In yet another blockbuster Internet deal, the leading Web portal Lycos will join with Net and commerce interests captained by media mogul Barry Diller to create a company with combined revenues of US$1.5 billion.
Under the agreement announced early Tuesday, Lycos will merge with Ticketmaster Online-CitySearch. The combined venture will absorb the USA Networks properties Home Shopping Network, Ticketmaster, and Internet Shopping Network/First Auction.
The new company will be called USA/Lycos Interactive Networks, and Diller, chairman and chief executive officer of USA Networks, will become its chairman. Robert Davis, president and chief executive officer of Lycos, will become president and chief executive officer of the new company, and will join its board of directors.
The complicated agreement gives USA Networks (USAI) 61.5 percent of the new company, Lycos (LCOS) shareholders 30 percent, and Tickmaster Online-CitySearch (TMCS) 8.5 percent.
The deal still needs Lycos shareholder approval, but the companies said CMG Information Services, which owns approximately 20 percent of the outstanding shares of Lycos, is "fully supportive of the transaction."
According to the Los Angeles Times, the new company will be worth some $21.5 billion. The deal values Lycos at $6.5 billion, just a bit over its market valuation, and Ticketmaster Online-CitySearch at $4 billion, the paper reported.
The merger follows multi-billion-dollar agreements that have brought together Internet players America Online and Netscape, At Home and Excite, and Yahoo and GeoCities.
In a statement, Diller emphasized the diversified scope and reach of the new company, which figures to benefit from television promotion through his USA Network and the Sci-Fi Channel.
"This places all the necessary ingredients for electronic information and commerce, from 'old' soup to 'new' nuts, into one centrally and aggressively managed enterprise," Diller said in a press release. "There is no excuse now for us not to be a dominant player as the world continues its transition towards interactive systems."
In their statement the companies said USA/Lycos will boast "the only global Internet portal with local content, auctions, and a direct commerce business." They said that at its inception the company will reach 70 million television homes and 50 percent of the Web audience.
Lycos is the second-most visited portal on the Web. Last fall it agreed to buy Wired Digital, publisher of Wired News, HotWired, and HotBot. It also owns the Internet community-building sites Tripod and Angelfire.
Tickmaster Online-CitySearch provides local city guides, local advertising, and live-event ticketing on the Internet; Home Shopping Network began selling goods on television in 1977; Ticketmaster dominates the computerized ticketing industry; and the Internet Shopping Network runs the online auction service First Auction.
