Xoom.com and Lycos Flourish Upon Merger News

While perhaps not good in the long term, Lycos' kaput merger with USA Networks pumped up the stock today.
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SAN FRANCISCO -- After today's announcement that NBC had agreed to merge with Xoom.com (XMCM) and news that USA Networks (USAI) - Get Report will drop its planned merger with Lycos (LCOS) , principals in both deals are flourishing.

Xoom.com was up 7 5/16, or 10%, to 82 7/16. And

CNet

(CNET) - Get Report

, whose

Snap.com

division will be incorporated in the merger of NBC Internet properties, was up 12 9/16, or 11%, at 126 5/16. Lycos, which has floundered since the merger announcement was made in February, was up 9 9/16, or 11%, at 99 1/16. And

CMGI

(CMGI)

, which has a significant stake in Lycos, was up 8 15/16, or 4%, at 230 3/16.

For Lycos, however, the debate continues over what its future holds.

PaineWebber

analysts are maintaining a neutral rating on the stock but raising their price target to 115 from 90.

Analysts write that the stock could bounce back to 137 per share, which was the price immediately prior to the merger. What "should happen," they say, is that the stock trades up to the 115 level, which was PaineWebber's price target before the announcement of the merger. Analysts argue that the company still needs a partner for long-term success and if one does not materialize, then Lycos could be viewed as "distressed property." PaineWebber has done underwriting for Lycos.

Also weighing in on the deal was

Merrill Lynch

analyst

Henry Blodget

, who said he does not believe Lycos will receive another offer and that lack of a partner could pressure the stock.

Other Internet stocks were firm as well, helped out by a recovery in

America Online

(AOL)

. It was up 8 3/8, or 7%, at 126 9/16.The stock has been battered since it was left out in the sweepstakes for

MediaOne

(UMG)

, won by

AT&T

(T) - Get Report

. AOL did say today that it had entered into agreements with four banks to offer online banking on AOL.

On the downside, shares of

RealNetworks

(RNWK) - Get Report

are weaker ahead of the company's 2-for-1 split after the close of trading today. It was down 5, or 2.6%, at 187 1/2.

A month ago, when most Internet stocks split, they ran up both before and after the split. But with the sector having lost some steam over the past month, companies whose stock has split have been greeted with less enthusiasm. Shares of

AboveNet Communications

(ABOV)

dropped on Friday ahead of the company's 2-for-1 split.

Next Internet Takeover Target?

Lycos

theglobe.com

RealNetworks

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