Digital had announced plans last August to spin off its 20 percent stake in the search engine company with an IPO.
But two events transpired to change those plans.
One was a cooling of the market for Internet IPOs last summer, when the door was virtually slammed shut. That delayed AltaVista's IPO.
"We were waiting for the market conditions to be appropriate for an IPO. But as of today, Digital has decided to make AltaVista's brand and technology part of its products division," said Chuck Malkiel, an AltaVista spokesman.
The other event that changed the IPO path for AltaVista was the recent restructuring of Digital. The company recently formed three divisions--products, sales and marketing, and digital services.
Malkiel said the integration of AltaVista into Digital's products division will accelerate the company's goal of moving ahead in its Internet solutions business.