A deal could be announced as soon as next week, according to Madrid’s El Pais newspaper, which quoted sources close to Telefonica.
A Lycos spokesman declined comment this morning, saying it’s the company’s policy not to comment on rumors.
An alliance with Telefonica could give Lycos a competitive advantage in Spanish-speaking countries.
Telfonica owns Terra Networks, an Internet service provider, with millions of customers in Brazil,
Chile, Guatemala, Mexico, Peru and Spain. Through a partnership with Internet Discount Telecommunications, Terra has also launched in several Hispanic
markets in the United States.
Recently, Terra said it wanted to beef up its online advertising, marketing and e-commerce capabilities, technology that Lycos has already refined. In fact,
Lycos has language and content specific portals in most of the countries that Terra serves.
For Telefonica, an interest in Lycos would help it diversify. The company has been looking for opportunities in the Internet fields. It is also interested in
partnering with Mexico’s TV Azteca, which owns half of the popular Internet unit, Todito.com.