Lycos Inc has completed its acquisition of Wired Digital Inc for an estimated $285m worth of Lycos stock. The deal was announced in October last year, but infighting among shareholders in Wired Digital and concerns expressed by the Securities and Exchange Commission delayed closure of the purchase. That has turned out to be no bad thing for shareholders in Wired Digital. Andrew de Vries, a spokesperson for Wired Digital, notes that when the deal was originally announced, it implied a valuation for Wired Digital of $83m. Lycos stock has more than tripled in the intervening months, in turn tripling the value of its acquisition.
The web properties HotBot, Wired News, HotWired, Webmonkey and Suck.com will now become part of the Lycos network. Interestingly enough, CMGI, which owns an 18% stake in Lycos, now has three search engines on its hands: Lycos, HotBot and as of this week, AltaVista. Analysts suspect that CMGI will divest itself of its Lycos interests, particularly as the relationship was damaged when CMGI opposed and eventually foiled a merger between Lycos and USA Networks Inc. However, CMGI chief executive officer Dave Wetherell has publicly affirmed his support for Lycos. We think that Lycos is a strongly-positioned company with a tremendous collection of assets of its own, he said in a teleconference earlier this week. This is not at all an either/or situation.
