Lycos Europe was founded in 1997 when Lycos signed a joint venture agreement with German group Bertelsmann. Two years later (1999) they opened branches in several cities. In Spain, a delegation was opened that was run by Oscar Sanchez for 4 years, now General Manager for Tech Sales Group.

Bertelsmann group was the content leader in Europe after merging with Lycos - one out of 3 Europeans was a Lycos Europe user. They were overwhelmingly successful and it went public at 24€.

In May 2000, Lycos is bought by Terra Networks (Telefonica) for $12500.

They start buying strategically in Europe. They buy, among others, Swedish ISP Tiscali for 13 million Euros in August 2004, or Spray Network (8 portals in European countries) for 674 million Euros in September 2000, increasing the number of registered users to 8.5 million and 19 million visited pages.

Those were years of incredible success, but the dotcom crisis and bad management brought about its debacle.

At the beginning of 2004, Lycos lays off 100 workers in Europe, leaving 825. In 2005 half of the Spanish staff is laid off. They also offered them to move to other countries, especially Germany.

On the other hand, 34 IT people in France (out of 109) were offered to move to Armenia for 300€ ad 500€ a month - in other words, an offer they could not refuse.

With Telefonica and Bertelsmann group having 32% of Lycos shares (the rest in the free market), they decided to sell their equity share for 200 million Euros (Lycos was worth 10 billion Euros in the market in 2000). Today, Lycos shares are at 0.24€.

After years trying to find a buyer, they have now decided to stop their operations and save face by selling at least their domains and shopping sites.

Former General Manager in Spain perfectly explains the reasons that caused the failure of Lycos Europe. I quote:

“Instead of supporting its subsidiaries with a state-of-the-art technology regarding search engines, management spent their time promoting content with highly qualified and costly programmers and staff. They did not invest in technology or content. R&D was nonexistent. Google took the baton on search engines, and Lycos Europe was never able to find its niche. They wasted money. They wasted money on senseless TV ad campaigns, along with a terrible management, worth of being studied in business school as an example of what not to do.”

“A company cannot have more directors than workers, and this is what happened at Lycos Europe headquarters in Germany. They reached 400 workers, half of them holding a director’s position. I still remember a conference in Palma de Mallorca - of course - where I stood up during a management meeting and, in front of more than 100 directors, I asked how many of them had generated enough sales as to cover their paycheck. Only one stood up.”