Wednesday, April 30, 2008

LycosBurgh

I really thought there was nothing to say today, but then this caught my attention: Lycos Europe seems to be hitting that final dot.com tailspin.

Why local interest? Lycos Europe is a distinct corporate entity, but still it was founded in part by Lycos. It's too long to write out the back story to this..... but remember when the departure of Lycos symbolized all that was wrong with Pittsburgh? Supposedly unable to find local workers they picked up and moved to Boston, taking with them all the economic growth. Lycos was founded at CMU, would be capitalized with some VC funding out of Boston, given a Bostonian CEO and then moved to Boston unsurprisingly. Thus I think most now say it was a lack of local VC funding at the time, if anything, that ultimately lead to Lycos departure.

But the early history of Lycos really set the stage for the dot.com party that followed when it IPO'd pretty much spontaneously in 1996 and then when it was sold to the Spanish firm Telefonica for $5-10 Billion in 2000. Lycos Europe was not part of the deal and kept by Telefonica's subsidiary Terra Networks and has been muddling along until now.

But if you look into it, the total jobs that Lycos would generate in Boston would never really amount to that much. The dot.com bust came quickly and Lycos would be resold to the Korean firm Daum for all of $95 million in 2004. You think you lost bucks in the stock market? I don't quite know how the main Lycos is doing these days as a business, but its not what it could have been. The latent thought out there is that it could have been Google and I suppose it follows that Pittsburgh could have been Mountain View. A fun little dream that will remain counterfactual.

One offshoot of all of this.... I don't want to speak for him, but I think that Richard Florida explains regularly how the history of Lycos in Pittsburgh forms one of the datapoints that would lead him to the whole Creative Class thesis. I'm not quite sure you can pin a number on it, but it would be ironic if this is true: I bet that all that forms Richard Florida Inc. these days is a bigger financial enterprise than the cumulative remnants of Lycos itself at this point. Even if that is hyperbole at the moment, and I am not sure if it is or isn't, given the trends at Lycos it may be true before too long.