Financial: Lycos Reports 2nd Quarter Revenues Up 142% Over Last Year and 24% Over Last Quarter - Company Financial Information

Edge: Work-Group Computing Report, March 1, 1999

Lycos, Inc. (NASDAQ:LCOS), the second most visited hub on the Internet and largest online community, Thursday announced financial results for its second quarter ended January 31, 1999. Revenues for the quarter were $30.6 million, representing an increase of 24% over the previous quarter ended October 31, 1999 and a 142% increase over the comparable period from the previous fiscal year.

The Company reported a loss of $1.5 million or $0.03 per share for the quarter before merger-related expenses. This compares to a net loss of $2.6 million or $0.06 per share for the previous quarter ended October 31, 1998. Net loss per share for the quarter ended January 31, 1999 after merger-related expenses was $0.22. "Our 39% growth in traffic to 50 million page views per day demonstrates the success of the Lycos Network and our multiple-brand strategy," said Edward M. Philip, Lycos' Chief Operating Officer and Chief Financial Officer. "The ability to monetize our traffic growth through value-added advertising and commerce platforms is evidenced by our strong revenue growth. In addition, we continue to greatly improve both our product and our bottom line." On February 9, 1999, the Company announced the formation of USA/Lycos Interactive Networks, Inc., a three way merger between Lycos, Ticketmaster-CitySearch Online and certain USA Network properties--Home Shopping Network, Ticketmaster and First Auction. The combined entity will create a significant electronic commerce operation, reaching 70% of cable television households and nearly 50% of Internet users while providing the infrastructure that currently fulfills 77,000 shipments per day. These strengths, combined with the country's leading local portal and preeminent ticketing service, will create one of the world's leading interactive platforms. "Lycos' strategic execution continues to lead the industry. As was the case with our leadership in community and our development of the multi-brand `Network' strategy, the USA/Lycos announcement once again gives us first-mover advantage in many of the fastest growing areas of our industry," said Robert J. Davis, President and CEO of Lycos. "As we offer our advertisers and commerce partners a one-stop shopping experience and superior targeting, we simultaneously offer users a diversity of programming and content. USA/Lycos will clearly establish itself as the Interactive Network for the new Millenium." Key accomplishments for the quarter: Strategic Milestones o Subsequent to quarter-end, on February 8, the Company entered into agreements with USA Networks, Inc. (USAi) and Ticketmaster Online-CitySearch, Inc. (TMCS). Under the agreements TMCS, Lycos and USAi's Home Shopping Network, Ticketmaster, Internet Shopping Network/First Auction will be combined to form a company to be named USA/Lycos Interactive Networks, Inc. The formation of USA/Lycos is subject to the approval of the Lycos stockholders and customary regulatory approvals. USA/Lycos would become one of the largest e-commerce entities in the world and the only global Internet portal with local content, auctions, and a direct commerce business. E-commerce and Advertising o Lycos opened the "Lycos Store" in time for the 1998 Holiday Season. The virtual department store carries thousands of name-brand products that shoppers can purchase easily and directly from Lycos. The Lycos Store is not only an extension of the Lycos Shopping Network; it enhances existing relationships with Lycos e-commerce partners, such as barnesandnoble.com, CDnow, Preview Travel and Bluefly.com. o Subsequent to the quarter, in February, Lycos and Open Market announced that they have entered into a revenue-sharing agreement to integrate the power of Open Market's software solutions into Lycos' burgeoning e-commerce infrastructure. The agreement enables Lycos to deliver a platform that offers the ultimate in convenience and efficiency for both the shopper and the vendor. o Lycos and Bluefly.com announced a strategic alliance that establishes Bluefly as a premier commerce vendor of Lycos for both the 1998 and 1999 Holiday Seasons. Bluefly is a leading designer outlet store that sells brand name apparel at significant discounts to retail prices. o AuctionConnect was introduced (http://auctionconnect.lycos.com). AuctionConnect is a shopping service unique to the Lycos Network that allows Internet users to obtain the best deals by searching multiple auction sites for a particular product. Lycos received exclusive rights to Bidder's Edge technology. o Lycos and IBM entered into an agreement to drive new users to the Lycos Network by providing ultimate Internet start page capability onto the desktops of all new IBM Aptiva PCs. o Bertelsmann Online, BOL.com, became the exclusive bookseller for Lycos Europe in a three-year, $10 million agreement. The Lycos Network o The Lycos Network extended its reach to 48.8% of all Internet users (MediaMetrix, 1/99 report). o Lycos launched the "Go Get It" national advertising campaign targeting new and experienced Internet users to visit the new Lycos Network and make it their hub for Internet activity. o Lycos and the National Football League jointly designed and built the official Web site for Super Bowl XXXIII: Superbowl.com. Superbowl.com delivered a true multimedia experience to fans, which included real-time updates and images, live commentary, chats and a host of interactive games and content without any interruption in service. Lycos was featured in TV programming leading up to the Super Bowl that provided significant brand exposure to over 130 million viewers worldwide. o Lycos launched an innovative program, Lycos Network Services, to distribute traffic-building services. The program helps Web sites build member loyalty and strengthen their online presence by offering a suite of key services, such as E-mail, Homepages, Web Guides, Search, People Finder Directory, and Personal Guide. Under the program, Lycos will sell the advertising related to its services. Product Enhancements o Tripod, a Lycos subsidiary and a leading community site, announced "Private Pods," a free service that enables members to build private Web communities. The Private Pods offer users a secure place to publish personal or private information and communicate with friends, family and co-workers by allowing the homepage builder to restrict who has access to information on a selected homepage or a group of homepages. o Lycos and Fast Search & Transfer ASA (FAST) announced an agreement to create and market a co-branded site (http://ftpsearch.lycos.com) featuring FAST's extensive database of more than 100 million FTP files and their associated search and compression technologies, resulting in faster download times for images and Web pages. o Subsequent to the quarter, in February, Lycos and FAST introduced the world's largest searchable database of MP3 audio files on the Web. From popular music to amateur recordings, MP3 Search gives music fans a quick and easy way to find high quality, low memory MP3 recordings from one central location, http://mp3.lycos.com. o Lycos and SmartMoney.com launched a co-branded site that expands Lycos Investing to include the award-winning personal finance tools and advice that has become a trademark of SmartMoney, the Wall Street Journal Magazine of Personal Business. o Lycos and AutoSite announced the availability of a new source of information for automobile shoppers. The free service provides consumers with extensive automotive Fact Sheets, which include new vehicle specification and pricing information and is available at http://www.lycos.com/autos/autosite.html. Founded in 1995, Lycos, Inc. (NASDAQ:LCOS) owns the Lycos Network, the second most popular hub on the Internet, combining all aspects of community, leading Web navigation resources and cutting-edge business and consumer e-commerce solutions. The Lycos Network, a unified set of properties that delivers mass reach and diversity of audience and programming, is composed of best-of-breed services: Lycos.com, Tripod, WhoWhere?, Angelfire, MailCity, Guestworld, HotBot, HotWired, Wired News, Webmonkey, and Suck.com. Located at http://www.lycos.com, Lycos.com --"Your Personal Internet Guide"-- is dedicated to helping each individual user locate, retrieve and manage information tailored to his or her personal interests. Headquartered near Boston in Waltham, Mass., Lycos, Inc. maintains U.S. offices in New York City, Pittsburgh, Dallas, Chicago, Los Angeles, San Francisco, Mountain View, Calif. and Williamstown, Mass. International offices are located in Germany, Italy, France, Japan, the UK, Spain and The Netherlands. Subsequent to quarter-end, on February 8, the Company entered into agreements with USA Networks, Inc. (USAi) and Ticketmaster Online-CitySearch, Inc. (TMCS). Under the agreements TMCS, Lycos and USAi's Home Shopping Network, Ticketmaster and Internet Shopping Network/First Auction will be combined to form a company to be named USA/Lycos Interactive Networks, Inc. The formation of USA/Lycos is subject to the approval of the Lycos stockholders and customary regulatory approvals.