Terra boss 'to quit'

February 1, 2001
Web posted at: 1241 GMT

LONDON (CNN) - Shares of Spanish Internet company Terra Lycos sank on Thursday amid talk that its chief executive Robert Davis is to resign later in the day.

Davis is to quit amid disputes over his control at the company created by the October merger of Web portal Lycos and Spanish Internet services provider Terra Networks, reports said.

An industry source told CNN.com that the company would make an announcement "along those lines" later on Thursday when it releases its financial results after the Madrid market close.

Terra Lycos shares were down 6.9 percent at 17.17 in midday trade in Madrid.

Davis has been seeking total control of Terra Lycos and, despite eleventh hour negotiations last night, is likely to step down, the Wall Street Journal reported.

Top executives of Telefonica, the Spanish telephone company that controls the Terra Lycos board of directors, have been unwilling to grant Davis the power he has demanded, the report said without naming sources.

A spokesman for Terra Lycos declined to comment on the reports.

Joaquim Agut, the Spanish chairman of Terra Lycos, is expected to be named chief executive, the Financial Times reported.

Davis, who was the Lycos search engine's first employee, had been sharing responsibility for the organisation with Agut.

"He has huge expertise in terms of portal operations and is respected internationally. It will be a huge loss for the company," said one analyst, who asked not to be named.

The question his departure would raise is whether Chief Financial Officer Edward Philip, who also came from Lycos, would also leave the company.

If Davis leaves, Telefonica might seek to merge Terra Lycos with its Telefonica Publicidad e Informacion, or TPI, directory, a move Davis opposed, the analyst said.

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