Compaq announces plans to spin off AltaVista

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Compaq Computer Corp., Houston, outlined plans for a separate AltaVista Co., based in Palo Alto, Calif.

Compaq President-CEO Eckhard Pfeiffer said AltaVista would go forward with an initial public offering, but he declined to say when. "We intend to transform AltaVista into the leading information and e-commerce site on the Internet," Mr. Pfeiffer said. Compaq also named Rod Schrock, formerly senior VP of Compaq's consumer product group, president-CEO of AltaVista Co.

Compaq is the world's largest PC computer company with 15% of the U.S. market, according to Dataquest. It acquired AltaVista when it purchased Digital Equipment Corp. in '98.

Other elements of AltaVista's plan included a technology sharing relationship with Microsoft Corp. in which Microsoft will license its Hotmail free e-mail and messaging services to AltaVista. Microsoft will use AltaVista's search services as the primary Web search engine for the MSN network. Each company's technology will be co-branded on the other's site. As a result, AltaVista said it would not renew its contract with existing e-mail provider iName, New York, and Microsoft said it would be dropping San Mateo, Calif.-based Inktomi for search services on MSN.

Copyright January 1999, Crain Communications Inc.

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