19 March 2007

Lycos re-brands itself for a crack at the US Web 2.0 market

Back in the heady days of Web 1.0, Lycos was a big player on the internet. However, since its inception in 1994 it has been subject to numerous takeovers and in more recent times has found itself lagging behind the behemoths of web-content and search engine providers - Google, Yahoo! and MSN.

At the height of its powers, Lycos was one of the most visited online destinations in the world, with a global presence in over 40 countries and several region-specific web portals. Lycos also acquired nearly two dozen high-profile internet brands, including free web-space providers Tripod and Angelfire, search engine Hotbot, finance website Quote.com and HTML Gear, a site which provided web-page add-ons. But having been faced with burgeoning competition from similar web portals, Lycos has increasingly found itself becoming eclipsed by other search engine operators.

Now, Lycos Europe - owned jointly by German media company, Bertelsmann and Spanish telecoms provider Telefonica - is looking to make an new impression on the US market with a new service which combines search, email, chat, photo and file storage, phone texting, blogging, VoIP and other services which have given rise to the Web 2.0 phenomenon, and are proving increasingly popular with young internet users. Meanwhile, the company will continue to forge ahead under its own name as a leading chat service and Internet portal in Europe. The company claims it has 31 million users across sites it owns as well as on partner sites, with around half of its users located in Britain, Germany and France.

Lycos Europe will re-brand itself for the American market via the brand and services of Jubii, its Danish search and community business. Lycos Europe cannot use the Lycos brand in the US, which is down to the fact that Lycos Inc - the name given to the US web portal - is not owned by either Bertelsmann or Telefonica. The trademark is, in fact owned by South Korean-based Daum Communications, and so Lycos Europe are unable to trade under this name in the United States.

Despite constantly reinventing the Lycos brand and posting losses in 27 out of 28 trading quarters, Lycos CEO, Christoph Mohn is confident that Jubii can bring the company back to profitability. He believes the company, which employs 700 people is finally back on track. In an interview, he said:

"I am confident we will have many profitable years... this company is a little bit behind the large players in terms of being nicely profitable, but we really started again in 2001."

Mohn refers to the period where the company ceased being a completely advertising-driven business, and with Jubii, alongside other new products, Mohn claims that Lycos Europe has moved to a 50-50 mix of advertisements and premium services. However, with similar established services already in operation, some internet experts harbour reservations that Jubii can help Lycos to recapture lost glories.

With Google, Yahoo! and MSN all investing vast amounts of money on search technology, advertising media and other services, the gap between the big players and the rest of the market is growing. Lycos are firmly in the 'rest of the market' bracket and are seen as unlikely to be able to make up lost ground on the market leaders, but Mr Mohn disagrees, stating:

"Give us two or three years. You'll see a lot different Lycos Europe than you see now."