Altavista Co - New Initiatives To Increase Traffic In 2000

NEW INITIATIVES TO INCREASE TRAFFIC IN (2000)

AltaVista launched its AltaVista Affiliate Network in early 2000 and quickly gained 1,600 applications for membership in the program. Under the program, AltaVista would let Web sites of any size or scope offer AltaVista services such as search, stock quotes, or language translation free of charge. Alta-Vista also would pay affiliated sites three cents for every click-through to an AltaVista Web page. Alta-Vista planned to distribute the HTML code to allow Web sites to feature an AltaVista search box and other services on their sites. For January 2000 AltaVista moved up to the ninth-most-visited site on the Internet with 13.4 million visitors, up from 12th in December 1999, according to Media Metrix.

AltaVista's strategy for growth was focused on three principal areas: searching, e-commerce, and financial information services. In February 2000 the company introduced three multimedia search centers that allowed users to search for more than 3 million MP3, video, and image files. Through partnerships with CDnow Inc., EMusic.com Inc., and Riffage.com Inc., AltaVista was able to offer more than 1 million downloadable MP3 audio files. Through additional partnerships with ABC News Internet Ventures, Merrill Lynch & Co., and Entertainment Boulevard Inc.'s Vidnet site, AltaVista expanded its coverage of breaking news and financial and entertainment news.

AltaVista also continued to build its presence in Europe. It was able to boast that more than half of its search requests came from outside of the United States. In March AltaVista began offering free Internet access in the United Kingdom. The company noted that high telephone charges for time spent online were hindering Internet usage in the United Kingdom. However, problems with British Telecom resulted in a suspension of AltaVista's free Internet access in the U.K. by August 2000.

Financially, AltaVista had not reported a profit since its inception, but it hoped to report positive cash flow by December 2000. After canceling plans for its IPO in April 2000, the company laid off about six percent of its workforce by eliminating 50 positions. It already had cut about 60 other jobs since fall 1999. For the six months ending January 31, 2000, Alta-Vista reported an operating loss of $542.9 million, due in part to acquisitions and the addition of new features to its Web site.