Robbie Stephens Conference: Terra Lycos Sees Possible Internet Ad Market Rebound

SAN FRANCISCO -- Terra Lycos' (TRLY - Cramer's Take - Stockpickr) Ted Philip told investors Monday at the Robertson Stephens Tech 2001 Conference here that he's cautiously expecting to see the U.S. Internet advertising market rebound in the second half of 2001.

That hope is based on information he's gotten from "conversations with advertisers" in which they've told him that they're "being very cautious over the next three to six months but expect to put out additional money" leading into the holiday season.

Still, he added that he wouldn't be surprised if that rebound didn't come until early 2002.

After a management shakeup two weeks ago that saw Lycos CEO Robert Davis leave as the combined company's CEO position went to former GE (GE - Cramer's Take - Stockpickr) executive Joaquim Agut, Lycos will take any good news it can get. (Lycos was acquired by Spain's Terra Networks to form Terra Lycos.)

Philip, who resigned his CFO post but stayed on with the company as a strategic adviser in mergers and acquisitions, said the company will continue its pursuit to become one of the top two Internet portals in every market it serves through an "aggressive" M&A strategy bolstered by its $2.4 billion cash position.

Still, the advertising market on which it depends for a good portion of its revenue has been dragging. Philip tried to stress that 75% of Terra Lycos' advertisers are traditional bricks-and-mortar companies and that 90% of them have re-upped on a quarter-over-quarter basis.

Despite Philip's optimistic tone, investors still seemed concerned about the management shakeup and the departure of Davis. The firm's senior management team is now made up of about 15 executives, split closely between Lycos and Terra. "Bob is obviously a high-profile person and an unfortunate loss. He wanted to be CEO," Philip said.