March 11, 1998 5:20 AM PST

Can Tripod buy boost Lycos?

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February 3, 1998

Lycos buys Tripod service

February 3, 1998
Lycos (LCOS) expects to boost its traffic with the recent acquisition of Tripod, but whether this online community for twenty-somethings can generate stellar advertising revenue growth remains to be seen.

Tripod's advertising revenues reached $450,980 for the ten months ending October 31, 1997, up about 30 percent from the 12-month period ending in December of 1996, according to a Securities and Commission Exchange filing yesterday.

Revenues from subscriber fees, however, soared to $113,749 for the ten-month period, compared with $5,032 for 1996.

Formerly a privately held company that has since become a wholly owned subsidiary of Lycos, Tripod also posted a growing net loss of $3.5 million for the ten-month period, compared with a loss of $2 million for 1996. The losses appeared to outpace Tripod's overall revenue growth.

The company, however, had remained highly liquid, with $6 million in assets and $841,176 in liabilities during the ten-month period. Operating expenses, meanwhile, ran up to $3.7 million during the period.

A search engine company that is expanding into an online service, Lycos announced last month that it would acquire Tripod. The $62.3 million stock transaction is designed to increase Lycos' "overall unduplicated reach" by 48 percent. Tripod generates more than 100 million page views per month.

Tripod's chief executive, Bo Peabody, will keep his current title, and the company's chairman, Dick Sabot, will join Lycos' board.

Peabody received 91,079 shares of Lycos stock from the transaction and plans to sell 14.3 percent of his stake. Sabot and a trust received 94,728 shares, of which a 28 percent stake will be sold. The shares will be among the 1.2 million up for sale in a pending offering by Lycos shareholders.

Lycos closed at 45-5/16 yesterday, down 7/16 over the previous day.

 

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