The PC Amigos: Microsoft Gets The Web, Why Not Intel?
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Yo quiero Alta Vista? The Taco Bell Chihuahua hasn't been saying that lately as we begin to wonder just what Compaq (NYSE:CPQ) plans to do the Web search engine unit it inherited as part of its buy of Digital. Indeed, something may be lost in the translation for Alta Vista ("tall or high view" in Spanish).
Having taken the search service out for a test drive again it resembles a search engine-turned wannabe portal circa 1996. The best thing about Alta Vista is it allows you to search in many languages--that's very powerful--but lost amid the race to catch up with the half-dozen flavors of vanilla the mainstream media calls "portals" but we dub "hubs."
Alta Vista was once the Web's most-powerful and bragged about search engine. Inktomi (NASDAQ:INKT) came along and spoke a different language (Native American) and inked the top Web sites with its service.
|Internet.com's||October||Dec 9||Dec 16||Dec 9||Dec 16||Percent|
|WEBDEX||Users||Market cap or PMV*||Market cap or PMV*||User||User||change|
|AVG. without Yahoo||16.6||$2,271||$2,281||$132||$131||-0.6%|
So, what's an Alta Vista worth? If it can build on the multiple language aspect, a multi-language search engine, we think it may find a $500 million sticker price. Put that RPM to use. Otherwise, we suspect Alta Vista may hum along lost in the Compaq shuffle.
The amazing thing about the top 10 Web sites shown is that only Microsoft, out of the entire PC industry (and not counting Compaq's attempts via Alta Vista), has managed to make a dent.
Where's Intel (NASDAQ:INTC), Oracle (NASDAQ:ORCL), IBM (NYSE:IBM) in this space? Despite having tremendous capital and marketing leverage these three are not factors in the world's leading channel to reach not only the technology industry they're part of but the consumer and customers they want to reach.
The part that the "three PC amigos" miss is that on the Web content, commerce, services all blend. Those aggregating the millions of users today will likely be the ones 5 to 10 years hence that not only control content but customer relationships.
In the old media world it's ok to buy ads on TV or radio and not own a TV or radio station. But in the new era owning the real estate may be a far cheaper approach to the sales and marketing channels of the future where 24/7/365 etail, commerce and customer service blend.
The three PC amigos have not hedged their positions so far. And it may be the single biggest strategic mistake they make in hindsight 10 years from now when user values may make Yahoo's (NASDAQ:YHOO) $803 seem fairly tame.