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Lycos Europe to close after failing to find buyer

Lycos Europe to close after failing to find buyer

A once-pioneering web portal is set to meet an ignominious end after Lycos Europe failed to find a buyer.

Lycos Europe began a strategic review in April but said on Wednesday that it would wind up its hosting and main portal, returning €50m to shareholders before the end of the year.

Lycos, a lossmaking joint venture between Telefónica and Bertelsmann, still hopes to sell its domain names, Danish portal and shopping site, Decido.

Lycos Europe was formed as a joint venture between Lycos, its US parent, and Bertelsmann, with Christoph Mohn, heir to the Bertelsmann media empire, appointed as chief executive.

In 2000, when Lycos' search, e-mail and community sites were among the most popular on the web, Lycos Europe listed in Frankfurt in a heavily oversubscribed public offering that valued the company at €773m.

On Wednesday, its shares closed at €0.20, for a market capitalisation of €62.5m.

In October, Lycos Europe posted a 20 per cent fall in revenues to €46.9m for the nine months to September 30, swinging to a net loss of €17.1m. Cash and other investments then stood at €139.2m. The company employs around 700 people.

Mr Mohn, who is still chief executive, told the FT in May that its user base and brand could have been of interest to a US or Asian media or telecoms buyer looking to enter the European internet market.

Bertelsmann and Telefónica each hold a 32.1 per cent stake in the company.

Dresdner Kleinwort advised on the strategic review. Shareholders will vote on the proposals on December 12 in Amsterdam.

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