NEW YORK (CNN/Money) -
Internet search engine Overture Services, Inc. said Tuesday it agreed to pay CMGI $140 million in cash and stock for AltaVista, a Web portal that was sold for more than $2 billion during the Internet boom
CMGI, an Internet investment firm, bought AltaVista in a $2.3 billion stock swap in June, 1999.
News of the deal, released after the closing bell, sent shares of Andover, Mass-based CMGI (CMGI: Research, Estimates) up 24 cents, or 29 percent , to $1.07. But Overture (OVER: Research, Estimates) tumbled $1.87, to 8.7 percent, to $20.90 in late trading.
Overture, based in Pasadena, Calif, said it will pay AltaVista in Overture common stock currently valued at $80 million, plus $60 million in cash. Overture will assume some of AltaVista's debt.
Overture said AltaVista's advanced algorithmic search technology, which crawls the Web and returns relevant search results in response to users' queries, complements Overture's market-leading technology in commercial search. Overture provides pay-for-performance search results to partners like Yahoo Inc.
The purchase is expected to close in April and add to Overture's earnings by mid-2004.
CMGI shares traded above $50 when the company agreed to buy an 83 percent stake in AltaVista from Compaq Computer.