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Compaq Acquires Zip2

In an effort to further e-commerce initiatives for its AltaVista directory, Compaq Computer Corp. Tuesday signed a merger agreement with Web directory Zip2 Corp.

A Compaq spokesman declined to disclose specific financial details of the acquisition.

Using Zip2's platform and media partnerships, AltaVista plans to develop a platform for localized information and e-commerce for the Internet. Incorporating the Zip2 platform with AltaVista's search and e-commerce technologies and high-volume user traffic via AltaVista and Compaq Internet PCs, the companies said Zip2 can substantially expand potential earnings for local media and e-commerce partners.

Zip2 will retain its headquarters in Mountain View, Calif.. It will become an operating division of the AltaVista Co., a wholly owned subsidiary of Compaq. Zip2's board has unanimously approved the transaction.

Zip2 develops, hosts and maintains consumer Web sites specifically for media companies. Zip2-created sites number in the hundreds, are located in the top 50 U.S. metropolitan areas. Zip2's local portal platform incorporates national portal services with deep local content of its media clients, who include the Mirror Group, Classified Ventures, The New York Times Co., Knight Ridder, Morris Communications, and newspapers in the Hearst, Times Mirror, Media General, and Pulitzer chains.

"This acquisition underscores AltaVista's commitment to delivering the very best Internet computing experience," said Rod Schrock, president and chief executive officer of the AltaVista Co.

"Our belief is that the best Internet computing experience must include a local 'Internet Oasis' where consumers can access deep local information about activities and shopping possibilities right in their own backyards. Zip2's advanced technology and strategic relationships with media companies will make AltaVista much more powerful and useful to the local user."

"Joining forces with AltaVista will enable Zip2 to more quickly achieve its vision of creating an Internet experience that connects consumers with the local information and e-commerce that is most relevant to their lives," said Derek Proudian, Zip2's chief executive officer.

"Zip2's advanced technology and extensive local online experience, combined with AltaVista's ability to drive millions of visitors to local Internet sites, will enable our media partners to lead their local online markets and expand their local business opportunities. We see this as a win for Zip2, our investors, partners, customers and for consumers," Proudian said.