Lycos has been bought by a South Korean company rumored to be Daum Communications, the firm who also tried to acquire Mail.com.
Spanish newspaper Expansion reported that on July 22 the board approved the sale to an unnamed Korean company, and that the company asked for $170 million. The company reportedly receive four bids.
Doug Mehus suggests that the profitable Daum Communications is trying to expand their reach in the global market with this buy (if they did indeed buy Lycos):
Does anyone want to speculate on whom the buyer might be? If it is indeed a South Korean company, I would be willing to place a gentleman’s bet that Daum Communications is the buyer. The reason? The South Korea-based Daum is said to be looking at expanding its successful Web portal business beyond southeast Asia and into the lucrative U.S. market. Earlier this month, a news article was circulating that Daum was in talks to buy Newcastle, Wash.-based Mail.com Corporation. So, it’s quite possible they’ve been negotiating to buy Waltham, Mass.-based Lycos, Inc., a wholly owned subsidiary of Terra Networks S.A.
Well Doug, it’s no longer rumor – this just in from the Korean paper Chosunilbo:
Daum Communication Corp., Korea’s largest Internet portal, announced they would acquire U.S. search portal Lycos.
Daum Communication Corp., Korea’s largest Internet portal, made the public announcement on Thursday that it is planning to acquire the American search portal Lycos. To do so, the company is negotiating with Spanish Terra Networks, the mother company of Lycos.
In regards to the conditions of acquirement, the company said, “Nothing concrete has been decided yet.” According to U.S. Dow Jones News on Wednesday (local time), the Korean Internet company tentatively agreed with Terra Lycos to take over Lycos for 75 million euros (around W100 billion) and the conditions of acquirement will be set around this week at the earliest. Lycos recorded revenues of US$98 million and net losses of US$24 million last year.
Koo Chang-keun, a researcher at Dongwon Security, however, said, “The American portal industry centered on a few companies such as Google, Yahoo, and MSN, in an oligopolistic form and this greatly reduced Lycos’ market share. Not only that, the environment of the American Internet industry is very different from that of Korea. Thus, even if Daum buys Lycos, it would not reap noticeable benefits.”