STOCKS TO WATCH: AOL, Ariba, Autohighway.com, Lycos and MMC Networks.

AOL's always among the Big Board's most actively traded issues, but it should be especially busy Tuesday after investment bank Donaldson, Lufkin & Jenrette said it and Wal-Mart Stores Inc. (NYSE: WMT) are discussing a strategic partnership.

Wal-Mart shares closed up 1/16 to 58 15/16 Monday. AOL closed up 7/8 to 149 3/8.

In a research note, DLJ analyst Gary Balter said the actual financial impact of such a deal would likely be small, but the psychological impact would has a positive effect on the stock.

The Bentonville, Ark., mass retailer's Walmart.com electronic commerce site could benefit by tapping AOL's extensive customer base while the Wal-Mart stores could add AOL kiosks, Balter said. Wal-Mart could instantly transfer its Internet operations "from an also-ran to leadership" by linking with AOL.

Through its current operations and future acquisitions, Wal-Mart should be one of the top-three retailers in Europe in the next few weeks, which could expand AOL's profile in Europe, Balter indicated.

The note added that there are many unanswered questions from this strategy, including any cross investments by the two companies into each other's efforts; any exclusive on either side; the tie-in, if any, with AOL's current shopping effort and the visibility of the AOL brand within Wal-Mart stores.

Internet procurement software developer Ariba said late Monday it will buy TradingDynamics Inc. for $400 million in stock.

Company officials said the deal will be accounted for as a purchase and that it expects it to close by the end of aMarch.

"This acquisition is the latest step in our business strategy to drive the adoption of business-to-business e-commerce by adding value to the Ariba network platform," said CEO Keith Krach in a prepared release.

Internet exchanges, also known as ``Net market makers,'' bring together groups of buyers and sellers online for greater buying power. Market researcher Gartner Group has forecast there will be as many as 10,000 exchanges by 2002.

TradingDynamics makes software that lets customers create any kind of auction, reverse auction or bid/ask exchange. Drew Harman, head of marketing for TradingDynamics, said in an interview that the combination of the two companies would make them an even more formidable competitor to rival Oracle Corp. (Nasdaq: ORCL).

Audiohighway.com posted drastically improved sales in its third quarter Monday, but still lost $2.8 million, or 50 cents a share, on sales of $613,000.

There was no First Call consensus estimate for Audiohighway.com this quarter.

Its shares closed off 5/16 to 12 11/16 ahead of the earnings report.

In the year-ago quarter, it lost $2.3 million, or $2.37 a share, on sales of $77,000.

Audiohighway.com shares moved up to a 52-week high of 38 5/8 in April after falling to a low of 6 in December.

Lycos shares will take off Tuesday after it met Street estimates in its first quarter, earning $700,000, or 1 cent a share, on sales of $56 million.

First Call consensus expected the Internet portal firm to earn a penny a share in the quarter on sales of around $50 million.

Lycos shares closed up 15/16 to 59 7/8 ahead of the earnings report but surged as high as $63 a share in after-hours trading.

The $56 million in sales marks a 126 percent improvement compared to the year-ago quarter when it lost $2.5 million, or 3 cents a share, on sales of $24.8 million.

"Our industry leading growth, global reach, premier alliances and best-of-class products give us tremendous momentum and position us for leadership into the 21st century," said CEO Bob Davis in a prepared release.

Company officials said its traffic jumped 17 percent from the fourth quarter when it recorded an average of 70 million page views a day.

Last quarter, Lycos raked in $600,000, or 1 cent a share, on sales of $45.1 million.

First Call consensus expects Lycos to earn 3 cents a share in its second quarter and 16 cents a share in the fiscal year.

Twenty-two of the 24 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.

The maker of chips for computer- networking equipment warned fourth-quarter sales and profit will fall short of forecasts because its biggest customer, Cisco Systems Inc. (Nasdaq: CSCO), slashed orders. MMC fell 1 1/8 to 22 at Monday's close.

Reuters contributed to this report.