Lycos Shifts Focus, Outsources Ad Duties

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Terra Lycos will revamp its Lycos portal in the United States to focus on networking sites and subscription services, the company said this week. As part of the overhaul, the company will cut 20 percent of its U.S. staff and outsource advertising operations to 24/7 Real Media.


The Spanish Internet company said it would shift Lycos to emphasize "connections" through its online dating, gaming and Web log services. Along with the move, the company closed offices in Mountain View, CA, and said it would reshuffle some operations in its Waltham, MA, headquarters. It has 417 U.S. employees.


Lycos inked a five-year deal with 24/7 Real Media to outsource its ad sales, joining the 24/7 Web Alliance network of sites. 24/7 Real Media aggregates sites and sells advertising on their behalf. The company also will provide ad serving, Web analytics and behavior targeting.


24/7 Real Media crowed that the deal would make its Web Alliance the No. 4 media entity online, based on Lycos bringing 50 million U.S. unique users per month, trailing Yahoo, Advertising.com and MSN.


Lycos will continue to display contextual paid listings in some areas through its Google AdSense program. 24/7 Real Media will sell advertising for various channels including finance, e-commerce, entertainment and games. It also will handle the site's pop-up advertising.


"We've given them our total solution," said David Moore, 24/7 Real Media's chief executive. "Through a combination of our technology and our ability to sell advertising on their behalf, the decision was based on our ability to grow incremental revenue."


DoubleClick formerly handled ad serving for Lycos. It will continue to provide e-mail and campaign-management services, the company said. DoubleClick attributed losing the ad-serving deal to Lycos' decision to outsource ad sales to 24/7 Real Media. DoubleClick no longer operates an ad sales network.


Lycos said changing the site would let the business focus on its core services, including dating site Matchmaker.com, Web publishing sites Angelfire.com and Tripod.com, gaming site Gamesville.com and finance site RagingBull.com.


The changes will not affect Lycos sites in Europe, Latin America and Asia.


Lycos vice president Mark Stoever said the move would let Lycos build off the excitement surrounding social networking sites like Friendster and Tribe.net. Unlike social networking sites, however, he said the company would add a missing ingredient: a subscription business model and the ability to join multiple communities. Subscriptions will be available on a standalone basis or part of a bundle.


"It's a strategic move to occupy a space that's untapped," he said.


Lycos said the connections model would let it convert more users into subscribers to its premium sites, such as Matchmaker.com. While shifting to emphasize subscription services, Stoever insisted that advertising remained a main driver of the company's business: "We expect both to grow quite nicely."


Stoever said Lycos would de-emphasize its traditional directory listings such as real estate and travel.


"We're definitely moving away from the portal look and feel," he said.


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