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AT&T, Lycos service pact
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May 4, 1998: 10:46 a.m. ET
Lycos to offer AT&T hybrid telephone service on Web site
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NEW YORK (CNNfn) - AT&T Corp. has formed an extensive marketing alliance with Lycos Inc. to jointly offer a variety of services including hybrid Internet telephony, the two companies said Monday.
The deal finally partners Waltham, Mass.-based Lycos, which provides software to navigate the World Wide Web, with an Internet service provider in AT&T WorldNet.
"What we haven't had is the access. This gives us the missing link," Lycos Chief Executive Robert Davis said.
Similar to other search-engine partnerships, the three-year agreement calls for the long- distance carrier to make cash contributions to Lycos. The unspecified payments were characterized as "substantial" during an interview with Davis.
Shares of Lycos (LCOS) popped up 4-5/8, or 7.3 percent, to 68 in early Monday trading on the Nasdaq. AT&T's stock (T) rose 3/4 to 61-1/2 on the New York Stock Exchange.
Under the agreement, AT&T will promote the Lycos service through its online and conventional marketing.
Also, Lycos' Tripod subsidiary, which develops software used to create home pages, will become the exclusive provider for AT&T's home page and one of two providers on AT&T's WorldNet page.
In exchange, Lycos will offer long-distance services under the co-branded "Personal Communications Center" name. These services include AT&T's One Rate Online service, which offers a discounted 9-cents-a-minute rate for Lycos users on their direct-dialed, state-to-state calls.
In addition, Lycos will develop and offer hybrid Internet telephone services such as point-and-click dialing on its Web site. Currently under testing, the service will enable users to scroll through an online directory and automatically dial any particular phone number through a second line by clicking on the listing.
However, all the hybrid service will rely on traditional phone networks to transmit voice and data signals, unlike standard Internet telephony service that carries voice and data signals on the Information Superhighway.
The hybrid services will be offered to Lycos users free of charge in the coming months.
"This important agreement with Lycos is the first in a series of steps AT&T will take to provide people with unprecedented capabilities," said Dan Schulman, president AT&T WorldNet Service.
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Lycos
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AT&T
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