Lycos sold to mysterious buyer at £12bn loss

Spanish group Terra Networks has found a helping hand for its internet business in the US - including portal Lycos.com. The name of the buyer had been kept a closely guarded secret, but Korean internet portal Daum Communications has finally put its hands up to being the mystery buyer.

Daum admitted that it was in the frame for the takeover after South Korean stock exchange Kosdaq demanded it clear up speculation about the deal, following reports in Spanish daily Expansion that a Korean company would be announced as the buyer.

The value of the deal was cited as between $95m and $115m, with the company's quoted value put at the lower end of the spectrum.

Terra's board of directors having agreed to the deal, it's thought all that remains is for the two companies to agree on the contractual niceties.

The value of the sale is well down on the £12.5bn that the merger between US firm Lycos and Terra Networks cost in 2000. The group, which, according to documents that came to light in April, was gunning for a price somewhere in the region of $200m, has had to think a little more modestly.

One contributing factor could well have been the balance sheet - in the whole of 2003, its US division managed turnover of $98m and ended up with a net loss of $24m.

Having failed in its initial objective - to compete with the big international portals such as Yahoo!, Terra is now thought to be concentrating on the Portuguese and Spanish markets. It's 32.1 per cent interest in Lycos Europe doesn't seem to be heading the same way, however. Lycos Europe operates in 10 European countries, including Germany, France, Italy, Spain and the UK, and is a separate entity from the US portal.

Estelle Dumout writes for ZDNet France