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.