Telefonica Takes Majority Stake in Terra Lycos

Spanish telecom giant Telefonica has completed its tender offer for Terra Lycos and now owns about 72 percent of the Internet content and access firm.

Previously, Telefonica owned about 33 percent of Terra Lycos, but felt the firm would do better in-house than as an independent company.

Telefonica also waived its own previous provision that it reach 75 percent ownership stake to close the deal.

As majority owner, Telefonica will be able 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 overhead costs, Telefonica said.

Terra Lycos, which has U.S. operations in Waltham, Mass., has not commented on move and what, if anything, it means locally. Earlier, a Telefonica spokesman said it had no immediate plans to sell Lycos if the deal went through.

For the last two years, Terra 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.

Terra Lycos has been working to transition its visitors (50 million per month for all its sites) to paid services. For example, in April it unveiled a new version of its investor site, offering real-time market data and online trading tools starting at $79 per month.

News Around the Web