People are beginning to lose money in

Lycos

(LCOS)

. No, not the venture holders. They won't lose money unless China launches missiles at Massachusetts. And not the people who bought it last year. They are still sitting pretty.

But people who piled in this year, they are hurting. Unless you bought it presciently during that first week of the year, you are thinking that you got sold out by management. You are down -- in some cases, down big.

Lycos is, in many ways, a battle for the heart and soul of the Net, which is why I keep it on my screen even though I have no intention of buying it. If you are an "emperor's new clothes" fan, Davis is probably your hero. You think that the whole Net thing is just some Wall Street bubble and the buyers and promoters are charlatans. Davis is getting something real in return for something "fake."

But I don't think like that. I think the growth on the Net is for real and that real organic growth is very hard to come by. Until the Net came along, we spent our time trading pieces of paper of very limited growth, since the biggest companies have no hope of growing 10% a month.

Many of the big "growth" companies are simply nongrowth companies with excellent cost-cutting measures and possible international expansion. Others rely on accounting and buybacks to make the numbers. But the Net could be, if executed well, something that has far greater potential than the stocks are currently showing. The Net's

organic

growth may be worth paying for.

Which is why Lycos is so painful. Davis had the organic growth the buyers of Net stocks were looking for. He has cashed in for finite, single-digit growth.

It is no wonder that this stock goes down every day and that the only time it ever goes up is when there are rumors that the Davis-Diller partnership is on the rocks!

That's no place to be.

Random musings:

Uh-oh, we are down after being up 500 points. Look for the "no follow-through" crowd to climb out of the dumpsters and get on TV.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication, his fund had no position in Lycos, though this may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending a letter to TheStreet.com.