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Lycos to breed Internet start-ups

The Web portal announces that it is creating an Internet "incubator" called LycosLabs to produce new businesses.

Lycos is pulling a page out of Idealab's book.

The Web portal today announced that it is creating an Internet "incubator" called LycosLabs to produce start-up businesses.

LycosLabs will invest in and build up to 12 start-ups a year, the company said. The company will help fund firms focusing on Internet technology, content, commerce and community, Lycos said. It also will provide start-ups with office space and the necessary technology.

The new division is the company's second foray into capitalizing on start-ups. In July, the company formed Lycos Ventures, a $70 million venture capital arm, in collaboration with Microsoft co-founder Paul Allen's Vulcan Ventures.

Incubators are established to turn business plans into companies. They often take a significant stake in a start-up and then supply it with services such as marketing, facilities and sales. Other prominent Internet incubators include Bill Gross' Idealab, CMGI and eCompanies.

"We have had tremendous success with Lycos Ventures and other corporate investments, and as a result have seen the remarkable potential for earlier-stage involvement in new businesses, where we could not only realize a great return on our investment but also provide a source of innovative new ideas for the Lycos Network," Lycos chief executive Bob Davis said in a statement.