AltaVista plays catch-up to dominant Net portals

AltaVista, the search engine run by Digital Equipment Corp. (DEC), Wednesday moved ahead with plans to become a full-featured Internet portal by introducing a new Finance Zone area on its site.

AltaVista, the search engine run by Digital Equipment Corp. (DEC), Wednesday moved ahead with plans to become a full-featured Internet portal by introducing a new Finance Zone area on its site.

But with the portal wars raging mainly around Yahoo! (YHOO), Excite (XCIT), Netscape (NSCP) and AOL (AOL), and with Lycos (LCOS), Infoseek (SEEK) and CNet's (CNWK) Snap! crowding in behind them, does AltaVista really stand a chance?

Industry watchers have their doubts.

Net giants battle for portal dominance

"I'm going to be brutal and say I don't see how they can survive, if they don't turn it around with a major marketing boost," said Vernon Keenan, an industry analyst with Zona Research Inc.

"The bottom line for AltaVista is, they haven't ponied up the cash, and they don't think of themselves as a TV network does," he said. (Yahoo! and other portal companies say they have modeled themselves on media companies.)

AltaVista has been around for years, initially run as a demonstration of Digital's hot technology, which almost accidentally garnered a huge following. AltaVista says 21 million users visit the site a month, compared to more than 30 million a month for Yahoo!

But as Internet searches became just another feature, the other search sites became "portals" -- meaning they built up their offerings to give users more reasons to hang around the site.

Yahoo! and Excite now offer a personalized front page that includes everything from your stock quotes to local weather and movie listings; they also offer chat rooms, shopping, e-mail and other features.

AltaVista lags
In the mean time, AltaVista stuck with its original strength, focusing on fast, thorough Internet searches and some new gadgets such as Web page translations and foreign-language searches.

Only in the last few months did the site begin adding e-mail and content channels, which include health and travel, and now finance.

"We are building AltaVista into a portal site. We want to be a major portal on the Web," said company spokesman Don Bradley. "We're one of the major portals, we'd like to think, right now."

The strategy is already having an impact, though not altogether positive. Yahoo! dumped AltaVista as its default search service -- a feature complementing its hand-picked Net directory -- earlier this week, in favor of upstart Inktomi Corp. One factor: AltaVista is now a direct competitor to Yahoo!

Missed the boat?
On the upside, AltaVista says its new business model has caused a 40 percent increase in revenues from quarter to quarter, due to increased ad sales.

But analysts say that given the overcrowded market, it might be a case of too little, too late.

"The question is, how many (portals) can you have, and how viable is that into the future?" said Steve Pelleen, a director with Giga Information Group. "They really have to get into something else -- they can't just be a search vendor -- but a portal, trying to sell ads, I don't know if that's a good idea."

As Telleen sees it, AltaVista's approach is out of step with what people need in an era of information glut.

Sifting through information glut
"It's not how much information you process that's important, it's what is the information that's relevant to me, what's important to me," he said. "(AltaVista) is focused on throughput. Whenever they talk about what makes their service better, it's, 'Our machines are faster, we deliver more results more quickly.' "

Yahoo!, he argues, is successful partly because it has focused on delivering filtered, relevant information from the beginning -- though critics may argue about how well they deliver on that model.

Rather than jumping on the Yahoo! portal bandwagon, however, AltaVista has an opportunity to leverage its technology into other areas, such as the emerging market of knowledge management, Pelleen says.

For example, AltaVista's search technology works well with helping individuals and businesses organize all kinds of documents, from Oracle databases to e-mail archives.

Other options
By partnering or merging with other knowledge-management companies, such as Verity Inc. (based in Sunnyvale, Calif.) or Autonomy Inc. (San Francisco), AltaVista could become a major force in that market, Pelleen believes.

"Helping people to sort though their structured and unstructured information, in a company or personally, that's a valuable thing," he said.


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