September 18, 1997 6:05 PM PDT

AltaVista searches for new market

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Digital Equipment (DEC), a lagging computer maker and service provider, is looking to push its AltaVista search engine into new markets at a time when the its top dog has resigned.

Ilene Lang resigned earlier this month following Digital's decision in June to cancel AltaVista's IPO and split its operations in two. The company's new structure has the search engine business folded into Digital's sales and marketing division, and its Internet security products into the corporation's products division. Lang was CEO of Digital's AltaVista unit, but then was given the title of vice president in Digital's products division.

Lang was viewed by some industry analysts as playing a key role in propping up the visibility of Digital's Internet efforts via the AltaVista search engine. With her departure, will Digital's presence on the Internet loom as large?

"Absolutely not," said David Wu, an analyst with the Chicago Corp. "But her departure will not affect the company overall, which is not a viable company and doesn't have sound strategies. The company changes its direction every 18 months."

Michael Geran, an analyst with Pershing, held similar views.

"AltaVista was an interesting sideshow for Digital. It's not overwhelmingly important to the company's sustainable profitability," Geran said, estimating that AltaVista contributes roughly 5 percent to Digital's overall revenue base.

Digital's revenues have been falling on a year-to-year basis for at least the past four consecutive quarters. And profits largely have fallen short of year-ago figures. But the stock currently is trading near its 52-week high, closing at 41-3/8 today.

Chuck Malkiel, an AltaVista spokesman, contends Digital's Internet presence will be enhanced under the new structure.

"Digital has a lot of resources for AltaVista search engine and products," he said. But Malkiel declined to discuss the extent to which Digital will increase its commitment to providing resources for AltaVista.

He added that the company's brand recognition will be maintained and improved via new partnerships and features that will make its search capabilities stronger.

"In the coming weeks," Malkiel said, "we will make announcements on how AltaVista will locate multimedia on the Web and retrieve it as easy as text."

 

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