AltaVista Technology and Compaq yesterday announced a record US$3.35 million deal for the rights to the altavista.com Internet domain name, according to a source close to the negotiations.
Compaq, which owns the popular AltaVista search engine, and AltaVista Technology, a small US digital imaging firm, signed a preliminary agreement last weekend and should have closed the deal Friday or Saturday, the source said.
Jack Marshall, president of AltaVista Technology, paid $US100 for the domain name four years ago, according to a spokesman for the company. Then Digital, the company that launched the AltaVista search engine in November 1995, was swallowed by Compaq last month in a $US9.6 billion deal.
The AltaVista Technology Web site receives 500,000 page views daily, a spokesman said. The AltaVista search engine logs 12.5 million unique users on a monthly basis and 530 million monthly page views, according to Compaq.
Mike Bernstein, a Gartner Group analyst, said that if the $3.35 million figure is true, it would be the highest amount ever paid for a single domain name.
But is that a smart buy for Compaq? Paul Sonderegger, an analyst at Forrester Research, thinks so. "AltaVista (search) at one time was the predominant search engine on the Web, and it still is a valuable Net property," he said.
Bernstein, however, said that AltaVista Technology already had a prominently posted disclaimer on its Web site, which tells online visitors that it isn't affiliated with the search engine. The site also provides a link to Compaq's AltaVista search engine at http://www.altavista.digital.com/, he pointed out.
"It doesn't seem to make very clear business sense right off the bat," Bernstein said. "That's a lot of money to spend on a name."
The source, which is close to AltaVista Technology, suggested that Compaq might have been facing a larger problem than simple confusion over the domain name. "More than one big-name search engine firm" had approached the company over the past few weeks with offers to buy the altavista.com. domain name should the Compaq negotiations break down, the source said.