Originally created 02/17/99

Compaq buying Zip2



Compaq Computer Corp. announced it will purchase Zip2 Corp. to help make its AltaVista Web site the leading destination on the Internet.

Financial terms were not disclosed Tuesday, although AltaVista says the cash deal is worth more than the $220 million Compaq paid last year for Internet retailer Shopping.com.

Zip2 develops online products such as city business directories and real estate guides specifically for media companies.

Its software helps power the Web sites of companies such as Morris Communications Corp. and The New York Times Co., both of whom were partners during early Zip2 stock offerings.

Zip2 also powers The Augusta Chronicle Online's CityGuide, a local directory of businesses, telephone numbers and other information about Augusta.

Once the agreement is approved by federal regulators, Zip2 will be used to help AltaVista visitors find nearby restaurants, local events and other regional information.

Michael Romaner, director of online services for Morris Communications and a member of Zip2's advisory board of directors, said he was excited about the agreement.

"We welcome the association with Compaq and AltaVista," he said. "We're excited about the expanded opportunity to use and grow the Zip2 software applications at our properties."

The agreement is Compaq's latest effort to flesh out AltaVista's services and products ahead of a public stock offering of the Web unit, expected this year. Compaq is retaining a majority stake.

AltaVista, the No. 12 Web site destination behind Yahoo and Lycos, already offers a widely used search engine and a variety of other options including news, stock quotes and shopping services. The company had about $40 million in revenue last year.

Compaq executives hope Zip2, a privately held company based in Mountain View, Calif., will help AltaVista attract more visitors and keep them on the site longer.

Using Zip2's technology, a visitor to AltaVista's site could find, for example, a nearby restaurant by typing in the desired food and location.

The technology also will let Web users automatically receive "personalized" information whenever they click onto the AltaVista Web site, tailored to their location and tastes.

Several major rivals already offer local Internet information, such as Microsoft Corp.'s Sidewalk.com service.

Damon Cline covers business for The Augusta Chronicle. He can be reached at (706) 823-3486.