Telefonica bid $2 billion for Terra Lycos

[Shak]

May 29 (Bloomberg) -- Telefonica SA's 1.73 billion-euro ($2 billion) offer for its Internet unit will probably be accepted because shareholders are willing to sell a stock that's unlikely to recover from a four-year slump, investors said.

Telefonica, Spain's largest phone company, offered yesterday 5.25 euros a share for the 62 percent it doesn't own in Terra Networks SA, owner of the Lycos Web sites. That's 19 percent below the average price in the last two years.

``It's a bad price, but Terra is a dead business,'' said Xavi Torres, who helps manage the equivalent of $530 million at Popular Gestion Privada in Barcelona. ``The best way out of this dead company is to tender the shares.'' He doesn't own Terra.

all interesting stuff.

Shak

[heini]

Everybody's been waiting for that to happen, since Bertelsmann canceled their mega advertizing deal last year. It was clear Bertelsmann wanted to get rid of their shares. The only prospect was Telefonica.

No idea what they are going to do with it. There's still a huge branding value in Lycos, but all plans to turn around the various business segments they are working in have failed so far.

[Shak]

Could always start selling Page Rank :)

Shak

[MrSpeed]

I hope they still keep the "Fuego Latino"
¡Quémate con la sensualidad latina!

[merlin30]

It isn't phone companies that need to own search engines, its retailers.

[heini]

>search engines
Terra Lycos a search engine? Nearly all of their search is from Fast, with additional PPC, resold PFI, and paid directory.
What Terra has is a large user base, lots of web properties, tons of content. In fact they have lots of assets, the only thing missing is a viable business model.

[shaadi]

Agree with you heini

[ncsuk]

Im sure a company as bit as Tele could turn it around and do something with it though.

Its not as if they dont have the cash to throw at it.

[jose]

I Totaly agree Heini.

Everybody knows Terra, but when you ask people what does Terra do? Music, News, chats, etc. I dont know...

Lots of things but nothing really. No specialization whatsoever...Bad business...

thanks

[Chris_D]

You wouldn't believe this - earlier today I tried a PFI for a client today on Lycos/FAST - all I got was a MS SQL error text message on page 2 of their submission form.

No wonder they are going out of business - they can't even take your money!

[leoo24]

telefonica is a huge monster! it has the cash in spare change and boasts 77 million customers worldwide!
Heini is right that Terra has a huge user base, through it's internet connection mainly, i connect through terra's broadband, 60% of spaniards connect to the internet throught terra.
i'm certainly looking forward to see how it goes :)

[iThink]

You wouldn't believe this - earlier today I tried a PFI for a client today on Lycos/FAST - all I got was a MS SQL error text message on page 2 of their submission form.

This problem is persisting since last 3-4 months. Either they have not noticed it or may be they don't have time to take/earn money.