Search engines battle over features

The search engine wars are heating up again, and new features are the weapon of choice.

As expected, Lycos (LCOS) today announced new chat and message group options to its users. Other features include personalization, which lets users receive customized news, weather, and stock reports, as well as free email.

"This is very critical for us," said Mark Stover, a products marketing manager for Lycos. "To become a personal guide for the Internet, we need to build the community and provide the services people need to navigate the Web."

Lycos users will be able to choose from 18 Web content categories, called "Web Guides," to launch themselves into real-time chat. They also can develop a personal profile of themselves to use in the chat. It is teaming up with eShare Technologies to offer chat.

The company's features are the latest example of the blurring line between online services and search engines. Search engines are adding features such as content "channels," chat, email, and e-commerce to boost ad revenue and traffic. Competition is fierce and most companies still are losing money, though; many analysts expect a shakeout.

In another example, Excite (XCIT) struck a two-year deal today with N2K to provide music content as well as sell CDs online. The service calls for production of a cobranded version of N2K's 185,000-title online superstore, Music Boulevard, on Excite.

Excite will receive a cash advance as well as a percentage of the transactions from sales on Music Boulevard.

N2K previously has struck online alliances with America Online, MTV, @Home, PointCast, AT&T, and WebTV, among others. In August, Yahoo struck its own music sales alliance with CDnow.

Net sales of prerecorded music are expected to reach $47 million this year, according to a study by Jupiter Communications. Another study by Iconocast predicted that nearly 100,000 music sites will launch by the year 2000, up from 32,000 now.

Excite also anounced it chose Auto-By-Tel to sell cars online through its auto "channel" in a three-year, $7 million deal.

In a separate deal today, Yahoo (YHOO) created a cobranded area with Bolt on the Net to provide a college guide for teenagers. The alliance with Bolt, which focuses on the teen market, will provide advice such as how to choose a college or even a laptop computer.

Even Microsoft (MSFT) is getting into the game, with an announcement expected in the coming weeks about its entry into the search engine marketplace. (See related story)