While the terms of the deal were not disclosed, this will likely boost Lycos's traffic and broaden its revenue streams, according to Sarah Garnsey, Lycos director of marketing communications.
This is "a for-profit venture," she said, which could change the way people see Lycos. "We want people to perceive us as the best location on the Internet, and this deal is a big vote of confidence from Microsoft."
Lycos will produce and host the Active Channel Guide, designed to guide Internet Explorer 4.0 users to channels that meet their topics of interest. Internet Explorer 4.0 is expected to ship September 30.
"This is an art as well as a science, and Lycos has experience building this kind of thing," said Paul Osborne, Microsoft's director of business development, noting that Microsoft had bids from other search contenders.
The Active Channel Guide will display the Lycos logo and is expected to expose a multitude of IE 4.0 users worldwide to the Lycos search service. In addition, Lycos will handle all requests for search information within the channel guide as well as for the rest of the Web, Osborne added.
Lycos's stock closed at 32-5/8, up 1-5/8 today.
Brand recognition has been called a key in the competitive search engine market, and this is part of Lycos's bigger strategy to branch out through joint ventures and partnerships away from just an advertising-based revenue model.
Other recent initiatives have included a deal with BarnesandNoble.com and a joint venture with Bertelsmann, in which the two companies offer directory services in 37 European countries in local language versions.