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To: Elwood P. Dowd who wrote (44665)	1/22/1999 9:55:00 AM
From: John Koligman	Respond to of 97611

Elwood, they are probably referring to this article... John Time Warner, Looking for Bigger Role Online, Holds Talks on Internet Stakes By EBEN SHAPIRO and JON G. AUERBACH Staff Reporters of THE WALL STREET JOURNAL Time Warner Inc. has discussed taking a stake in several Internet businesses, including record retailer CDnow Inc. and search-engine companies that include Lycos Inc., according to people familiar with the situation. Like other big media companies, Time Warner is maneuvering to become a major player in the online world. Since last summer, it has bolstered its electronic-commerce efforts and recently promoted a publishing executive, Michael Pepe, to head its new electronic-commerce division. Yet, Time Warner has indicated to the financial community that it doesn't want to make a major investment in an Internet business at today's rich prices. The company has taken the position that it already has a number of businesses -- such as its stake in the Road Runner service offering high-speed Internet access -- that are poised to take advantage of the booming demand for digital services. Speculation about Lycos's future in particular has intensified in the wake of AtHome Corp.'s agreement to buy Excite Inc. for about $7.5 billion, more than double Excite's prior stock-market valuation. Lycos shares rose $12.1875, or 12%, to $117 in Nasdaq Stock Market trading, while Time Warner shares fell $3.625, or 5.5%, to $62.375 on the New York Stock Exchange. Lycos has held talks in recent months with a number of parties besides Time Warner to sell a minority stake, people close to the company say. Executives at Lycos, Waltham, Mass., favor a minority investment of between 5% and 35% rather than an outright acquisition, these people say. Talks with one potential partner, German media giant Bertelsmann AG, have so far been fruitless, say people familiar with both companies' thinking. Bertelsmann traditionally favors controlling investment stakes. Lycos has also held past discussions with companies including CBS Corp., Walt Disney Co.'s ABC unit; Viacom Inc.; and News Corp., people familiar with the matter say. Representatives for each of those four companies declined comment. A Lycos spokeswoman declined to discuss specific partners, but said the company has held numerous talks with parties in recent years. In an interview, Chief Executive Robert Davis said Lycos "is committed to its independent strategy." In the case of CDnow, Time Warner isn't interested in acquiring CDnow outright, people close to those talks say. Rather, Time Warner is discussing taking a stake in CDnow to add heft to its already-sizable business of selling books and music over the Internet. Various Time Warner units, including Warner Bros. Studio Stores and Atlantic Records, have established their own Web sites. Time Warner also owns Book-of-the-Month Club and Time Life Inc., a direct marketer of books, music and video. A Time Warner spokesman declined to comment and CDnow didn't return calls. Time Warner, meanwhile, also held talks with Compaq Computer Corp. about taking a stake in Compaq's AltaVista search site, people close to the situation said. Those talks have cooled, however, they said. Compaq declined to comment. Return to top of page