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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 29, 1999
COMPAQ COMPUTER CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9026 76-0011617
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
20555 SH 249
HOUSTON, TEXAS 77070
(Address of Principal Executive Offices) (Zip Code)
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(281) 370-0670
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
In a release dated June 29, 1999, Compaq Computer Corporation (NYSE:
CPQ) and CMGI (Nasdaq: CMGI) announced that they are forming a strategic
Internet partnership. The partnership will enable both companies to pursue
Internet-related business and will expand the range of both companies' Internet
business capabilities. Under the terms of the agreement CMGI will acquire
control of Compaq's AltaVista business and its related properties (Shopping.com
and Zip2) and will integrate the popular search engine into its network of 40
leading Internet operating companies. The completion of the agreement is
subject to normal regulatory approvals and does not require shareholder
approval. The news release is attached as Exhibit 99.
ITEM 7. EXHIBITS.
Exhibit 99 News Release dated June 29, 1999 is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPAQ COMPUTER CORPORATION
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Dated: June 29, 1999 By: /s/ Ben K. Wells
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Ben K. Wells
Vice President, Corporate Treasurer and
acting Chief Financial Officer
COMPAQ COMPUTER CORPORATION P.O. BOX 692000 NEWS RELEASE
PUBLIC RELATIONS DEPARTMENT HOUSTON, TEXAS 77269-2000
TEL 281-514-0484
FAX 281-514-4583
http://www.compaq.com
[LOGO OF COMPAQ COMPUTER CORPORATION APPEARS HERE]
FOR IMMEDIATE RELEASE
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COMPAQ AND CMGI FORM STRATEGIC INTERNET PARTNERSHIP; CMGI ACQUIRES ALTAVISTA
TEAM TO DELIVER END-TO-END TECHNOLOGIES AND
ENTERPRISE SOLUTIONS; PARTNERSHIP TO DEFINE FUTURE OF
CONSUMER INTERNET PC MARKET
EDITOR'S SUMMARY:
- - CMGI takes majority stake in AltaVista; Compaq to be CMGI's largest
outside shareholder
- - CMGI's Internet leadership and resources to accelerate AltaVista's move to
world-leading portal network
- - Compaq named a premier IT partner to CMGI; CMGI to be a premier Internet
technology and solutions supplier to Compaq
- - CMGI to collaborate with Compaq's world-class research labs and business
groups to develop and rapidly deploy next-generation Internet technologies
HOUSTON, TX AND ANDOVER, MA - JUNE 29, 1999 - Compaq (NYSE: CPQ), a top
global supplier of information technology systems and solutions and worldwide
consumer PC leader, and CMGI (Nasdaq: CMGI), the leading diversified Internet
operating company, today announced a comprehensive strategic partnership that
will enable both companies to aggressively pursue Internet-related business and
market opportunities.
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The strategic partnership is aimed at providing the best Internet services
and solutions to both businesses and consumers. The two companies will drive
the Internet PC market by combining Compaq's consumer PC leadership with CMGI's
network of leading Internet destinations and enabling technologies. CMGI will
acquire control of Compaq's AltaVista business and its related properties
(Shopping.com and Zip2) and will integrate the popular AltaVista search engine
into its network of 40 leading Internet operating companies to deliver a
superior online experience to Internet users both at home and at work.
"Our partnership will define and lead the consumer and enterprise market,
from PC to web, by combining Compaq's consumer Internet PC, commercial computing
and infrastructure leadership, global reach and worldwide customer base with
CMGI's network of leading Internet technologies and destinations," said Dave
Wetherell, CMGI Chairman and CEO.
"CMGI has established itself as a clear leader in the Internet economy,"
added Benjamin M. Rosen, Compaq Chairman and acting CEO. "And as CMGI's largest
outside shareholder and its principal strategic partner, we look forward to
mutually driving future Internet opportunities for the benefit of the Internet
marketplace, our respective shareholders, customers and employees."
Under the terms of a definitive agreement, Compaq will transfer 83.0
percent equity ownership in the AltaVista business to CMGI. Compaq will retain
17.0 percent equity ownership in the AltaVista business and hold a Board seat.
In return, Compaq will receive 19.0 million CMGI common shares and CMGI
preferred shares equivalent to 1.8 million CMGI common shares, which combined,
would represent a 16.4 percent fully diluted equity stake in CMGI. In addition,
CMGI will issue a $220 million three-year note to Compaq, bringing total
consideration for CMGI's 83% ownership in the AltaVista business to
approximately $2.3 billion, implying a total value of $2.7 billion for
AltaVista. Compaq will also take a seat on the CMGI Board of Directors and plans
to announce the appointment to this new position in the coming months. The
agreement, subject to normal regulatory approvals, is binding on both parties
and does not require shareholder approval for the closing.
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GLOBAL BUSINESS AND CUSTOMER BENEFITS
The partnership between CMGI and Compaq will expand the range of both
companies' Internet business capabilities.
Under the agreement, CMGI designates Compaq as its strategic IT partner,
enabling CMGI, its Internet companies and their customers to benefit from
Compaq's global leadership in consumer products, PC products, and
enterprise-class systems, solutions and services.
Compaq plans to integrate the diverse Internet capabilities of CMGI's
pure-play network of 40 Internet companies into its consumer Presario Internet
PCs, commercial PC and enterprise-class solutions offerings. This integration
includes web browser and keyboard access to the AltaVista Network and other CMGI
Web services. Importantly, the alliance will enable Compaq and CMGI to offer
Compaq's enterprise customers an array of business-to-business and
business-to-consumer services to create customized vertical portals along with
other comprehensive Internet solutions.
With Compaq as its strategic IT partner, CMGI's network of businesses will
be able to take advantage of Compaq's NonStop eBusiness solutions. This will
ensure that the IT systems fundamental to their success will maintain
uninterrupted operations with complete data integrity and unlimited scalability,
supporting continual growth and ease-of-management.
CMGI will also collaborate with Compaq's world-class research labs and
business groups to develop innovative, high-value Internet technologies and
next-generation Internet appliances, and will foster business opportunities to
exploit them.
BUILDING WORLD-LEADING NETWORK WITH ALTAVISTA
CMGI, Compaq and the AltaVista management team - headed by Rod Schrock -
will work together to establish AltaVista as one of the world's leading Internet
networks. AltaVista will integrate services from CMGI Internet companies to
create a premier Internet network for both on-line consumers and Web-based
businesses.
Yesterday, AltaVista announced several new services that form the
foundation of a premier media and commerce network. These include an updated
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search site, the world's first microportal service, 42 local community portal
partners, and redefining Shopping.com as the ultra-satisfying place to shop.
"We believe in the power of the Internet and in the power of leading
portals to capture and retain users," added Wetherell. "The integration of
AltaVista services with CMGI's extensive network of best-of-breed Internet
operating companies will create a formidable network. We see enormous
opportunity ahead as we execute on the dynamic potential of our synergies."
"CMGI's Internet leadership will greatly accelerate the AltaVista strategy
announced just yesterday," said Rod Schrock, president and CEO of AltaVista
Company. "By combining AltaVista services with CMGI's extensive network of
community, infrastructure and e-commerce Internet companies, there is no limit
to our long term potential."
COMPAQ BACKGROUND
Compaq Computer Corporation, a Fortune Global 100 company, is the
second-largest computer company in the world and the largest global supplier of
computer systems. Compaq develops and markets hardware, software, solutions,
and services, including industry-leading enterprise computing solutions,
fault-tolerant business-critical solutions, enterprise and network storage
solutions, commercial desktop and portable products and consumer PCs. The
Company is an industry leader in environmentally friendly programs and business
practices.
Compaq products are sold and supported in more than 100 countries through a
network of authorized Compaq marketing partners. Customer support and
information about Compaq and its products are available at
http://www.Compaq.com.
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CMGI BACKGROUND
A recognized leader in the Internet economy, CMGI (Nasdaq: CMGI) has built
a substantial base of Internet operating companies and, through its @Ventures
affiliates, has invested in a growing portfolio of synergistic Internet
enterprises which enhance the value of its core holdings. This unique method of
generating equity for its shareholders is what CMGI calls "creating net value."
Microsoft, Intel and Sumitomo hold minority positions in CMGI.
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CMGI's majority-owned subsidiaries include Activerse, Adsmart, Engage,
iCast, Magnitude Network, NaviSite, NaviNet, Planet Direct and ZineZone. The
Company's @Ventures affiliates have ownership interests in Lycos, Inc. (Nasdaq:
LCOS), Critical Path (Nasdaq: CPTH), Silknet (Nasdaq: SILK), Ancestry.com,
Asimba, blaxxun, BizBuyer.com, CarParts.com, Chemdex, eCircles.com,
Furniture.com, HotLinks, KOZ.com, MotherNature.com, NextMonet.com,
NextPlanetOver.com, OneCore.com, ONElist, Productopia, Promedix.com, Raging
Bull, Softway Systems, Speech Machines, ThingWorld.com, Universal Learning
Technology, Vicinity, Virtual Ink and Visto.
CMGI is also the majority-owner of SalesLink, InSolutions and
On-Demand Solutions, leaders in direct marketing, fulfillment and turnkey
arenas. CMGI Corporate headquarters is located at 100 Brickstone Square,
Andover, MA 01810. Telephone: 978-684-3600. Fax: 978-684-3814. Additional
information is available on the company's Web site at http://www.CMGI.com .
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ALTAVISTA BACKGROUND
AltaVista Company is the premier online media and commerce network. The
company integrates unique Internet technology and services to deliver relevant
results faster for both individuals and Web-based businesses. By combining
distinctive AltaVista brand services with 'best of the Web' partnerships, the
AltaVista Network creates the most satisfying Internet experience. AltaVista is
building on its heritage of technology and innovation leadership, offering
award-winning services including: AltaVista Search, AltaVista Local Portal
Services, AltaVista MicroPortal and AltaVista's Shopping.com. AltaVista, already
a top-10 Internet destination, enjoys one of the Web's most loyal and satisfied
user-bases. For more information, visit AltaVista at http://www.altavista.com.
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# # #
This release contains forward-looking statements based on current expectations
that involve a number of risks and uncertainties. The potential risks and
uncertainties that could cause actual results to differ materially include the
failure of systems associated with order fulfillment, the failure to close
certain sales contemplated prior to the end of the second quarter 1999; changes
in product mix; inventory risks due to shifts in market demand; continued
competitive factors and pricing pressures; and market responses to pricing
actions and promotional programs. Further information on the factors that could
affect Compaq's financial results are included in its SEC filings, including the
annual report on Form 10-K for the year ended December 31, 1998, and the
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quarterly report on Form 10-Q for the quarter ended March 31, 1999. Compaq,
Registered U.S. Patent and Trademark Office. Product names mentioned herein may
be trademarks and/or registered trademarks of their respective companies.
Forward looking statements made by CMGI in this release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Act. Investors are
cautioned that actual results could differ materially from those anticipated by
such statements and are advised to consult CMGI's current SEC filings for
additional information concerning risk factors that affect the Company's
business.
For further information, media may contact:
Compaq Computer Corporation Alan Hodel 281-518-8932
[email protected]
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ON JUNE 29 CALL 212-521-4800
Compaq Computer Corporate Eileen Quinn 281-518-8932
[email protected]
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CMGI Krista Thomas 978-684-3141
[email protected]
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Investor Relations Contact for Compaq: Investor Relations Contact for CMGI:
281-514-9549 OR 800-433-2391 Catherine Taylor, 978-684-3540
[email protected] [email protected]
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