Compaq spends $3m on altavista.com address

Compaq confirmed today that it is negotiating with a small Californian businessman to buy the altavista.com Web address.

A source close to Compaq said it is prepared to pay $3m for the address. It is the latest in a spate of vendors paying out for the highest profile Internet domain names for their products.

A company spokesman said: "Compaq can confirm it is currently talking with Jack Marshall, the businessman who currently owns the dot.com registration, but no final agreement has been reached."

Input analyst, James Eibisch, commented: "It is an unusually large amount of money to pay for a domain name, but it's not the only case - Microsoft recently paid $5m for rights to an Internet Explorer domain name."

Compaq acquired the AltaVista search engine when it bought Digital in January. Eibisch said Compaq is likely to want to hang on to it because its such a strong Internet brand and is potentially very lucrative. "It presents a great opportunity for Compaq to own one of the few portal sites which will control traffic on the Internet," he added.

According to Eibisch, this expensive problem is going to get worse for corporates trying to get a presence on the Web. "It's a warning to all companies developing their Internet strategy to get their domain name situation straight," he concluded.