Earlier this month, Lycos Asia was given access to operate as an Internet content provider in China, indicating that government may be loosening restrictions on such foreign content providers. Though this was a victory for Lycos and companies like it, there's still a long way to go. Part of the reason is that three analysts downgraded Lycos after the announcement, citing the high premium paid and the risk in Terra shares. Terra just went public in November and has significantly lower trailing 12-month revenue than Lycos.
Many investors are wary of owning foreign stocks, especially untested ones.
Lycos has howled in the past about how the market isn't valuing it properly. Perhaps most importantly, now that Lycos has accepted an offer from a company that many investors don't think of as a top-tier ISP, it has called its own value into question. As the first international portal buyout, this deal will be a test case for Web cultural-integration issues. It seems that this is going to be a really good testing ground for the new probable trend of international companies acquiring US-based net companies. Well the markets aren't treating LCOS too well in the wake of the announcement, so I have a feeling the consensus is there's something wrong with the deal.