Terra Lycos chairman Juan Villalonga at a news conference announcing that  Terra Networks SA will buy U.S. Internet portal Lycos Inc. for $12.5 billion in stock. // Terra Networks/Lycos (Suzanne Plunkett/AP Photo)

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Terra Lycos chairman Juan Villalonga at a news conference announcing that Terra Networks SA will buy U.S. Internet portal Lycos Inc. for $12.5 billion in stock.

Merger date: 2000
Cost: $12.5 billion

Any connoisseur of the Internet will remember Lycos, the search engine that used to be a power player in the years surrounding Y2K. Used to be. Therein lied the problem for Spanish telecom giant Terra Networks, which took an expensive gamble by merging the website into its corporate family. At the time of the deal, Lycos was said to be the third-most visited site in the U.S., and Terra had ambitions of growing the portal further into a formidable rival to online powers AOL, Yahoo! and - ahem - MSN. Of course, the dot-com bubble burst and Lycos has faded into a footnote in Internet history. The hallmark trait of this merger's failure lies in the initial deal itself. When the acquisition was first announced in 2000, it was for a reported $12.5 billion. Yet with both companies' stock falling that year, the value of the deal quickly fell to just $4.6 billion by the time it closed months later, a decrease of more than 50%.

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