Spanish internet group, Terra Networks is this afternoon (16 May) expected to announce plans to acquire US web portal Lycos for $10bn.
If the two sides successfully agree on a deal, it would create a global internet portal pitching the European company against US heavyweights, Yahoo and America Online (AOL).
Terra, the internet arm of Spanish telco Telefonica, confirmed last week that it was in talks with Lycos, but said it had yet to reach "any definitive agreement which deserves to be made public". Lycos officials declined to comment.
Terra is Europe's largest publicly traded internet company with a stock market valuation of almost $17bn, nearly three times that of Lycos. A merger would combine Terra's two million Spanish and Portuguese speaking subscribers with Lycos' online programming services.
Observers believe Lycos' unique programming, as well as its youthful customer base, would help extend Terra's current reach in Europe and Latin America and boost its presence in the US.
Lycos had 32.9 million unique visitors in March compared with two million for Terra, with about half using the company's free internet service. Terra estimates that there are 550 million Spanish and Portuguese speaking people around the world, and expects its subscriber base to increase to four million this year.
Lycos was the subject of a takeover bid by media company USA Networks last year, but talks failed when Lycos shareholders rejected the offer.
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