Compaq shops around to boost AltaVista

Compaq has agreed to buy e-commerce site Shopping.com in an attempt. to revitalise the AltaVista portal site it acquired when it bought Digital Equipment.

Until the announcement, most observers considered AltaVista to be an also-ran in the portal space. Compaq has not given it the marketing push enjoyed by rivals such as Excite and Yahoo and, as a result, the site once respected for its technology no longer leads the market.

The Compaq offer values Shopping.com at $220 m (#132m). Compaq said it had already come to an agreement with shareholders owning 27 per cent of the company. However, the deal depends on at least 90 per cent of shares being sold.

Barry Parr, director of internet strategy at analyst IDC, said: "We had been expecting Compaq to sell AltaVista, and I still think that is going to happen longer-term."

But he added that this has made him look at AltaVista in an entirely different way due to the "synergies" between it and Shopping.com.

Shopping.com is unprofitable and has a history of management reshuffles.

But it will give Compaq software for initiating a purchase, doing credit checks and maintaining electronic links to suppliers.

The e-commerce site claims it sells two million brand-name products, ranging from software and hardware to books and CDs.

Jim Balderston, an analyst with Zona Research, sounded cautiously optimistic: "This is a first step for Compaq. It indicates a potential direction, but the company has to follow up with other steps."

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