Lycos drops merger with USA Networks

NEWS According to media reports the Lycos/USA Networks (USAi) merger - hailed on Tuesday as the dream ecommerce deal - has fallen through. The merger between the online portal, Ticketmaster Online-Citysearch and the ecommerce and Internet assets of USAi would have created one of the world's largest ecommerce companies. To be known as USA/Lycos it was predicted that the new company would pull in revenue of more than $1.5bn through its Web site and cable TV home shopping network. But according to reports, CMG Investment, which holds a 20 per cent stake in Lycos, has backed out of the deal after negative market reactions to the announcement. In a statement released late yesterday CMG said it was "generally supportive" of the deal, but "reserves the right to reassess its position as developments unfold". The portal company's shares - which stood at $127.25 on Monday after a January high of $145 - plummeted $40 after the deal was announced on Tuesday. Market price settled to around $100 on Thursday and rose slightly to $105 this morning after news of the deal's breakdown hit the US. Lycos was unavailable for comment at the time of publishing.