South Korean firm snaps up Lycos
South Korean top internet portal Daum Communications is buying US web portal Lycos Inc from Terra Lycos of Spain, to push its way into the US market.
Terra Lycos is 72% owned by Spanish phone operator Telefonica.
Daum said it had agreed to pay 111.2bn won ($95m; £52m) for Lycos Inc as a springboard into the US market from which to then become a global player.
The two sites both offer teenager friendly news, e-mail, chat, web search, personals and shopping among other things.
Lycos Inc also owns Tripod which allows users to build personalised web sites, and runs an online version of Wired, a technology news magazine.
The sale price for Lycos Inc reflects the precipitous drop in the valuations of internet stocks since the dot.com crash in mid-2000.
In May 2000, Spanish web firm Terra thought it worth $12.5bn in shares to acquire Lycos, a US internet search engine.
In April this year, Terra Lycos put the loss-making, Nasdaq listed US business up for sale with a price tag of $170m. In its own books, Terra Lycos went for a write down of Lycos to 75m euros ($84m; £46m), a sum closer to what Daum has paid.
Daum said Lycos has 170,000 paying subscribers and 6% of the online banner advertising market in the US.
The purchase meant Daum was "ready to take off in its globalisation initiative", said Daum president Lee Jae-Woong. But investors were doubtful about the wisdom of Daum's purchase.
The firm's shares initially rose 2.4% on news of the deal, but had slumped 5.18% by the market's close as analysts looked more closely at the deal and queried how much Daum could expect to earn from loss-making Lycos Inc.