RealTime IT News

Telefonica Would Keep Lycos

Telefonica has no immediate plans to sell Lycos if its takeover of the Web site network's parent goes through, an executive for the Spanish telecom giant reportedly said today.

According to Dow Jones news service, Telefonica COO Fernando Abril told reporters at a Madrid news conference that Telefonica would operate Lycos, which got its start in Waltham, Mass., as an independent company.

At the same time, Abril said it would not increase its $2 billion offer to buy the 62 percent of Terra Lycos it does not already own. Some shareholders are bristling at the offer which they deem too low.

Proposed last week, the deal must be accepted by at least 75 percent of Terra Lycos shareholders, would allow Telefonica to more tightly integrate Terra Lycos' broadband products and services with its Internet access business.

Service providers increasingly see bundled offerings as a key to retaining current subscribers and winning new ones and have been partnering with content providers.

The combination would also save the company overhead, Telefonica said. Terra Lycos has not commented on the offer.

For the last two years, Lycos -- which runs a network of content sites (paid and free), offers Web site building tools, and search services -- has been buffeted by the poor economy, online advertising slump and fierce competition. It has tried to offset these forces by offering subscription services for specialized sites and tools, such as its Quote.com financial site.

And yesterday Lycos signed a deal with Google to distribute content-targeted AdWords listings on its member-generated Web pages in eight European countries.