Terra Lycos has a dog of a day

The portal's shares dropped 9.6 per cent to E16.70 (£10.59) on the Madrid Bolsa during a cliff-hanging two days as the internet portal negotiated to keep Davis on board.

He will stay, but only as vice chairman of the board. Ted Philip, the company's highly regarded CFO, will leave his job and become senior vice president of strategic planning.

Internet veteran Davis founded Lycos in June 1995 and transformed it from a university project to one of the world's major portals. Last October the company was taken over in a multi-billion deal by Terra, Spanish Telefonica's internet arm.
At the time of the takeover, Juan Villalonga, chairman of Telefonica, promised Davis a free hand as CEO. But Villalonga proved too flamboyant for Spain's conservative financial class and was abruptly ejected after the deal was completed. With Villalonga went Davis' free hand.

Last night, Davis reportedly said: "As this large ship barrels through the ocean, you can't steer it effectively with two hands on the tiller. We have been very successful because of our ability to be nimble and decisive. A dual executive role is not conducive to that. I am an entrepreneur and it is best that I move on."

Terra Lycos' partial year-end results showed revenues of $526m. The loss of $348m excludes the costs of the merger. Comparisons with previous years are hampered by the difference in Spanish and US accounting standards.

The company said results were better than predicted and it expected to meet its first quarter targets. Revenues in the fast-growing Latin American market have trebled to $42m from last year.

Joaquim Agut, chairman of Terra Lycos, will run the company from its new Barcelona headquarters.