Lycos to Take Large Stake in World's Biggest Search Engine?

Computergram International, Nov 3, 1999 by Kevin Murphy

Web portal firm Lycos Inc looks set to take what it calls a "significant equity stake" in Fast Search & Transfer ASA, the Norwegian company that claims to run the biggest internet search engine in the world, in a deal involving the two companies and Dell Computer Corp. On Monday Lycos entered into a technology partnership with Fast, and Dell recently said it will invest $33m in the Oslo-based firm, subject to the two parties coming to an agreement under which Dell will bundle Fast's software in its corporate boxes, and use its search engine in Dell web sites.

Lycos Monday said it would use Fast's media-specific search technology to create "the web's largest integrated multimedia search." The two firms have a pre-existing relationship under which Lycos provides a search engine for MP3 music files using Fast software.

The suspicion that Lycos is nearing making the relationship more substantial comes from a memorandum of understanding signed by Fast and an as-yet-unnamed internet company in September. The two companies apparently began negotiations to integrate Fast's search technology into the internet company's products in return for a sizable equity investment. As a result of that the Dell deal had its original 45-day deadline for completion extended indefinitely, so the firms could bash out a three-way deal.

Since that time, the Norwegian firm has made two further announcements about partnerships with internet companies - for the development of censorware with PAX Internet Inc, and to provide search technology to Nasdaq-listed Australian portal LookSmart Ltd. On both occasions Fast released statements that were cut-and-paste copies of each other, saying: "Fast Search & Transfer ASA would like to make clear that [insert company name] is NOT the 'Internet Company' referred to in FAST's press release dated September 16, 1999."

A similar statement was issued following the Lycos deal Monday, but the company name was replaced with "this transaction" and "internet company" had been replaced with "the transaction". Fast said: "final agreements for that [the "internet company"] transaction and with Dell Computer Corp to be completed within a short period of time." Thomas Fussell, chairman of Fast, told ComputerWire he could make no comment on the identity of the third party in the deal. Spokespeople for Lycos were unavailable for comment at press time. An announcement is expected within the month.