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Memo details AltaVista management shake-up, changes

The Web search company will reorganize its business as it struggles to become profitable, according to an email memo obtained by CNET News.com.

Web search company AltaVista will reorganize its business as it struggles to become profitable, according to an email memo obtained by CNET News.com.

Details of the reorganization were sent Thursday evening to AltaVista employees by Peter Mills, a general partner at CMGI's venture capital arm @Ventures. Mills is temporarily handling chief executive functions at AltaVista until a permanent replacement is found. CMGI owns a majority stake in the company.

According to the memo, AltaVista will reorganize into two units: consumer search and business solutions services. The move is another example of AltaVista's focus on its search technology and a further step away from its previous ambitions as a Web portal.

"It is critical that a series of aggressive steps be taken for our company to get on track to realize its potential, improve morale, and cement our leadership in search," Mills wrote.

An AltaVista representative confirmed the authenticity of the memo, which did not mention the possibility of layoffs. The company has scheduled two conference calls with employees, the first of which began Friday at noon PST, to answer questions about the changes. The AltaVista representative declined further comment.

Whittling down AltaVista comes as no surprise. The company has undergone two rounds of layoffs, in September and May, as a way to trim costs. The company has publicly stated its intention to refocus on Web search technology instead of trying to become a full-fledged Web portal to compete with Yahoo.

CMGI has taken aggressive measures to cut money-losing businesses and reorganize its potentially lucrative ones. The company has closed two of its holdings, entertainment site iCast and free Internet service provider 1stUp.com. It has also slashed jobs in many of the businesses under its ownership portfolio.

Among the details listed in the memo obtained Friday: chief operating officer Greg Memo will head the consumer search business, and executive vice president Phil Rugani will remain in charge of the business solutions division.

Memo and Rugani will report to Mills until a new CEO is found. The position was vacated in October when chief executive Rod Schrock resigned to spend time with his family.

Bret England has been appointed chief financial officer, a week after former CFO Ken Barber said he would retire by year's end.

The memo also said three executives will leave the company, including human resources head Lyn Christensen and vice president of corporate and international strategy Mark Delfino. Dan Stickel, executive vice president of worldwide engineering and operations, will be replaced by former AltaVista executive David Henke.