Time Warner Inc.
is said to be looking to take a stake in several leading Internet
businesses, including music retailer CDnow
Inc. and search engine Lycos Inc.
If the media giant does follow through on the speculation, it will be an
about-face considering the company has previously said the high valuations
of today’s Internet leaders make a takeover financially unattractive. The
company has indicated its Road Runner high-speed Internet service, which
competes with @Home Networks, is the best
way for it to capitalize on the Internet boom.
Speculation over Lycos’ future has intensified since @Home agreed to buy
Excite for about $7.5 billion. Lycos chiefs have also talked with several
other companies about taking stakes. Reports indicate Lycos is looking for
someone to make a minority investment, with a maximum stake of about 35
percent, rather than a company to buy Lycos.
A Lycos spokesman declined to comment on the latest rumors and Lycos Chief
Executive Officer Robert Davis reaffirmed this week that Lycos intends to
remain independent.
As for CDNow, sources say Time Warner favors taking a stake in the music
retailer rather than buying the company. That would allow the company to
increase its Internet music sales, which are currently handled by sites set
up by its various labels, including Atlantic Records.
Time Warner refused to comment on the report and CDnow could not be reached
for comment.
Time Warner is also said to have talked to Compaq Computer Corp. about taking a stake
in its AltaVista search engine. However, those discussions have reportedly
broken off.
Time Warner is following the moves of several other large media companies
that have bolstered their online presence. To help accomplish that goal,
the company recently named Michael Pepe, an former executive in its
publishing division, to head up its new electronic-commerce division.
