Lycos Enters Online Computer Sales Fray

Web portal Lycos, Inc. (Nasdaq: LCOS) is attempting to cash in on a lucrative e-tail niche by lending its name to a new computer and software retail site.

The partnership with Virtual Technology Corp. will target both business customers and consumers, and offer more than 60,000 hardware products, 100,000 software titles, 25,000 office products and thousands of consumer electronic items.

The computer and peripheral market ranks second in dollar volume to travel as the most active online retail categories.

Exchanging Name for Experience

Through the deal, Lycos gets an entry point into the online computer sales business, while VTC gets the endorsement of one of the Internet’s top properties.

VTC CEO Gregory Appelhof called the deal “a tremendous validation of our strategy of serving business customers and consumers not just at the purchase point but throughout the fulfillment cycle.” The companies agreed to share revenue from both sales and advertising on the co-branded site.

Virtual Technology, which offers free shipping, a 30-day guarantee and on-site service on the four other sites it operates, will supply the same services for the Lycos-VTC site. The company will also participate in Lycos Rewards, the new loyalty program that rewards users for shopping online and offline.

Desvpite those consumer benefits, the companies will also have to pay close attention to price, which researchers say is the most important factor in computer sales. According to Forrester Research’s PowerRankings, top computer site Outpost.com has used “highly competitive prices in a crowded marketplace” to carve out its lofty perch. Beyond.com, BUY.com, CDW and egghead.com, the rest of Forrester’s top five, will also challenge Lycos and VTC for customers.

VTC Changes Name

In related news, VTC announced that it will change its flagship e-commerce site from Virtual-World to netdirect. VTC operates four separate Web sites, all of which focus upon sales of computer products.

Virtual-World is a standard consumer computer hardware and software site, while Graphics Technologies, Inc. is a wholesaler and distributor of high-end computers and graphic products. The company also offers Community TechMart, a private label e-commerce service with complete inventory, fulfillment and transaction processing systems, and a technology product auction service called Virtual Technology Corporation.

Lycos operates a variety of Web portals and search sites that can be used to drive traffic to the new Lycos-VTC online retailing site. The Lycos network includes Lycos.com, Tripod, WhoWhere, Angelfire, MailCity, HotBot, HotWired, Wired News, Webmonkey, Suck.com, MyTime, Sonique and Quote.com.

Lycos is estimated to have more than 30 million regular visitors.