaq's
> consumer PC leadership with CMGI's network of leading Internet
> destinations and enabling technologies. CMGI will acquire control of
> Compaq's AltaVista business and its related properties (Shopping.com and
> Zip2) and will integrate the popular AltaVista search engine into its
> network of 40 leading Internet operating companies to deliver a superior
> online experience to Internet users both at home and at work.
>
> "Our partnership will define and lead the consumer and enterprise
> market, from PC to web, by combining Compaq's consumer Internet PC,
> commercial computing and infrastructure leadership, global reach and
> worldwide customer base with CMGI's network of leading Internet
> technologies and destinations," said Dave Wetherell, CMGI Chairman and
> CEO.
>
> "CMGI has established itself as a clear leader in the Internet economy,"
> added Benjamin M. Rosen, Compaq Chairman and acting CEO. "And as CMGI's
> largest outside shareholder and its principal strategic partner, we look
> forward to mutually driving future Internet opportunities for the
> benefit of the Internet marketplace, our respective shareholders,
> customers and employees."
>
> Under the terms of a definitive agreement, Compaq will transfer 83.0
> percent equity ownership in the AltaVista business to CMGI. Compaq will
> retain 17.0 percent equity ownership in the AltaVista business and hold
> a Board seat. In return, Compaq will receive 19.0 million CMGI common
> shares and CMGI preferred shares equivalent to 1.8 million CMGI common
> shares, which combined, would represent a 16.4% fully diluted equity
> stake in CMGI. In addition, CMGI will issue a $220 million three-year
> note to Compaq, bringing total consideration for CMGI's 83% ownership in
> the AltaVista business to approximately $2.3 billion, implying a total
> value of $2.7 billion for AltaVista. Compaq will also take a seat on the
> CMGI Board of Directors and plans to announce the appointment to this
> new position in the coming months. The agreement, subject to normal
> regulatory approvals, is binding on both parties and does not require
> shareholder approval for the closing.
>
> Global Business and Customer Benefits
>
> The partnership between CMGI and Compaq will expand the range of both
> companies' Internet business capabilities.
>
> Under the agreement, CMGI designates Compaq as its strategic IT partner,
> enabling CMGI, its Internet companies and their customers to benefit
> from Compaq's global leadership in consumer products, PC products, and
> enterprise-class systems, solutions and services.
>
> Compaq plans to integrate the diverse Internet capabilities of CMGI's
> pure-play network of 40 Internet companies into its consumer Presariob
> Internet PCs, commercial PC and enterprise-class solutions offerings.
> This integration includes web browser and keyboard access to the
> AltaVista Network and other CMGI Web services. Importantly, the alliance
> will enable Compaq and CMGI to offer Compaq's enterprise customers an
> array of business-to-business and business-to-consumer services to
> create customized vertical portals along with other comprehensive
> Internet solutions.
>
> With Compaq as its strategic IT partner, CMGI's network of businesses
> will be able to take advantage of Compaq's NonStopb eBusiness solutions.
> This will ensure that the IT systems fundamental to their success will
> maintain uninterrupted operations with complete data integrity and
> unlimited scalability, supporting continual growth and
> ease-of-management.
>
> CMGI will also collaborate with Compaq's world-class research labs and
> business groups to develop innovative, high-value Internet technologies
> and next-generation Internet appliances, and will foster business
> opportunities to exploit them.
>
> Building World-Leading Network with AltaVista
>
> CMGI, Compaq and the AltaVista management team - headed by Rod Schrock -
> will work together to establish AltaVista as one of the world's leading
> Internet networks. AltaVista will integrate services from CMGI Internet
> companies to create a premier Internet network for both on-line
> consumers and Web-based businesses.
>
> Yesterday, AltaVista announced several new services that form the
> foundation of a premier media and commerce network. These include an
> updated search site, the world's first microportal service, 42 local
> community portal partners, and redefining Shopping.com as the
> ultra-satisfying place to shop.
>
> "We believe in the power of the Internet and in the power of leading
> portals to capture and retain users," added Wetherell. "The integration
> of AltaVista services with CMGI's extensive network of best-of-breed
> Internet operating companies will create a formidable network. We see
> enormous opportunity ahead as we execute on the dynamic potential of our
> synergies."
>
> "CMGI's Internet leadership will greatly accelerate the AltaVista
> strategy announced just yesterday," said Rod Schrock, president and CEO
> of AltaVista Company. "By combining AltaVista services with CMGI's
> extensive network of community, infrastructure and e-commerce Internet
> companies, there is no limit to our long term potential."
>
> Compaq Background
>
> Compaq Computer Corporation, a Fortune Global 100 company, is the
> second-largest computer company in the world and the largest global
> supplier of computer systems. Compaq develops and markets hardware,
> software, solutions, and services, including industry-leading enterprise
> computing solutions, fault-tolerant business-critical solutions,
> enterprise and network storage solutions, commercial desktop and
> portable products and consumer PCs. The Company is an industry leader in
> environmentally friendly programs and business practices.
>
> Compaq products are sold and supported in more than 100 countries
> through a network of authorized Compaq marketing partners. Customer
> support and information about Compaq and its products are available at
> http://www.Compaq.com.
>
> CMGI Background
>
> A recognized leader in the Internet economy, CMGI (Nasdaq: CMGI) has
> built a substantial base of Internet operating companies and, through
> its @Ventures affiliates, has invested in a growing portfolio of
> synergistic Internet enterprises which enhance the value of its core
> holding. This unique method of generating equity for its shareholders is
> what CMGI calls "creating net value." Microsoft, Intel and Sumitomo hold
> minority positions in CMGI.
>
> CMGI's majority-owned subsidiaries include Activerse, Adsmart, Engage,
> iCast, Magnitude Network, NaviSite, NaviNet, Planet Direct and ZineZone.
> The Company's @Ventures affiliates have ownership interests in Lycos,
> Inc. (Nasdaq: LCOS), Critical Path (Nasdaq: CPTH), Silknet (Nasdaq:
> SILK), Ancestry.com, Asimba, blaxxun, BizBuyer.com, CarParts.com,
> Chemdex, eCircles.com, Furniture.com, HotLinks, KOZ.com,
> MotherNature.com, NextMonet.com, NextPlanetOver.com, OneCore.com,
> ONElist, Productopia, Promedix.com, Raging Bull, Softway Systems, Speech
> Machines, ThingWorld.com, Universal Learning Technology, Vicinity,
> Virtual Ink and Visto.
>
> CMGI is also the majority-owner of SalesLink, InSolutions and On-Demand
> Solutions, leaders in direct marketing, fulfillment and turnkey arenas.
> CMGI Corporate headquarters is located at 100 Brickstone Square,
> Andover, MA 01810. Telephone: 978-684-3600. Fax: 978-684-3814.
> Additional information is available on the company's Web site at
> http://www.cmgi.com
>
> AltaVista Background
>
> Launched in 1995, AltaVista is a pioneer in Web search technology and
> continues to set new standards, from indexing the entire Internet, to
> providing the first of their kind language translation, AltaVista Photo
> & Media Finder and AltaVista Family Filter search capabilities. With an
> extensive line-up of content and services, AltaVista is now regarded as
> one of the top destinations on the Internet.
>
> AltaVista continues to build upon its heritage through extensive
> enhancements and industry-leading partnerships to make the Internet
> relevant, fast and effective for Web users of all proficiency levels.
> For more information, visit AltaVista's flagship site at
> http://www.altavista.com or http://www.av.com
Here's the interview with the chairmen of CMGi and Compaq on CNBC...
> CNBC- STREET SIGNS INTERVIEW WITH COMPAQ CHAIRMAN AND ACTING CEO
> BENJAMIN ROSEN AND CMGI CHAIRMAN AND CEO DAVID WETHERELL
> JUNE 29, 1999
>
> SUMMARY: Rosen says CPQ is selling AltaVista in an effort to
> differentiate the company's Internet holdings. Wetherell plans to
> integrate AltaVista before strategizing an IPO for the portal.
>
> Maria: After weeks of speculation, Compaq computer announced this
> morning it is selling control of its AltaVista search engine operations
> to the Internet company CMGI. Compaq will become CMGI's biggest
> shareholder after the company's Chairman and CEO, David Wetherell. Both
> stocks are trading higher today on the news. Joining us now from New
> York are CMGI's Chairman and CEO, David Wetherell. And Compaq's Chairman
> and Acting CEO, Benjamin Rosen. And joining me here in the studio, Steve
> Frank of "The Wall Street Journal," who has been reporting on this
> story. Welcome congratulations on your deal.
>
> Thank you very much. Maria: Let me ask you, Mr. Rosen, why would you be
> selling AltaVista at a time when most people believe that it is the
> Internet strategy which your company must define at a time when PC
> business has come under some pressure?
>
> We are not selling AltaVista. What we are doing is trading 100%
> ownership of one Internet company for a significant ownership in a
> portfolio of over 40 Internet companies that really is part of our
> Internet strategy. It greatly broadens our reach and breadth in the
> Internet area.
>
> Maria: And what is the Internet strategy?
>
> Our plan is to be one of the leading Internet companies of the future.
> This combines with our nonstop e-business strategy in the enterprise
> area that will give us the highest performance group of solutions in the
> Internet area.
>
> Steve: David, it's Steve Frank. I wanted to ask you a question on
> pricing. You haven't disclosed officially AltaVista's revenues, but sort
> of hinted they're in the range of about $160 million annually. And that
> would suggest you're valuing the company right now at about 17 times
> current fiscal year revenues. That compares to about 31 times revenues
> for Lycos, or at least where Lycos is trading right now. Does that
> suggest you got a real bargain on AltaVista or does that suggest to you
> that Lycos is overvalued?
>
> Well, it doesn't have to be one of or the other, of course. There are
> different ways of valuing companies and different metrics you need to
> look at. Lycos is closer to breakeven than AltaVista is. However, on the
> search engine part of the business, AltaVista looks to be profitable at
> this time and growing very quickly. The Shopping.com and Zip2 assets
> that we're acquiring here are earlier in their business evolution and
> are still experiencing reasonably heavy losses. We think that there's a
> great deal we can do to leverage up all those businesses and improve
> both the top and the bottom lines.
>
> Let me just follow up asking you about CMGI's relationship with Lycos,
> where you still own a pretty hefty stake, I think something on the order
> of something like 18%. You've announced that many of your CMGI-owned
> Internets companies are going to be rolled up or affiliated somehow with
> the AltaVista search engine here, integrated into the search engine.
> Does that suggest they will have a lesser role to play with Lycos or
> that CMGI's relationship with Lycos will somehow change?
>
> Not at all. These companies that are going to be integrated into the
> AltaVista portal are still going to remain a stand-alone business unit.
> And free to collaborate with other portals and a couple of them their
> own portals in their own vertical niches and in the case of Myfamily.com
> and Raging Bull, the second-largest financial community on the Web. And
> we have some broad more general interest portals that will also remain
> as independent business units and have every opportunity to collaborate
> with Lycos where possible.
>
> Maria: Mr. Rosen, this, of course, one more change, a lot of changes
> ahead of naming a new CEO. Where does your search for the CEO stand at
> this point?
>
> The search is doing very well. We don't comment publicly on it other
> than to say that we are on our schedule to find our permanent CEO.
>
> Maria: And are you looking specifically within technology?
>
> We're looking at both, within and outside technology.
>
> Maria: With respect to the shift in revenues that we have been seeing
> within the PC area, within the PC industry, where some companies are
> trying to bundle Internet access. Along with selling a PC and perhaps at
> some point selling a PC at somewhat of a discount to get the person to
> buy into Internet access. Does that create an opportunity for Compaq to
> look for new sources of revenue, perhaps on the service area or the fee
> side?
>
> Absolutely. We're looking at a variety of means of deriving recurring
> revenues from our PC sales in both our consumer as well as our
> commercial PCs. And I think this relationship we're announcing today
> with CMGI, it's a strategic relationship that will offer a variety of
> new services that will benefit both us and CMGI.
>
> Steve: Mr. Rosen, it's Steve Frank. There's been some speculation,
> getting back to the issue of the CEO search, that by making all these
> decisions, by making the decision with regard to Compaq's recently
> announced restructure, by making this decision on Internet strategy,
> that you're complicating that search by taking away many of these
> decisions from a perspective new CEO. Do you feel that's the case? And
> assuming you don't, how active a role do you foresee yourself playing
> once a new CEO is named?
>
> What we are doing are taking the steps that are necessary to make Compaq
> a stronger growing and more profitable company. We live in Internet
> speed today. And you can't waste a day where there's an opportunity. So,
> we've taken the steps that are necessary to get us growing and
> profitable again, steps that will make it easier for the new CEO when he
> or she comes in, not more difficult. And my role is to do what I've done
> for the last 16 years, except for the last 10 weeks, and that is to
> disappear into the woodwork as non-executive chairman.
>
> Steve: Okay. Let me ask you another question, Mr. Rosen, related to your
> newfound stake in CMGI. At what point do you see yourself unlocking the
> value that you've now gained by selling those shares?
>
> Well, we have no current plans to sell the shares. We cannot sell any
> shares in the first year. And then it's a percentage thereafter, but
> right now we're very happy to be shareholders.
>
> Steve: Well, if that's the case, why the need for a lock-up agreement
> that allows you to sell those shares, half in a year and half in 18
> months?
>
> Well, I don't want to go into all the details of the agreement. Let me
> just say that we're very pleased to be a part of the largest outside
> shareholder of CMGI.
>
> Maria: Mr. Rosen, you have had difficult financial results ever since
> acquiring Digital. What value did that bring? And is that value still
> there?
>
> Digital and our previous acquisition, Tandem Computers, have provided us
> with all of the elements we needed to be a complete information
> technology to implement this nonstop E-business solution strategy. From
> Digital, we acquired 25,000 service people, we acquired AltaVista. We
> acquired the 64-bit alpha chip, a variety of products and services that
> we simply did not have and could not develop in a reasonable time.
>
> Steve: David, it's Steve Frank again. I wanted to ask you a quick
> question about your own Internet advertising companies that you own
> between Ad Smart and Engage, which together are considered rivals to
> DoubleClick, which obviously, has a big relationship with AltaVista,
> that I understand is under contract for another three years. What can
> you tell us about that relationship with DoubleClick? Do you expect to
> get out of it after three years? And secondarily, what can you tell us
> about CMGI's plans, ultimately, to take AltaVista public again?
>
> As far as DoubleClick's concerned, we have every intention of honoring
> the agreement that's in place. In looking to ways that we can extend the
> relationship that we have beyond AltaVista with DoubleClick. You talked
> about Engage in particular. There is the distinct possibility or
> opportunity to extend all that Engage has to offer to DoubleClick.
> Certainly, we expect to provide Engage profiling to the AltaVista set-up
> properties. We believe that that is something that would benefit all the
> other DoubleClick properties as well. We haven't had those meetings with
> DoubleClick at this time. So, it's not clear what the long-term
> relationship will be. As far as IPO opportunities, it is our business
> model to take companies public. When they are best ready, we're going to
> wait until we finish further along down the road of integrating all of
> the CMGI collection of properties into the AltaVista megaportal before
> we pick a day and strategize with the AltaVista management as to what
> the best time would be for an IPO.
>
> Maria: Gentlemen, once again our congratulations and we thank you for
> joining us.
>
> Thank you very much. Thank you.
>
> Maria: CMGI's David Wetherell and Compaq computer's Benjamin Rosen and
> our thanks to Steve Frank in the studio.
----
adam@cs.caltech.edu
Well why don't you call the Internet and ask their techincal support
personnel for help?
-- AOL tech support person