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Last Updated:  Wednesday, 19 February, 2003, 00:50 GMT
Internet veteran AltaVista sold off
AltaVista and Overture logos
The internet veteran AltaVista has been sold to marketing firm Overture for $140m.

AltaVista was once the most visited search engine on the internet, but failed to keep up with rivals such as Yahoo and Google, which is now the web's search engine leader.

Internet investment fund CMGI, the majority owner of AltaVista, will receive $60m in cash and $80m in Overture shares.

In 1998, CMGI paid about $2.4bn for AltaVista.

'Pay-for-performance' searches

Overture helps companies to be displayed prominently on the results pages of searches conducted on web sites like Yahoo and MSN.

Overture says AltaVista's search algorithms "complement" its own "commercial search" technology.

The marketing firm wants to use the AltaVista web site to "test and refine new products in a live setting" and "offer its advertisers additional high-return marketing vehicles intended to drive targeted customer leads".

Only three months ago AltaVista had relaunched its web site in a final attempt to recapture its old glory.

Back then, advertising on search engines was hailed by AltaVista managers as one of the few bright spots in the online advertising market.

Glory days

AltaVista was the brainchild of engineers at computer firm Digital Equipment, and was designed to show off the company's hardware.

It soon became one of the best ways to navigate around the young but rapidly growing world wide web.

Digital is long gone, snapped up by Compaq, which in turn is now part of Hewlett-Packard.

AltaVista, meanwhile, was caught up in the bursting of the internet bubble.

The search engine once boasted more than 65 million users a month and hoped to raise $300m by selling some of its shares on the stock market.

But AltaVista owners CMGI scheduled the stock market flotation for April 2000, but weeks earlier the bubble burst and technology share prices began to tumble.

AltaVista now employs just 250 people, and offers searches in 25 languages.

'Free internet' gamble failed

In the UK, AltaVista gained notoriety three years ago by promising free unmetered internet access, and realising too late that its business model would not work.

Tens of thousands of people applied to sign up, and in July 2000 the company said it was conducting a "controlled roll-out".

In reality the service was never launched.



Theo Leggett, BBC business reporter
"Analysts say the deal could prove highly lucrative..."

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