LYCOS Europe takes over Tiscali Sweden

Lycos Press Release 30/08/04

LYCOS Europe takes over Tiscali Sweden and strengthens position as one of the leading Internet access providers in the Swedish market

• LYCOS Europe subsidiary Spray increases ADSL customer base by 75 per cent and improves its market position to number three
• Narrowband customer base is more than doubled to become the fourth largest player
• Additional revenues of EUR 20 Million in 2005 expected / EUR 2 Million positive result contribution
• Pay back of EUR 13 Million investment expected within five years

LYCOS Europe N.V, one of Europe´s leading Internet portals, today announces the acquisition of Tiscali Sweden by its Swedish subsidiary Spray. By the acquisition of Tiscali Sweden, Spray speeds up its profitable access business by gaining 75 per cent more broadband customers and 110 per cent more narrowband customers. Spray will become the third largest ADSL provider (totalling 46,000 customers) and the fourth largest narrowband provider (totalling 200,000 customers) by acquiring Tiscali Sweden.

LYCOS/Spray started its ADSL access business in 2002 and expects to increase its access revenues by a minimum of EUR 20 Million in 2005, parallely contributing at least EUR 2 Million for the LYCOS Europe results due to the acquisition alone.

The investment also include Tiscali Sweden´s Internet and email-provider home.se, one of the most popular Swedish email services with 130,000 active email accounts. The pay back of the investment of EUR 13 Million is expected within five years. The transaction is subject to approval of the Swedish Competition Authority.

"Taking into consideration the ongoing consolidation process in the Swedish access market we are making a big step forward in Spray´s positioning as one of the strongest players in this market", states Christoph Mohn, CEO of LYCOS Europe N.V. "Our access business in Sweden is profitable and will provide even higher results due to synergy effects on costs and also revenues because of additional sales of our prospering paid-for-products such as email, chat, dating, webhosting and telephony."

LYCOS Europe runs access in Sweden and Germany. Spray was founded in 1995 as one of the first Swedish portals and was taken over by LYCOS Europe in 2000.

"It is good to know that what we have built in Sweden during the last years now will be managed by Spray, who not only has an excellent reputation for high-quality Internet access but also offers a portal that will increase the value offered to our customers as Spray customers", says Thomas Eriksson, CEO at Tiscali in Sweden.

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