Now that Lycos Inc. (Nasdaq: LCOS) and USA Networks Inc. are no longer an item, the portal's fiscal third quarter results on Tuesday suddenly take on more meaning. Lycos has to show us a big revenue jump to prove it's more than just a takeover target.
Yes, we know Lycos will hit estimates. The portal told us -- three times. Once in April and twice last week on a conference call and through a press release. The company also said it booked $200 million in e-commerce deals.
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None of those statements gave us revenue previews, however. The top line is all Wall Street cares about. Analysts are expecting sales of about $32 million, up from second quarter revenue of $30.6 million. First Call consensus calls for a loss of 3 cents a share.
Lycos' PR blitz about its upcoming earnings shows how important it is for the company to look like it's not standing still.
Of course, up until last week, Lycos earnings were an afterthought. Investors were primarily focused on USA-Lycos merger. But the merger, which combined offline properties with prized Internet assets, irked Lycos shareholders, notably CMGi Inc. (Nasdaq: CMGI).
According to Lycos CEO Bob Davis, USA and Lycos grew weary of "fighting the tape" and settled for a cross-marketing pact.
Once the deal was scrapped and shares gained. "The key thing here is that the uncertainty is lifted," said Daniel King, an analyst at LaSalle Street Securities.
But that relief -- and Lycos recent stock gains (chart) -- won't last long if the company doesn't deliver some strong revenue numbers. "This report is very important," said Andrea Williams, an analyst with Volpe Brown Whelan. "The results are a lot more important than what they would have been if the USA deal was still in tact."
Lycos can yap about having more reach than Yahoo! (Nasdaq: YHOO), but if it wants to portray itself as one of the Web's last kingmakers it better deliver the sales and an upside earnings surprise.
Lycos' earnings could distinguish it from the competition. Excite Inc. (Nasdaq: XCIT) reported a ho-hum quarter and missed estimates. Officials admitted they were focused on the nearly completed At Home Inc. merger. Infoseek (Nasdaq: SEEK) showed strong traffic gains in its latest quarter, but a sequential revenue decline.
Lycos isn't going to get Yahoo-like status until it puts up Yahoo-like results. The company is certainly getting the press. Lycos should report strong page view growth. If the USA Networks merger saga accomplished anything, it put the portal in the press.
Lycos CEO Davis said the USA deal fell apart, but definitely helped the portal's brand. "We saw our audience explode," said Davis on an analyst conference call. "The news in the last three months sent our brand awareness through the roof."
Now show us the revenue.