After selling its stake in a Japanese portal last week, Internet search and content provider Terra Lycos has reached a sales and marketing agreement with the new owners.
Key to the pact is branding. The portal will retain the Lycos Japan name, and certain products and services available will also be sold under the Lycos moniker. Joint marketing campaigns will also be mounted by Terra Lycos and the portal’s owners, financial services giant Sumitomo and e-commerce specialist Rakuten.
Financial terms were not disclosed.
“It is very important for Terra Lycos to keep the Lycos brand in this market,” said Juan Rovira, a Terra Lycos executive vice president overseeing international ventures.
Lycos Japan went online in 1998 as a destination site initially focused on Web navigation and search. News, sports, stock information, and other services, including e-mail and domain registration, were later added.
At the time, then-Lycos chief Bob Davis predicted the site would become “the best Web destination for the Japanese consumer.” A year later, Lycos Japan was the third most visited of Lycos’ international sites, however, traffic didn’t equate to profits.
And with online advertising revenues continuing to lag, Terra Lycos, based in Madrid and with U.S. headquarters in Waltham, Mass., is making a variety of moves to cut costs.
For its part, Rakuten seeks to increase traffic, and ultimately sales, for its “Internet shopping malls.” It employed a similar strategy two years ago when it picked up the Infoseek Japan portal.
Rakuten (which will be majority owner with more than a 90 percent share) believes the sites complement each other; with Infoseek attracting business users, and Lycos being used by young people. Cost savings could also come from consolidating content and sales operations.