In 1996, the company completed the fastest IPO, from inception to offering, in NASDAQ history and in 1997 became one of the first profitable internet businesses in the world. Over the course of the next several years Lycos acquired nearly two dozen high profile internet brands including Tripod, Gamesville, WhoWhere, Wired Digital, Quote.com, Angelfire, and Raging Bull.
Lycos Europe was a joint venture between Bertelsmann and Lycos, but has always been a distinct corporate entity. Although Lycos Europe is the largest of the overseas ventures, several other companies also entered into joint venture agreements, including Lycos Canada, Lycos Korea, and Lycos Asia.
Near the peak of the internet bubble in May 2000 Lycos announced its intent to be acquired by Terra Networks, S.A., the internet arm of the Spanish telecommunications giant, Telefonica, for $5.4 billion. The acquisition price represented a nearly 3,000 times return on the initial venture capital investment in Lycos and about 20 times its initial public offering valuation. The transaction closed in October 2000. The merged company was renamed Terra Lycos yet the Lycos brand was the US franchise. Overseas, the company continued to be known as Terra Networks, S.A. Davis left the company shortly after the merger was completed to join Highland Capital Partners, a premier venture capital fund, where he now serves as a Managing General partner and concentrates on internet investments.
On August 2, 2004, Terra announced that it was selling Lycos to Seoul, South Korea-based Daum Communications Corporation for $95.4 million in cash, less than 10% of Terra's initial multi-billion investment. In October 2004, the transaction closed, and the company name was changed back to Lycos, Inc. The remaining Terra half of the business was subsequently reacquired by Telefónica.
Under new ownership, Lycos began to refocus its strategy in 2005, moving away from a search-centric portal, toward a community destination for broadband entertainment content. With a new management team in place, Lycos also began divesting properties that were not core to its new strategy. In July 2006, Wired News, which had been part of Lycos since the purchase of Wired Digital in 1998, was sold to Conde Nast and re-merged with Wired magazine. The Lycos Finance division, best known for Quote.com and Raging Bull.com, was sold to FT Interactive Data Corporation in February 2006, while its online dating site Matchmaker.com was sold to Date.com. In 2006, Lycos also regained ownership of the Lycos trademark from Carnegie Mellon University, becoming Lycos, Inc. once again.
During 2006, Lycos introduced services including Lycos Phone, which combined IM, video chat, real-time video on demand and an MP3 player. In August the same year a new version of Lycos Mail was released that allowed sending and receiving mega files, including unlimited size file attachments. In Nov. 2006, Lycos began to roll out applications centered around social media, including the Web's first watch & chat video application, with the launch of its Lycos Cinema platform. In Feb. 2007, Lycos MIX was launched, a tool allowing users to pull video clips from YouTube, Google Video, Yahoo Video and MySpace Video, creating playlists where other users can add video, comments and chat in real-time.