From: Linda (email@example.com)
Date: Fri Oct 20 2000 - 20:17:27 PDT
[Hey Jeff, at least CMGI isn't at **2.5** ...yet...
AltaVista Exec Departs; What Hath Rod Schrock Wrought?
By George Mannes
10/19/00 8:06 PM ET
Following Rod Schrock's announcement Thursday that he was leaving his
post as CEO of CMGI (CMGI:Nasdaq - news) subsidiary AltaVista,
whoever ends up taking over his job will find a very long to-do list
waiting on his desk.
AltaVista, the flagship consumer-oriented business operated by
Internet empire CMGI, has set ambitious plans for itself over the next
12 months -- building new revenue streams, staking out patent claims
and perhaps even going public.
The plans, which AltaVista first broached in an early September
reorganization, are key to building AltaVista into one of the
survivors of the dot-com meltdown that has overtaken the Internet.
And AltaVista is in turn one of the key components of CMGI's business
-- the Search and Portals segment in which the search firm sits
accounted for $98 million, or 26%, of revenue in CMGI's fourth
quarter, making it the company's second-largest revenue line.
CMGI's stock rose a dollar Thursday to close at $16.44.
As Schrock explained in a presentation and an interview at CMGI's
semiannual analyst day last week, AltaVista is embarking on several
new strategies after dumping its plan, first announced last fall,
to become a media portal.
In Search Of
One element of AltaVista's business plan is to reap more money by
licensing its technology -- for example, to private companies that
need to index the information on their internal networks to make
them more easily searchable by employees.
In addition, AltaVista hopes to extract more money from the 50
million daily search queries conducted either on AltaVista's own
site or other Web sites to which it syndicates its search engine.
Last week, Schrock illustrated about a half-dozen ways the company
could make money from search listings, such as by appending
promotional offers, multimedia advertisements and relevant links to
local retailers to search results.
AltaVista hopes to improve its technology by tailoring searches
to its anonymous user profiles. That way, the company said, it
would be able to distinguish between the person who types in
"mustang" in a search for information about horses and the person
who enters "mustang" in a search for classic cars. Along with the
appropriate search results, AltaVista would be able to make more
money by more personalized advertising, too.
Patents a Possibility
AltaVista apparently is also planning to expand into the
semicontroversial field of business process patents. Schrock said
the company has applied for patents in the area of Web marketing
services. "We do believe we have services that are patentable,
that give us revenue beyond the AltaVista site in the long run."
Acknowledging that there has been some controversy surrounding
Internet patent claims, such as Amazon.com's patent on one-click
ordering, Schrock said AltaVista's "service-oriented" patents
were different: "It's easily documentable," he said. "We're
talking about services that haven't been done before and are
currently not done on the Internet."
But those patents and most of AltaVista's new services are off
in the future, Schrock had said last week. "What we've presented
is a direction it's going to take over the next 12 months to put
in place," he said.
The Family Calls
One week later, Schrock said his departure, which was in the
works before last week, won't change any of these plans. "The game
plan is right on track, and it's going to remain the same," he said.
"We had worked to put all this in place before I left." While the
company seeks a new CEO, Schrock's executive duties will be shared
by president Greg Memo and chief financial officer Ken Barber. Both
joined AltaVista when it was spun out of Compaq to become an
independent company January 1999. Schrock, who was head of Compaq's
consumer products group, joined at the same time.
In the face of inevitable skepticism over Schrock's stated reason
for his departure -- in part, he said he's leaving to spend more
time with his family -- Schrock said, "This was voluntary on my
part, and it is, in fact, true."
As long as four years ago, Schrock said, he was planning to take
time off with his family to attend the 2000 Summer Olympics. In
fact, Schrock ended up not going to Sydney. "I went past my
time-frame goal," he said.
Let's see whether the Schrock-less AltaVista makes the same mistake.
"...the roadrunner is a good metaphor for the momentum stock,
and Wile E. Coyote for the momentum investor."
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