Lycos Expects To Push Past
Yahoo!
By Steven Vonder Haar
January 7, 1999 3:51 PM ET
The Lycos navigation hub, which has spent much of
the past year acquiring outside companies to expand
its viewership, said it soon will surpass portal pioneer
Yahoo! in audience size.
That's the prediction of Lycos Vice President of
Marketing Jan Horsfall, who estimated that Lycos'
audience reach will outstrip Yahoo!'s by the end of the
first quarter.
"It's not a question of if," Horsfall said. "It's just a
question of when."
But perhaps the biggest question of all is: Does it
matter?
Lycos expects to take the lead in audience reach, a
yardstick measuring how many unique individuals visit
a site in a given month. If that happens, it would mark
the first time the industry-leading Yahoo! would
relinquish the top spot in a key audience metric to its
peer group of one-time search engines that includes
Lycos, Excite and Infoseek.
Yahoo! and Lycos, though, have taken sharply
different roads to building their reach. Yahoo! funnels
the bulk of its traffic through its flagship directory
service, which serves as the umbrella brand over a
broad range of topic-specific directory sites. Lycos, in
contrast, has built its network by acquiring a string of
Web properties, such as Tripod, WhoWhere? and
Wired Digital. Lycos promotes them under separate
brand names to consumers while integrating them
into a single network that can be sold to advertisers.
The acquisitions have Lycos nipping at Yahoo!'s
heels. In November 1998, Lycos reached 45.2 percent
of the Internet audience, a total of 25.6 million users,
according to Media Metrix. Yahoo! during the same
month held a 48 percent reach, representing 27.3
million unique viewers for the month.
Losing the lead in reach likely would be a minor chink
in Yahoo!'s armor, industry analysts said. Leadership
in other key areas, such as overall financial
performance, likely will help Yahoo! hold onto a Wall
Street valuation that this week pegged the value of the
company at $28 billion - 10 times higher than any of
its portal rivals, including Lycos.
"Yahoo! will only be dented if a competitor has more
reach and more revenue than they do at the same
time," said Ron Rappaport, analyst at Zona Research.
"People will be less convinced by the reach argument
if the revenues are not there to back it up."
What will likely emerge is a new debate over the
measures that truly matter in predicting the future
performance of the high-flying navigation hubs.
The industry last year largely dismissed page
impressions as a viable solo yardstick in predicting
performance, because of the glut of page views
available to carry advertising in the marketplace.
In its place emerged a focus on audience reach, a
measure that investors ostensibly could use to project
the media influence a portal would wield as usage of
the Internet expands. Just as real-world stores prefer
to position themselves at high-traffic intersections, the
thinking goes, online retailers would opt to set up
shop at portals drawing the highest number of
individual users.
Karen Edwards, vice president of brand marketing at
Yahoo!, could not be reached for comment. |
