Mumbai: Internet advertising company Ybrant Digital Ltd has acquired search engine Lycos Inc. for $36 million (around Rs170 crore) in a bid to increase its reach and gain its own online publishing space.

“We can use our network reach to not only give Lycos better visibility, but also to better monetize their user traffic," Ybrant’s chief executive Suresh Reddy said.

“The larger pool of funds thus created through synergies can be used for innovations."

The Lycos website claims to be among the top 25 Internet destinations with a global reach of 60 million unique visitors in a month, including 25 million from the US.

Lycos was founded in 1995, based on Internet search technology developed as part of a research project at the Carnegie Mellon University, and listed on the US technology market index Nasdaq in 1996.

Its contemporaries such as Infoseek, Excite, WebCrawler and AltaVista have lost out to competition from more powerful search engines like Yahoo and Google. The latter is now synonymous with Net search.

In 2000, at the height of the so-called dot-com boom in the US, Lycos was acquired by Spain’s Terra Networks for $12.5 billion. Four years later, it was bought by South Korean firm Daum Communications for $94.5 million.

Lycos’ chief executive Jungwook Lim said the deal with Hyderabad-based Ybrant will bring value to the search engine’s clients and users.

“A lot depends on how Ybrant can improve the user mindshare for Lycos brand and generate more online traffic," said B.G. Mahesh, an Internet entrepreneur who has launched ventures such as Indiainfo. com and Oneindia.in.

The acquisition will be funded by Ybrant’s private equity (PE) partners through a pre-initial public offering (IPO) placement of Ybrant’s shares with selected investors, said a person aware of the development, who did not want to be named.

For the IPO, the firm has appointed Deutsche Bank, BNP Paribas and JM Financials as lead bankers, and India Infoline and Yes Bank as co-lead.

Prior to the acquisition, Ybrant had $55 million in PE funding from Asia Pacific Capital and New York-based hedge fund Sansar Capital Management Llc.

Since 2006, Ybrant has bought Oridian Inc. for $13.5 million, AdDynamix for $10 million, MediosOne Llc for $4 million and email marketing firm VoloMP for $2.2 million, among other acquisitions.

Launched in 1999 as California- headquartered USA Greetings, an online greetings card company, Ybrant has since moved into Internet advertising with its own proprietary technology.

Last year, Reddy had told Mint he expected the company to have revenue of about $250 million by end 2010-11.

This story was first published on 17 August 2010

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