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Lycos restructures, cuts U.S. staff

The Web portal lays off about 90 employees and says it's streamlining its business to focus on subscription services such as Matchmaker.

Web portal Lycos laid off about 20 percent of its U.S. staff Wednesday, as it restructured its business.

As previously reported, the company began advertising space for lease at its Mountain View, Calif., office last week, a sign of imminent cutbacks.

Lycos, a division of Spanish Internet conglomerate Terra Lycos, will streamline its business to focus on subscription services, such as its personals site Matchmaker. The company, based in Waltham, Mass., will outsource U.S. advertising sales to 24/7 Real Media, it said.

"Lycos will transition from a generic portal business to a tight network of interconnected vertical sites focused on personal connections," according to the company.

As a result, Lycos laid off about 90 people in the United States, according to a company representative. Sources inside the company said many members of its U.S. ad sales team were laid off Monday, along with the engineering and Webmonkey staff in San Francisco; employees of financial services site Quote.com and others in the Mountain View offices; and most of the staff in the New York office. Employees at Wired News were not affected by the layoffs.

A company representative said it will close its Mountain View offices. Some employees, such as those with Quote.com, were given relocation offers.

The company plans to relaunch its home page, emphasizing its "connections" services, including personals, Web logging and Lycos' search tools. It also plans to introduce new online social-networking services.

The corporate changes come about a year after Lycos trimmed 147 people from its U.S. operations. The company cut another 90 positions in 2003, leaving it with about 417 employees.

Lycos has been further tightening its belt lately. This month, it closed its collection of community sites, including chat, message boards and clubs, in an effort to refocus its business. The company owns search technology HotBot, home page builder Angelfire and Tripod, its blogging site.

Traffic to Lycos' Web network has dropped in the past year. From October 2002 to December 2003, the number of visitors to the network dipped from about 35 million to 32 million, according to market researcher Nielsen/NetRatings.

Along with other companies, Lycos has been hit by a decline in online advertising spending since the dot-com bust. Among other things, German media giant Bertelsmann renegotiated $675 million in advertising with Barcelona-based Terra Lycos, which subsequently reorganized. And in late 2002, Terra Lycos' former head of U.S. operations, Stephen Killeen, left the company.