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Lycos Takes 10% Stake in Autoweb

The deal also includes the formation of a four-year strategic alliance.
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Lycos

(LCOS)

has acquired a 10% stake in online automotive sales site

Autoweb

(AWEB)

, the companies said Monday.

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Financial terms of the deal, which also includes the formation of a four-year strategic alliance, were not disclosed. The companies said they are forming an online destination that "will serve as the automotive hub for all the diverse sites and destinations that comprise the Lycos Network." Lycos claims more than 33 million users.

The announcement moved Autoweb shares up in the face of a broad decline on

Nasdaq

-- the company's stock jumped 7/32, or 6%, to 4 3/16 in midmorning trading, but was still trading well below its 52-week high of 31 1/2. Lycos was down 1 3/8, or 4%, to 34 11/16. (Autoweb closed 3/32, or 2%, at 3 7/8 while Lycos closed down 3/8, or 1%, at 35 11/16.)

Lycos and Autoweb said they would jointly market the new site and share in advertising and e-commerce revenue as well as traffic and consumer information. Lycos also said it would receive annual "multimillion-dollar payments."

The companies said they would seek partnerships with car manufacturers and automotive technology providers to "enhance the next generation of in-vehicle wireless systems."

"I believe the synergies resulting from this deal will strengthen Autoweb's market position, allowing us to reach a wider audience and uniquely address the strategic needs of manufacturers in the rapidly evolving online automotive market," said Dean DeBiase, chairman and chief executive, in a statement.

"Together, Autoweb and Lycos can leverage the depth and breadth of our new offerings to help the vehicle manufacturers position their brands in new and innovative ways, with the goal of helping them sell more cars," DeBiase said.