Lycos, Inc. (Nasdaq: LCOS) was down 3 13/16 early Monday, after announcing plans to buy a 10 percent stake in Autoweb.com (Nasdaq: AWEB) as part of a four-year agreement to build and operate an online “automotive channel.” Autoweb was up 5/16 at 4 1/4.
The site, launched Monday, will link all the auto sites on the Lycos network, including wireless offerings. The two companies will share advertising and e-commerce revenue, as well as traffic and consumer information from the venture. Lycos, which has nearly 33 million users, said it will also receive “yearly multimillion-dollar payments.”
The companies said they will also focus on partnering with vehicle manufacturers and suppliers to “enhance the next generation of in-vehicle wireless systems.” Planned new offerings include Web access, navigation, content and value-added consumer services.
For Lycos, the auto venture is part of a strategy to “build out rich content in key vertical markets,” said President and Chief Executive Bob Davis. The companies said they hope to get a share of the more than $14 billion spent each year by the auto industry to entice consumers to buy cars. More than 55 percent of new car buyers use the Internet at some point in the shopping process, according to J.D. Power and Associates. That figure is expected to grow to 80 percent by 2003.