Compaq Computer (CPQ) said Tuesday it will buy Web site software publisher Zip2 in a move to beef up its portal subsidiary, AltaVista.
Privately held Zip2, based in Mountain View, California, sells software that helps online publishers set up classified sections and online city guides. Its operations will be rolled into Compaq's Internet directory service AltaVista.
Financial terms of the cash purchase were not disclosed, but Compaq said the deal is worth more than its purchase of online retail directory Shopping.com (IBUY) last month, which cost US$200 million.
Last year, Compaq ended up with AltaVista as a part of its purchase of Digital Equipment Corporation. Last month, Compaq decided to spin off AltaVista as a wholly owned subsidiary and sell shares of the company to the public. Compaq has been buying up Internet businesses like Shopping.com and Zip2 to make AltaVista more competitive with Yahoo and America Online.
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Nose drops on AOL: For an online company that has yet to launch a Web site, drugstore.com is certainly thinking big.
The Redmond, Washington, company said on Tuesday it signed on with AOL and Excite to take orders for beauty and health products, from Prell to prescriptions. Drugstore.com didn't disclose what it paid for the placement deals.
Wider distribution will, in theory, help bolster drugstore.com's position against PlanetRX, another nascent online drugstore that has yet to launch a Web site. PlanetRX has already agreed to pay AOL $15 million over three years for prominent placement across its Web sites.
Both companies expect to launch their online stores sometime during the next quarter.
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ETrade funds: ETrade (EGRP) said Tuesday that federal regulators have approved its plan to sell its own mutual funds online.
Approval in hand, the online broker will next week introduce its first fund, the ETrade S&P Index Fund. The fund will be run by the newly formed ETtrade Asset Management group, and ETrade customers will be able to buy and trade shares through ETrade's Mutual Fund Center. The company will roll out several new funds over the next 12 to 18 months, it said.
ETrade has been busy adding services it hopes will transform it from a discount brokerage into a full-service online investment bank. The company last month announced it would begin underwriting initial stock offerings through a new division called EOffering.
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Silicon Valley start-ups raked in $4.55 billion in venture capital in 1998, by far the largest share of any region in the United States, according to a survey released Tuesday by the San Jose Mercury News and Price Waterhouse Coopers LLP.
In 1998, venture capitalists doled out a total of $14.27 billion to new companies, an increase of 24 percent over 1997, according to the The Money Tree survey. Internet-related investments soared 66 percent in 1998, compared to the previous year.
The largest single investment cited in the report went to Advanced Technology Group in Los Altos, California. The company received $102 million from AT&T Ventures, Alta Communications, Norwest Venture Partners, J. P. Morgan Capital, and the law firm of Wilson, Sonsini, Goodrich, and Rosati.
