March 27, 2006 By Michael Hickins

Lycos has joined the burgeoning free voice-over-IP (VoIP) fray by offering the service to its users.

But that's not all the feisty search contender is rolling out in its bid to gain mindshare with the lucrative 18- to 25-year-old crowd. It's hot on the trail of offering communication and entertainment features, too.

Brian Kalinowski, chief operating officer at Lycos, said that by integrating a raft of features, including IPTV, MP3 downloads, video-on-demand and chat into the free VoIP offer, Lycos hangs onto more customers for longer periods of time.

"People can keep the application open long after they're done with the phone call," Kalinowski said. "Certain applications lend themselves very well to that kind of content, and IP telephony is one of those."

The VoIP offering includes free phone numbers and allows users to make an unlimited number of free PC-to-PC voice and video calls. Users can also receive free incoming calls from landlines and cell phones.

Customers will also be able to call landline and cell phone numbers for free; however, free calling to non-PC phones is limited to 100 minutes, after which they will have to either sign up for promotional offers or pay per-minute charges.

Lycos is hoping that even customers who would rather pay than see more banner ads scrolling across their screen will see that they are getting a comparative bargain.

"Yahoo charges one to two cents for PSTN dialing," noted Kalinowski. In contrast, "calling on Lycos is less than a penny per minute."

The free VoIP offer comes at a time when the big industry players--Yahoo, Google, and AOL, for starters--have all introduced some version of PC-to-phone calling, bundled to some extent with their other offerings.

Lycos has managed to maintain its relevance among core users, despite a seemingly endless series of corporate and image makeovers. So is this more than a me-too play from a former Internet hi-flier?

One of the early entrants back before Google's star began to rise, Lycos still figures among the top ten online search destinations. According to research firm Nielsen/NetRatings, Lycos Network Search ranks tenth among search portals; monthly unique visitors have actually increased by 6 percent since February 2005.

Lycos also has some mojo of its own among some of the most coveted age groups that advertisers seek. Kalinowski said the portal owns several teen-oriented sites, including Angelfire.com, which he called "the largest teen site on the Web."

The plan is to retain those users and expand its base by focusing on broadband-based communication and entertainment, the kind of media 18- to 25-year-olds consume by the gulp.

It's "the most desirable and lucrative demographic for advertisers," said Will Stofega, tech analyst with IDC. "Any demonstrated capability to increase usage from this crowd is something that all ad buyers look for."

Even if the strategy works, Lycos has a long way to go. With just over 4 million unique monthly visitors, it's off in the distance behind leading search portals Google (89 million unique visitors), Yahoo (55 million), MSN (37 million), and AOL (28 million), according to Nielsen/NetRatings.

Lycos may be wise to keep an eye on the parallels with another pre-bust Internet stalwart, known until recently as AskJeeves.com. Both are under new corporate ownership and both want to compete with the big dogs of search.

Ask.com is now part of Barry Diller's IAC/Interactive (Quote, Chart). Lycos, until recently part of Spanish telecom giant Telefonica, is a wholly-owned subsidiary of Korean Internet portal play Daum Communications, Corp.

Last month, Jeeves simplified its name to Ask.com and retired its ubiquitous butler. Lycos has shed the Terra name with which it was associated during its days as a subsidiary of Telefonica, and has rescued its familiar "retriever" icon from the dog pound.

VoIP is not the last piece of the puzzle for Lycos. But if it hopes to build more market share, analysts call it a place to start.

IDC's Stofega noted that VoIP is no longer considered a nice-to-have feature. "You're going to have to provide this, or you'll lose the client base you already have," he said.

The VoIP platform is provided in partnership with Globe7, a soft phone provider also owned by Daum Communications.