With two canceled IPOs under its belt, outgoing CEO Rod Schrock acknowledges that AltaVista's sense of timing "has been the worst." The company now finds itself in a business environment more hostile than ever to Netcos with marginal business models, and it is looking to its past in search of its future.
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One of the Internet's oldest brands and search engines, AltaVista, last week announced the resignation of its CEO effective immediately. Rod Schrock's move comes just one week after he outlined AltaVista's latest plans at an analyst schmoozathon held by Internet conglomerate CMGI (Nasdaq: CMGI), which owns AltaVista.
AltaVista is abandoning some of its more recent ambitions and refocusing on its roots. The company said in its Thursday announcement that it has initiated a search for a new CEO "with a background commensurate with AltaVista's leadership in the search and software licensing arena."
In a separate move, portal NBCi (Nasdaq: NBCI) also announced last week the departure of its president and chief operating officer, along with several vice presidents, in association with a comparable strategic reorientation.
The plans Schrock outlined are still in the works, and he says he's excited about AltaVista's future -- but not excited enough to stick around. The company's next chapter will need to be written by someone else. "It is time for me to move on to other milestones in my career and to spend more time with my family,'' Schrock actually said. In the interim, his duties will be handled by the company's chief financial officer and president/chief operating officer.
Compaq's AltaVista visions
An executive at Compaq (NYSE: CPQ), Schrock was installed as the head of AltaVista with much fanfare in January 1999 following Compaq's acquisition of Digital Equipment, which originally founded the site as a demonstration of its search technology.
With visions of stratospheric portal valuations, and the possibility of a pre-fab platform for replicating Dell's (Nasdaq: DELL) e-commerce success shimmering in the Texas heat, Compaq's plan was to develop AltaVista in a way that Digital had not, spinning it off as a separate company and eventually taking it public. Compaq acquired e-commerce firms to enhance the site's capabilities.
That was before the surprise joint resignation of Compaq's CEO and CFO the following April. By June, an investment and partnership deal between Compaq and CMGI made AltaVista a majority-owned subsidiary of CMGI.
The worst timing
Following that, expectations had been kept relatively high for AltaVista. Along with private-label Internet access provider 1stup.com, another CMGI company, AltaVista has since been part of the ad-supported ISP phenomenon. Plans were announced last year for AltaVista to become a general interest media portal.
Unfortunately, AltaVista's much-anticipated initial public offering (IPO) was canceled at the last minute when the scheduled pricing of the shares coincided perfectly with last April's market crash. In an earlier chapter of the AltaVista story, then-owner Digital withdrew a planned 1997 IPO. "It's fair to say that AltaVista's historical sense of timing has been the worst," Schrock acknowledged last week.
Back to its roots
Will that timing improve under his replacement? Officially, the plans are still on the table to take the company public early next year, though one could be forgiven some skepticism given the withering of Internet stocks over the last six months.
Nearly a quarter of AltaVista's employees were recently sacrificed on the alter of profitability. The company now plans to license its search technology to websites and corporate users. It has also applied for patents on marketing and consumer-profiling technologies which it plans to integrate with its search services.
Interestingly, the new plans find AltaVista pulling back from competing as a content and general services provider with Yahoo! (Nasdaq: YHOO), Lycos (Nasdaq: LCOS), and Excite (Nasdaq: ATHM) -- its original peers from the search engine days -- and instead competing with Google and Inktomi (Nasdaq: INKT) in the search and related shopping-agent space.
Of course, a lot has happened since then, and it remains to be seen if a search engine can lose itself, find itself again, and successfully make its way back to its roots.
Your Turn:
Will we ever be able to call up a quote on AltaVista? Or have the company's chances for an IPO come and gone? Share your thoughts on the CMGI discussion board.
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