Well, color me Lycos!
Some industry pundits say the portal companies are to the Internet as
the television networks are to the airwaves. If that is so, what network is
Lycos most similar too?
We're not the WB by any means. We are one of the leading networks. No
one else can lay claim that they own two of the top ten Web sites. We can
with Lycos and Tripod.
On that same note, as television and the Internet become more closely
related, the networks appear to be eyeing their Internet brethren as ways
into the market. Disney struck a deal with Infoseek and NBC took control of
Snap. Any concern that the television networks are going to take control of
What the networks have proved is they are not successful on the Web.
Look at NBC Interactive. I don't think it is the case here, that because you
have a media asset, you can translate that into a Web audience.
How has being on the East Coast, while your competitors are in the
Silicon Valley, hurt or helped you?
It has been a bit of double-edge sword. Where it has helped us in a
significant way is in employee development and growth. We are the largest
Internet company in the Northeast and if you don't count AOL as an Internet
company, which I don't, then we are the largest in the East. We always have
openings in the company not because of attrition but because of growth
lack of raiding by competitors]. As it relates to deal flow, I'm talking
about partnerships, it takes more work because the preponderance of
companies are in the [Silicon] Valley. So we need to keep a strong
out there. But for the audience, it doesn't matter. Ninety percent of the
people coming to our site don't know where we are located. I read Sports
Illustrated, but I don't know where it is produced.
What are your plans for Tripod, the Web community site you bought
earlier this year?
Tripod is a valuable property. It is a separate brand. We are committed
to keeping it an individual brand but see great opportunity to leverage the
relationship between Lycos and Tripod. Tripod provides a great sense of
participation by users of the Web. It's an overused clich?, but Tripod
fosters a sense of community. It is not a community, but a collection of
communities, the same as the United States is not a community. What might be
a community, however, is a parent group in Oshkosh or kayaking enthusiasts
in San Francisco.
Where is your revenue coming from and what kind of growth do you expect?
Our revenue comes from advertising and commerce. As of April, we have
1,100 brands advertising on Lycos or [who] are commerce partners
through us, like
Barnes and Noble, AT&T, and CDNow. For the commerce partners, we get a
piece of the transaction and we get fees for the real estate on our pages.
By year's end, the fiscal year ending in July, we will be a $52 million to
$53 million company. It is estimated that next year we will be a $100 million
plus company. While all of our competitors have had their share of holds
now and then, 12 investment analysts rate us buy or strong buy.
How do you gather "eyes," the audience for your site?
Word of mouse mostly, through participating sites, and we brand ourself
aggressively. We advertise on every form of media. We do television,
radio, major print publications. We even sponsor a NASCAR driven by Matt
Kenseth. That has been tremendously successful. You can turn on a NASCAR
race and see our logo.
Stock cars aren't the only place to see the Lycos logo. Walking through
the parking lot there were a number of cars painted with the Lycos label.
You won't see many corporations where the people that work there are
ready to paint their cars the corporate colors. We offered to pay for the
decals and the paint if people wanted to do it. We had 33 people take us up
on the deal. You can't beat brand recognition. It's like the Nike swoosh.
Your brand is your marquee value.
What are you doing internationally?
We have a 50-50 deal with Bertelsmann, one of the largest media
companies in Europe. Lycos is now in 11 European countries with local
language and local vendors. In Japan, we have a joint venture with Sumitomo
Corporation, one of the largest media companies in Japan, and IIJ, Japan's
largest Internet service provider. In Korea, we have a deal with LG
Electronics, the second largest company in the country.
What markets are still untapped?
Internationally, the market lags North America by a year to three years
in terms of usage. We still see much of the United States as untapped. We
looking at a fraction of the people accessing the Internet and most are
doing it from work, not home. The concept of portable Internet, with
personal communication devices and so on, is untapped and a great opportunity.
The majority of growth is still ahead of the market. We are no longer in
the embryonic, stage but we are still a young child as it relates to
maturity of the market.
Last question, where did the name Lycos come from?
It was invented by the scientist who came up with the technology for our
product. It was originally lycosidae, or wolf spider, which hunts at night.
In the early days of the Web, indexing took place after hours because of
Net congestion and network backbone lags.