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Excite & Magellan Merge

Excite and Magellan Internet directories announced a merger, possibly beginning a shakeout in the search engine market.

"The window of opportunity in the public market may have closed after Infoseek," which went public two weeks ago, said analyst Keith Benjamin of investment house Robertson, Stephens & Company. "Everybody's acknowledging that it's going to be a tough race, and consolidation in this industry seems inevitable."

Benjamin has assigned a "buy" rating to Excite stock, which closed today at 8-3/8, up 1/8 of a point. Competitor Yahoo was also up, by 2-3/4 points at 21, while Lycos was up half of a point to close at 11-1/8. The deal is valued at roughly $18 million, a figure based on the average trading price of Excite for the last 30 days. Excite raised more than $39 million in an initial public offering in April.

Prior to the merger the two companies were headed in opposite directions. The merger creates the second-largest Internet search engine.