The new company will be called USA/Lycos Interactive Networks and will form the centrepiece of a huge new media and e-commerce group.

WWF professional wrestling is part of the USA Network empire

USA Networks will be the majority shareholder and combine Lycos with its Home Shopping television network, while merging with phone ticket retailer Ticketmaster at the same time. The market capitalisation of the three firms was around $20bn based on Monday closing prices.

Shareholders in USA Networks will control just over 60% of the new company, 30% will go to Lycos and the rest to owners of Ticketmaster shares.

Lycos says it is the second most visited hub on the Internet, with more than 21m unique visitors in the United States alone, owning a raft of web sites like Tripod.com, Angelfire.com, Whowhere.com and Hotbot.com and publishing Internet sites like Suck, Wired news and Hotwired.

The new media and electronic commerce venture will have a combined revenue of $1.5bn and television veteran Barry Diller will be the man in charge.