Lycos Buys Wired Digital
Portal/search site Lycos said Tuesday that it will pay $83 million in stock for Wired Digital and its related web sites.
Wired's search engine HotBot, which attracts nearly five million unique visitors a month, is included in the deal.
The deal would give Lycos a roughly 40 percent share of the Web audience, according to a September ratings report by Media Metrix.
In May, privately held magazine giant Conde Naste bought Wired magazine for about $80 million.Lycos (LCOS) said in a press release that its unduplicated reach will grow to more than 40 percent of the Web audience.
Lycos shares gained 3/16 to 31 15/16 on Monday ahead of the news.
Scheduled to close by the year's end, the deal calls for Lycos to buy Wired's outstanding capital stock for approximately $83 million in Lycos stock, plus an additional amount of Lycos stock equal to any Wired cash outstanding on the closing date. Lycos will also assume Wired Digital's stock option plan.
"The acquisition of the industry-defining Wired Digital further fortifies our position as a premier media company," Bob Davis, president and CEO of Lycos, Inc., said in a statement. "In addition to gaining quality products and an incredibly talented group of people, the pioneering spirit of Wired Digital, its high-profile brands and added reach elevate the Lycos multi-brand network strategy to a new level."
Wired Digital President Beth Vanderslice said the deal will help grow the Wired brand in cyberspace by moving into the Lycos Network.
"We'll be reaching a larger audience with an expanded array of quality content and services," she said.
Citing Media Metrix research, the companies said Lycos.com and HotBot.com attract distinct audiences, with only 20 percent overlap between the two.
Lycos acquired Web-based community Tripod in February 1998, the company said. Lycos said its network is "the fastest growing destination on the Web."
Wired Digital will continue to operate from its San Francisco, Calif., office as a business unit of Lycos. Vanderslice, presidet of Wired Digital, will report to Davis. Lycos now employs more than 250 people in its West Coast facilities.
Written By Steve Gelsi