SAN FRANCISCO (04/17/2000) - Call it the curse of AltaVista Co.: The company's IPO (initial public offering) aspirations have been thwarted again.
Citing slippery market conditions, the search engine-cum-portal said it would postpone its hotly anticipated initial public offering, which had been scheduled for this week.
David Emanuel, AltaVista's director of communications, used a baseball analogy.
"We're on a rain delay," he said, indicating that the company is still registered to go public. "We're still suited up - we're still in the dugout."
This isn't the first time AltaVista has had to step back from the public market. In October 1997, then-parent Digital Equipment Corp. (DEC) withdrew AltaVista's S-1 registration statement, saying it would integrate the search engine into DEC's products division as part of its effort to focus on Internet business solutions.
AltaVista's latest setback puts it in good company. Amid the Nasdaq nosedive, a slew of Internet firms have either postponed or withdrawn IPOs in recent days.
Spanish-language portal Yupi.com, career site Techies.com and Internet professional services firm Zefer, which were scheduled to go out this week, have all decided to wait out the storm. ISky, an Internet customer-service firm, and Certicom, a maker of security technology for wireless devices, went so far as to withdraw their registration statements.
After Compaq Computer Corp. bought DEC in 1998, the PC maker began to groom AltaVista to join the ranks of the full-fledged portals. It signed content deals and bought both the Shopping.com e-commerce service and the Zip2 city-search site. In early 1999, Compaq announced that it would spin off AltaVista with the intention of filing for an IPO later in the year. Instead, the company sold the portal to CMGI last April for US$2.3 billion.
Since then, AltaVista has overhauled its image as a consumer portal, unveiling a new look and launching a $120 million advertising campaign in October.
Despite these efforts, AltaVista still trails the pack. Its 12.3 million monthly visitors lag behind Yahoo's 45.5 million, MSN's 35.8 million and Lycos' 26.9 million, according to February data from Media Metrix.
Lately, even the category leaders have taken a pounding on the market. In midday trading, Yahoo dipped another 4 percent to $111.69, Lycos dropped more than 2 percent to $37.50 and ExciteAtHome was down nearly 10 percent to $19.63.
Despite the hot anticipation for the stock offering, some investors applauded the postponement. One investor, "BULLJR," wrote to thank CMGI Chairman David Wetherell and AltaVista Chief Executive Officer Rod Schrock "for seeing that this stock sits on shelf a bit longer." His message was posted on a message board at Raging Bull, the personal finance site AltaVista bought in November.
"There is a reason why CMGI is a strong company on the Nasdaq, and they are making sure AltaVista stays the same way as CMGI... strong and ready to grow."
CMGI was enjoying a midday bounce of nearly 6 percent to $55.13.
AltaVista had filed to sell 14.8 million shares of common stock at an expected price of $18 to $20 a share.