Posted: Thu Aug 05, 2004 9:38 am Post subject: Daum acquires Lycos for $95 million
Ending weeks of speculation, Daum Communications Corp. said yesterday it has acquired Lycos Inc., offering 111.2 billion won ($95 million) to buy the remaining assets from Spain's Terra Networks SA.
Analysts predicted the move by Korea's largest Internet portal would have a limited impact on its intentions to expand overseas, pointing out the company's lack of products to penetrate the U.S. market and Lyco's demise in popularity among search engines.
The deal marked the second ownership change for Lycos. Terra acquired the search site in 2000 for $12.5 billion, amid the height of the Internet boom. Daum now owns 100 percent of Lycos at a price less than 1 percent of that of four years ago.
Terra's board last week authorized the sale of Lycos for between $95 million and $115 million, slightly above the company's book value at $90.3 million. Terra will keep its 30 percent share of Lycos Europe and still run its own portal for the Spanish-speaking community in the United States, Terra Networks USA.
"The high brand recognition of Lycos could be the cornerstone of our future business in the U.S. market, when blended with our proven business model in the Korean market," said Daum chief executive Lee Jae-woong, in a conference call.
"We plan to turn Lycos back to black in two years," he added.
Daum, the operator of Korea's No. 1 Internet portal Daum.net and popular free e-mail service Hanmail.net, reported 141 billion won in sales and 25 billion won in net income last year. The company reported last week a first-half revenue of 91 billion won on the operating profits of 23.1 billion won.
Daum has been recently seeking to expand its overseas business, investing 8.8 billion won to take 65 percent of Taon Corp., a joint venture with Japanese Web company PoweredCom in a deal completed earlier this month. PoweredCom owns Cafestar.com, the country's largest Internet community portal with 1.15 million registered users.
Established in 1995, Lycos is the seventh-largest Internet portal in the United States, with more than 170,000 paid customers for its contents in search, e-mail and blog services among other applications. Lycos reported $98 million in sales and lost $24 million in 2003. The company's revenue has been on decline since 2001, with its popularity falling behind to other search sites and portals such as Google, Yahoo and MSN.
Daum said it will create an online community service in Lycos next year, extending the success of its Korean business which has more than 37 million users for its online community services called "cafes." The company also plans to upgrade Lycos' search engine, introducing more keyword search options and adding an interactive question and answer function similar to the services expected to be provided by Daum.net this year.
Daum hopes its acquisition of Lycos will give the company a fast start in the United States, where the market for Internet advertising and search services shows steady growth. Banner advertisements are expected to generate $6.5billion in the United States this year and $28.7 billion in 2015, according to Universal McCann. The research group predicts the market for search advertisements to grow to $2.8 billion this year and $5.6 billion by 2008.
However, Seoul analysts responded with skepticism on the company's latest move, pointing out Daum's lack of a business model proven beyond the Korean market.
"It's uncertain what Lycos will bring to Daum other than a negative impact in the company's cash flow. And it's hard to anticipate how U.S. customers will respond to concept of online communities when their more accustomed to individualized applications such as homepages and blogs," said Dongwon Securities analyst Koo Chang-gun.
"It's becoming harder for newcomers to break through the U.S. Internet market and acquiring the No. 7 portal is just not cutting it," he added.
Joined: May 22, 2005 Posts: 1751 Location: reppin' d 214 area .. ÇÊ¢¬¢çÇÉ..
Posted: Wed Dec 21, 2005 3:39 am Post subject:
I have Daum account..^^;;
it is so fun~!!!
I didn't know before that Daum is~
Korea's No. 1..
Internet portal.. _________________ standing beside you as you sleep..
wipe my tears as i close the door...--- TAKE... reminiscin' ...¢¾
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