Lycos Armenia shuts down

YEREVAN, November 27. /ARKA/. Lycos Armenia is being shut down as a result of the termination of the portal’s activities and hosting services by Lycos Europe.

Zhenya Azizyan, Head of the High and Information Technologies Development Department, RA Ministry of Economy reported that in August 2002 the Lycos Europe Company was founded in Armenia. Later it was renamed Lycos Armenia. At present the company has a 200-member staff.

Lycos Europe, which was among the first Internet searchers in 1990s, has announced its plans to shut down its portal and hosting service system. The company is searching a purchaser of its three other businesses, which will result in the liquidation of Lycos Europe.

“Lycos Armenia was just serving the Lycos Europe portal, and the Government is now conducting negotiations to stabilize the situation within the limits of the possible. The current situation is not a problem inside Armenia. It is only a decision made by the head office of Lycos Europe, which has been affected by the crisis,” Azizyan said.

She pointed out that among the possible solutions is the retraining of personnel.

“We plan a meeting with the company specialists to discuss possible solutions, whereupon we can announce results, including the formation of a crisis group,” Azizyan said.

She pointed out that some fields of Armenia’s IT sector have not only remained unaffected by the crisis, but are prospering, particularly, the developers of 3D technologies for the jewelry industry.

In 1990s, the Lycos searching system was one of the major portals, being leader in Europe, which left Yahoo, as well as the nascent Microsoft network, behind (Google did nit exist at the time). However, in the course of time Lyscos was becoming less and less popular, and Lycos Europe became a loser.

Christoph Mohn, CEO, Lycos Europe, had said that Lycos could be purchased by an American media or telecommunications giant. Nevertheless, the company has failed to find a purchaser during nearly ten months.

Last month Lycos reported a 20% decrease in its proceeds – down to €46.9mln, with the company’s net losses totaling €17.1mln. The managers decided to sell the company in parts.

The Dresdner Kleinwort says that the sale of the company as a whole is a difficult task because Lycos is an unprofitable asset, with its stock held by a number of large companies. The company is rapidly losing popularity as well.

However, the company relies on its history and image. As regards its cost, it was €5.5bln in 2000, whereas it is within €200mln now.

Experts view the shutdown of the portal and business in Europe as the company’s loss to its rivals Yahoo and Google. –0--