Lycos Reports 126% Increase in Revenues - Company Financial Information

Edge: Work-Group Computing Report, Nov 22, 1999

Lycos, Inc. (NASDAQ:LCOS), the fastest growing Internet portal and the world's largest online community, Monday announced financial results for its first quarter of fiscal year 2000 ended October 31, 1999. Revenues for the quarter were $56.0 million, representing an increase of 24% over the previous quarter ended July 31, 1999 and a 126% increase over the comparable period from the previous fiscal year. The Company reported a profit of approximately $700,000 or $0.01 per share for the quarter before amortization of intangible assets.

"We are extremely pleased with our performance this quarter as our growth rates have once again led the industry," said Edward M. Philip, Lycos' chief operating officer and chief financial officer. "In addition, through a series of acquisitions and key strategic alliances, we expanded the depth and breadth of our services and distribution throughout the world."

A number of significant accomplishments marked the company's first quarter in fiscal year 2000. Lycos became the Internet's first true full service ecommerce portal with the launch of LYCOShop, the Web's most complete integrated shopping destination. The Company expanded the distribution channels for its product offerings by extending its alliance with IBM and forming alliances with such notable companies as Fidelity and America Online. Further, Lycos announced two key acquisitions including Quote.com, one of the Web's premier financial sites and Internet Music Distribution, Inc. ("IMDI"), the developer of Sonique, one of the most popular MP3 players. In addition, the Company, through its strategic investment arm Lycos Ventures, made investments in several emerging companies including FogDog Sports, LifeMinders and Conducent. Internationally, Lycos continued its aggressive rollout plan with the launch of Lycos Asia, Lycos Korea, Lycos Latin America and the further expansion of Lycos Japan.

"Our industry leading growth, global reach, premier alliances and best-of-class products give us tremendous momentum and position us for leadership into the 21st century," said Robert J. Davis, president and CEO of Lycos.

Key recent accomplishments: Strategic Milestones - Lycos and Singapore Telecom formed a $50 million pan-Asian joint venture that will bring localized versions of Lycos.com and Tripod to more than 10 additional Asian markets, including China, India and Singapore.

- Lycos and America Online (AOL) announced the formation of a strategic alliance to bring AOL Instant Messenger ("AIM") to Lycos and link AOL's 45 million member AIM community to Lycos users. In addition, Lycos' distribution with Netscape was significantly expanded in scope and duration.

- Lycos announced Lycos Latin America with the launch of 12 localized portal and community sites for Latin America, and two sites for the Spanish-speaking population in the United States. Localized services include Brazil, Mexico, Argentina, Chile, Peru and Venezuela.

- Lycos Japan added leading Japanese media company Kadokawa as a 7.4% partner in the joint venture and in the process raised an additional $32 million of financing for the business.

- Lycos announced the launch of Lycos Korea and Tripod Korea through a joint venture announced earlier in the year with Mirae Corporation. In its first 10 days of operation, Tripod Korea signed up more than 80,000 members and is the fastest growing online community in Korea.

- Lycos announced an expanded worldwide alliance with IBM to provide one-button access to top content on the Internet. Four Easy Launch Buttons on the new IBM ThinkPad I Series directly connect users to Lycos content and shopping.

- Peter Lund, former president and CEO of CBS, Inc., joined the Lycos board of directors.

E-commerce and Advertising - The Company unveiled LYCOShop, the Internet's most complete shopping destination. LYCOShop has assembled more than 1,000 stores including The Sharper Image, Crate & Barrel, Crutchfield, and Neiman Marcus, while integrating online auctions and classifieds with retail, forming a seamless shopping destination.

- Lycos announced an alliance with Fidelity to deliver powerful customization services and content for use in Fidelity's new online financial Website, "Powerstreet." As part of the agreement Fidelity features Lycos prominently in its multi-million dollar "Powerstreet" advertising campaign. Fidelity has also become a charter advertiser on Lycos' Quote.com.

- Lycos and AmericanGreetings.com announced a three-year strategic alliance that will make AmericanGreetings.com the exclusive online greetings provider across the Lycos Network. The two companies will create a co-branded site that will feature AmericanGreetings.com's extensive selection of free and subscription greetings content.

- Cardservice International, Inc. ("CSI") and Lycos announced an agreement for CSI to provide payment processing services to Lycos merchants. The alliance will allow merchants within the Lycos shopping area to easily establish a payment processing relationship with CSI and be selling online within hours.