CNet (CNET) - Get Report and EarthLink (ELNK) may be in play. But they may not be as playful as investors hope.

Both stocks rose Thursday afternoon in the wake of a

Reuters

report, citing unnamed sources, that international Internet conglomerate

Terra Lycos

(TRLY)

was in acquisition discussions with Internet service provider EarthLink and technology news and information provider CNet. A deal could be announced by the end of the summer, according to the

Reuters

report. Spokespeople for EarthLink and CNet declined to comment. A Terra Lycos spokeswoman couldn't be reached.

Although a merger with these companies might be plausible, both putative targets likely would play hard to get, says one buy-side analyst, pushing up the price of any deal. Further muddying the waters, Terra Lycos would likely have to pay cash, considering the 80%-plus drop in its shares over the past year, the analyst says.

In Thursday trading, CNet shares rose 90 cents, or 7.7%, to $12.57, and EarthLink shares dropped 3 cents to $12.70. Terra Lycos American depositary shares fell 20 cents to $8.47.

Disparity

At first glance, the credibility of the report is stretched by the disparity of the companies named as acquisition targets. To say that Terra Lycos is interested in purchasing either a provider of Internet connections or a property devoted to tech news covers the bases pretty broadly, like a child announcing he can't decide between buying a pet mouse or a pet alligator.

But, in fact, Terra Lycos' business already includes both Internet access and editorial content such as the

Lycos

portal and financial news site

Raging Bull.com.

"I guess I could see why they're interested in both," says the buy-side Internet analyst, who spoke on condition of anonymity. The analyst's firm doesn't own Terra Lycos, CNet or EarthLink.

One sell-side analyst who asked not to be identified says a Terra Lycos acquisition of EarthLink has been rumored for months. Such a deal would make more sense than a deal to buy CNet, because Terra Lycos needs to broaden its Internet access business. "You have to own your customers," says the analyst. A CNet deal "really won't solve Terra Lycos' problems," the analyst adds.

Liquidity

A major sticking point of any deal, though, would be that CNet or EarthLink probably would not want to take Terra Lycos stock in payment, the buy-side analyst said. The buy-sider pointed to several factors, including the limited float of the stock and the short interest in Terra Lycos. "You're getting a pretty illiquid stock," says the analyst. "I would not be happy with it."

As of March 31, Terra Lycos reported having the equivalent of $2.2 billion in cash on hand. The

market capitalizations of EarthLink and CNet are each around $1.7 billion.