Compaq computer is selling an 83 per cent stake in its Internet operations, including the AltaVista search engine, to CMGI, the Internet investment business, for $2.3 billion (€2.23 billion) in stock.
The move marks the second shift in strategy since Mr Ben Rosen, Compaq chairman, ousted chief executive Mr Eckhard Pfeiffer two months ago.
Although Mr Rosen is only acting chief executive while Compaq searches for a replacement for Mr Pfeiffer, he is moving rapidly to reshape the company.
Yesterday's reversal of Compaq's recent moves to build up its own Internet operations comes a fortnight after he scrapped the management structure put in place by Mr Pfeiffer.
Mr Rosen said Compaq would build a strategic relationship with CMGI with a 16.4 per cent stake in the business and a seat on the board. The two companies would promote each other's products and develop joint services such as helping business build Internet capabilities.
Analysts said Mr Rosen's changes would make it harder for Texas-based Compaq to find a new chief executive, as many key decisions at the company were being made now.
"All the hard decisions are being made ahead of the CEO's arrival," said Mr Ashok Kumar, an analyst with US Bancorp Piper Jaffray. "It takes some of the juice out of the job . . . no-one wants to go to Houston to be Ben Rosen's puppet."
However, Compaq could not ignore opportunities such as CMGI's interest in AltaVista while it searched for a new chief executive.
Mr David Wetherell, chief executive of CMGI, said the acquisition of AltaVista would provide the focus for the creation of what he called a new mega-portal.
CMGI owns a stable of Internet businesses. It also has minority investments in a range of consumer web sites such as Lycos, the leading Internet portal, and Raging Bull, the investment site. Mr Wetherell said he planned to combine a wide range of web properties owned or part-owned by CMGI.
He added that there were enormous opportunities to increase revenues from AltaVista, which analysts estimate at close to $150 million for this year. The deal will nearly double CMGI's revenues.
CMGI is also interested in taking full control of Lycos.
