Lycos Europe comes to the end of the road

LYCOS EUROPE IS WAVING the white flag of surrender and admitting no one actually wants to buy the flailing portal, once so popular in the late 90s.

Lycos has been sinking for a while, last month announcing it had seen a 20 per cent drop in revenue to $60.8 million and a net loss of €17.1 million. The firm will be packing up its portal and its web hosting activities as well as selling off bits and pieces of its assets to the highest bidder. Lycos Europe’s domain names, Danish business and shopping sites are all up for grabs.

In a press release, the firm said its investors would vote on certain management proposals at a December 12th meeting, after which Lycos Europe would probably be handing back €50 million to its shareholders. Whispers are already hinting that between 500 and 700 souls will lose their jobs.

Lycos Europe is a separate entity to America’s Lycos and was the product of a joint venture between firms Telefonica (owning 32 per cent) and Bertelsmann (thought to own 20 per cent). The European version of the portal has been going steadily downhill after completely failing to cash in on the online ad boom of the last few years and having to pay Lycos Inc $5.2 million to renew its license to use the brand name. It subsequently entered the US market itself under a different company name, Jubii.

Matters weren’t helped when Telefonica took Lycos Europe to court recently on claims its CEO, Christoph Mohn, hadn’t explored every possible sell-off avenue. Mohn had previously said he was in talks with AOL and German ad network Tomorrow Focus for a deal rumoured to be worth around €200 million, something which never materialised.

The end of Lycos Europe, its online search engine, web communities and content channels comes at a time when rivals Yahoo and AOL are also desperately struggling to keep their heads above water and even Internet search engine giant, Google, is taking measures to tighten its belt. µ