Lycos Restructures Ad Deal With 24/7

24/7 Real Media and Lycos amended their multi-year ad representation and technology agreement following Lycos’ October acquisition by Korean Internet portal Daum Communications.

“There was a lot of uncertainty about whether the new owners would continue with the relationship. It’s been reaffirmed and enhanced,” said Dave Moore, chairman and CEO of 24/7 Real Media.

Terms of the deal were not disclosed, but Lycos CFO Kew Kelly said that the deal had been restructured financially and the end date for some parts of the agreement had been moved up. “The deal wasn’t working from a financial perspective on both sides, so we made some modifications,” Kelly said.

Lycos inked a 5-year deal to outsource all of its ad sales, ad serving and analytics for its U.S. properties to 24/7 Real Media in February. The new deal eliminates 24/7 Real Media’s annual revenue guarantee to Lycos in favor of a minimum revenue commitment based on Lycos’ actual impression delivery. This was necessary due to a drop in traffic to Lycos’ sites during 2004, Moore said.

The “right-sized” revenue commitments go into effect immediately for 2004 and 2005, and have been eliminated altogether for 2006 and beyond, Moore said.

The technology services portion of the agreement remains untouched, remaining in effect through 2009. The end date was changed on the ad sales portion, to allow Lycos to opt out of the deal at the end of 2006, or continue to the end of the agreement in 2008.

Because Lycos wanted to offer more focused ads on its and site, the contract was changed to allow Lycos to begin a staged transition into selling its own inventory on in the second half of 2005, and on in 2006, he said.

Kelly said these sites are more specialized, and thus able to garner double-digit CPMs for their ad inventory. 24/7 Real Media sells the Lycos properties as part of its network.

Under the new multi-year deal, 24/7 Real Media will provide its media sales, ad serving and analytics technology and services for Lycos’ U.S. Web properties. Lycos will also continue to use 24/7 Real Media’s Open AdSystem technology exclusively to serve all advertising, and to enable behavioral targeting, on all Lycos U.S. Web sites. Korean sites of parent company Daum are not part of this agreement, Kelly said.

Lycos properties include Lycos, Hotbot, Wired, Tripod, Angelfire and sites, as well as Lycos Mail, Gamesville and GetRelevant.

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