Robbie Stephens Conference: Lycos Says It'll Get the Votes

SAN FRANCISCO -- Lycos (LCOS) is confident that the company will "get the votes to get the deal done," executive vice president Ron Sege told a group of reporters following his presentation at the BancBoston Robertson Stephens Technology '99 Conference, referring to the merger of USA Networks (USAI), Lycos and Ticketmaster Online-CitySearch (TMCS), announced Feb. 9.

Sege said he's "exceedingly optimistic for the deal to go though," even though one of Lycos' biggest shareholders, CMGI (CMGI) is supportive of the deal but "not at this price." CMGI holds a 20% stake in Lycos.

Lycos shareholders have voiced their unfavorable opinion of the deal with a lawsuit filed Monday on their behalf. The suit alleges that Lycos executives said openly that they were committed to remaining independent while they were in talks to close the USA merger. News of the USA deal drove Lycos' stock down 35% to 94 1/4 on the day it was announced. The stock closed Thursday at 93, up 2 1/2.

Sege was unsure what percentage of vote was needed in order to approve the proposed merger. A vote is expected by May 10.

Sege, who has only been with the company for three weeks, started his Thursday afternoon presentation with "an apology in advance for any questions I can not answer." The conference schedule listed the Lycos presenter as Edward Philip, company COO and CFO. He talked up the merger, then ran a video explaining the synergies among the parties involved in the deal. "This deal makes compelling sense strategically," he said. "We can't rationally debate values too strongly."

The absent Philip, it turns out, had stayed in snowy New England to co-host an investor meeting with Lycos CEO Robert Davis that outlined earnings and set an aggressive schedule for the proposed merger. "The next holiday season is the first bellwether for us all," he said.

Lycos posted a loss of 3 cents a share in the January quarter, widening from the year-ago loss of 1 cent. The First Call consensus estimate was for a 4-cent loss. Revenues for the second quarter rose 143% to $30.6 million.

A highlight of the East Coast meeting was a simulated Home Shopping Network broadcast that Davis & Co. staged. Borrowing one of the hosts who hawks products on HSN, the simulation was meant to show off some of USA's plans for Lycos: Pitching its sites on TV when selling a computer, or telling viewers to visit the Lycos site to place their order or get more information.

Davis also offered more details than attendees at the Robbie conference heard, saying the company would also set up an "uber-shopping destination," the name of which has not yet been disclosed, as well as set up many smaller sites with a smaller product focus -- a jewelry site, an electronics site and a computing site, for example. "You will see a steady onslaught of Internet sites," Davis said, in as soon as 30 days.

He also said that by the end of the year, he expected Home Shopping Network television sales pitches to be archived on a Web site, so callers could pick and choose to watch from a catalog of broadcasts.

The audience was cordial; none of the questioners expressed displeasure with the deal, and only one of them mentioned CMGI's objections.

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