Lycos Europe sees drop in 9M08 revenue

Lycos Europe N.V., one of the leading European portal providers and online advertisers, reported a drop in revenues in the nine months of the year to EUR 46.9 mln compared to EUR 58.4 mln in the same period in 2007, which led to a drop in the the gross margin to 46% (54% last year). Ordinary expenses were down EUR 5.3 mln thanks to strict cost management, but this could not fully compensate for the revenue decline. The EBITDA for the nine months of 2008 came to a negative EUR 19.9 mln, compared to -12.9 mln in the same period in 2007.
Cash, cash equivalents and other investments amounted to EUR 139.2 mln as of September 30. The cash ratio of 3.9 (cash, cash equivalents and other investments divided by total liabilities) and the equity ratio of 80% shows the strong financial position and solid balance of Lycos Europe.
In the short term, the company announced that it will continue focusing on the product offensive to stabilize traffic. Supported by the launch of behavioral targeting, this should help attract advertising partners.
Lycos iQ has already exceeded the key threshold of 1 mln queries. The shopping guide portal "decido" will be further promoted.
Cost management will be further tightened in the fourth quarter of 2008 to offset decreasing revenues, and Lycos Europe said it expects to conclude the strategic review process as planned in the second half of 2008.