NEW YORK (CNNfn) - Internet media company Lycos Inc. Tuesday agreed to acquire WhoWhere? Inc., an upstart online services firm, for $133 million.
According to Lycos, the all-stock transaction fits in well with the company's long-term strategy to broaden its audience reach and strengthen its position in the competitive Internet services race.
But Wall Street doesn't necessarily agree.
Shares of Lycos (LCOS) were trading down 3-7/16, or more than 5 percent, at 64-1/2 on the Nasdaq.
"This [acquisition] gives us yet another top 10 Web site," said Lycos President and Chief Executive Bob Davis. "In our business, audience is everything and there just are not that many opportunities left out there for organizations to grow rapidly. We overnight changed the landscape in the portal space."
Lycos, based in Waltham, Mass., is the world's fourth most popular Web site, behind America Online, Yahoo and Microsoft.
The company owns the two fastest-growing domains, Tripod and Angelfire, of the top 10 Web sites and touts itself as a provider of the largest and fastest-growing online community.
Through its acquisitions of Tripod and WhoWhere? Inc. this year, the company claims its network is the most full-featured community-oriented online service on the Internet.
The Lycos network includes lycos.com, tripod.com, angelfire.com, whowhere.com and mailcity.com.
WhoWhere? offers a range of Web-based communications applications, including directory services, MailCity e-mail and angelfire.com, a Web community with more than 1.3 million members.
WhoWhere? will continue to operate from its Mountain View, Calif., headquarters as a business unit of Lycos.