Lycos to Change Hands?

  |  July 29, 2004   |  Comments

Spanish ISP Terra Lycos reportedly is set to sell its U.S.-based Lycos portal business for $100 million to Korean ISP Daum Communication Corp.

According to reports published in Korean newspaper The Chosun Ilbo and Spanish newspaper Expansion, Spanish Internet service provider (ISP) Terra Lycos is set to sell its U.S.-based Lycos portal business for $100 million to Korean ISP Daum Communication Corp.

If this turns out to be true, it will be a stark contrast to the $12.5 billion purchase price Lycos fetched just four years ago. Terra bought the American portal Lycos in May 2000. Terra Lycos was in turn bought out by Spanish telecom Telefonica, which paid $2 billion cash in May 2003 for the 62 percent of Terra Lycos it did not already own, believing the Internet unit would perform better in-house than as an independent company.

While details have not been announced, documents reportedly filed with Spain's securities and exchange commission, the Comision Nacional de Mercado de Valores (CNMV), indicate that Terra will keep key parts of its Internet business, including Terra Networks USA, its Spanish-speaking portal in the United States, as well as a minority stake in Lycos Europe.

Lycos has had a tough time competing in a crowded search market. In two dramatic announcements made in February 2004, Lycos U.S. planned to shed its portal strategy to become a vast social network, and inked a 5-year deal with 24/7 Real Media to outsource display ad sales, ad serving and analytics for its Internet properties.

The questionable plan revolved around the company's hopes to convert users into paid subscribers of premium content and services, or of building cores of audiences around various niche sites to attract advertisers. Lycos recorded revenues of $98 million and net losses of $24 million last year.

The acquisition would add another twist to the relationship between Lycos and paid search firm Overture Services . Lycos ended a two-year agreement to carry Overture's paid listings in November 2003 after Overture was acquired by Yahoo in July 2003. Terra Lycos filed a lawsuit saying that Overture breached the terms of its services agreement because it didn't obtain Lycos' consent before being acquired by Yahoo -- which Lycos sees a competitor. The company immediately began supplanting Overture listings with those from rival Google.

While Daum uses Google for algorithmic search services, it has a three-year exclusive paid-listings deal with Overture which began in January 2003.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Call Center Manager
      Call Center Manager (Common Sense Publishing) - Delray BeachWanted: Dynamic Call Center Manager with a Proven Track Record of Improving Response...
    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...