Afraid of being left behind in the Internet retailing frenzy, more technology companies are acquiring small electronic commerce firms for their expertise and retailing base.
Compaq Computer Corp. of Houston in February announced its purchase of Shopping.com, an Internet shopping service. Compaq is buying Shopping.com in a $220 million stock deal for its name and base of 1,000 retailers.
Intel Corp., Santa Clara, Calif., is also making a bigger play for the Web selling market. Intel is acquiring iCat Corp., a leading shopping cart software developer.
Intel is buying Seattle-based iCat and adding the company to its new business development group because it needs a shopping cart component for its growing array of electronic commerce products and services. The transaction was expected to be complete in March. Intel, along with SAP AG, Walldorf, Germany, also owns Pandesic, an electronic commerce infrastructure development company.
Because momentum is building for business-to-consumer electronic commerce, big companies would rather make a quick acquisition than take the time to develop an internal solution. “They just want to grab what they need,” says Carl Howe, director, computing strategies, Forrester Research, Boston.