This story was written by Keith Dawson for the Industry Standard's Media Grok email newsletter. It is archived here for informational purposes only because The Standard's site is no more. This material is Copyright 1999-2001 by Standard Media.

THE INDUSTRY STANDARD MAGAZINE
LyTerra? Terracos?
May 16 2000 12:00 AM PDT



No officials spoke for the record yesterday about the negotiations between Lycos (LCOS) and Terra Networks, so reporters had little choice but to keep digging. Whether they used "will" or "might" to report about the potential merger depended on who returned their calls.

The New York Times and the Washington Post expressed the most certainty that a deal would happen, and said the companies would announce it this afternoon. The Times' "top executive close to the talks" and the Post's "official with one of the companies" may have been one and the same.

Most outlets agreed that Bertelsmann would have some role in the deal, but details of the German company's involvement were scattered. The Times' source offered the most specifics: a five-year "preferred content provider" arrangement on Lycos in the U.S. for $1 billion. But the Times reporters didn't mention Bertelsmann's ongoing obligations under its European deal with AOL, a complication noted by the Financial Times.

The Times' source said that details weren't finalized on the question of who would run the new company, while the Wall Street Journal's "several people close to the discussions" picked Terra chairman Juan Villalonga for chairman and Lycos head Robert J. Davis for CEO. All outlets agreed that no name or headquarters location for the new company had been chosen.

The Times' Doreen Carvajal and Andrew Ross Sorkin attributed information to their source in each of the first eight paragraphs. When they finally turned to analysts for reaction, they caught Deutsche Bank (DTBKY)'s San Francisco managing director Andrea Williams Rice coining a spiffy shorthand for offline businesses in the Old Economy: Without this deal, "Lycos could not very effectively extend its reach into the old-line world." - Keith Dawson

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