Lycos CEO Bob Davis has admitted that he was surprised by shareholders' dramatically negative response to the announcement of the proposed Lycos-USA Networks-Ticketmaster merger.
"I did not expect that the (announced) transaction would drive the stock down," Davis said in a heavily attended press conference. "I expected that it would drive the stock up."
Davis said the company had to take its lumps for failing to fully educate investors about the complex deal's details. "We didn't do a good enough job explaining (the deal), or we wouldn't be back here today," Davis said bluntly. "If there was confusion on any level, shame on us." The company evidently has some further explaining to do; Lycos stock closed down 5 3/8 on Friday.
In a multimedia presentation, Davis bombarded reporters with figures about the merged USA-Lycos company, calling it "a next-generation Internet company," and repeatedly asking: "Who is in a better position to become the dominant e-commerce company? There may be one company out there, but I don't know who it is."
Davis brushed off the two class-action suits filed on behalf of Lycos shareholders as "without foundation," and said he was "highly confident" that Lycos shareholders would approve the deal. He declined to answer questions about the continued resistance of Lycos shareholder CMGI to the deal as structured. Asked about rumors that CMGI had commissioned a major investment bank to study the implications of the merger, Davis said, "I don't know," and referred questions back to CMGI.
CMGI did not respond to a request for comment.
Davis touted the customer service capabilities of USA's Home Shopping Network, claiming that the company can handle more than 1 million phone calls a day and that it already ships out 77,000 packages every day. He also said that the average new buyer on HSN has an annual income of $US61,000, which Davis said is "very contrarian to the perception that many have." He said the company has high hopes for HSN's ability to drive viewers to Lycos's Web properties, but did not disclose any specific predictions for traffic growth.
In coming months, Davis said, the company would be putting forth a "steady stream" of niche e-commerce sites, like the online jewelry outlet announced this week. Asked what kind of goods these e-commerce sites would sell, Davis said: "Things you can put in boxes and put in warehouses."