Financial: Lycos Reports 166% Increase in Revenues. 51% Sequential Growth in Quarterly Traffic 30% Increase in Revenues from Previous Quarter Lycos Network Reach Grows to 44.5% - $0.35 per share net loss - Company Financial Information

Edge: Work-Group Computing Report, Nov 23, 1998

Lycos, Inc. (NASDAQ:LCOS), the second most popular hub on the Internet and largest online community, Thursday announced financial results for its first quarter ended October 31, 1998. Revenues for the quarter were $24.8 million, representing an increase of 30% over the previous quarter ended July 31, 1998 and a 166% increase over the comparable period from the previous fiscal year. The Company reported a loss of $2.6 million or $0.06 per share for the quarter before amortization, one-time merger-related expenses and gain on sale of equity securities. This compares to a net loss of $1.6 million or $0.04 per share for the previous quarter ended July 31, 1998. Net loss per share for the quarter ended October 31, 1998 after amortization and one-time charges was $0.35.

"Once again Lycos far exceeded Wall Street's estimates of every key metric. This quarter's explosive growth in revenue, reach and traffic reaffirms the strength of the Lycos Network business model," said Edward M. Philip, Lycos' Chief Operating Officer and Chief Financial Officer. "Our strong operating results this quarter are evidence of our ability to quickly integrate acquisitions, monetize traffic and create operating efficiencies throughout the Lycos Network."

During this quarter, Lycos unveiled the Lycos Network, which fortifies our position as a premier media company. The Lycos Network combines diversity of programming with mass audience reach - a business model for continued expansive growth. Consumers get access to tailored programming while advertisers and commerce partners have access to a large audience with unparalleled market segmentation. The Lycos Network provides the Company cost efficiencies in infrastructure, operations and distribution. With its unduplicated reach of 44.5% of Web users or 27.8 million unique visitors in October (see separate release issued earlier Thursday), the Lycos Network has strengthened its position as the Web's second most visited hub or portal. Usage of the Lycos Network grew 51% to 36 million page views per day in October, up from 24 million page views per day in July.

"We are extremely pleased with the progress we made this quarter toward our mission of becoming the world's most visited online destination," said Robert J. Davis, President and CEO of Lycos. "Through a combination of internal growth and a series of strategic acquisitions, we have created a network of properties that gives Internet users a wider choice of content, offers advertisers unprecedented targeting and reach and leverages the cost efficiencies of our infrastructure. Lycos has become the world's fastest growing Web network and with our tremendous momentum, we are excited about the opportunities that lie ahead."

Key accomplishments for the quarter: Acquisitions * Lycos acquired WhoWhere?, which offers a complete line of Web-based applications, including its leading directory services, popular e-mail service and Angelfire, a leading Web community. With Angelfire, Tripod and Guestworld, Lycos owns the Web's largest community with over 5 million registered members.

* Lycos signed a definitive agreement to acquire Wired Digital, home of one of the strongest brands and innovative families of products and services on the Web, including HotBot, HotWired, Wired News, WebMonkey, Suck.com and Web 101.

E-commerce and Advertising * Lycos signed a $22.5 million agreement with Fleet Bank, which, among other initiatives, allows consumers to apply for a no-annual-fee credit card bearing the Lycos brand. This partnership enables Lycos to extend its relationship with members and consumers with a Lycos-branded credit card. Fleet Bank will also promote Lycos services to Fleet's existing card members.

* Lycos introduced AuctionConnect, a unique shopping service that allows Internet shoppers to get the best deals by searching multiple auction sites for a particular product. The DealWatch feature of AuctionConnect allows users to receive automatic, personal notifications when specific items are available for auction. Lycos also has the exclusive right to use the Bidder's Edge proprietary technology for the service.

* During the quarter, Lycos also entered into agreements with Boston.com, CareerPath.com, iVillage and Microsurf.

Product Enhancements * Each of the Lycos Network sites has been redesigned to allow for easy navigation amongst Lycos Network properties and to provide users easy access to a multitude of services and content.

* Lycos launched the redesigned Lycos.com making it faster and easier for users to navigate the Internet and find what they need. Influenced by extensive market research, Lycos.com's interface and navigation features are designed to give users the most precise and relevant information at all times. As a direct result of these enhancements, Lycos was recently ranked as the second fastest website by Keynote Systems.

* Tripod, a Lycos subsidiary and leading community site, launched a redesign of the www.tripod.com site with improved navigation, functionality, organization and a fresh new look. The new design, based heavily on feedback from Tripod's over 2 million members, fully integrates the Lycos search technology and divides the site into sections centered around activities that members engage in most: Build, Explore, Interact, and Buy/Sell.