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Compaq Takes Stake in Newest CMGI Venture

Compaq Computer Corp. Thursday took a 4 percent stake in CMGI's Inc. latest venture, investing $20 million investment in CMGion, the incubator's new majority-owned company.

Designed to speed up the delivery of applications and content, the new venture will act as an "infomediary" between clients and servers. The incubator said the new network will "mine the flow" of Net traffic by profiling and delivering any type of content, creating an "infostructure" to support personal portals.

The computer and Net infrastructure company joined fellow technology behemothsSun Microsystems Inc. and Novell Inc., who each invested $20 million when CMGion was announced April 11.

Their investments make them co-founders of the new networking firm, which specializes in data caching services. Just as Sun and Novell lent technical support, Compaq will offer appliances, server and storage platforms and operating system components.

CMGI said its newest creation is a move to stay ahead of the B2B curve, in which they believe the linking of content, consumers and information flow is crucial. The CMGion network is expected to begin beta operations later this year and plans to be offering services early in 2001.

Compaq President and Chief Executive Officer Michael Capellas said the partnership will take advantage of Compaq's deep experience in industry- leading platforms - Windows2000, Tru64 UNIX, Linux, and Novell Directory Services and ICS - to ensure the fastest possible development and deployment of the CMGion network service."

"Compaq's support for CMGion takes the strategic relationship between our two organizations to a new level and adds tremendous momentum to the development of CMGion moving forward," said CMGI Chairman and CEO David Wetherell.

Weatherell said there would ultimately be three dozen to five dozen data centers all over the world and that CMGI would eventually allow other firms to connect to the new caching and hosting services for a fee later to be determined. Wetherell also said it will cost between $200 million and $300 million to build the first four data centers.

The deal is an extension of the alliance Compaq (CPQ) and CMGI (CMGI) forged last June. In that deal, CMGI took an 83 percent stake worth $2.3 billion in Compaq's AltaVista Co search engine. Compaq then became CMGI's largest outside shareholder.

AltaVista recently floated an initial public offering.