Lycos CEO eyes buying spree after merger
NEW YORK (Reuters) - Lycos Inc. Chief Executive Bob Davis said Thursday the online media network has its eyes set on a buying spree, especially after its merger with Spain's Terra Networks SA is completed.
Terra, the Internet unit of Spanish telecoms giant Telefonica , agreed in May to buy the Waltham, Mass.-based firm for US$12.5 billion. The deal is now expected to close in late October and will create a combined entity with more than US$3 billion in cash.
"Our focus in the States is on acquisitions," Davis said. "Wireless is important for us and it will be a key area of focus."
While Lycos's union with Terra will bolster its telecommunications exposure in Latin America and Spain, the company may look for added wireless and telecom presence in the U.S., according to analysts.
Davis dismissed any concerns about the deal's completion that have arisen from the recent departure of Telefonica Chairman Juan Villalonga, who was seen by some as the architect of the Terra-Lycos deal.
"He wasn't an active employee of the company. Every company has board changes," Davis said in an interview at Jupiter Communications' online advertising forum in New York, adding that the departure does not change the vision of the deal.
Davis also said the Internet sector was in for another year of aggressive consolidation, and the combined company would be well-poised to take part in the action.
Earlier Wednesday, Lycos said it entered into a pact with wireless Internet infrastructure and application service provider Mobilee Inc. for the development of Lycos's voice portal to be launched by year-end.
The voice-activated portal will provide telephone users with free access to content, such as stock prices and move listings, via the Lycos Network of Web sites by dialing a local access number and speaking.
To add to the combined firm's cash war chest, Davis reiterated plans to take the company's five international joint ventures public within the next 12 months, including ventures with Singapore Telecommunications Ltd. and Bell Canada International Inc. . He said the company is currently interviewing investment banks in every location for the deals.
In recent months, America Online Latin America Inc. , the joint venture between America Online Inc. and media conglomerate Cisneros Group, has made a more aggressive push in the region where Terra has a strong presence.
"AOL has had a tough time outside the U.S. with its proprietary content and backbone," Davis said. "It has a long way to go before it can get (Terra-Lycos') market share."
While many of AOL's rivals have spoken out against the Internet services provider's proposed merger with media powerhouse Time Warner Inc. , Lycos has not, but Davis is concerned about open access and content availability.
"AOL has to practice the openness it preached prior to their merger with Time Warner, either voluntarily or through government decree," Davis said.
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