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Lycos sees meteoric growth
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August 20, 1998: 9:26 a.m. ET
CEO Bob Davis says portal will be the biggest Web company within a year
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NEW YORK (CNNfn) - Unless your company is named Yahoo! or Excite, it's an uphill battle in the Internet portal industry. But Lycos Inc. is showing signs of heading in the right direction.
After Wednesday's closing bell, Lycos (LCOS) reported better-than-expected second-quarter earnings, posting an operating loss of 9 cents a share. Wall Street had forecast a loss of 13 cents a share.
The company also is adding new features to its site and striking deals with several other Internet companies. Lycos President and Chief Executive Officer Bob Davis spoke with CNNfn's Bruce Francis about his company's direction. Here is a partial transcript of their conversation.
BRUCE FRANCIS, CNNfn ANCHOR, DIGITAL JAM: Congratulations on your numbers.
BOB DAVIS, LYCOS CEO: Thanks very much. It was a great quarter.
FRANCIS: First of all, of course, with a company like yours, it's not really the bottom line that analysts are looking at. They're looking for things like revenue growth. How did that do compared to your expectations?
DAVIS: Oh, it was, it was a fantastic quarter. We were in excess of 20 percent over consensus estimates for the quarter, 26 percent sequential revenue growth, that's quarter over quarter. Just an absolutely great quarter: 145 percent over the previous year.
FRANCIS: What was doing best for you? Was it advertising? Internet commerce? And where are you putting most of your hopes for next quarter?
DAVIS: They're both growing well ahead of any schedule we could have laid out for the company. Advertising -- we had in excess of 845 advertisers at the end of the quarter. Internet commerce revenues -- we continue to see new partners at every level of the site. My enthusiasm for the business has really never been higher.
FRANCIS: What kind of guidance are you giving analysts tonight about the quarters to come?
DAVIS: I'm very bullish. I think people should look for more of the same. And what does more of the same mean? That means aggressive growth at every level of the company.
We've exceeded every metric that the street has laid out for us in this business in the course of the last year, including the most recent quarter. Top line, bottom line, paid-view growth.
I heard you say in the opening comments, how do we fare up against some of the competitors? The important thing to note is that Lycos is the youngest company in this portal space. We have bypassed everybody except three players. And the only ones that we haven't passed to date, in terms of audience reach, are America Online (AOL), Yahoo! (YHOO) and Microsoft (MSFT), and we're gaining on every one of those guys.
The Lycos network has a reach of 32.3 percent. [It's the] fourth-largest Web destination in the world. And if you extrapolate our rate of growth compared to anyone ahead of us, we're going to be the largest company on the Web in the year, within a year.
FRANCIS: The other shoe that a lot of folks are still waiting to drop is some sort of major deal with a major media player, which has become something a lot of analysts are looking for. Should, or would you encourage us to watch for that?
DAVIS: I'll give you two answers to that. One is that we don't have any short-term plans to buy any of the major media companies, but you never know if that will change.
But having said that, we have a major media alliance. Bertelsmann, third-largest media company in the world, is our joint venture partner throughout Europe. We have Lycos services running in 11 European countries with their great assistance. We're growing this into a rapidly growing media company. 
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Lycos
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