Lycos

Lycos is a search engine and web portal centered around broadband entertainment content. It began as a search engine research project by Dr. Michael Loren Mauldin of Carnegie Mellon University in 1994. It was incorporated in 1995 and went on to become one of the most visited online destinations in the world with a global presence in more than 40 countries. Lycos merged with Terra Networks of Spain in May of 2000, forming a new company, Terra Lycos, creating one of the world's largest Internet companies. In Oct. 2004, Lycos was sold a second time to Daum Communications Corporation, the 2nd largest Internet portal in Korea, becoming Lycos, Inc. Lycos remains a top 25 Internet destination in the US, and the 13th largest online property worldwide according to comScore Media Metrix. Lycos also remains a top 5 Internet portal, behind Yahoo, MSN, AOL and MySpace (comScore Media Metrix).

Introduction

Shortly after the development of the search engine, Lycos, Inc. was formed with approximately $2M in venture capital funding from CMGI. The Founder and CEO of Lycos from inception was Bob Davis, a native of Boston who incorporated the company in Massachusetts and concentrated on building it into an advertising-supported Web Portal. Lycos grew from a crowded field in 1995 to become the most visited web portal in the world in the spring of 1999.

In 1996, the company had a successful IPO and in 1997 became one of the first profitable internet businesses in the world. Over the course of the next several years Lycos acquired nearly two dozen high profile internet brands including Tripod, Gamesville, WhoWhere, Wired Digital, Quote.com, Angelfire, and Raging Bull.

Lycos Europe was a joint venture between Bertelsmann and Lycos, but has always been a distinct corporate entity. Although Lycos Europe is the largest of the overseas ventures, several other companies also entered into joint venture agreements, including Lycos Canada, Lycos Korea, and Lycos Asia.

Near the peak of the internet bubble in May of 2000 Lycos announced its intent to be acquired by Terra Networks, S.A., the internet arm of the Spanish telecommunications giant, Telefonica, for $5.4 billion. However, by this time the business had peaked and Lycos was being eclipsed by other search giants such as Yahoo, Ask, and Google. The acquisition price represented a nearly 3,000 times return on the initial venture capital investment in Lycos and about 20 times its initial public offering valuation. The transaction closed in October of 2000. The merged company was renamed Terra Lycos yet the Lycos brand was the US franchise. Overseas, the company continued to be known as Terra Networks, S.A. Davis left the company shortly after the merger was completed to join Highland Capital Partners, a premier venture capital fund, where he now serves as a Managing General partner and concentrates on internet investments.

In August 2, 2004, Terra announced that it was selling Lycos to Seoul, South Korea-based Daum Communications Corporation for $95.4 million in cash, less than 1% of Terra's initial $12.5 billion investment. In October 2004, the transaction closed, and the company name was changed back to Lycos, Inc. The remaining Terra half of the business was subsequently reacquired by Telefónica.

Under new ownership, Lycos began to refocus its strategy in 2005, moving away from a search-centric portal, toward a community destination for broadband entertainment content. With a new management team in place, Lycos also began divesting in properties that were not core to its new strategy. In July 2006, Wired News, which had been part of Lycos since the purchase of Wired Digital in 1998, was sold to Conde Nast and re-merged with Wired Magazine. The Lycos Finance division, best known for Quote.com and Raging Bull.com, was sold to FT Interactive Data Corporation in February 2006, while its online dating site Matchmaker.com was sold to Date.com. In 2006, Lycos also regained ownership of the Lycos trademark from Carnegie Mellon University, becoming Lycos, Inc. once again.

During much of 2006, Lycos focused on introducing first-to-market products and services including the launch of Lycos Phone, the Internet's first free VoIP integrated communication platform, combining IM, video chat, real-time video on demand and MP3 Player. In August, 2006, Lycos also released its new Lycos Mail product, an industry-defining email system built for sending and receiving mega files, including unlimited size file attachments for video, music and photos. In Nov. 2006, Lycos began to roll out Web 2.0 applications centered around social media, including the Web's first watch & chat video application, with the launch of its Lycos Cinema platform. In Feb. 2007, the second iteration of its watch & chat proprietary technology launched with Lycos MIX, a tool allowing users to pull video clips from YouTube, Google Video, Yahoo Video and MySpace Video, creating playlists where other users can add video, comments and chat in real-time.