SINGAPORE: Lycos Asia will revamp its business model to lessen its
dependence on online advertising as the economic climate worsens.
The shift in strategy follows its move to retrench 200 staff,
representing 60 per cent of its workforce, and centralise its regional
operations in Shanghai and Singapore. The company will maintain a
minimal head count in its other offices in Asia.
The cutbacks took place earlier in the month and included around 28
people being retrenched in Hong Kong and another 28 people in China.
This will leave four positions in Hong Kong and around 80 staff in
China.
The Singapore office will service the Lycos portals for South Asia
including Singapore, Malaysia, India, Indonesia, Philippines and India.
Shanghai will service China, Hong Kong and Taiwan.
The company is cutting costs so it can become profitable sooner and
counter the global economic downturn.
It has also been earning revenues from developing corporate sites - such
as My Singtel and SingNet - and by charging firms wishing to put content
on Lycos' portals.
But it plans to focus more on email and wireless marketing as it remakes
the company to offer advertisers a more complete digital marketing
service.
Additional revenues will come from ecommerce and by charging web users
for some services and content.
Contrary to news reports in Hong Kong, Lycos Asia's evenly-split
joint-venture partners - Terra Lycos and Singapore Telecommunications -
remain committed, said Andy Pe, Lycos Asia corporate affairs
manager.
He said the firms injected more funds into the business following Lycos'
take-over earlier this year of Myrice.com, a mainland China web
portal.
The extra liquidity increased Lycos Asia's market capitalisation to more
than US$50 million, according to Pe.
Some of Lycos Asia's major clients - including online advertising firms
BMC Media and Engage - have either gone out of business or heavily
downsized their Asian operations.