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A L S O_ T O D A Y 21st Log Disney to buy Apple and Pixar -- rumor at 11   T A B L E__T A L K What's wrong with cyberspace? Take a moment to vent in the Digital Culture area of Table Talk   Search for technology books, software and more at barnesandnoble.com Search by:  Keyword Title Author     ____________________ Technology news from "Use the source," Microsoft is told ____________________   R E C E N T L Y The tomorrow tribe By Etelka Lehoczky Virginia Postrel's "dynamism" manifesto reaches out to geeks (02/16/99) Confessions of an online sex columnist By Patrizia DiLucchio Sure, talking about sex is fun. So is telling people what to do (02/12/99) The 21st Challenge No. 18 Results By Charlie Varon and Jim Rosenau Microsoft antitrust haiku (02/12/99) The scandal domain name game By Patrick J. Shields Viewed through the lens of domain registrations, Monicagate looks tawdry in a whole new way (02/11/99) To catch a thief By Wagner James Au In this new 3-D game, the emphasis is on stealth instead of shooting (02/10/99) - - - - - - - - - - BROWSE THE 21ST FEATURES ARCHIVES - - - - - - - - - -

LYCOS' TAKEOVER OF WIRED'S WEB SITES SPARKS A BITTER SHAREHOLDER BATTLE THAT COULD KILL THE DEAL. Editor's note: This story is a joint project between Salon 21st and TheStreet.com, where it will also appear. BY KEVIN KELLEHER A long-simmering dispute among Wired Ventures shareholders is close to boiling over into the courts and could imperil the company's acquisition by Lycos, sources close to the company say. In October, Wired, which had sold its flagship print magazine to Condé Nast last May, agreed to sell its remaining properties -- Web sites including the Hotbot search engine, HotWired and Wired News -- to Lycos, a "portal" site that has spent the past year buying up Web companies like Tripod, Angelfire and WhoWhere. Now the different classes of Wired shareholders are hunkering down for a bitter battle, and many close to the company fear that the discord will drive away its proposed acquirer. Lycos, after all, has bigger problems to preoccupy it, such as salvaging a separate and bigger merger with USA Networks that its own shareholders are threatening to nix. Wired's properties aren't central to the new e-commerce strategy that Lycos hopes to pursue with USA. Now the fear inside Wired is that Lycos could come to see Wired Ventures and its internecine troubles as more of a liability than an asset and end the merger. "Even the people fighting this don't want to see the merger itself fall through," said one Wired shareholder who asked not to be named. "The last thing Lycos wants right now is a messy fight within its ranks." Wired has suffered a high-profile array of misfires and misfortunes since it first filed for an initial public stock offering in May 1996. The latest battle suggests the company is still afflicted with the top-level disputes and machinations that have dogged it for years. At the heart of the present conflict is a disagreement over the allocation of Lycos shares to different classes of preferred shareholders. The A-class shareholders, largely investors who came in before 1996 and founding employees, maintain that the B-class and C-class shareholders -- who invested in May 1996 and January 1997, respectively -- have wrongly appropriated much of the Lycos stock that Lycos plans to use to pay for the acquisition. The A-class shareholders say that as much as $100 million worth of Lycos stock has been taken from them. They blame the C-class shareholders -- a group comprising East Coast firms Providence Equity Partners and Tudor Investment Corp. Providence's funds, specializing in telecom and media investments, manage money from such giants as CalPERS and GE Capital. Tudor manages $1.8 billion in global investments; its founder, Paul Tudor Jones, is as famous for his trading prowess as for controversial moves that have drawn several hefty fines. Together, Providence and Tudor control six of the 11 seats on Wired's board of directors, having wrested control of the company from founders Louis Rossetto and Jane Metcalfe a year ago. Beneath the dispute, however, lie tensions and animosities that seem as inseparable from the company as its faded brand name. The struggle between Silicon Valley idealists and East Coast pragmatists to control Wired is the central tale of the company's history since its failed IPO attempts in 1996. The Securities & Exchange Commission filings that Lycos submitted as part of its proposed merger tell part of the tale. Between them and interviews with several people close to the proposed merger, all of whom declined to speak on the record, a story emerges of how a company that started out as one of the more promising bastions of the digital revolution lost control to old-fashioned "vulture capitalism." N E X T_ P A G E .|. As Wired journeys from a failed IPO to a breakup of the company, its founders lose control - - - - - - - - - - - - - - - - - Become a Salon member. Click here.