In two dramatic announcements this week, Lycos U.S. said it will shed its portal strategy to become a vast social network; the company also inked a 5-year deal with 24/7 Real Media to outsource display ad sales, ad serving and analytics for its Internet properties.
“This is totally an untapped space. We’ll enter the market already in the leadership position because of where we’ve been,” said Mark Stoever, executive vice president of Terra Lycos, U.S., of the company’s new direction.
He stressed the new business model capitalizes on the company’s experience in online publishing, dating and search. “Lycos will be the first to bring together the entire spectrum of ways people connect online,” he noted.
Lycos says the revenue potential for its new model lies in subscriptions and contextually targeted ads. Google provides contextual ads for Lycos through a deal with its parent, Terra Lycos (Quote, Chart).
The company plans to relaunch its homepage in two weeks as a “hub for personal connections.” That’s step one in a phased rollout with a corresponding national advertising campaign. Lycos search will emphasize enabling users to navigate between various professional, personal, family, business and affinity sites.