Lycos To Merge With USA Network

Lycos To Merge With USA Network

From The Search Engine Report
March 3, 1999

On February 9, Lycos and USA Networks announced plans to merge their various Internet and e-commerce businesses into a new company called USA/Lycos Interactive Networks.

If approved by investors, the new company will be firmly grounded in the business of selling consumer goods. It would be a dramatic shift for Lycos, whose core business to date has been that of a media property.

Retailing partnerships for portals like Lycos are not new -- we've lived with them for nearly two years now. But the proposed new company would give Lycos an interest in selling goods and services to its users far beyond what any search portal has ever had before.

The new company would have various properties in its network, including existing Lycos sites such as the Lycos search engine, HotBot, Tripod and WhoWhere. Added to this would be Ticketmaster, CitySearch, the Home Shopping Network and First Auction.

At a press briefing last Friday, Lycos CEO Bob Davis outlined the cross-promotional opportunities the new network would offer for touting the new company's products. There was talk of "turning viewers into buyers," and the ability to pitch products to consumers dominated the presentation.

That wasn't surprising, given that Lycos is trying to build up support among its stockholders that the deal is a money maker for them. Lycos stock dropped after the deal was announced, and some angry shareholders have filed suit against the company.

Thus, Lycos has good reason to focus on the ability for the new company to sell goods. But that focus raises questions over whether the flagship Lycos search site is about to be transformed into an online shopping mall, rather than the search-and-navigation center that it is today.

Davis said at the press conference that it hadn't been determined which Lycos property would carry the weight of the shopping moves. "I don't know what brand we'll put against this," Davis said. "There is a lot of consumer research that has to take place."

Lycos spokesperson Brian Payea said it wasn't likely that the flagship Lycos site itself would be radically transformed. "We recognize why our users come to the site, and we are going to stay focused on search as a top priority and providing the overall experience that those people are looking for," he said.

Even if this is so, we can almost certainly expect online shopping to filter more heavily into the Lycos site than ever before. It will be interesting to see whether this causes users to turn away, if they'll welcome it, or if Lycos will attract a different audience that wants that type of experience.

Lycos results boost debate over USA Networks
San Jose Mercury News, Feb. 26, 1999
http://www7.mercurycenter.com/premium/business/docs/lycos26.htm

Lycos defends USA Networks deal
News.com, Feb. 26, 1999
http://news.com/News/Item/0,4,32979,00.html

Lycos Says Wired Deal to Go Forward
InternetNews.com, Feb. 19, 1999
http://www.internetnews.com/bus-news/article/0,1087,3_4682_Ext,00.html

In Every Way, Lycos/USA ,Is a Big Deal
Internet World, Feb. 15, 1999
http://www.internetworld.com/print/1999/02/15/news/19990215-every.html

Lycos Plans Merger With USA Networks
Industry Standard, Feb. 12, 1999
http://www.thestandard.com/articles/display/0,1449,3525,00.html

Can USA Networks turn Lycos into an e-commerce winner?
Red Herring, Feb. 11, 1999
http://www.redherring.com/insider/1999/0212/inv-lycosvalue.html