Internet

Lycos looking for partner

Following yesterday's Excite-@Home deal and an active day of trading, Lycos acknowledges it's looking for an investor.

Following yesterday's Excite-@Home deal and an active day of trading, Lycos acknowledged it's looking for an investor.

The rising portal company is in "informal discussions" with media and telecommunications companies about a 20 percent stake of the Waltham, Massachusetts, company, according to Eric Gerritsen, vice president for international business development. The investment could reach $1 billion, Gerritsen told the Financial Times.

Gerritsen did not disclose potential partners. The company is not considering selling its business, he said.

Lycos spokeswoman Michele Perry confirmed that Lycos has been in talks with media companies, and is considering selling a limited stake, Bloomberg reported.

Earlier today the See related profile: 
Lycos focus: Eyeballs, not image company's stock had rallied on rumors that Lycos will be bought, before closing down 8.125, or 7 percent, at 104.8125. Lycos' shares have jumped as high as 44 percent since yesterday's proposed $7.5 billion purchase of No. 2 online search service Excite by @Home.

"We do not need the money," Gerritsen told the Financial Times. "But we could do with the global clout a large media or telecoms groups would bring."

Among the companies previously associated with Lycos acquisition talks are See related story: The eye's the prize Germany's Bertelsmann (which operates a joint venture with the portal in Europe), Microsoft, and CBS, which sources have previously told News.com is interested in Lycos. Unlike network rivals ABC and NBC, CBS does not have a portal partner.

(NBC, which owns about one-fifth of the Snap portal, is an investor in CNET: The Computer Network, the publisher of News.com.)

Lycos and Yahoo are alone among leading portals haven't yet been bought by or partnered with a larger media or technology company. Yahoo's $32.4 billion market value means that only a handful of companies could afford to purchase it, while Lycos's $5.3 billion market value puts it within reach of more potential acquirers, said analysts.

"To get big fast [in the Internet market], the only way to get there is Lycos," said William Blair & Company analyst Abhishek Gami, who has a "strong buy" on the company. "The whole universe of companies that could buy Yahoo is small."

Gerritsen's remarks came during a briefing on Lycos' international strategy, which will soon be expanded with the announcement of a southeastern Asian partner that will carry the brand to 24 countries. An African partnership is in the works, while the company is about to launch itself into Latin America, Gerritsen said.

Separately, Lycos said today that its audience reach, or the percentage of Internet users who visit a Lycos Web site each month, rose to 46.5 percent in December from 40.3 percent in August. According to Media Metrix, the company attracted 26.3 million visitors in December to its Web sites, which include Lycos; Tripod, a Web home page community site; HotBot, a Web search directory brought on along with its Wired Digital acquisition; and WhoWhere, a Web telephone and address directory.

With such a collection, Lycos has described itself as a "network" or "hub" to distinguish itself from the commonly used portal moniker applied to its competitors. Though Lycos's primary site, Lycos.com, does not attract as many daily page views as heavyweight Yahoo, the company instead counts the cumulative audience numbers of all of its sites as its primary selling point. This strategy has propelled Lycos's reported audience numbers and registered users.

Bloomberg and News.com's Jim Hu contributed to this report.