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Alternative Lycos deal could come soon

CMGI could have a sweeter deal for Lycos than the one announced with USA Networks within the next few weeks, sources say.

Internet venture firm CMGI could have a sweeter deal for Lycos than the one announced with USA Networks in the next few weeks, sources say.

While CMGI marketing manager Bill White said he couldn't predict the exact timing of a new deal, another source close to the company said an announcement could come in the next few weeks. In an interview with CNET today, White denied earlier reports that quoted him as saying it would happen "within several days."

CMGI, which holds the largest stake in Lycos, will likely rekindle talks with television broadcaster NBC, the source said. Other candidates include Fox News and CBS. There is an outside chance that Time Warner may enter the fray, sources said. NBC declined comment.

"I can't predict timing on this, but the key is that there are several options," said White. "[The options] include renegotiating the deal with USA Networks, finding a new potential owner or a new relationship with a new third party, and a possible CMGI takeover or ownership of Lycos."

CMGI hired Morgan Stanley Dean Witter & Company to head a search effort to find a better deal for Lycos, whose stock has dropped about a third of its value since the company's merger announcement with USA Networks last month.

Just last week, USA Networks' Barry Diller said his company would not renegotiate the terms of its acquisition of Lycos. The portal has been slapped by one shareholder lawsuit after another alleging that Lycos executives made misleading statements about the company's strategic future, including intentions to stay independent.

Lycos declined to comment, saying it is in a Securities and Exchange Commission-mandated quiet period. Earlier this week, however, the company said it remains fully committed to the USA deal.

Diller's USA Networks is in the process of acquiring Lycos in an $18 billion deal. Under the agreement, USA Networks would own 61.5 percent, Lycos shareholders would own 30 percent, and Ticketmaster Online-CitySearch shareholders other than those at USA Networks would own 8.5 percent. Diller would become chairman of the new company.

On Tuesday, CMGI chairman David Wetherell said he was resigning from the Lycos board so he could "explore the best options available to Lycos shareholders, including the possibility of Lycos remaining independent."

Shares of Lycos dipped 1.59 percent today to 108.25, while CMGI stock dropped 3.36 percent to 185.25. USA Networks, however, climbed 2.87 percent to 38.13.