" writeme += "

" writeme += "" writeme += "" writeme += "" writeme += "

" playme.document.write(writeme); playme.document.close(); if((navigator.appName == "Netscape") && (navigator.appVersion.substring(0,1) >= "3")) {playme.focus();} if((navigator.appName == "Microsoft Internet Explorer") && (navigator.appVersion.substring(0,1) >= "4")) {playme.focus();} if (playme.opener == null) { playme.opener = self; } } function play(vid,neth,netl,realh,reall) { var cm=GetCookie("playbar"); if (cm != null) { //if (cm=="nh" && neth=="t") { cm="hi.asx"; //if(aol||nstr||iebug) { //} else { // showvid('asf',vid+cm); //} } else { if (cm=="nh" && neth!="t") { this.sec=1; pbw(vid,neth,netl,realh,reall); } } if (cm=="nl" && netl=="t") { cm="lo.asx"; //if(aol||nstr||iebug) { //} else { // showvid('asf',vid+cm); //} } else { if (cm=="nl" && netl!="t") { this.sec=1; pbw(vid,neth,netl,realh,reall); } } if (cm=="rh" && realh=="t") { cm="hi.rmm"; if(aol||iebug) { } else { showvid('rm',vid+cm); } } else { if (cm=="rh" && realh!="t") { this.sec=2; pbw(vid,neth,netl,realh,reall); } } if (cm=="rl" && reall=="t") { cm="lo.rmm"; if(aol||iebug) { } else { showvid('rm',vid+cm); } } else { if (cm=="rl" && reall!="t") { this.sec=2; pbw(vid,neth,netl,realh,reall); } } } window.onerror = MSIE; // -->

logo
Sat, Jun 17, 2000
Register today for a free financial forecast
fundsnav.gif (2552 bytes)

Registration
Account Management
Site Help
Market Wire Home
Fox News Online Home
Live Ticker
Indices Chart
Click on index
for more information
USA Networks-Lycos Merger
To Form E-Commerce Giant

By Eric Auchard  Reuters
NEW YORK — In a marriage of TV and the Internet, USA Networks Inc. and Lycos Inc. agreed Tuesday to merge, forging an interactive entertainment and e-commerce giant to be headed by veteran television executive Barry Diller.

The combination will create a powerhouse with more $1.5 billion in annual revenues and the capacity to reach 70 million TV households and 30 million Internet users.

Terms of the deal call for Diller's USA Networks, which is 45 percent owned by Canada's Seagram Co. Ltd., to control 61.5 percent of the company, Lycos shareholders to hold 30 percent and Ticketmaster holders 8.5 percent, the three companies said in a statement. The merged company will be called USA/Lycos Interactive Networks Inc., with Diller as its chairman.

An investment banker involved in the deal said, "the aggregate value of 'NewCo' [the merged company] is $17 [billion] to $18 billion," based on Lycos' fully diluted market value, including options of about $5 billion divided by the 0.30 percent.

The deal got a mixed reception on Wall Street. Lycos shares tumbled $33, almost 26 percent, to close at $94.25, while USA Networks stock rose $3.69 to $41.625 on the NASDAQ.

One analyst said investors were apparently disappointed that the merger apparently would not carry a handsome premium for Lycos stockholders.

Lycos Chief Executive Robert Davis, who admitted he held merger talks with "everybody", said the deal that was finally announced is, "the opportunity to create the most dominant e-commerce entity in the world."

Davis downplayed the negative reception the deal met on Wall Street and said investors will come around once they gain a better understanding of the deal's value. He also noted that the entire Internet sector has been off the past two days.

Davis, who will be CEO of the combined firm, said the deal should be valued using an Internet industry revenue multiple.

By that measure, using Lycos's pre-merger price/revenue valuation, the combined entities that will form the new USA/Lycos Interactive Networks Inc., would have a market value of $45 billion, on sales of $1.5 billion, Davis said.

The new company will combine Lycos with USA Networks' various operating units, which include Home Shopping Network, Internet Shopping Network/First Auction, and its majority interest in Ticketmaster .

USA/Lycos will have the reach of a national cable TV network combined with the broad range of Internet media, communications and commerce capabilities.

"This places all the necessary ingredients for electronic information and commerce ... into one centrally and aggressively managed enterprise," Diller said in the statement. "There is no excuse now for us not to be a dominant player as the world continues its transition toward interactive systems."

The deal caps weeks of speculation about whether Lycos was seeking to merge with a major media company or form a partnership in exchange for a large investment in the company.

The trend was started last year, when the Walt Disney Co. bought half of Infoseek and incorporated it into its new Go portal. Also NBC has bought a small portal, Snap, while Yahoo! has purchased Geocities, and Excite was bought by At Home, which offers Internet service via cable TV lines.

Until last week, Lycos was said to have been in "serious talks" on such a partnership with General Electric Co.'s NBC network, according to a source familiar with the talks. Other reports paired them with Time Warner Inc. and German publishing and media giant Bertelsmann AG .

The deal offers enormous potential for cross-promotion between television and the Internet.

USA/Lycos television will have the capacity to reach 70 million homes. Its Home Shopping and Ticketmaster properties will be able handle more than one million telephone transactions and ship more than 200,000 items each day.

On the Internet, USA/Lycos will reach about 30 million people, nearly 50 percent of all users, through its network of Web sites.

The company will operate four of the top 20 Web sites including Lycos, a leading "portal," or central starting point for finding news, electronic mail, online shopping and discussion groups and Web searches.

Its Ticketmaster Online-Citysearch business runs a network of 19 online city guides in the United States and Canada.

The deal is subject to regulatory approval and a vote by Lycos shareholders. Internet venture fund CMGI Inc. agreed to vote its 20 percent stake in Lycos in favor of the deal.

More Marketwire More MarketWire News Top of Page


© 2000, News Digital Media, Inc. d/b/a Fox News Online
All rights reserved. Fox News is a registered trademark of 20th Century Fox Film Corp.
Data from Thomson Financial Interactive is subject to the following Privacy Statement
© 2000 Reuters Ltd. All rights reserved