Lycos Europe Still Dragged Down By Falling Ads, Growing Costs

Looking at Lycos Europe through the prism of its unaudited trading update for the first nine months of the year, you wouldn’t think we’re in the middle of an online advertising boom. The Holland-based online portal, which is a joint venture between Bertelsmann and Telefonica (NYSE: TEF) and is separate from Lycos in the US, saw revenues slip by 600,000 euros (£418,380) from the same period in 2006 to 58.4 million euros (£40.72 million). At fault: “Decreasing advertising revenues, a margin decrease in the Shopping business, an increase in cost of revenues and additional marketing initiatives for LYCOS iQ.” Woe is them.

Based on EBITDA, the company’s losses grew from 3.4 million euros (£2.37 million) in 2006’s first nine months to 12.9 million euros (£9 million) this time. Net profit was 44.1 million euros (£30.75 million) but, with continued marketing and product costs, the company also forecasts a Q4 loss. Lycos badly needs to give people a reason to still use its services nowadays. The company last week said Springer Science and Business Media chair Heike Findeis will in January take the chief product officer position John Grabisch vacated in June. Findeis had previously headed platform development for the magazine group and was in charge of videotext for German TV channel RTL 2.