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Lycos, AT&T in online deal

The search site announces a three-year agreement with AT&T to develop and offer Internet-based consumer communications services.

Lycos continues to make deals intended to spawn its growth into a full-blown Web portal service.

The search site today announced a three-year agreement with AT&T WorldNet to develop and offer Internet-based consumer communications services, the companies said. No financial terms were disclosed.

The deal with AT&T has been rumored for some time. As previously reported, last week Lycos president and chief executive Robert Davis, speaking at the Hambrecht & Quist Technology Conference, said the company planned to enter the "portal" market with an unnamed partner.

Many sites are aiming to be Netizens' gateway to the Net, or "portal," such as Yahoo, Excite, America Online, and Netscape Communications, among others. They frequently add features such as free email, paging services, stock quotes, and home pages to attract users and the ad dollars that come with them.

When he announced the Web-based online service last week, Davis said it was part of an ongoing effort by Lycos to compete with Yahoo. In March, Yahoo joined forces with MCI Communications to offer Yahoo-branded Net access to MCI customers. Davis said Lycos also is gearing up to launch an automated search directory to compete with Yahoo's search service.

As part of the agreement announced today, the companies plan to build a Web portal service called "Lycos Online powered by AT&T WorldNet Service." Also planned are new multimedia Internet applications for Lycos users. The new applications will combine Web-based technology with traditional communications services. Multimedia applications planned include voice-enabled chat and point-and-click directories, the companies said.

Lycos and AT&T recently partnered on a promotion in which movie-goers were given CD-ROMs in theaters showing Lost in Space. The CD-ROMs contained a Lycos-branded Internet Explorer 4.0 browser, access via WorldNet with 30 days free, a personal home page builder, and clips and photos from the movie.

Today's agreement comes on the heels of Lycos's announcement last week that it acquired directory systems provider WiseWire in a stock deal worth $39.75 million.

A few weeks earlier, Lycos also announced it had made six deals worth $30 million, all of which are part of the company's aggressive game plan in the race to become a gateway to the Web by winning the coveted spot of start page for as many surfers as possible.

"We are pleased to be aligned with one of the world's leading communications companies, and look forward to working with AT&T to expand the reach of our customers new services," Davis said in a statement. "We will provide new Web users with a full featured, low-cost portal into the World Wide Web with Lycos."

Another feature of today's agreement includes making the Lycos Personal Communications Center a cobranded gateway to AT&T's telecommunications services that can be ordered and billed electronically.