BOSTON -- Lycos was in "serious" talks Friday to sell a sizable stake of itself to NBC, according to a person familiar with the talks.
The person, who requested anonymity, said the Waltham, Massachusetts-based Internet service was considering selling NBC a 25 to 30 percent stake.
The Internet company's stock surged US$5.69 to $137 on Friday after trade journal The Industry Standard reported Thursday that Lycos was close to selling up to 35 percent of the company for cash and promotional time on NBC. Lycos declined comment, and NBC did not immediately return calls seeking comment.
Lycos is in the process of buying the parent company of Wired News. The fast-growing network of Internet properties has been rumored in recent months to be in talks with virtually every major media firm about selling a minority stake.
In addition to its broadcast network, NBC, a unit of General Electric, operates cable networks and owns a stake in several Internet ventures, including Snap and MSNBC.
Under the structure being negotiated, Snap, an Internet portal owned jointly by NBC and CNET, would be rolled into Lycos, and the two would stand as separately traded companies, the person said. Snap declined comment.
Lycos is the second most visited portal after Yahoo and the only major portal other than Yahoo that remains independent. Speculation that it would be acquired by a large media company has been swirling since last month, when its rival Excite was acquired by At Home in a multibillion dollar deal.
Analyst John Robb of Gomez Advisors in Concord, Massachusetts, said of Lycos, "They want a major media property to invest in them."
Television is the best way to lure traffic to an Internet portal, and Lycos could use that kind of exposure, as well as the cash, Robb said.
Lycos chief executive Robert Davis has often said that Lycos wants to stay independent, although he hasn't ruled out selling a minority stake. A deal could be announced within the next couple of weeks.
Copyright© 1999 Reuters Limited.
