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Lycos to start online service

The search site is teaming with an undisclosed ISP to create a Web-based online service, the firm's chief executive says.

SAN FRANCISCO--Search site Lycos is teaming up with an Internet service provider to offer Lycos Online, a Web-based online service, the firm's chief executive said today.

The new service will be provided to the ISP's customers when they sign up, according to Robert Davis, president and chief executive of Lycos, who spoke at the Hambrecht & Quist Technology Conference here today. A formal announcement about the online service is expected in the next few weeks.

Lycos's stock jumped nearly 19 percent today to close at 58.375.

Although Davis declined to name the ISP partner, some have speculated that it will be AT&T WorldNet. An AT&T spokesman declined to comment.

The creation of Lycos Online could be a major competitive boost for Lycos, which has emerged as an aggressive player in the race to become a gateway to the Net by winning the coveted spot of start page for as many surfers as possible. Last month, search giant Yahoo joined forces with MCI Communications to offer Yahoo-branded Net access to MCI customers.

"You heard about Yahoo online powered by MCI, I'd like to suggest that I'll be telling you shortly about an agreement that will make that look like child's play," Davis said. "We have what we think is an extremely powerful alliance."

The chief executive added that the partner will provide the "marketing push" for the project.

Davis said that within a few weeks, Lycos also will announce its "first real threat to Yahoo" by unveiling an automated search directory. Whereas Yahoo has employees who surf for new sites, Lycos will use technology to gather information about new sites automatically, he said.

On the financial front, Davis noted that as Lycos brings its third quarter to a close, it has never missed analysts' estimates--even the most optimistic ones. "We feel good about the quarter that we're wrapping up now," he said.

Davis also said Lycos plans to go after the largest violators of its patents in the next two months. The company was awarded a "notice of allowance" by the U.S. Patent and Trademark Office in September 1997. It applied to the firm's indexing technology, known as a "spider," which "crawls" the Web to collect information that is used to build searchable databases.

Competitors such as Excite said at the time that their technology "predated" the Lycos spiders and would not be affected by the patent.

Davis declined to comment on which companies Lycos plans to target. "In the next 40 to 60 days, you'll be hearing more about the patent allowances for the Web spider," Davis said.