South Korea’s Daum Communications confirmed that it is buying Lycos, the US search business of Spain’s Terra Lycos, for a bargain price of $105m.
The Seoul-based Website operator had first hinted at such a move in early July this year.
Terra Lycos, which owns popular Websites like Wired News, bought Waltham, Massachusetts-based Lycos in an all-paper deal worth $12.5bn in May 2000, at the height of the dot.com boom.
Since then the Lycos Website is ranked a lowly seventh in the US in terms of hits and has mustered only around 170,000 paid users.
Apart from scooping up Lycos at a cut price, the deal shows Daum’s ambitions in the US Internet market as it strives to become a global player. But the size of Lycos’ user base means it has some way to go. Last month Daum launched a joint venture in Japan with PoweredCom.
Terra Lycos is offloading its Internet unit to sharpen its focus on its core Spanish and Portuguese markets.
According to analysts, South Korea has the greatest broadband connection rate per capita in the world. According to government data over 60% of South Korea’s population (28.6m users) is connected to the Internet. Around 11m are broadband service subscribers.
Daum is the fifth biggest stock traded on the Kosdaq. But financial analysts however still remain wary of the investment merits of South Korea despite its technological advancement.