Lycos Getting Shopped Around -- News & Speculation

Do you remember when Lycos was All That? When they were doing tons upon tons of acquisitions, gathering up Wired and Hotbot and Angelfire, etc. Lycos was one of the search engines which went portal and never really went back, got acquired, mutated into something really different. And now, according to a News.com story ( http://news.com.com/2100-1023_3-5201301.html ) they're getting ready to jettison the search element of their site.

Well, actually the US element of their site: "Terra is seeking a buyer for the Lycos division as it focuses on its Spanish- and Portuguese- language businesses... Terra Lycos is hoping to sell Lycos for cash or liquid shares. Although no purchase price was listed, one source familiar with the deal said Terra Lycos is looking to sell Lycos for $200 million, based on $98 million in pro-forma revenue that the site generated in 2003."

I think this is a good idea; there's little chance that Lycos could easily haul itself back into the search engine game, and its interests lie elsewhere anyway. Unless Google and Yahoo want to buy the property for stock and stick it in their back pocket (which I don't see as likely) I see three candidates for a Lycos purchase. Here they are, in the order of my favorites.

1) NORTHERN LIGHT -- I saw David Seuss speak at Computers in Libraries in March. He said some things that really made me mad! But despite that I think his company is a good one. Having Lycos would get them the name recognition and consumer recognition they never got when the search market was more crowded, recognition they deserve. On the down side, I'm not sure they could afford it, if they're stuck on enterprise services it wouldn't fit in with their strategy, and it's not clear what, if anything, they could do with the content side of the concern.

2) ASK JEEVES -- While Northern Light is my sentimental favorite Ask Jeeves is a far better fit, perhaps the best fit. Their stock is near the top of its 52-week high, with a market cap of almost two billion dollars; I suspect they could afford a Lycos acquisition. While the Ask Jeeves natural language engine is fairly well-known, Teoma would get far more spotlight by being merged with the Lycos/Hotbot name. Plus their March acquisition of Interactive Search Holdings (Excite, iWon, etc.) might mean that they're more willing to explore these kinds of acquisitions.

3) LOOKSMART -- Looksmart's never been able to get Wisenut a lot of attention; a Lycos acquisition would help them a lot in that regard. Unfortunately their market cap is much lower than Ask Jeeves; they might have a hard time coming up with the money. It's also not clear that they would know what to do with the Lycos content parts.

Of course, there's always a chance that a longshot could swoop outta nowhere and buy Lycos. If Dipsie ( http://www.dipsie.com/ ) wanted an instant position in the search wars they could buy Lycos. If O'Reilly, now renamed O'Reilly Media ( http://press.oreilly.com/pub/pr/1168 ) really wanted to make a media splash, what better way than owning Wired, and tweaking the search engines to include their large collections of content?

No matter who buys it, I don't think the Lycos division will be on the table for long. It might not sell for $200 million, but I don't think it'll be on the table for long.

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