AltaVista mulls public offering of European unit
The Web portal is considering a public offering of its European operations but says it continues to focus primarily on its delayed U.S. public offering.
"It is a longer-term possibility, but we have no active plans right now for such a move," said David Emanuel, an AltaVista spokesman.
The company's response comes in light of a report this weekend saying AltaVista was planning to split into two publicly traded companies--one focusing on the United States and one for its European operations. The United Kingdom's Sunday Times quoted Pierre Paperon, who heads AltaVista Europe, as saying the company is exploring ways to float a European offering by the end of the year.
The report added that investment bank Morgan Stanley was advising the offering, valued at $898.6 million.
AltaVista's Emanuel said the company is primarily focused on its U.S. public offering, which was delayed in April because of poor market conditions. Emanuel added that the company remains in registration for its IPO and plans to go public by the end of the year.
"Our concentration is on a U.S. IPO, and we remain in registration for that," Emanuel said.
The possible creation of a separate European company would underscore AltaVista's heightened attempts to compete more aggressively in the region. Many U.S. Internet companies have had difficulty making inroads in the European market, given the region's cultural differences and the dominance of local telecommunications monopolies.
All of the Net giants have set their sights on tapping the European market. America Online, for instance, has struggled in the region after companies such as the United Kingdom's Freeserve overtook the ISP leader with its "free" Internet access service. Meanwhile, Web portal Lycos opened its arms to a European suitor when it agreed to be acquired by Spanish Internet service Terra for $12.5 billion in stock.
AltaVista has also made its own moves in the region. The company in March said it planned to offer a free ISP in the United Kingdom that would cover local toll charges. The service would differ from typical "free" ISPs such as Freeserve, which waive subscription fees but take a cut from metered local calls that people pay when accessing the Internet. AltaVista's service would charge an up-front fee and subsidize its costs with advertising and e-commerce revenues.
AltaVista continues to expand its services abroad. Today, for instance, the company announced a deal to offer its search services on Microsoft's MSN Web portals in Asia. AltaVista will provide regional language searches for MSN's sites in Japan, Korea, Taiwan, Hong Kong, Malaysia and Singapore.
Still, AltaVista, which CMGI acquired last year from Compaq Computer for $2.3 billion, has remained far behind portal leaders such as Yahoo, AOL, MSN and Lycos in attracting a U.S. audience, according to online audience-measurement company Media Metrix. This comes despite a $120 million re-branding campaign and the launch of services such as a free ISP and its new Raging Search engine.