January 11, 1999 1:45 PM PST
Compaq to buy Shopping.com
Compaq is hoping to leverage the traffic generated at its AltaVista portal site and, with its Internet PCs, drive consumers to Shopping.com, an online retailer that offers brand-name consumer products.
The move is likely to help Shopping.com grow faster and more efficiently than if it were a standalone site. The acquisition will also help AltaVista become a full-service portal.
Last week, Shopping.com installed a new executive management team, hoping to improve the service's performance and image with investors.
The company tapped Randall Read as chairman of the board, Frank Denny as president and CEO, and James Chamberlain as CFO. Denny assumes his new position after serving as Shopping.com's chairman since April 1998. He replaces John Markley, who will remain as a director.
Since January 1998, 274 complaints were filed against Shopping.com nationally. Of those, 198 have been closed to the satisfaction of the BBB because Shopping.com either issued credits for undelivered items, or apologies for late items.
Shares of Shopping.com soared 5.40625, or 41 percent to 18.59375 today. The stock has traded as high as 25.5 and as low as 0.97 during the past 52 weeks. Compaq stock was up 2.875 to 48.25.
During the holiday season, Compaq said that AltaVista attracted several million visitors to the AltaVista Holiday shopping experience and its e-commerce partners. With the addition of Shopping.com features, AltaVista will be able to directly complete e-commerce transactions.
"The Internet is really quickly becoming a transaction medium as well as a content medium," said Rod Schrock, Compaq senior vice president. "We want to make AltaVista the leading guide for both information and e-commerce on the Internet."
For example, Schrock added that if a user does a search with AltaVista, the results will also provide a link that can allow for the purchase of relevant products. While there will be a link to Shopping.com at the AltaVista site, Schrock said it won't always be apparent whether you are buying from Shopping.com or completing a transaction through AltaVista.
A wholly owned subsidiary of Compaq will offer to acquire all of the outstanding shares of Shopping.com for $19 per share in cash, about $220 million.
The board of directors and management of Shopping.com have unanimously approved the acquisition and will recommend shareholder approval.
The closing of the transaction is subject to the satisfaction of various conditions including, but not limited to, Compaq receiving at least 90 percent of the issued and outstanding shares of common stock of Shopping.com and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.