Evidently, Yahoo will close down Alta Vista on July 8th, the Internet search company it acquired in 2003.  This is the second time Yahoo has killed Alta Vista. Let me explain.

Internet Search Arrives

We should pause to remember that today’s internet is less than 20 years old.  I date it from the launch of Netscape in 1994.  Around that time, we see the birth of the early search engines such as Lycos, Webcrawler,   Hotbot (which became Inktomi) and eventually Ask Jeeves.  Prior to this it was very difficult to find internet site other than utilizing  small specialized listing of web sites.    Search has now become such an important part of our lives that it will be difficult for many to imagine life before that, especially the younger of us.

 

Alta Vista was started in the  Western R&D labs of Digital Equipment Company, Palo Alto CA (established in 1984), and was launched publicly in December 1995. It was an immediate success.  In 1996, it became the exclusive search provider to Yahoo, who itself had started life as a directory of Internet sites.  This was before the concept of Search.

 

Compaq Computer Acquires Digital Equipment and Gets a Surprise

In 1998, Digital Equipment Corp. was sold to Compaq Computer (a remarkable story in its own right). Rod Schrock  of Compaq was made CEO of Alta Vista.  Compaq may not have even been aware of the existence of Alta Vista when it acquired Digital for $9.6 billion dollars which, at that time , was then the largest acquisition of a computer company.

Alta Vista was the first search company that had the technology to index the entire Web.  One has to wonder what would have happened if Digital had spun Alta Vista out in 1996 the year that Google was founded.

 

 

CMGI Acquires Alta Vista and I Join the  Board

In June 1999, 83% of Alta Vista shares where acquired by CMGI from Compaq in return for  2.3 billion dollars of CMGI stock which was worth about 16% of that company. CMGI was founded and led by Dave Wetherell and was the leading Internet conglomerate then.  While at Intel, I had invested in CMGI.  We acquired about 5% of that company’s stock for something like $12 million, I believe.    I became the Intel CMGI board representative.  When I resigned from Intel in April 1999, Wetherell asked me to join the board of CMGI which I did.   CMGI stock rose to a market valuation of $40 billion about a year later.

I remember that day that CMGI became worth more than the General Motors Corporation. Frankly, I thought that was nuts.  I sold all my vested shares in March of 2000 by the way.   Intel’s position may have been worth a couple of billion dollars at that time.   I am pretty sure that Intel did not sell very much of its positoin and probably was lucky just to get their original investment back (when I was at Intel, I  made sure we took money off the table).

 

Alta Vista’s Past Should Have Been Its Future

As part of the CMGI acquisition of Alta Vista, I joined its board.  Alta Vista under Rod Schrock’s leadership moved from being a Search Company to becoming an Internet Portal.  Basically, Alta Vista had Yahoo envy. At the same time Google had Alta Vista envy.  I think part of the issue for Alta Vista  was not having a vision for how to monetize search (Google would eventually figure this our with ad words and ad sense).  Advertising on the internet was pretty much banner ads at that time. I would like to say that I pushed against this move by Alta Vista but I don’t think I did. The Alta Vista board  knew about Google and considered acquiring it. We  had some discussions with them but they had just raised $25 million from Kleiner Perkins and other key VCs and were really not interested. I think the valuation of Google was about $80 million at that time.  There were probably only 12 or so people at Google then.  While Alta Vista was the most powerful and popular search engine, Larry Page one of the founders of Google had figured out how to make search results more relevant. That combined with Alta Vista move to becoming a Portal, created the opportunity for Google to become the leader in search.

 

Alta Vista Almost Went Public

Alta Vista almost went public.  The company was about to make its IPO ini April of 2000 when the Internet meltdown took place.  This actually was the third time the company almost went public.  Both Digital Equipment and Compaq had flirted with the idea of taking Alta Vista Public.

 

Google Overtakes Alta Vista

This graph says it all.

There were a number of management shake ups after that and Schlock left in October 2000. The company refocused on search but it was too late to overcome Google. Had the company successfully gone public prior to the melt down, it may have had the cash that would had allowed it to buy up many of the relevant Internet Companies including Google. Timing is everything as they say.

 

Alta Vista Final Resting Place

In Feb. 2003, Alta Vista was sold for a third time. This time it was to Overture Services  for $140 million, which in turn was acquired a few months later by Yahoo.  So that is how Alta Vista came to be part of Yahoo, the company it envied.  This was to be Alta Vista’s final resting place. CMGI also saw its stock collapse.  However, It survived, and is now a small internet marketing company called ModusLink Global Solutions (what a catchy name).

Frankly, I did not know that Alta Vista was still alive.  You can visit it here for sentimental reasons.  Don’t wait too long.

 

And What of the Future of Search?

At one time, I had a reputation as a visionary.  I use to joke when I was at Intel that a Visionary was just a dreamer with a PR department.  So I guess I should say something about the future of search.

The development of search has been disappointing to me.  It is not personalized enough and does not have enough context.  There have been many improvements like using location information but still I seem to have to work very hard to find the things that interest me.  Google still dominates search but I believe much of their effort goes to monitoring search.  Microsoft is pushing Bing but offers little that Google does not have.  Facebook would love to get into search but my guess is they will do a mediocre job of it and further anger their users.

My bet is that there are many start ups now looking for at better ways to do search.  Of course they will not be able to compete effectively with Google but there is one company that is barely in the search business that I believe cold create significant competition for Google.  That company is Amazon. Amazon could easily acquire advanced search capabilities from start-ups.  They have a great deal of information about their customers that can help them tailor search.  But most importantly they are in an even better position to monetize search by actually selling products instead of just selling ads.