Lycos Looks to Video
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Lycos, a one-time Internet high-flier brought low by Google (GOOG) and Yahoo! (YHOO), is hoping to regain some of its lost altitude. In its most recent effort to do so, it's teaming up with video-search engine Blinkx.
On Aug. 29, Lycos will announce an agreement in which Blinkx will provide videos and related search technology for Lycos users in the U.S. As part of the deal, Blinkx will power a video-search tab on the Lycos browser capable of scanning videos for audio content and images matching desired criteria. The technology is unlike the search engines used by other video sites, which typically scan clips based on descriptions supplied by content providers.
Lycos Chief Operating Officer Brian Kalinowski says the partnership is part of a plan to engage Lycos' base by focusing on media content such as videos and music. The company, owned by South Korea's Daum Communications, is harnessing advanced technologies known collectively as Web 2.0 that emphasize participation by users or groups, often involving interactive content. "Our strategy over the last six months has been to really move away from the flat world of Web 1.0 and move aggressively into the Web 2.0 experience," says Kalinowski.
Kalinowski says the Blinkx deal is the first of many multimedia content partnerships Lycos has in the works. In October and November, the company plans to announce additional distribution and content deals with movie studios and independent filmmakers. "We will be acquiring a large quantity of video programming ourselves," Kalinowski says.
It's little surprise that Lycos sees its future in multimedia content. As broadband connections have increased, more users are looking to the Internet for video and music files. From a traffic standpoint, video sites such as YouTube are seen as some of the hottest properties on the Web (see BusinessWeek.com, 8/23/06, "Online Video: Tasty Takeover Targets,"). Recently, News Corp.'s (NWS) MySpace was dubbed the Web's most popular destination due, in part, to its extensive video and music content (see BusinessWeek.com, 8/9/06, "Fox to Make MySpace More Spacious").
Video is seen as a way to lure traffic, and thus, a greater share of the advertising dollars flooding onto the Web. Online advertising is expected to generate $26 billion by 2009, according to research firm eMarketer. About $1.5 billion of that will go to video advertisements including commercials appended to online videos and viral marketing (see BusinessWeek.com, 7/24/06, "Raising the Bar on Viral Web Ads").
PLENTY OF COMPANY.
Lycos will sell text and banner advertising on its video results pages and append commercials to videos shown on its site. Blinkx will share some of the advertising revenue. "It will start off being a few text and a few banner ads, but obviously Lycos has more experience than most delivering advertising, so we are going to let them discuss what kind of advertising to put on the site," says Blinkx Chief Technology Officer and founder Suranga Chandratillake.
Lycos is not alone in flocking to multimedia content and related advertising. On Aug. 24, AOL announced that it would provide premium movie downloads and television content from News Corp.'s Twentieth Century Fox, Sony Pictures Home Entertainment (SNE), Universal Pictures, and Time Warner's Warner Bros. Home Entertainment Group (TWX). The new pay-to-download content will augment the existing library of free clips on AOL's video portal. Kevin Conroy, AOL's executive vice-president, has said the company plans to continue to expand its video content in the future.
But the appeal of video has certainly not been lost on the Internet's new leaders, like Google, which is giving greater prominence to its own video search tool (see BusinessWeek.com, 8/17/06 "Google Video: No Tube of Plenty"). Just as Lycos had to do battle with Google in Web search, it will need to contend with Google in video, as well.
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