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Thursday, February 02, 2006

Lycos Not Dead Yet

When the Internet economy was booming, Lycos was a solid #4 in the portal race behind Yahoo, MSN, and Excite, and for a time its stock rode the bubble. (This was before Google, and AOL was still a walled garden). That was then, and the now is that Lycos is limping along, never mentioned in the same breath as the big boys.

Lycos is in the news these days because today it sold off subsidiary finance site for $30 million, six plus years after acquiring it for $78 million. Not exactly the ROI that makes investors happy. Lycos says didn't match its current focus, which is on "digital content creation, as a destination for people to create, store and market content." Lycos also signed a deal this week to switch to myGeeks ad network.

Lycos owns blog site, web hosting site, and social networking site Lycos Planet, so I can see where stock quotes don't fit. The company will also expand its games, music and entertainment sites.

Lycos itself has been acquired twice, by Terra Networks in 2000 (for a cool $12.5 billion), but then sold four years later to Korean company Daum Communications for less than one percent of that ($95 million).

So is Lycos looking to be acquired by someone looking to cash in on the youth market that is currently being aggressively pursued by MySpace, Facebook and others? Or is it looking to sell off more properties (such as Wired News, where I used to hang my hat and still contribute the occasional article?)

The recent acquisition of MySpace, interest in Gawker, and loosening of VC purse strings indicates that investors are starting to support web properties, suggesting another run-up may be in the wings. But before getting all happy about the possibilities of Flickr, and others, learn the lessons of Lycos well.

By John Gartner at 08:00 PM | Comments (0)

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