Broad Market Rises Despite Fed | Internet News

Broad Market Rises Despite Fed

Written By
Steve Harmon
Steve Harmon
Jun 30, 1999
1 minute read

ISDEX, NASDAQ and the Dow climb on the eve of the Fed’s rate meeting Wednesday. ISDEX gains 3.29% to 522.27.

  • CMGI (NASDAQ:CMGI) agrees to acquire 83% of Compaq’s AltaVista Web search unit for $2.3 billion, or 19 million CMGI common shares. Compaq also gets a $220 million 3-year note, becomes CMGI’s largest outside shareholder, and a board seat. Not bad for an Internet property that tagged along with Compaq’s buy of Digital.

    AltaVita never belonged at Compaq in my opinion. AltaVista garners a $2.77 billion valuation or what I estimate could be 18x revenue. With that in mind I think the deal is fairly valued given AltaVista’s #10 Media Metrix ranking in users and its raw moldable asset.

    CMGI will be able to deploy its portfolio on AltaVista, a plus. But it also means they’re now competing with AOL, Yahoo, Lycos, Excite@Home, and NBCi, among others. That could make it more difficult for CMGI to do deals with these firms in its @Venture area. CMGI shares soar 13% to $110 5/16 on the deal news today.

  • DoubleClick (NASDAQ:DCLK) is up. Ironic in that the stock dropped the other day on fears a Compaq-CMGI deal could mean lost revenue since AltaVista makes up about half DCLK’s revenue. The DCLK-AltaVista agreement is for three more years, however. The way I see it with CMGI’s stable of properties that could be a plus for DoubleClick as CMGI deploys.
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