The companies today launched The Lycos/Autoweb Channel, a new online destination that will serve as the automotive hub for all the diverse sites and destinations that comprise the Lycos Network including all wireless offerings. With the new automotive site, Lycos is the only portal on the Web to combine the entire depth and breadth of car-buying and unique content resources from Autoweb with new features to be jointly developed by the two companies. Access to The Lycos/Autoweb Channel will be strategically integrated with links throughout the Lycos Network, making the site's broad array of services directly accessible to Lycos's nearly 33 million users.

Under the terms of the agreement, Lycos will acquire an approximately 10 percent stake in Autoweb.com. The companies plan to jointly offer a wide range of targeted marketing programs to the automotive industry and will share in advertising and e-commerce revenues, traffic and consumer information generated from these new offerings. The agreement also provides for Lycos to receive yearly multi-million-dollar payments.

During the term of the agreement, Lycos and Autoweb plan to work together to address the emerging markets for wireless and web-enabled automobile services. The companies will focus on jointly partnering with vehicle manufacturers and automotive technology suppliers to enhance the next generation of in-vehicle wireless systems. With their combined content and technology capabilities, the companies plan to offer new product and service offerings including Web access, navigation, content and value-added consumer services.

"I believe the synergies resulting from this deal will strengthen Autoweb's market position, allowing us to reach a wider audience and uniquely address the strategic needs of manufacturers in the rapidly evolving online automotive market," said Dean DeBiase, chairman and CEO of Autoweb.com. "Together, Autoweb and Lycos can leverage the depth and breadth of our new offerings to help the vehicle manufacturers position their brands to consumers in new and innovative ways, with the goal of helping them sell more cars."

The Lycos/Autoweb Channel continues the Lycos strategy to build out the Network with content rich, deeply integrated vertical destinations. According to Bob Davis, president and CEO of Lycos, "This new automotive destination is another step in Lycos's effort to build out rich content in key vertical markets, and demonstrates the powerful combination of content and commerce that benefits consumers and sellers. The deep integration of the Lycos Network with Autoweb's excellent capabilities will provide auto makers with the first opportunity to effectively segment their marketing efforts to targeted groups online using the power of the Web's leading multi-brand network."

Together, the companies will capitalize on future growth opportunities in the automotive industry, which currently spends over $14 billion annually to entice consumers to buy vehicles. The Internet is playing an increasingly important role in consumer automotive purchases. More than 55% percent of new car buyers currently use the Internet as part of their car-shopping process, according to J. D. Power and Associates, and the figure is expected to grow to 80% by 2003. Cars sold using the Internet are expected to increase from $13.5 billion in 1999 to more than $40 billion in 2000.

(April 24, 2000)