Lycos is rolling out its Lycos Phone service today. Like Yahoo! Phone and eBay's (NASDAQ:EBAY) Skype, the software-based offering allows users to communicate for free with other online users, while enabling dirt-cheap voice calls to folks on mobile phones or conventional landlines.
More than just a "me too" product, Lycos is offering long-distance rates in key markets that are less than half of what Yahoo! and eBay are charging. For registered Lycos users, we're talking less than a penny a minute in areas like the United States, Canada, and Europe. Lycos is also giving its validated users a free phone number for incoming calls, something for which Yahoo! and eBay charge about $30 a year.
It's a bold move by Lycos, but the company isn't bearing the brunt on its own. It is partnering with Globe7 to make it happen. Globe7 is providing the platform and absorbing the operating costs, Lycos is promoting the system and the parties will split advertising revenue. Lycos also has a 3-year exclusivity deal in the portals space for the Globe7 soft phone.
I spoke to Lycos COO Brian Kalinowski over the weekend about the service. He was gushing about the rich features, including a built-in media player and a wide assortment of on-demand content. The only area where he feels the Yahoo! Phone service has an edge is in e-mail integration, but that feature is coming in the next two months.
The name Lycos brings back memories of Lycos and Yahoo! going public within weeks of one another in the spring of 1996, and staying joined at the hip as dot-com bellwethers. A couple of years later, Lycos was a $6 billion company reaching out to 47% of all Internet users. Then the pin popped the bubble, and Lycos found itself cashing out to Telefonica's (NYSE:TEF) Terra Networks online arm.
Kalinowski was there for the halcyon days, and he feels that the company's acquisition by the Spanish telco giant led to its loss of focus stateside. With Telefonica looking to duplicate the dial-up success of United Online's (NASDAQ:UNTD) Juno and NetZero through Lycos, it wasn't long before the company's flagship portal magnet went neglected.
Less than two years ago, Telefonica sold Lycos to Korea's Daum Communications. While the Massachusetts-based Lycos now has a parent company that is even further away than Telefonica geographically, Lycos is ready to give it another shot as a major portal.
Both its namesake search site and its Tripod hosted-page community are among Alexa's most popular Internet destinations. It's why Lycos is in a fair position to market Globe7's free soft phone. Once the thrifty catch on, Lycos Phone may even prompt a revival of upper-crust relevance for its parent portal.
Should Lycos reach that point, it would be awfully sweet if Daum would spin off the company to give it a second go as a stand-alone entity. I think that Lycos will find the climate that much kinder than when it was rushed into the mash-up that became Terra Lycos.
Like the Lycos Phone announcement, Daum's timing couldn't be any better.
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Longtime Fool contributor Rick Munarriz has kept Lycos bookmarked over the years, but he does not own shares in any of the companies mentioned in this story.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
