"This alliance represents an early validation of the value that the Lycos Network provides to our business partners," Lycos' president and CEO Bob Davis said in a statement.
Bluefly's stock soared on the news, climbing 3.44 points, or 43.65 percent, to close on an all-time high.
The 14-month deal calls for the New York fashion district-based discount retailer to deliver up its discount apparel sales, fashion tips, and trends to the Lycos Network. The service claims to offer users discounts of up to 75 percent in offering such name brands as Calvin Klein, Ralph Lauren, and Tommy Hilfiger.
In addition to becoming an anchor tenant, Bluefly signed on for Lycos promotions that include banner ads and search results.
Separately, Lycos reported that revenues jumped to $24.8 million, a 166 percent increase from the same period last year and a 30 percent increase from the previous quarter, on earnings that were 1 penny per share higher than analyst estimates.
Financial terms of the deal were not disclosed.