Lycos leasing out office space – Tough times ahead

Preface: Lycos announced they were no longer accepting paid advertisment for Gambling Terms in January. This sort of fiscal ineptitude on the part of management is further evidenced by this news release.

Lycos offers office space for lease
By Stefanie Olsen
Staff Writer, CNET News.com

Web portal Lycos is offering for lease space at its Northern California offices in what could be a sign of further cost-cutting at the company.

Lycos, a division of Spanish Internet conglomerate Terra Lycos, is advertising available space at its Mountain View, Calif., headquarters, according to a for-lease sign posted at the 850 N. Shoreline Blvd. location. Lycos plans to continue occupying half the space and is seeking to rent out the other half, or 15,000 square feet, according to Cornish & Carey Commercial, the company’s real estate agent.

Brian Payea, a Lycos representative, would not confirm or deny that the office was for lease, nor whether staff would be relocated or laid off. “I can’t comment on plans that are not ready to be announced,” Payea said.

Staff at the office who asked not to be identified said they are bracing for layoffs and possible relocation offers, although no announcement has yet been made. About 60 employees occupy the Mountain View office.

The decision to lease part of its office space comes about a year after Lycos trimmed 147 people from its U.S. operations. Headcount fell by another 90 positions through 2003, leaving the company with about 417 employees, company officials said.

Lycos has been belt-tightening lately. This month, it closed its collection of community sites, including chat, message boards and clubs, in an effort to refocus its business. The company owns HotBot search technology, home page builders Angelfire and Tripod, its blogging site, and online personals site Matchmaker.

Traffic to Lycos’ Web network has also dropped in the past year. From October 2002 to December 2003, the number of unique visitors to the network dipped from about 35 million to 32 million, according to market researcher Nielsen NetRatings.

Along with others, Lycos has been hit by a decline in online advertising spending. Among other things, German media giant Bertelsmann renegotiated a $675 million in advertising with Terra Lycos, and the Barcelona-based company subsequently reorganized. In late 2002, Terra Lycos’ former head of U.S. operations, Stephen Killeen, left the company.