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Lycos: Tripod traffic equals ads

Lycos plans to leverage the traffic generated by Tripod, which it recently acquired, to bolster targeted ad sales.

SAN FRANCISCO--Lycos (LCOS) plans to leverage the traffic from Tripod, which it recently acquired, to bolster targeted ad sales, a company executive said today.

The acquisition, announced earlier this month, provides a new forum in which Lycos can spread its brand and attract new users. Tripod?s community is broken down into categories, making it easy to sell targeted advertising, which costs more than regular banner ads, Ted Philip, the company?s chief financial officer, said at the BancAmerica Robertson Stephens investment conference here.

"Community builds interaction," Philip said. "It brings people of likeminded thoughts together."

Lycos also has been growing its revenue streams through its shopping channel, by licensing out its technology, and by partnering with content providers, such as GTE?s Interactive Yellow Pages, who pay for promotion on the company?s Web site.

Philip said the company gets paid millions of dollars to host value-added content on the site. "They pay us millions of dollars per year, and then we also get a cut of all ad revenue," he said, noting that the run rate is about 45 percent, which means that about 45 percent of ad spots are filled.

The GTE deal and others like it have contributed to Lycos' $21 million in deferred revenues, which are guaranteed over next year or so. "That allows us to manage our company on a longer-term basis," Philip said.

Lycos has been aggressively promoting its brand by advertising in movie theaters, on radio, and on television. The company also is getting ready to launch the Japanese version of its navigational site.

Lycos stock is up about 7 percent today, to 37-1/2. Philip said about half of the company's shares are in the hands of institutional investors.