Analysts claim Shopping.com deal could prove expensive for Compaq

Compaq is to buy ecommerce portal Shopping.com for $220m in a deal designed to link the retail site to the computer giant's own AltaVista search engine and its recently launched range of Web-ready PCs.

But the acquisition has already proved unpopular among some industry analysts, who say Compaq is buying an expensive white elephant.

Alexander Kopriwa, analyst at the Meta Group, said: "Shopping.com has had nominal revenue and its Internet stock for 1998 was flat."

He added: "Shopping.com has also been implicated in a stock manipulation scandal." Reports in the online edition of the Wall Street Journal and the Industry Standard said online messages boards had been clogged with horror stories about bad credit card charges, endless busy signals and products that were not delivered.

The Californian Better Business Bureau has, according to Kopriwa, "received multiple complaints", regarding the shopping Web site. Kopriwa added: "What Compaq got was an expensive shopping portal of some limited visibility, nothing more."

The Shopping.com board of directors and shareholders - who own 27 per cent of the company - have approved the deal. Compaq now needs to win the backing of 90 per cent of the remaining shareholders.