SAN FRANCISCO -- Lycos (LCOS) shares jumped 18% after its largest shareholder's CEO quit Lycos' board to oppose its unpopular deal with USA Networks (USAI) - Get Report.

The executive, David Wetherell of

CMGI

(CMGI)

, an Internet venture fund that is Lycos' largest shareholder, resigned from the Lycos board, saying he thought Lycos should get a better deal for its shareholders. Wetherell was part of the original Lycos board, and CMGI holds a nearly 20% stake in Lycos.

In an interview with

Reuters

, Wetherell said his firm has hired investment bank

Morgan Stanley

to try to get other shareholders to press for changes in the proposed

deal that would put television executive Barry Diller in charge of a new television-electronic commerce entity. The proposed deal was seen as more favorable to USA Networks and has caused Lycos shares to shed more than a third of their value at times since early February. The stock closed at 127 the day before the USA Networks deal was announced. Tuesday the stock was up 15 3/8 at 99 1/4.

The CMGI executive added that if Lycos fails to receive a better deal, he would press for Lycos to remain independent or to seek another media partner. CMGI was up 16 5/8, or 8.5%, to 216 5/8 after gaining 47 1/2, or 31%, yesterday. USA was off 9/16, or 1.5%, at 37 15/16.

Mixed Day for Microsoft

First, the good news.

Microsoft

(MSFT) - Get Report

and the

Justice Department

are exploring ways to settle the government's antitrust trial against the Redmond, Wash., software giant, according to

The Seattle Times

. The newspaper reported that the company and government are trying to get a settlement before the trial resumes in April from a six-week break. A settlement, like the one

Intel

(INTC) - Get Report

reached Monday, could allow investors to breathe a sigh of relief.

Microsoft also announced a link with

Hong Kong Telecom

(HKT)

to deliver movies, video games and software to PCs in Hong Kong. Microsoft is also expected to unveil later this week plans to deliver the Internet to Chinese television viewers.

Now, the bad news.

SG Cowen

analyst Drew Brosseau has done the unthinkable. He downgraded Microsoft to buy from strong buy, due to forecasts for sluggish PC unit growth in 1999, according to

CNBC

. Microsoft was last up 2 5/8, or nearly 2%, at 161 3/4.

The expected slowdown in PC-unit growth also spurred Brosseau's colleague Richard Chu to cut

Dell

(DELL) - Get Report

to buy from strong buy. It was down 5/8, or 1.4%, at 44 3/4.

Semiconductors in the Spotlight

Credit Suisse First Boston

analyst Charlie Glavin upgraded chipmaker

Conexant Systems

(CNXT) - Get Report

to strong buy and raised his price target to 35 after the company's positive second-quarter preannouncement Monday.

"Conexant announced that it now anticipates break-even in Q2 FY99

March and a return to profitability during Q3 FY99," Glavin wrote in a research note. "This is about a full quarter ahead of previous expectations. We estimate that about half of the upside is coming from personal computing (analog modems), exceeding the company's conservative guidance. Network access, wireless and personal imaging businesses also appear to be ahead of previous expectations." He added that further operating margin improvement should provide additional upside potential.

Glavin raised his fiscal year 1999 earnings-per-share estimate to a loss of 4 cents from a 22-cent loss. He sees fiscal year 2000 earnings per share at 47 cents from 34 cents.

Conexant last traded up 1 15/16, or 9%, at 23 7/8.

Advanced Micro Devices

(AMD) - Get Report

suffered from analyst cuts after

saying that it expected a significant loss in the first quarter and that it would cut 300 jobs over the next two quarters.

Morgan Stanley Dean Witter

analyst Mark Edelstone maintained a neutral rating on the stock but cut his 1999 estimates to a 20-cent loss from a 10-cent gain per share. Morgan Stanley Dean Witter is having its annual semiconductor conference in California this week.

AMD was last down 1 15/16, or just more than 10%, at 17.

Semiconductor-equipment maker

Credence Systems

(CMOS)

was also upgraded to strong buy by CS First Boston analyst Elliott Rogers. Rogers said firming orders from Asia and an attractive valuation spurred his move.

"Despite low margins on older products and higher discretionary spending, a modest profit is now forecast in Q3, as opposed to a loss, driven by a prospective 40% sequential revenue gain, led by initial shipments in CMOS' new mixed-signal tester," he wrote in a research note.

Credence was up 3 1/8, or 18%, at 20 15/16.

Go2Net Gets Started

Portal company

Go2Net

(GNET)

rose 28% to 84 1/4 after

ING Baring Furman Selz

initiated coverage of the stock with a strong buy and a price target of 100.

Go2Net's properties include

Silicon Investor

,

StockSite

and

MetaCrawler

. ING said it sees the company as "an ideal strategic partner" for more traditional media companies with a compounded annual revenue growth of more than 60% through 2005.