Compaq flogs AltaVista for $2.3 billion

Compaq has confirmed that it has sold its AltaVista division to investment house CMGI. The deal was done by way of a stock swap, valuing the former Digital search engine business at $2.7 billion, the deal itself being worth some $2.3 billion CMGI gets 83 per cent of AltaVista and, by turn, Compaq ends up with a 16.4 per cent stake in CMGI - which owns 18 per cent of Lycos, one of AltaVista rivals. Which, in a roundabout kind of way, gives Compaq an interest in Lycos. Do try and keep up. The IT industry is nothing if it isn’t incestuous. Compaq gets 19 million common shares and preferred shares equal to 1.8 million common shares in CMGI, which will issue a $220 million three-year note to Compaq. The PC giant will also take a seat on CMGI's board of directors. Also included in the deal are Shopping.Com – which Compaq bought to add to AltaVistas resale value - and Zip2. ® See earlier stories: Compaq to sell AltaVista to investment house Lycos/USA Networks merger collapses