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Lycos/USA Networks deal in limbo, VP says

Top Lycos exec likes the deal but admits the market doesn't

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At least one senior executive at Lycos doesn't hold out much hope of the proposed merger between Lycos and USA Networks going ahead. In a frank exchange about the turmoil that has thrown Lycos into the spotlight for all the wrong reasons, VP Bo Peabody touched upon the difficulties of the last two months. "We've had a little hiccup in the ranks," he said referring to the open dissent of Lycos' major shareholder, CMGI, which pledged not to support the deal. "The deal is still in limbo," he said. "The market will decide if it will go ahead, but it's clear that the market doesn't like it," he said. The Register found out back in February that the deal was waiting to be put out of its misery. Things soon got worse when Lycos was hit with a class action lawsuit in March. Lycos stock is currently trading at around $100 15/16 -- after plummeting to the mid $80s in the wake of stockholder unrest -- some level of confidence has returned but it's still a way off the high of $145 3/8 experience earlier this year. Peabody's frankness is in sharp contrast to Lycos' spin doctors' abrasive defence of the whole affair, but his assessment of the situation does not detract from his belief that the deal with USA Networks is a good one. "I think this is a brilliant strategic deal," he said. "And one that is valuable for the company." Last week Lycos became the Web's fastest growing portal dislodging Yahoo! from the top spot with an audience reach of 51 per cent and almost 32 million visitors. Part of Lycos' success is down to its acquisition of Tripod -- the Web community network with more than 3.3 million members -- which was founded by Peabody in 1992. ®

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