AltaVista says it will cut 25 per cent of staff

Search engine AltaVista, a division of Internet holding company CMGI Inc., announced on Thursday that it would lay off 25 per cent of its staff, with most of the cuts coming at its Palo Alto, Calif. headquarters.

The reduction of 200 employees represents a “further alignment of resources” as AltaVista moves toward being a company that focuses on selling search technology for the Internet and corporate networks, confirmed company spokesman Jim Shissler. The company made a similar workforce cut of 25 per cent in September. At that time, the company also quit the media portal business.

AltaVista has not been immune to the softness in the online advertising market, said Peter Mills, a CMGI@Ventures managing partner and executive adviser to AltaVista, in a statement. The company is making progress in selling search engine software to corporate customers and has a customer base of more than 1,100, the company said.

On Jan. 10, AltaVista pulled an initial public offering of 14.8 million shares of common stock, citing poor market conditions. CMGI owns 81.2 per cent in AltaVista, while Compaq Computer Corp. owns 18.2 per cent of the AltaVista stock, Shissler said.

Shares of CMGI [CMGI] traded down 8.19 per cent or US$0.59 to $6.65 a share during mid-afternoon trading Thursday.