Dot-Com Shakeout Hits 200 Alta Vista Workers

Web portal AltaVista announced Thursday that it is laying off 200 employees, or 25 percent of its workforce.

The company said that the layoffs would primarilyaffect employees at the company’s Palo Alto,California headquarters. AltaVista said that itsEuropean offices would only be “minimallyaffected by the change.”

The layoffs leave the company, which is backed by CMGI, with 600 employees.

“AltaVista has not been immune to the softness inadvertising,” said Peter Mills, executive adviserto AltaVista and managing partner of CMGI @Ventures.

Miller added: “These are challenging times for mostInternet and technology companies but we areconfident in the steps we are taking to remainstrong.”

The move comes a week after AltaVista scrapped plans for a US$160.5 million initial public offering (IPO), citing poor market conditions.

Going Wide

For most of its five-year existence, AltaVista hasstruggled to find an identity in the dot-world. Initially launched as a search engine, thecompany reportedly spent more than $100 millionin a failed bid to recreate itself as a generalinterest portal along the lines of Internet giantYahoo!.

The site now offers a comparison shopping page, a customer loyalty program backed by ClickRewards, and auction services through uBid Auction.

Its most recent strategy is to diversify itsrevenue mix by maintaining its own consumersearch site and selling its search software toother companies.

AltaVista said Thursday that its expansion intothe search software business is proceedingrapidly, and that it had signed up 87 newcustomers in the last three months to bring itstotal roster to more than 1,100 companies.

Hard Times

The most recent round of layoffs is the third forthe company in less than a year. In May, AltaVista laid off 40 employees and in Septemberthe company let go 225 workers.

Last week’s scrapped IPO represents the secondtime in less than a year that the company hascancelled plans to go public. The company firstfiled for the IPO on December 17, 1999, butpostponed the offering on April 17, 2000 after a drop inthe Nasdaq market.

The company was also been hit by the twin losses offormer chief executive officer Rod Schrock, wholeft the company in October, and the surpriseretirement of his replacement, Ken Barber, whowas to leave the company last month.

AltaVista also dumped its free, ad-drivenInternet service provider (ISP) offering in theUnited States last year, ostensibly because thecompany that provided its communicationinfrastructure, 1stUp.com, was going out ofbusiness. 1stUp.com is also a CMGI company.

Not Alone

Due to the slowing dot-com economy, a series of Web companies have cut their workforce in recent weeks. On Wednesday, NBC Internet let go 150 employees,or 30 percent of its workforce.

Other layoffs this month include the termination of 700 employees from the embattled eToys, 350 employees from online trading company Ameritrade,and 120 employees from Internet delivery service Kozmo.com.

By all accounts, the dot-com workforce has struggled in the past year. According to industry observers, more than 40,000 dot-com job have been slashed in the past year.