ELECTRONIC COMMERCE: ON-LINE COMMERCE DRIVING RESTRUCTURING ON THE INTERNET.

The battle for domination of the Internet, of which electronic commerce is an integral part, is well and truly joined, and the announcement on February 9 of the merger of the browser and on-line service Lycos with the Internet activities of the television network USA Networks, is just the latest chapter in what promises to be a long-running saga. The deal will involve the merger of Lycos with USA Networks' TicketMaster Online-City Search, the world leader in the sale of tickets for sports and entertainment events.

The new company, USA/Lycos Interactive Networks, will become a major player in trade on the Internet, combining the strengths of Lycos, the fourth browser and on-line service, just behind Yahoo, with the 70 million households making purchases on USA Networks' television channels. The new joint venture will be chaired by USA Networks Chairman, Barry Diller, a pioneer of tele-shopping with the Home Shopping Network created in 1977. The value of the deal has not been revealed, but at a press conference both partners estimated the market value of Lycos at 33 times the turnover of the new company for 1999, put at USD1.5 billion (about Euro 1.3 billion).

From its creation, the company should be able to attract 30 million of the current users of its Internet sites, about 50% of the total Web audience. The two partners will undertake a crossed promotion of their services on their respective networks, a distinct advantage in a new world where the difference between the various medias is becoming increasingly blurred. Through TicketMaster, Lycos will gain access to lucrative information on local communities. The market was recently abuzz with rumours of negotiations between Lycos and potential partners including NBC, Time Warner and Germany's Bertelsmann, the world's...