Lycos Mounts Challenge To AOL Shopping Portal Dominance

In a bid to compete with AOL and other industry leaders, Lycos, Inc. (Nasdaq: LCOS) has unveiled a 1000-plus merchant shopping portal that it says more closely emulates a real shopping experience.

The Waltham, Massachusetts-based network has been working on LYCOShop and its “integrated marketplace” for the last year, and today touted the synergy between its shopping channels, research channels and links to like-minded consumers across its network.

“This is one very powerful destination that we think is unmatched when compared to our competition,” Lycos vice-president and General Manager of E-Commerce Jeff Bennett told theE-Commerce Times. “I have great respect for AOL and the job they did with its shopping portal, but they are offering a closed platform and we are unveiling an open platform that offers a complete solution for consumers. LYCOShop is unique.”

Bennett said that LYCOShop has established a number ofe-commerce shopping portal firsts, including a loyalty program that rewards users for shopping both online and offline, a value-based shopping option that allows a consumer to list the most important options to them and search the network, and 24/7 customer support.

Research, Consult & Buy

Lycos worked with Cambridge, Massachusetts-based Frictionless Commerce to develop what it calls the first value-based comparison-shopping engine, one that Bennett calls a “bot on steroids.”

Essentially, the company allows consumers to go beyond the traditional price comparison when shopping and allows them to decide what is most important about the product. Lycos also disclosed that it has made an investment in Frictionless Commerce.

The portal, which also features an integrated online auction place and a classified ads section, offers links across Lycos’ network that allows consumers to talk with others about products. The company said it will deliver honest and unbiased opinions about products and has also teamed with Web Watchdog to offer community-based merchant ratings.

Lycos said that it processes some 12 million e-commerce related searches on Lycos and HotBot search engines every month. The new shopping portal will help translate those inquiries into purchases and assist Lycos in developing another source of revenue from ad placement, hosting and transaction fees.

Bennett said the company’s revenues have gone from almost completely advertising-driven to a more balanced mix ofe-commerce, ad revenue and equity investments in other companies.

“We are not publicly stating our goals,” he said. “However, we have obviously evolved in the last 24 months and will continue to. This is a big component of our strategy both here and abroad.”

Stemming The Bleeding

The move comes at a time when the Internet business is a bit wary about drops in visitor figures for Yahoo!, Excite and Lycos from August to September. According to researcher Media Metrix, Yahoo! visitors dropped from about 33.4 million in August to 32.1 million, Excite dipped slightly from 14.1 million to 14.09 million, and Lycos lost about 1.5 million visitors, posting about 13.4 million in September.

Though only Lycos saw a dramatic drop of more than 10 percent, many in the industry had been expecting September numbers to jump as families returned home from summer vacations and prepared for the start of the school year. Go Network and AltaVista posted modest gains of about 500 and about 200 visitors, respectively.

Despite its 10 percent drop in visitors, or perhaps because of it, Lycos continues to expand its operations in the United States and abroad. Last week, the company opened 14 new Web sites in Latin America and a Spanish-language version of its U.S. site to tap Spanish-speaking Web surfers.

Ironically, Lycos’ shopping announcement closely mirrors one made today by rival AltaVista.