Internet Market Close Report for 1999.02.09

Investors voted with their feet on the proposed merger of USA
Networks-Ticketmaster/Citysearch with Lycos (NASDAQ:LCOS) in a new firm to be
dubbed USA/Lycos Interactive Networks (USA/Lycos). The stampede in LCOS shares
drives them down 26% to $94.25 per share. Ticketmaster-Citysearch shares also
tumble, off 26% to $42.25 per share. The only gainer of the three is Barry
Diller’s USA Networks (NASDAQ:USAI), which runs cable programming. USAI shares
pop 9.7% to $41.625 per share.

Both Lycos and USA Networks play up the combined revenue of the firms, $1.5
billion annually. Pro forma the merger USAi will own 61.5%, Lycos shareholders
will own 30% and TMCS shareholders other than USAi will own 8.5% of the
USA/Lycos equity (more on the merger in tomorrow’s Internet Stock Report).

The merger hype with Lycos now over, ISDEX takes another hammering as
investors take profits and shy away from some of the buying frenzy that drove
Internet shares earlier this year. The selloff is marketwide as the bears in the
bunch trigger a pullback. ISDEX is down 4.7% and NASDAQ not far behind.