The search engine says it agreed to buy Tripod for $58 million in stock, adding an online community to its Internet directory.
Shares of Lycos rose on the news, climbing as high as 43-5/8, up from 41 yesterday.
As reported yesterday by CNET's NEWS.COM, sources said the two companies were holding merger talks and added later that they had closed a deal. Both companies declined to comment at the time, however.
In confirming the deal today, Lycos executives said that acquiring Tripod will significantly boost traffic to its site, and Wall Street analysts agreed.
Lycos said the buyout combines two of the top ten most visited Web sites and will increase its "overall unduplicated reach" by 48 percent. Tripod generates more than 100 million page views per month and includes more than 1.5 million member home pages, according to the search firm.
Privately held Tripod, the online community for "twenty-somethings," will become a wholly owned subsidiary of Lycos. Its chief executive, Bo Peabody, will keep his current title. Tripod chairman Dick Sabot will join Lycos's board.
"It was an extension of our existing strategy" to build a "navigation and community network," Jan Horsfall, vice president of marketing at Lycos, said in an interview today. "We've been on the hunt a long time" for a company such as Tripod.
Peabody said Tripod has talked with about a half-dozen companies about a possible combination, including Microsoft and America Online.
Lycos chief executive Bob Davis called the Lycos and Tripod pair "an unbeatable combination." Peabody added it would allow Tripod to maintain its "hip, homegrown culture."
Here's how the integration of Lycos and Tripod will work from the consumer's end: Lycos customers who search for "Boston Celtics" not only will receive links to the team's official site but also ones to home pages built by Celtics fans. They also will get links to a community, where users chat about basketball. A so-called Lycos personal guide offers sports scores as well.
Lycos faces stiff competition from Internet directories such as Yahoo, Excite, and Infoseek, as well as America Online and Microsoft on the Web.
Yahoo recently acquired a stake in GeoCities, an earlier deal to meld an online community with a search engine.
Tripod also recently raised the ire of some Netizens by joining companies such as GeoCities in using pop-up ads on its site.
Peabody and Sabot founded Tripod in 1992. Its 18- to 32-year-old demographics are considered highly desirable on the Web.