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AT&T, Lycos Join Forces to Attract Web Users

Analysts predict more free services as directory and search services compete in expanding market.

By Rebecca Sykes, PCWorld   

The announcement reflects an intensifying fight to control how World Wide Web users get to the Internet. It follows yesterday%squots news that Netscape Communications and Excite have forged a similar marketing and development partnership.

Under the terms of the AT&T and Lycos deal, the telecommunications giant will pay an undisclosed sum to display its traditional offerings, such as long-distance phone service and phone cards, at a %dquotpersonal communications center%dquot section on the Lycos Web site, according to Madeline Mooney, director of communications at Lycos. Registered Lycos users will be offered the AT&T services at special prices.

The companies also agreed to package AT&T%squots WorldNet Internet service with Lycos%squots offerings, which have grown from their origins as a search service to include directories, chat rooms, and content, Mooney said. The package will be available within three months in the United States only, and pricing has yet to be worked out, she added.

The companies will also jointly develop new technology combining voice with Web applications. Currently in testing is software that brings voice to traditional keyboard-based Internet chat sessions, Mooney said: %dquotYou%squotll be able to click and convert to voice-enabled chat%dquot while still preserving confidentiality and anonymity.

Lycos and its newly acquired subsidiary, Tripod, will put content on both AT&T%squots corporate site and its WorldNet site, Mooney said. The content will include Tripod%squots home page creation service, she said.

The deal with Lycos gives AT&T a way to access more potential customers, and for Lycos it fills an significant hole in the company%squots strategy, according to Mooney.

%dquotWhat we were missing was the access piece,%dquot Mooney said. %dquotIn the next 100 days, we%squotll have a directory that%squots better than Yahoo.%dquot That will give Lycos what it needs to take on the competition, she said.

This week%squots news illustrates that the push is on for companies such as Lycos and Excite to make sure they are not left out of the evolving Internet landscape, according to one observer.

%dquotThere%squots a limited window to establish a top position in the business, in getting eyeballs and loyalty,%dquot said Peter Krasilovsky, vice president at Arlen Communications.

With America Online heavily pushing aol.com and Microsoft readying a similar Internet site, internally called MSN Start, for release by the end of the year, some of the smaller, unaffiliated players are anticipating a shifting Internet scene, Krasilovsky said.

%dquotThe other guys, the also-rans, are beginning to realize they%squotre getting squeezed out of the game, so you%squotre seeing a lot of activity to make sure that they don%squott end up as number four or number five,%dquot Krasilovsky said.