Filed by Terra Networks, S.A.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Lycos, Inc.
Commission File No. 0-27830
Terra Networks, S.A. Slide Presentation
[terra LYCOS Logo]
The Creation of a Global Leader in
Internet, New Media and
Communications
[Telefonica Logo] [Bertelsmann Logo]
Safe-Harbor Statement
This presentation contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations or
beliefs and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements contained in this
release address the following subjects: expected date of closing the merger;
future financial and operating results; and timing and benefits of the merger.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk
that the Terra's and Lycos' businesses will not be integrated successfully;
costs related to the merger; failure of the Terra or Lycos stockholders to
approve the merger; inability to further identify, develop and achieve success
for new products, services and technologies; increase competition and its
effect on pricing, spending, third-party relationships and revenues; inability
to establish and maintain relationships with commerce, advertising, marketing,
technology, and content providers.
For a detailed discussion of these and other cautionary statements, please
refer to Terra's filings with the Securities and Exchange Commission, including
the Risk Factors section of Terra's F-1 filing that became effective in
November 1999, and Lycos' filings with the Securities and Exchange Commission,
including the section titled "Factors Affecting the Company's Business,
Operating Results and Financial Condition" of the Management's Discussion and
Analysis in its From 10-K for the year ended July 31, 1999 and the Risk Factors
section of Lycos' S-3 filing that became effective in March, 2000.
Investors and security holders are urged to read the joint proxy
statement/prospectus regarding the business combination transaction referenced
in the foregoing information, when it becomes available, because it will
contain important information. The joint proxy statement/prospectus will be
filed with the Securities and Exchange Commission by Terra and Lycos. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus (when it is available) and other documents filed by Terra
and Lycos with the Commission at the Commission's web site at www.sec.gov. The
joint proxy statement/prospectus and these other documents may also be obtained
for free from Terra.
Terra Lycos Strategic Vision
Value for Consumers and Shareholders Will be Created by Leading
the Convergence of Media and Communications Globally
[GRAPHIC OMITTED]
Fixed Telephony Web TV/Media
Mobile Communication terra LYCOS Cable Modems
Multiple-Access Portal
(MAP
Wireless
PDA's
Web Phone
Terra Networks
The Leading Global
Spanish and Portuguese
[terra Logo] Language Internet
Access and Content
Company
o 2 million subscribers
o 14 cuntries
o Multiple access offerings
o Rich/compelling content
o Network model
Commanding Market Position
[GRAPHIC OMITTED]
Spain
U.S.A. #1 #1
#1
Guatemala
Mexico #1 #1
#2 #1 Access Portal
Peru
#1 #1 Brazil
#2 #2
Chile
#1 #1 Argentina
#3
Rapid Subscriber Growth Across
Latin America
Growth in Quarterly Subscribers
(In Thousands)
Growth - 522.5%
-------------------------------------------------------
320 485 681 1,317 1,992
Mar-99 Jun-99 Sep-99 Dec-99 Mar-00
Rapid Page View and Revenue Growth
Page Views Quarterly Revenues
(Per Month) ($ in Millions)
- ----------------------------------- ----------------------------------
Growth = 181.3% Growth = 164.8%
- ------------------------------- ------------------------------
251 290 464 706 $15.6 $20.0 $34.2 $41.3
June-99 Sep-99 Dec-99 Mar-00 Jun-99 Sep-99 Dec-99 Mar-00
The Internet's Leading Network
[LYCOS Logo]
o 44% U.S. reach
o 148 Million page views per day worldwide
o Four of the world's top 20 internet sites
o $78M in Q3 revenues with $25M of cash flow
o An acquisition integration success story
o Earnings positive for 4 consecutive quarters
o Met or exceeded consensus for 16 straight quarters
Lycos: Leadership in North America, Europe and Asia
[GRAPHIC OMITTED]
LYCOS
Canada LYCOS LYCOS
Europe LYCOS Korea
LYCOS Greater Asia
LYCOS
Japan
The Leading Telecom Group in Spain and Latin America
[Telefonica Logo]
o #1 Telco in Spain and Latin America
o #6 Wireless service provider worldwide
o #1 TV broadcaster in Spain and Argentina
(#2 Pay TV)
o More than 62 million customers
[Bertelsmann Logo]
Bertelsmann delivers leading content worldwide
as the premier content provider on Terra Lycos
Representative Brands
o Random House (#1 publishing house worldwide)
o CLT-UFA/Pearson TV (#1 TV producer worldwide, #1 TV distributor in Europe)
o Gruner + Jahr (#1 magazine publisher in Europe)
o BMG Entertainment (#4 music company in the world)
o Bertelsmann Direct (#1 in clubs worldwide,
#2 in media e-commerce worldwide)
o Bertelsmann Arvato (#1 Printing house in Europe,
o #1 in distribution/services)
o Bertelsmann is the most global media company in the world and the leading
media company on the Internet
o Bertelsmann occupies leading market positions worldwide with over 600
companies in 54 countries
[terra LYCOS Logo]
The Creation of a Global Leader in Internet,
New Media and Communications
Terra Lycos: Global Internet Leadership
o Internet's Largest Footprint with operations in 37 countries
o 175 Million page views per day
o Industry Leading Revenue Growth
o Over $3b in cash
o LTM Operating Margins of 30%
o Mobile Leadership
o Deep Alliances with Market Leaders:
Telefonica and Bertelsmann
Terra Lycos: A Global Leader in Key Internet Regions
[GRAPHIC OMITTED]
Canada
#1 Western Europe
#3 Japan
#2
U.S. Hispanics United States
#1 #4 Korea
#1
Latin America
#1 Asia Pacific
#1
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre
Lycos Free
Commundo
Terra Line
Terra Premium
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre terra
Lycos Free LYCOS
Commundo HOTBOT
Terra Line Angelfire
Terra Premium tripod
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre terra QUOTE.COM
Lycos Free LYCOS Gamesville
Commundo HOTBOT terra
Terra Line Angelfire sonique
Terra Premium tripod invertia.com
Wired News
Big Brother
LYCOS Zone
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre terra QUOTE.COM Lyco Shop
Lycos Free LYCOS Gamesville WINGSPANBANK.COM
Commundo HOTBOT terra BARNES & NOBLE
Terra Line Angelfire sonique BBVA
Terra Premium tripod invertia.com DeRemate.com
Wired News Amadeus
Big Brother
LYCOS Zone
Expense Synergies
o Lycos Avoids Latin American Market Development
o Terra Avoids US and Europe Market Development
o Sales and G&A Leverage
o Substantial Bandwidth Economies
o Content Costs Greatly Reduced
o Terra R&D eliminates search and community
o Lycos R&D eliminates mobile products
Wireless Portal Joint Venture
o Access through wireless platform
o Content distribution to 20 million
customers
o Realtime E-Commerce
Telefonica Servicios Terra LYCOS [Logo]
Moviles, S.A.
o Anytime Anyplace
o Killer applications
Telefonica Mobile Market Leadership
[GRAPHIC OMITTED]
Spain
El Salvador [pie] 59%
[pie] 33% [triangle] 79.5%
[triangle] 316.1%
Peru Brazil
[pie] 69% [pie] 70%
[triangle] 41.3% [triangle] 99.9%
Chile Argentina
[pie] 52% [pie] 25%
[triangle] 76.9% [triangle] 113.4%
Key
---
[pie] Market Share
[triangle] March 1999 -
March 2000
Annual Growth
Only included subsidiaries managed by Telefonica
Data as of March 31, 2000, except for market share for Morocco, April 2000
Terra Lycos: Creation of Shareholder Value
o Global Leadership
o Large Scale and Diversified Revenues
o Unparalleled Depth and Breadth of Access Platforms
o Deep Telefonica and Bertelsmann Alliance
o The Most Complete Investment Vehicle for Convergence
o More than a $3b cash position
o Opportunity to fully exploit premium assigned to first mover
[terra LYCOS Logo]