Lycos to offer own-brand Web browser
One of the first partnerships is with NASCAR. Lycos (LCOS) had previously sponsored a Chevrolet driving team in the 40th annual Napa Auto Parts 300 race. Future deals include a movie tie-in with the "biggest hit of the spring" said Jan Robert Horsfall, vice president of marketing for Lycos.
That deal will hook Lycos up with a "major access provider" in a plan to give away branded browsers to a million people after they see the ad in theaters this spring, he said.
The plan is part of an overall effort by the company to drive users to the site, as the competition heats up between search engines and other "web portals" like America Online Inc. (AOL)
Just this week, Yahoo! Inc. (YHOO) announced plans to launch two new channels devoted to specialized interest. Also, Digital Equipment Corp.'s AltaVista, released plans to launch a series of content "zones" that will make the site more competitive with search engines, including Lycos and Yahoo!.
What's behind the wave of deals and partnerships? Although the companies have been adding features like personalization and free e-mail, most of the technology has become relatively similar. As it becomes harder to differentiate between the sites, they are focusing on ways to strengthen user loyalty to a particular page.
"What it boils down to is, how well doe we advertise and how ell can I get a brand built," Horsfall said. 'That's where a lot of technical companies falter."
But Lycos is still interested in adding new features. He said the company is planning a major set of personalization enhancements for next month. By the end of the changes, the company plans to have at least 17 personalized areas within the start page.
Lycos has so far been the only one of the sites to consistently post a profit, although Yahoo! has had a few quarters in the black. But no one is expecting these firms to be solidly profitable for a while.
"There are risks you take in focusing on near-term profits. You could win the 50-yard dash but lose the marathon," said Andrea Williams, research analyst at Volpe Brown Whelan in San Francisco. She said she expects most of the search firms to have a full year in the black by 1999, and "we'll really see the spigot turn on" in 2000.
One positive sign may be the deal signed between AOL and news firm Bloomberg this week, which reportedly calls for Bloomberg to pay the online service for access to its nearly 11 million members.
By contrast, AOL had formerly paid Dow Jones to supply business news to the readers.
Many analysts read this as a sign that companies are recognizing there is money to be made by getting your name out in front of Internet users. But that doesn't mean they want to go up in front of just anyone.
"No one questions you if make an ad buy Yahoo!," Williams said.
Horsfall said that Lycos has been in talks with media firms. He predicts that most of the major content companies will have signed deals with search firms by the end of the year.