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TERRA LYCOS, BERTELSMANN SPEAK COMMON LANGUAGE
German Company Announces Online Media Joint Venture Following Spanish Net Company's $10.6 Billion Purchase Of Lycos
Yesterday, we reported that Spanish Internet group Terra Networks announced its formal plans to buy U.S. Internet search company Lycos. The purchase—for a reported $10.6 billion, or $96.70 a share—would position Terra as one of the world's four largest Internet companies.

Bertelsmann AG, which co-owns Lycos Europe and is already said to have committed to $1 billion in advertising and service deals with the combined company, today declared its intention to set up media e-tailing outlets in Latin America and Portugal as a joint venture with Terra Lycos.

The German concern—which claims to have been tapped as the "preferred media partner" of the new multinational Net entity—is slated to control 75% of the venture, and Terra Lycos 25%.

Other details, notably a date for opening the shops and the cost of the enterprise, have not yet been settled.

On Monday, the Wall Street Journal speculated that if Terra planned to buy Lycos, it would cost the company roughly $90 a share, just $6.70 a share off the actual purchase price. Since WSJ came closest without going over, they will get to compete for the turtle wax.

Terra is owned by Telefonica de Espana SA. Telefonica Chairman Juan Villalonga, who is also chairman of Terra, will head the merged Terra-Lycos. Current Lycos President and Chief Executive Robert Davis will be the new company's Chief Executive.

Rumors of the Terra purchase ignited Lycos' stock price over the last week. Last Tuesday (5/9), Lycos opened at 48. Before yesterday's trading began, it hit 54 1/8. After hitting the 70s yesterday, the stock adjusted downward to 57 19/32 at presstime.

Said Bertelsmann head Thomas Middelhoff, "Ze trains vill run on time in Portugal now, I vill tell you zat. Er, I mean, 'Bertelsmann intends to become a leader in the international digital media arena.' Stick to ze script, Thomas, stick to ze script!"

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