E-commerce Forum: High noon for search engines

A shake-out may be on the way in the search engine business, according to Lycos Europe chief operating officer Tony Philip.

"There's only two navigation centres that are profitable - Lycos and Yahoo! People keep saying 'we're in this for the long run and we'll be profitable eventually'. Well, eventually is now... you can only survive cash burn rates for so long," said Philip.

Philip was at pains to refute the claim made in this week's edition of Business Week that Yahoo! and AOL were creating an uncatchable lead in the mega-site wars. Philip said, "Nobody goes to AOL right now who is not an AOL member... and oh, by the way, AOL search in Europe is Lycos technology. AOL is owned 45 percent by Bertelsmann as is Lycos. So in Europe, the market is a little bit different to the United States."

But Philip does not deny that a shake-out may be starting to happen, "You are going to see two sites bubble to the top. Look at the cola wars - this is what happens in most markets."

Yahoo! is partly owned by Softbank, the same company that owns ZDNet UK.

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