More NewsTelefonica Makes $2B Terra Lycos Bid

Telefonica Makes $2B Terra Lycos Bid

The combination would allow the telecom to tightly integrate the Internet unit's broadband offerings with its access business.

Spanish telecom Telefonica is offering $2.04 billion cash for the 62 percent of Terra Lycos it does not already own, saying the Internet unit will perform better in-house than as an independent company.

The deal, which must be accepted by at least 75 percent of Terra Lycos shareholders, would allow Telefonica to more tightly integrate Terra Lycos’ broadband products and services with its Internet access business.

Service providers increasingly see bundled offerings as a key to retaining current subscribers and winning new ones and have been partnering with content providers.

The combination would also save the company overhead of operating a stand-alone publicly traded company, Telefonica said.

Terra Lycos, which has U.S. operations in Waltham, Mass., has not commented on the offer. A spokeswoman did not immediately return a phone call.

For the last two years, Terra Lycos — which runs a network of content sites (paid and free), offers Web site building tools, and search services — has been buffeted by the poor economy, online advertising slump and fierce competition.

“Telefonica has actively managed this changing and increasingly demand environment, adapting contuinously to the changes,” the company said in a statement.

It also noted its financial support for Terra Lycos during the rough stretch. Most notably, Telefonica committed $500 million over six years deal for portal and other Internet services from Terra Lycos.

The pact plugged a gaping hole left by Bertlesmann. Last year, the German music and content giant rethought its $1 billion advertising commitment to Terra Lycos after the market soured.

Terra Lycos has been working to transition its visitors (50 million per month for all its sites) to paid services. For example, in April it unveiled a new version of its Quote.com investor site, offering real-time market data and online trading tools starting at $79 per month.

Related Articles

GDPR: The role of technology in data compliance

Data & Analytics GDPR: The role of technology in data compliance

3w Clark Boyd
What companies can learn from the We-Vibe lawsuit about the Internet of Things

Legal & Regulatory What companies can learn from the We-Vibe lawsuit about the Internet of Things

8m Al Roberts
Has advertising arrived on Google Home?

Media Has advertising arrived on Google Home?

8m Al Roberts
Is Twitter slowly dying?

More News Is Twitter slowly dying?

9m Al Roberts
FedEx launches fulfillment service to take on Amazon

Ecommerce FedEx launches fulfillment service to take on Amazon

9m Al Roberts
Target is the top retail digital marketer, so why is it struggling?

Ecommerce Target is the top retail digital marketer, so why is it struggling?

8m Al Roberts
YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

More News YouTube is "on pace to eclipse TV" thanks to savvy algorithm use

9m Al Roberts
YouTube is getting rid of 30-second unskippable pre-roll ads

Ad Industry Metrics YouTube is getting rid of 30-second unskippable pre-roll ads

9m Al Roberts