Ybrant Digital, a Hyderabad based digital marketing solutions company, has inked a stock purchase agreement to acquire Lycos Inc from Daum Communications of Korea for $36 million, in an all cash deal. Daum had bought the non-European and non-Spanish business of Lycos from Spain’s Telefonica owned entity Terra Networks, back in 2004 for $95 million. (Update:) It sold Quote.com ($30 million), Wired.com ($25 million), Matchmaker.com, Getrelevant.com and Webmonkey.com since 2006, so the transactions are not exactly comparable. Terra had itself bought Lycos for $12.5 billion in 2000 in an all stock deal. Terra eventually shut down Lycos Europe in 2008, and Lycos (Daum) bought back rights for Europe. So Ybrant has bought a company with worldwide rights to Lycos owned brands.

Over the past few years, Ybrant has acquired Australian ad network company Max Interactive, Israeli ad firm Oridian ($13.5 million), US-based DW Net Ventures LLC / MediosOne ($4 million), Serbia-based Seenetix for its flagship bulk emailing product VoloMP ($2.2 million) and US- based Pennyweb Inc ($10 million) and Argentina based ad network DreamAd. (Also read: How Ybrant Funds Its Acquisitions)

Update: According to a recent filing (pdf) from Daum communications, Daum’s only Global SBU (i.e. Lycos) reported revenues of KRW 8984 million (around $7.2 million) for the quarter ended June 30th 2010, and an operating profit of KRW 1884 million (around $1.58 million). Lycos underwent a restructuring in 2009. Going by the revenues, of around $24.74 million, this appears to be a rather reasonably priced deal.

Source: Daum financials for Q109, Q209, Q309, Q409, Q110, Q210.

Lycos went from having 82 employees at the end of 2008 to 47 employees at the end of 2009. Its management team includes CEO Jungwook Lim, who held held several management positions at Daum before joining Lycos; Edward Noel,VP and Chief Strategy Officer, an old Lycos hand who joined the company in early 2000, and was at KPMG in Boston before that move. Christopher Cummings is Director of Product Management at Lycos, Joe Pranevich is Director of Technology and Operations and James Brooks is Senior Product Manager of Web Publishing.

Lycos was once an Internet powerhouse, but today is hardly a shadow of its former self. It currently averages 12-15 million unique visitors in the US, and is, according to its website, a top 25 Internet destination with 60 million unique visitors globally. The Lycos network includes search engines like Lycos.com and HotBot (once a very popular search engine), community sites like Tripod, Angelfire and Gamesville. Lycos also offers email services; Angelfire used to offer email services as well, though it was eventually merged into Lycos mail. Tripod, Hotbot, Angelfire and Lycos would be familiar names if you were online in the late 90’s or early 2000’s. Not anymore, though.

For Ybrant, this is a forward integration: a marketing and advertising entity buying a publisher. Ybrant, essentially an online marketing company, now it gets access to properties to run advertising on, and also leverage its own network for promoting Lycos.

Lycos Timeline:
Aug 16, 2010: Ybrant Digital buys Lycos from Daum for $36 million
Jun 11, 2009: Lycos (Daum) takes over rights to Lycos brands in Europe (paidcontent)
December 2008: Lycos Europe Opts for Liquidation, $66 million paid back to shareholders (paidcontent)
Aug 2, 2004: Daum Communications buys Lycos from Terra Networks for $95 million, except Lycos Europe and Lycos’ Spanish-language portal in the US. (Wired)
May 15, 2000: Telefonica’s Internet division Terra Networks buys Lycos for $12.5 billion in an all stock deal (CNET)

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