AltaVista, a Web-Search Pioneer, Files to Go Public
AltaVista Co., the fifth most popular Internet search engine, filed for an initial public stock offering amid continued enthusiasm for shares in online companies.
Palo Alto-based AltaVista filed its notice with the Securities and Exchange Commission on Friday. The number of shares to be sold and their estimated price will be disclosed in a supplemental filing.
The filing comes about four months after CMGI, the Andover, Mass.-based Internet venture fund, spent $2.3 billion to buy a majority stake in AltaVista from Compaq Computer Corp., which acquired it when Compaq bought Digital Equipment Corp. last year. More than 45 million visitors used AltaVista’s service in November.
AltaVista is one of the oldest names on the Internet, first appearing in 1995 with a powerful search engine that made it an immediate hit with the technologically savvy.
But through the years, it has always seemed to find itself running more or less in the middle of the pack, unable to become as popular as some of its competitors, such as Yahoo and Excite.
Martin Goslar, principal analyst with Phoenix-based e-commerce consulting firm Organizational Research and Technology Services, said that AltaVista will no doubt do fine with its public offering, largely on the strength of its brand name and the momentum behind Wall Street’s interest in Internet companies.
But he added that there is nothing overwhelming about AltaVista, which has recently been trying to reinvent itself as a one-stop portal, offering e-mail, news, search and even free Internet access.
“They’re in a transitional phase,” Goslar said. “Quite frankly, I don’t think they know exactly where they are going. But they do have brand recognition.”
Goslar added that unlike many of the recent highfliers in technology, AltaVista has few unique technologies or ideas behind it.
“There’s no great technological innovation so it is largely a marketing play,” he said.
AltaVista has lost money since its inception, according to its SEC filing. In the three months ending Oct. 31, the company had a net operating loss of $267.7 million on revenue of $52.6 million.
One factor that could help the company is that it is one of the few big-name Internet companies that is still private.
For all its problems, AltaVista has still managed to win a loyal following because of the speed and accuracy of its search engine.
Unlike its early competitor, Yahoo, which used human editors to select Web sites and categorize them into a directory, AltaVista used automated programs to “crawl” the vast expanse of the Web to index as many sites as possible.
AltaVista has indexed about 275 million Web pages out of an estimated 800 million.
But even its vaunted index is being matched by such search engines as Northern Light, which now indexes more than 200 million pages, and Excite@Home, which has also indexed more than 200 million pages and has announced its intention to index up to 600 million in the coming year.
CMGI invests in Internet and software companies with the goal of taking them public or selling them for a large gain. AltaVista would be an attractive offering because Internet experts like its powerful Web-search technology.
AltaVista said it will use proceeds from the IPO for general corporate purposes, including working capital and advertising.
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Times wire services were used in compiling this report.
