Key AltaVista exec to retire at year-end

Gartner analyst Michal Halama says AltaVista still represents a tremendous brand that is well known on the Internet and has a good reputation, giving it time to charter a course of action. see commentary

Peter Mills, a general partner at CMGI @Ventures and an executive adviser to the company, will for now assume "top-level executive responsibilities," according to AltaVista spokesman David Emanuel. @Ventures is a venture capital arm of CMGI, which owns a majority stake in AltaVista.

Barber, 55, will leave just over two months after AltaVista's former CEO, Rod Schrock, resigned to spend time with his family. Barber is officially the chief financial officer but began sharing CEO duties with chief operating officer Greg Memo when Schrock resigned.

The departure marks the latest in a string of setbacks for AltaVista, which has foundered since CMGI acquired it from Compaq Computer in June 1999 for $2.3 billion. AltaVista was initially envisioned as a crucial element in CMGI's plans to take on industry-leading Web portals Yahoo, Lycos and America Online.

AltaVista had hoped to go public in April, but the company postponed the share sale because of a souring market for Internet stocks.

In May, AltaVista launched Raging Search, a faster search engine to take on rival services such as Google. The move indicated that AltaVista had begun abandoning its Web portal plans and was instead trying to develop search services that would be sold to corporations.

Since then, however, the company's troubles have mounted.

AltaVista suffered a black eye in its overseas operations this summer, when it abandoned a plan to offer unmetered flat-fee Web access in the United Kingdom, leading to the resignation of its AltaVista U.K. managing director.

In September, the company slashed its work force by 25 percent, or 225 people. Those layoffs came on top of earlier cutbacks that trimmed 5 percent off its work force in May.

The restructuring at AltaVista coincided with a CMGI announcement that it will scale back the number of its operating companies and that it is abandoning plans for a $1.5 billion international Web venture fund.

Times have been hard on other CMGI majority-owned ventures. In an effort to cut costs and restructure its focus, CMGI shuttered its online entertainment site iCast in November.

The company also plans to shut down free Internet service provider 1stUp.com, which had powered AltaVista's own branded free ISP service. AltaVista said Tuesday that it will terminate its free ISP because of 1stUp's eventual demise.