LYCOS INC (LCOS) SPO
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|Company Name||LYCOS INC|
|Company Address||400 2 TOTTEN POND ROAD
WALTHAM, MA 02451
|CEO||Robert J. Davis|
|Employees (as of 12/31/1999)||919|
|State of Inc||DE|
|Fiscal Year End||7/31|
|Exchange||Nasdaq National Market|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||2/21/2000|
Our net proceeds from the sale of the 6,000,000 shares of common stock we are offering will be approximately $443.7 million (or approximately $510.4 million if the underwriters' over-allotment option is exercised in full), at the public offering price of $77.375 per share after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We anticipate that the net proceeds will be used for general corporate purposes. We may also use a portion of the net proceeds to acquire businesses, products or technologies that we believe are complementary to our business. Although we actively engage in discussions regarding possible acquisitions, we have no present agreements with respect to any proposed transaction.
The market for Internet products and services, advertising and e-commerce is highly competitive. Lycos believes the principal competitive factors in this market are name recognition, quality of content and commerce offerings, site performance, ease of use, features and quality of support. A number of companies currently offer competitive products in our target markets. The primary competitors of our products and services are other companies providing online services and include About.com, Amazon.com, AOL, Ask Jeeves, Buy.com, CMGi's AltaVista, Disney's GO Network, DealTime, Excite@Home, FortuneCity, GoTo.com, Go2.net, Google, Infospace, Looksmart, Microsoft's MSN, mySimon, NBCi (including Snap and Xoom), CBS StoreRunner, theGlobe.com and Yahoo!. In addition, a number of companies offering Internet products and services, including direct competitors of Lycos, recently have begun to integrate multiple features within the products and services they offer to consumers. These competitors have integrated competing products and services through internal development, acquisitions, joint ventures and licensing arrangements.
Lycos is a global media company operating one of the Internet's leading networks of separately branded websites. The Lycos Network is one of the most visited online destinations in the world, attracting nearly one of every two U.S. Internet users in November 1999. According to a Media Metrix
report, the Lycos Network of branded websites included four of the twenty most popular U.S. sites on the Internet, and had over 29 million unique users in November 1999. The Lycos Network enables users to quickly access and retrieve information, communicate with other Internet users, easily establish online communities and engage in commerce. Our popular websites provide a broad offering of integrated content and services, attracting users into the Lycos Network through multiple points of entry and creating a large and diverse audience. While users typically access the Lycos Network for specific content through one of our branded sites, they are encouraged to remain in the Lycos Network by the breadth of our product offerings and the easy navigation possible amongst our sites. We derive our revenues primarily from online advertising and e-commerce. Demand for online advertising is expected to grow significantly in the future. According to Forrester Research, the market for online advertising is expected to grow from $3.3 billion in 1999 to $33.1 billion by 2004. We believe that we are well positioned to serve this market as the Lycos Network provides advertisers a large and diverse audience and the ability to segment and target that audience. The wide variety of content and services available on the Lycos Network enables advertisers to focus their promotional efforts on the Lycos Network sites most relevant to their product or service offerings. The Lycos Network has attracted a wide variety of advertisers, including Dell, Intel, Motorola, Johnson & Johnson, Macy's, OfficeMax and Sears. The electronic commerce, or e-commerce, market is also projected to experience significant growth. International Data Corporation projects that e- commerce revenues will grow from $50.4 billion in 1998 to $1.3 trillion by 2003. We generate e-commerce revenue through two principal means. We integrate product and service offerings from merchant partners directly into our search, directory and community offerings on a topical basis. In addition, in October 1999, we launched our online marketplace, LYCOShop, providing users with a seamless e-commerce experience that incorporates products from over 2,000 retailers, as well as classified advertising and auctions. We expect that international users will become a substantial part of the Internet user base in the future. According to International Data Corporation, Web users outside the U.S. will increase from 79.4 million in 1998 to 325.5 million in 2003. We have broadened our offerings outside of the U.S. by expanding into Latin America and by partnering with local media and technology companies in Asia and Europe. We currently offer country-specific versions of our Lycos search and navigation service and other selected network services in Argentina, Belgium, Brazil, Chile, Denmark, France, Germany, Ireland, Italy, Japan, Mexico, The Netherlands, Norway, Peru, Singapore, South Korea, Spain, Sweden, Switzerland, the United Kingdom and Venezuela. Our Strategy Our goal is to be the most visited and utilized global online destination. The essential elements of our strategy are to: . expand the reach of the Lycos Network; . increase the frequency and duration of user visits to the Lycos Network; . continue to provide comprehensive advertising solutions; . provide a compelling e-commerce platform; and . expand the global presence of the Lycos Network. We were incorporated in Delaware in June 1995. Our principal executive offices are located at 400-2 Totten Pond Road, Waltham, Massachusetts 02451, and our telephone number is (781) 370-2700. We maintain a site on the Web at www.lycos.com.
|Company Counsel||Testa, Hurwitz and Thibeault LLP|
|Lead Underwriter||Credit Suisse First Boston Corp|
|Underwriter||Allen and Co. Inc|
|Underwriter||Bear, Stearns and Co. Inc|
|Underwriter||BofA Merrill Lynch|
|Underwriter||Goldman, Sachs & Co|
|Underwriter||Goldman, Sachs & Co.|
|Underwriter||Hambrecht and Quist LLC|
|Underwriter||Merrill Lynch, Pierce, Fenner and Smith Incorporated|
|Underwriter Counsel||Cravath, Swaine and Moore|
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