Terra Lycos Unveils Redesign, Slashes Ad Inventory

Terra Lycos today unveiled a networkwide redesign that eliminates most small ad units on individual pages. The changes on the Web portal are more than cosmetic, as they reduce overall ad inventory across the network by a third.

Rich Gotham, vp of U.S. sales at the Waltham, Mass.-based company, said getting rid of smaller ad units will allow single advertisers to dominate pages with ads in larger formats. “We wanted to get away from the Nascar approach,” he said. “The redesign makes the site look less like a table of contents and more like a magazine in format.”

The strategy has its risks, analysts said. “Terra Lycos is definitely taking a risk,” said Jim Nail, senior analyst at Forrester Research. “Whether or not they can generate a significantly higher CPM to make up for the low-cost stuff they eliminated is yet to be seen.”

“Maybe it’s a risk, but it’s not a hard risk to take,” Gotham said. “There’s less inventory, but the inventory will be more compelling.”

Peter Naylor, vp of agency relations at Terra Lycos, said the company over the past year has diversified its business to include subscription fees for premium sites such as Quote.com. He said the reduction in inventory would be offset by gains in emerging markets, such as Latin America.

According to Nielsen NetRatings, Terra Lycos ranks No. 5 on the top-properties list with an 18 percent reach and 32 million unique visitors during the month of September. It ranks behind AOL, Yahoo!, MSN and Microsoft.