Lycos Europe
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Lycos Europe N.V. was the European arm of the Lycos internet portal, set up in 1997 as a joint venture between Lycos Inc. and Bertelsmann. Listed in Amsterdam, it ran a network of European web properties including the Lycos portal, the Fireball and Paperball search engines, the French email service Caramail, the MultiMania hosting service, the Danish portal business, the Lycos iQ Q&A service and the United Domains domain business. After years of losses and a failed attempt to find a buyer, shareholders approved a shutdown plan in December 2008; the company sold off its business units, returned capital to shareholders and wound down operations.
02 / Lycos Europe FAILURE REASONS
Failure factors
loss-making Lycos Europe failed to find an investor after a strategic review, citing fierce competition from Google/Yahoo and sinking online revenue (net loss €17.1M on €46.9M sales in 9M 2008), leading it to sell some assets and close the rest.
Fierce competition from Google and Yahoo.
Sinking online revenue and ongoing losses; failed sale/investor search.
03 / EVENT HISTORY
Events in the structured record
- Joint venture founded
Lycos Europe was established as a joint venture between Lycos Inc. and Bertelsmann to run the Lycos portal business in Europe as a separate listed company.
- IPO
Lycos Europe floated on the Amsterdam stock exchange during the dot-com boom.
- Shutdown announced
After a strategic review failed to find a buyer or investor, Lycos Europe announced a shutdown process on 26 November 2008, approved by shareholders on 12 December 2008; the company reported a net loss of EUR 52.9 million for the year.
- Asset sales and wind-down
Lycos Europe sold its business units piecemeal: United Domains to United Internet for EUR 34.1 million, the shopping unit Pangora to a Become Inc. affiliate, plus Fireball, Paperball, Caramail, MultiMania and the chat business to other buyers; most employees were released by April 2009 and the company began repaying EUR 85 million of capital to shareholders.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Announced a formal shutdown process on 26 November 2008, approved by shareholders on 12 December 2008, after failing to find a buyer or investor.
- 02
Reported an audited net loss of EUR 52.9 million (about $77.8 million) for the 2008 financial year, versus a small net profit of EUR 11.9 million in 2009 after asset disposals.
- 03
Sold United Domains to United Internet for EUR 34.1 million (EUR 7 million in escrow) and disposed of the remaining business units (Pangora, Fireball, Paperball, Caramail, MultiMania, chat) to various buyers in 2009.
- 04
Released the majority of employees by 1 April 2009, terminated nearly 600 agreements, delisted from Euronext Paris and returned EUR 85 million of capital to shareholders ahead of an eventual liquidation.