Feeds

Terra buys Lycos in $12.5bn stock deal

Will CMGI let this one go through?

  • alert
  • submit to reddit

The essential guide to IT transformation

Terra, Spain's biggest Internet business, is taking a huge leap onto the world stage with the $12.5 billion agreed takeover of Lycos.

The deal has the backing of Telefonica, the Spanish PTT and majority owner of Terra, which is underwriting the issuance of $2 billion of new Terra stock. Based on yesterday's closing price for Terra, this will give the new group a market cap of $30 billion.

Not bad for a merged entity that is expected to produce pro forma revenues of $500 million this year, and which will, after the rights offering, have $3 billion in the bank.

Bertelsmann, Europe's biggest media house and 50 per cent owner of Lycos Europe has also given the deal its blessing: it plans to fold Lycos Europe into the merged group in 2003. The company will also collaborate with Terra Lycos, as the new group is called, in a $1 billion five-year commerce agreement for the "purchase of advertising, placement and integration services from Terra Lycos worldwide".

Question is: will CMGI, Lycos' biggest shareholder with 17 per cent of the stock, put the spanner in the works, this time around? CMGI last year torpedoed the proposed takeover of Lycos by USA Networks. We guess it will jump for this one.

It is difficult to see how Lycos can, on its own, catch-up with AOL, Yahoo! or MSN. As a component of the Terra- Bertelsmann axis, its prospects to join the ranks of super portal are transformed. The combined entity already boast 50 million unique users a month, 175 million page impressions a day, and a powerful presence in Spanish-speaking countries. ®

Build a business case: developing custom apps

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.