Lycos will acquire an approximately 10 percent stake in Autoweb.com. Specific financial terms were not disclosed. However, the stake is worth just under $11 million based on Thursday’s closing prices. As part of the agreement, Lycos will also receive yearly multimillion-dollar payments.
The companies plan to jointly offer a wide range of targeted marketing programs to the automotive industry and will share in advertising and e-commerce revenues, traffic and consumer information generated from these new offerings.
As part of their strategic alliance, Lycos (LCOS) and Autoweb (AWEB) also agreed to launch a new online automotive channel, www.autoweb.lycos.com. The two companies will build and jointly operate the channel. By providing an efficient platform for manufacturers to reach and conduct transactions with online car-buyers, Autoweb and Lycos expect to capture a growing share of the multi-billion-dollar online automotive market.
“We believe it dramatically changes the Internet automotive industry,” said Dean DeBiase, Autoweb.com’s chairman and chief executive officer.
“Together we will help build the next generation of automotive e-commerce…Both companies are completely aligned and motivated to drive traffic to the Lycos/Autoweb Channel.”
The Lycos/Autoweb Channel will serve as the automotive hub for the Lycos Network, including all wireless offerings. With the new automotive site, Lycos is the only portal on the Web to combine the entire depth and breadth of car-buying and unique content resources from Autoweb with new features to be jointly developed by the two companies. Access to the Lycos/Autoweb Channel will be strategically integrated with links throughout the Lycos Network, making the site’s broad array of services directly accessible to Lycos’s nearly 33 million users.
“We’re building a premier site that we think will let us tackle Detroit in ways that no one has ever done before,” said Bob Davis, president and CEO of Lycos. He noted that there would be a sizeable short-term revenue upside for Lycos.
During the term of the agreement, Lycos and Autoweb plan to work together to address the emerging markets for wireless and Web-enabled automobile services. The companies will focus on jointly partnering with vehicle manufacturers and automotive technology suppliers to enhance the next generation of in-vehicle wireless systems. With their combined content and technology capabilities, the companies plan to offer new product and service offerings including Web access, navigation, content and value-added consumer services.
“I believe the synergies resulting from this deal will strengthen Autoweb’s market position, allowing us to reach a wider audience and uniquely address the strategic needs of manufacturers in the rapidly evolving online automotive market,” DeBiase said.
“Together, Autoweb and Lycos can leverage the depth and breadth of our new offerings to help the vehicle manufacturers position their brands to consumers in new and innovative ways, with the goal of helping them sell more cars.”
The Lycos/Autoweb Channel continues the Lycos strategy to build out the Network with content rich, deeply integrated vertical destinations.
“This new automotive destination is another step in Lycos’s effort to build out rich content in key vertical markets, and demonstrates the powerful combination of content and commerce that benefits consumers and sellers,” Davis said.
“The deep integration of the Lycos Network with Autoweb’s excellent capabilities will provide auto makers with the first opportunity to e
ffectively segment their marketing efforts to targeted groups online using the power of the Web’s leading multi-brand network.”