Daum to purchase Lycos for £52 million
2 August 2004
South Korean internet portal Daum Communications Corp has reached an agreement with Terra Lycos of Spain to purchase US web portal Lycos Inc.
Daum, Korea's top website operator, announced that it has agreed to pay 111.2 billion won (£52 million) for Lycos, including $10 million in guarantees for real estate leased for Lycos' US operations, marking the company's entry into the US market.
The price agreed for Lycos represents less than one per cent of the $12.5 billion Terra paid for the site during the internet boom in May 2000.
Daum shares fell slightly after news of the deal broke, as analysts questioned synergy prospects from the Lycos buy and its potential for future earnings.
Terra reported that it would keep Lycos' European portal business and its Spanish-language portal in the US, Terra Networks USA.
Terra Lycos put the loss-making US site up for sale in April for $170 million (£93 million), but was forced to accept a write down of Lycos to $84 million (£46 million).
Lycos has 170,000 paying subscribers and six per cent of the online banner advertising market in the US.
Daum president Lee Jae-Woong said that the purchase showed Daum was "ready to take off in its globalisation initiative".
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