[terra lycos logo]
One Team, One Mission
Safe-Harbour Statement
This presentation contains forward-looking statements within the meaning of
the "safe harbour" 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 presentation address the following subjects:
future financial and operating results and efficiency; future industry,
revenue and customer growth; future internet penetration rates; and the
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 Terra's and Lycos' businesses will not be integrated successfully;
costs related to the merger; failure of the Lycos stockholders to approve
the merger; inability to further identify, develop and achieve success for
new products, services and technologies; increased 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; difficulties in
having the internet accepted as an advertising medium; the growth of free
internet access in many markets; adverse economic trends; and the effect of
any future acquisitions.
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-4 filing, as amended,
initially filed on June 27, 2000 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 Form 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 BECAUSE IT CONTAINS IMPORTANT
INFORMATION. Copies of the joint proxy statement/prospectus and other
documents filed by Terra and Lycos with the Commission are available from
the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington DC
20549, telephone 202-942-8090. The joint proxy statement/prospectus and
these other documents may also be obtained for free from Terra.
Agenda
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
Coffee Break
6 Wireless Opportunity
7 Financials
8 Summary
Q&A
Four Powerful Companies Join Forces
[LYCOS LOGO] [TERRA LOGO]
[BERTELSMANN LOGO] [TELEFONICA LOGO]
A Global Powerhouse is Born
[terra lycos logo]
All the Benefits, None of the Liabilities
Growth Fastest in industry
Content Proprietary content
Culture Internet-centric
Distribution Global reach
Operations Limited overlap
[terra lycos logo]
Our Vision
[GRAPHIC OMITTED]
Globalisation Convergence
Profitability
[terra lycos logo]
Our Vision
To be the
most visited online destination in the world
Proven Integration Model
"One Team Committed to Customer Success"
[GRAPIC OMITTED]
Seamless
Simultaneous
Speed
Organisation Change
Operational Communications
Efficiency
Values
People Change Culture Change
Process Change
Fast paced change on simultaneous fronts to
take advantage of "Window of Opportunity"
[terra lycos logo]
Terra Lycos Integration Values
o Organise for speed
o Financial responsibility and accountability
o Boundary less thinking . . . sharing best practices
Profitable Growth
Common Internet Culture
o Similar employee profile
o User focus
o Agile
o Aggressive competitor
o Experienced integrators
An Experienced Management Team
[GRAPHIC OMITTED]
Executive Chairman
Joaquin Agut
Strategy Counsel Legal
Christina Lamana
CEO Audit
Bob Davis Antonio de Esteban
People Development
Carmen Casares
CFO COO Corporate Corporate Human
Ted Philip Abel Linares Development Communications Resources
Jeff Bennett Madeline Mooney John McMahon
Industry Leading Revenue Growth
o EBITDA positive Q4 2001
o Long-term revenue mix:
o 85% Media
o 15% Access
[GRAPHIC OMITTED]
80% Growth
Pro-forma calendar year revenues for Terra and Lycos as if they were
combined for all periods presented
Source: Historical results based on Terra Lycos Management Reports.
Projected 2000 and 2001 based on Terra Lycos Management
Projections
Investment Highlights...
o # 1 Global Footprint
o # 1 Revenue Growth
o # 1 Wireless Platform
o # 4 World-wide Access Provider
o Leading Cash Position
o Market's Leading Convergence Vehicle
...All With A Clear Path to Profitability
Note: Management estimates relative to Terra Lycos peer group
Agenda
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
The Market is Evolving...
Global Footprint Local Market Execution
Content Access
Revenue Growth Operating Margin
Globalisation, Convergence, Profitability
[terra lycos logo]
...And We are Well Positioned...
Global Footprint Local Market Execution
o Deep penetration in 40 o Strong local
major markets management
Content Access
o Strong global brands o Nearly 5 million subs
o Deep content portfolio o Wireless platform
Revenue Growth Operating Margin
o Industry leading o Best practices
growth
Globalisation, Convergence, Profitability
[terra lycos logo]
Globalisation: The Opportunity Before Us
[GRAPHIC OMITTED]
Europe 19%
69%
99%
North America Asia
11% 36%
42% 77%
41% 79%
Latin America
39%
86%
43%
2000-2003 CAGR Internet Users
2000-2003 CAGR Ad. Spending
2000-2003 CAGR e-Commerce Spending
Source: eMarketer as of June 2000 and Jupiter Communications 2000
Globalisation Strategy: Extend Leadership
[GRAPHIC OMITTED]
Canada Europe Korea
# 1 #4 #1
US Hispanics United States Asia Japan
#1 #4 #2 #2
Latin America
# 1
o Consolidate markets through acquisition
o Leverage state-of-the-art global delivery platform
o Exploit local expertise
Source: Media Metrix and Terra Lycos Management
Convergence: On The Leading Edge
[GRAPHIC OMITTED]
Media Communications
o Bertelsmann o Telefonica
o Telefonica Media o Telefonica Moviles
o Endemol
terra [GRAPHIC OMITTED] lycos
Interactive
Content
o Terra
o Lycos
Convergence Strategy:
Maximise Value Chain
[GRAPHIC OMITTED]
Providing Aggregating Offering Monetising
Access Audience Rich Traffic
Content
o Acquiring o Best-of- o Focus on o Sell
users breed verticals advertising
services increases and
attract user loyalty commerce
o Fostering traffic and and to a
customer facilitate duration segmented
loyalty circulation audience
o Leverage multiple access points for customer acquisition
o Exploit content to maximise page views and duration
o Diversify revenue streams
o Integrate best-of-breed convergence technologies
[terra lycos logo]
Profitability Strategy
o Large and efficient sales force
o Unique global platform
o Strong management controls
o Market consolidation
o Operating efficiencies
o Significant economies of scale
o Best practices
Measurement and accountability
Corporate Objectives
Globalisation
o Establish #1 or #2 position in each local market
o Be the undisputed leader in worldwide page views
Convergence
o Integrate Bertelsmann and Telefonica Media content
o Exploit the market's broadest range of access offerings
Profitability
o 80% revenue growth in 2001
o EBITDA positive by Q4 2001
Agenda
[Graphics Omitted]
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
BUILDING ON A GREAT FOUNDATION
[Graphics Omitted]
o Over 7 billion page views per month
o Nearly 5 million access subscribers
o 60 million registered users
o 91 million unique visitors
o $3 billion in cash
o Over 3,000 advertising partners
o More than 5,000 stores
Source: Terra Lycos Management
Global Leadership
[Graphic Omitted]
Canada #1 Europe #4
US Hispanics #1 Asia #2
United States #4 Korea #1
Latin America #1 Japan #2
Source: Media Metrix and Terra Lycos Management
US Market
A Growing and Profitable Market
[Graphic Omitted]
United States
CAGR %
2000 2000-03
o Internet users 122m 11%
o Ad. spending $6bn 42%
o E-com spending $37bn 41%
Source: eMarketer as of March 2000 and Jupiter Communications 2000
United States
Closing the Gap
[Bar Chart -- Graphic Omitted]
Reach Growth in Average Pages per Month
Yahoo 64% Terra Lycos 95%
AOL 63% AOL 41%
Microsoft 63% Yahoo 12%
Terra Lycos 42% MSN N/A
Source: Media Metrix, as of July 2000 (all domains, home/work)
United States
Key Accomplishments Key 18 Month Objectives
o Growth in operating margins, EPS o Capture #1 reach position
and cash
o Leverage European wireless
o 46% increase in user loyalty platform into US
metrics
o Monetise Bertelsmann content
o Industry leading traffic growth
o Integrate Terra content
o Integration of 5 companies
o Continue to build US Hispanic
o Leading position among US Hispanic market
community
Source: Terra Lycos Management
Latin America
Fastest Growing Market Worldwide
[Graphics Omitted]
Latin America
CAGR %
2000 2000-03
o Internet users 16m 39%
o Ad. spending $163m 86%
o E-com spending $1bn 43%
Source: eMarketer as of June 2000 and Jupiter Communications 2000
Commanding Leadership
[Graphics Omitted]
US Hispanic
#1
Mexico Central America
#2 #1 #1 #1
Peru Brazil
#1 #1 #2 #2
Chile Argentina
#1 #1 #3
Access [Graphic Omitted]
Portal [Graphic Omitted]
Source: Terra Lycos Management
Latin America
Key Accomplishments Key 18 Month Objectives
o 16 countries in 14 months o Maintain and grow leadership
position
o Page view growth of 298%
o Launch Lycos products
o Revenue growth of 180%
o Expand #1 wireless position
o Reach of over 80% in Brazil
and Mexico o Grow broadband services
o Strong alliances with leading o Leverage US advertising and
media groups commercial alliances
o Improve process efficiency;
transfer best practices
Source: Terra Lycos Management, including internal estimates
Europe and Asia
Joint Venture Strategy
o Think global - act local
o Joint ownership with local market leaders
o Strong partner funding of operations
o Market share and value driver
European Market
A Combination of Size, Growth and Wealth
[Graphics Omitted]
Europe
CAGR %
2000 2000-03
o Internet users 85m 19%
o Ad. spending $1bn 69%
o E-com spending $7bn 99%
Source: eMarketer as of June 2000 and Jupiter Communications 2000
Pan-European Franchise
[Graphics Omitted]
Norway
UK
Sweden
Denmark
Holland
Germany
Belgium
France Switzerland
Spain
Italy
Source: Terra Lycos Management
Europe
Strong Market Position
[Bar Chart -- Graphic Omitted]
Reach Growth in Unique Visitors %(a)
Yahoo 42% Terra Lycos 199%
MSN 36% MSN 152%
AOL 28% Yahoo 99%
Terra Lycos 25% AOL 63%
T-Online 23% T-Online 60%
(a) Annualised growth between October 1999 and July 2000
Source: Media Metrix, as of July, 2000 for Europe. European figures only
consider UK, Germany and France includes only "at home" users
Europe
Key Accomplishments Key 18 Month Objectives
o Raised $650m in IPO for Lycos o Grow position in France,
Europe Germany, Italy, UK and
Scandinavia
o Lycos.de overtook Yahoo in
Germany o Pan-European launch of Hotbot
and Fireball
o Launched Comundo in Germany,
France, Netherlands, Italy and o Expand wireless platform
UK
o Leverage US best practices
o 90% reach in Spain
o Grew annual revenues by 271%
Source: Terra Lycos Management, including internal estimates
Asian Market
Key Growth Market of the Future
[Graphics Omitted]
Asia
CAGR %
2000 2000-03
o Internet users 38m 36%
o Ad. spending $470m 77%
o E-com spending $15bn 79%
Source: eMarketer as of June 2000
Extended Reach in Asia
[Graphics Omitted]
Korea
Apr 99
China
Apr 00 Japan
Jun 98
Hong Kong Taiwan
Apr 00 Apr 00
India Philippines
Jun 00 Jul 00
Source: Terra Lycos Management Malaysia Singapore
Jan 99 Dec 99
Asia
Key Accomplishments Key 18 Month Objectives
Japan: o Grow market share in Japan and
China
o #2 portal
o Maintain and grow leadership
o Raised $32m in strategic in Korea
financing with Kadokawa
o Invest aggressively in content
o Launched Lycos internet and distribution partnerships
magazine
o Enhance China business scope
Korea:
o #1 portal
o 8 million unique users
o #1 in community with 2m Tripod
members
Rest of Asia:
o Launched sites in China,
India, Hong Kong, Taiwan,
Singapore, Malaysia, and the
Philippines
o Launched wireless portal
Source: Terra Lycos Management
Agenda
[Graphics Omitted]
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
Terra Lycos Network
A Global Family
of Brands
Multibrand Strategies Dominate Media.....
Bertelsmann/ AOL-
Gruner+Jahr Time-Warner Disney Viacom
[Graphics Omitted]
Der Club HBO Toon Disney MTV
Get Music.com The WB Disney Infinity
BB TBS Superstation A&E AandE.Com TV Land
GEO Explorer CNN ESPN Sundance channel
bol.de Warner Bros. Lifetime Nickelodeon
Capital Cinemax ABC Showtime
TNT Touchstone Pictures CBS
Gabler TCM Go Network UPN
CNNfn Miramax VH-1
P.M. Castle Rock Paramount
www.ANDSOLD.DE Time Comedy Central
Cartoon Network The Movie Channel
BMG Entertainment People Online Nick at Nite
Springer Sports Illustrated
Goldmann Fortune
RCA In Style
MAGAZIN
Borse ONLINE
RTL
BIZZ Capital
...And Will Dominate on the Internet
[Graphics Omitted]
Terra Lycos
terra Lycos Terra Libre Acceso a Internet gratis
Gamesville Quote.com LycoShop
Comundo Sonique HotBot
tripod Terra Premium Sympatico Lycos
Charla.com Lycos Zone Angelfire
Wired News Lima On
invertia.com
As Audience Fragmentation Accelerates...
1996 2003
[Pie Charts -- Graphics Omitted]
Kids
(2-12)
3.8%
Teens Kids
(13-18) (2-12)
7.6% 15.5%
Older Teens Adults
Adults (13-18) (19-50)
(50+) 11.4% 47.1%
10.6%
Older Adults
(50+)
College Adults 11.7%
Students (19-50)
13.4% 64.6%
...A Network Gains Momentum
Growth in Traffic
[Graphics Omitted]
Gamesville Quote.com
171% 204%
- ----------------------------- -----------------------------
Dec 1999 July 2000 Dec 1999 July 2000
Invertia
358%
-----------------------------
Dec 1999 July 2000
Source: Terra Lycos Management
Multibrand - Appealing to a Fragmenting Web Audience
[Graphics Omitted]
0 10 20 30 40 50 60+
Lycos Zone terra Lycos
Angelfire
Gamesville
Almas Gemeas tripod
HotBot
invertia.com
Quote.com
[Graphics Omitted]
Key Advantages Across All Segments
Advertisers Company
Highly targeted audiences A Economies of scale
Global cultural unity and brand equity
Network
Consumer
Personalised world-class
brand experience
A Web Network Offers Significant Efficiencies
o A global passport for registration
o Common selling organisation
o Precise advertising targeting
o Audience circulation and cross-promotion
Powerful Model for Growth and Consolidation
o No user disruption
o Seamless positioning adjustment
o Multiple brands always lead to larger audiences
Exploiting Convergence Trends
[Graphics Omitted]
Providing
Access
o Acquiring users
o Fostering customer loyalty
[Terra Lycos Logo]
The Access Model
[Graphics Omitted]
Free Access
Value-added Media
User Acquisition Services Revenue
Paid Services
Paid dial-up
Cable Advertising
Wireless Commerce
Value-added Services Satellite
XDSL
4.7 million
Subscribers
[terra lycos logo]
Exploiting Convergence Trends
[GRAPHICS OMITTED]
Providing Aggregating
Access Audience
o Acquiring users o Best-of-breed services attract
traffic and facilitate circulation
o Fostering customer loyalty
[terra lycos logo]
Comprehensive Audience
Aggregation Products
Search
[LOGOS OMITTED]
terra Lycos
HotBot FIREBALL
Community
[LOGOS OMITTED]
tripod Angelfire
MAILCITY Charla.com Almas Gemeas
Commerce
[LOGOS OMITTED]
Lycoshop tiendasoft
Search Strategy
[LOGOS OMITTED]
----> o Widely recognised properties
HOTBOT
o Drive traffic from search to content
LYCOS destinations
Terra
FIREBALL
Community Strategy
[LOGOS OMITTED] o Expand state-of-the-art integrated
community platform
tripod
o Textmail, voicemail, videomail
Charla.com Angelfire
o Community as a vertical driver
-------->
Instanterra o Customise community platforms to meet
global needs
MAILCITY
Almas
Gemeas
Exploiting Convergence Trends
[GRAPHIC OMITTED]
Offering
Providing Aggregating Rich
Access Audience Content
o Acquiring o Best-of- o Focus on
users breed verticals
services increases
attract user loyalty
o Fostering traffic and and
customer facilitate duration
loyalty circulation
[terra lycos logo]
Targeted Vertical Content
Vertical Content
[LOGOS OMITTED]
WIRED NEWS LYCOS COMPUTERS
QUOTE.COM invertia.com
Sonique LYCOS SPORTS
LYCOS TRAVEL GAMESVILLE
LYCOS ENTERTAINMENT
Vertical Content Strategy
[LOGOS OMITTED]
o Established and emerging verticals
o Grow sticky content sites
QUOTE.COM
o Leverage Bertelsmann and
Telefonica media content
GAMESVILLE ---->
o Cross-pollinate Terra and
Lycos content and content
partnerships
invertia.com
o Drive network traffic into
destinations
o Locally relevant content
Strategic Content Partnerships
[GRAPHIC OMITTED]
Access Content
o 60 million + o Leading TV producer
customers in Europe and in the Spanish and
Telefonica Portuguese speaking world
o 17 million mobile ----------
subscribers
[GRAPHIC OMITTED]
Bertelsmann
o 3rd largest media
company in the world
Source: Terra, Lycos and Telefonica Management Reports
Bertelsmann: Global Media Powerhouse
600 Companies in 54 Countries
[LOGOS OMITTED] [LOGOS OMITTED]
bol.com BMG
Random Bertelsmann Arista Online
House arvato Today
o 25 m book club o 200 record labels
members around Books Music
the world o Celebrities drive
massive page views
o 150 best sellers in
the NYT list in
98/99
Bertelsmann [LOGOS OMITTED]
RTL CLT
F
A
o 120 m viewers in
Europe
o 22 TV channels
o 1,000 hours worth of
[LOGOS OMITTED] programming every year
MAGAZIN Springer
TV &
o The sale of 400 Magazines Radio o 22 TV channels
magazines
Source: Terra Lycos and Bertelsmann Management
Net 4 Music Digital Sheet Music
Where Musicians Connect Pop Download-Print-Play
Lycos Music Search: Artists Songs
for Search! Search Help
Downloads News Concerts Charts Radio Videos
Location: Lycos>Music>Featured Artrist - Toni Braxton
Featured Artist - Toni Braxton
Toni Braxton Free Download
Five-time Grammy winner, Toni Braxton, has returned with her newest album,
a musical tour-de-force entitled The Heat.
This album showcases Toni's creative growth as a songwriter and producer as
she continues to explore themes of love, pasion and romance. "Spanish
Guitar," the newest single from the album, is a gorgeous and sultry track
accompanied by sensual Latin guitar. Once again,Toni proves herself worthy
of her pop diva status.
"Spanish Guitar" is available as a free download on Lycos Music--but only for
a limited time.
Download Now (U.S. residents only)
File Info: Windows Media file, 4.45 MB, free, unlimited play for 14 days
System Requirements: PC, Netscape 4 or IE4 and above, Windows Media Player
Dowload: Windows Media Player
Visit click2music.com to enter to win a Toni Braxton "Beat the Heat" prize
pack including an autographed CD, Vinyl, and other items to beat the summer
Heat.
Get the Music
Watch (Real Player required)
The video of Toni's single "He Wasn't Man Enough"
Buy
The album The Heat from Barnes&Noble.com
Get more information on Toni Braxton from Lycos Music.
Telefonica Content Alliance
[LOGOS OMITTED] [LOGOS OMITTED]
Antena 3 TE LE FE Sienta ONDA
Continental CERO
2000 Radio
o #1 private TV Radio o #1 in AM/FM in
Spanish open TV Argentina
o #1 TV channel in o #3 Spanish radio
Argentina
[LOGOS OMITTED] Telefonica [LOGOS OMITTED]
Pearson Media Hispasat Via
Lolafilms Endemol Digital
Entertainment
Audiovisual Sport
o Leading TV o 551,000 DTH subscribers
producer in
Europe o Satellite coverage
over Spain and Latin America
o Leading Media Pay TV
Spanish Production and
film producer Satellite
Source: Terra Lycos and Telefonica Management
Rich Local Content Partnerships
[GRAPHIC OMITTED]
REUTERS
EFE
Disney's AP Associated Press KADOKAWA
Club The Miami Herald www.xinhuanet.com Entertainment Site
Blast Internet Edition News ORICON
GLOBOVISION.COM Streambox.co.kr http://www.oricon.co.ip
Quokka EL NACIONAL www.yonnapnews.co.kr Bloomberg
sports RBS Hankyung.com .co.ip
Online NE 3W MapFan Web
MTV 3W tour.com
Music Televison O Estado Des. Paulo Asian
REFORMA LSTOE Bourses Corp.
elnorte.com COPESA Market Intelligence as
easy as ABC
AFP
channelwsasia.com
Exploiting Convergence Trends
[LOGOS OMITTED]
Offering
Providing Aggregating Rich Monetising
Access Audience Content Traffic
o Acquiring o Best-of- o Focus on o Sell
users breed verticals advertising
services increases and
attract user loyalty commerce
o Fostering traffic and and to a
customer facilitate duration segmented
loyalty circulation audience
[terra lycos logo]
Distinct Media Model
o Geographic diversification Mass
Audience
o Unique global platform
Segmentation
o Single point of contact
Highly
o Direct marketing Targeted
Powerful Media Platform
World-Class Advertising and
Commerce Partners
[LOGOS OMITTED]
A&E AandE.com
Mexicana
Procter & Gamble
Gap
Lloyds TSB
HBO
Dell
HP invent
Fidelity Investments
Coca Cola
GM
Bertelsmann
Eddie Bauer
Compaq
E-Loan
Barnes & Noble
intel
BBVA
Ford
Kodak
British Airways
Sony
IBM
Disney
CVS/pharmacy
Time Warner
Unifon
AT&T
Unibanco
BMW
Xerox
Nobel
"la Caixa"
patagonia
The Wall Street Journal
Forbes MAGAZINE
Marriott.com
Nintendo
TelePizza
investShop.com
Half of the Fortune 50
Agenda
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
Huge Wireless Market Opportunity
Growth in Wireless Wireless Internet
Handsets Revenue
1.1 terra lycos logo
CAGR = 29% billion CAGR = 106% $36
is at the centre billion
303 of an exploding $2
million market opportunity billion
1998 2003 1999 2003
Source: IDC, Goldman Sachs, excludes Intranet users,
estimated to be 133 million in 2001
Wireless Revolution
Mass Market Internet Opportunities
PC Installed Base,
Wireless
Subscribers
CAGR (%)
1000 Europe: 160m [GRAPHIC OMITTED] 1999-2002
customers WIRELESS 28.0%
900
United States:
800 103m customers
700 [GRAPHIC OMITTED] 15.9%
PC
600
500
400
1999 2000 2001 2002
Source: eTForecasts as of March 2000 and IDC as of March 2000.
Forrester December, 1999
Commanding Leadership
T. Guatemala Telefonica Moviles
#3 #1
100 75%
11,451
T. Del Salvador [GRAPHIC OMITTED] TeleSudeste
#2 #1
195 70%
2,156
Telefonica Moviles CRT Cellular
#1 #1
37% 66%
810 1,167
Telefonica Moviles Tele Leste
#1 #1
45% 53%
1,225 589
Unifon 2000 Ranking
#2 YoY Growth
105% Mngd Customers ('000)
1,371
Source: Terra Lycos Management
Leading Wireless Carriers
Proportionate
Subscribers UMTS
(in million)
Vodafone 39 Germany, Netherlands, Spain, UK
NTT DoCoMo 34 Japan
Telecom Italia 25 Spain
France Telecom 23 Germany, Netherlands, Spain, UK
Deutsche Tel 22 Germany, Netherlands
Telefonica 17 Germany, Spain
AT&T Wireless 12 -
BT 12 Germany, Netherlands, Spain, UK
Source: Brokers research, proportionate equity subscribers, company reports
Our Unique Wireless Platform
Mobile Operator Portals Wireless Portals
o User Knowledge o Content o Development of
expertise killer applications
o Billing o Services o Niche
relationship offerings applications
o Technology o E-commerce o Management focus
relationships
o Infrastructure
Telefonica + [terra lycos logo] = The world's Leader
in the Wireless
Moviles Internet Market
o 17 million users o 91 million unique o 1.3 million users
world-wide users in Finland, Sweden,
Germany and UK
iobox
Terra Mobile Portal
Publicity
M-Commerce Personal information
management
o Event tickets o Sponsorship o Agenda
o Personalised o Listing fees o Calendar
promotions
o CBC
o Travel
o Auctions,...
[GRAPHIC OMITTED]
Mobile Portal
Entertainment
Information Communications
Services
o News o Personalised o E-mail
melodies A new
---> universe of
o The weather o Icons,... o Instant services
messaging oriented to
the consumer
o The Traffic,... o Chat market
Information Services
Users can access a wide range of contents,
classified by channels or sections in order to offer
the easiest interface to find the more interesting
and suitable information
Entertainment
A great set of games and entertainment
ideas specially designed
for the mobile device
M-Commerce
The mobile device allows secure payments and
transactions in order to purchase products,
contents or services
TV Promotional Campaign
[GRAPHIC OMITTED]
Terra Lycos Mobile Value
Proposition
Infotainment
M-Advertising
Entertainment News Guides
----->
Personalised Services Information
Services
Search Chat Communications M-Commerce
Infotainment
Agenda
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
Combination of Two Powerful
Business Models
[GRAPHIC OMITTED]
LYCOS terra
Web Access Web
Lycos Network + Terra Network
Advertising Commerce Advertising
Lycos Historical Results
Track Record of Fast Growth and Profitability
[GRAPHIC OMITTED]
Quarterly Revenues ($M) Quarterly Net Income ($M)
$88
91%
$79 333% $13
$69 $8
$56 $3 13%
Operating
$46 Margin
Jul Oct Jan Apr Jul
1999 1999 2000 2000 2000
$(3) $(2)
Jul Oct Jan Apr Jul
1999 1999 2000 2000 2000
Source: Terra Lycos Management Reports
Terra Historical Results
Accelerated Growth Profile
[GRAPHIC OMITTED]
Quarterly Revenues ($M)
$47
262%
$37
$28
$21
$13
Jun 1999 Sep 1999 Dec 1999 Mar 2000 Jun 2000
Source: Terra Lycos Management Reports
Next Generation Business Model
Fixed Lines Wireless
Broadband Web
[GRAPHIC OMITTED]
Telefonica ---> terra lycos <--- Bertelsmann
Content Content
[logo]
Media Revenue Access Revenue
o Advertising o Subscription fees
o Commerce o Value added services
o Direct marketing
Key Business Model Drivers
Media Access
----- ------
o Page views o Subscribers
o Targeted inventory o Pricing
o Sell-through rate o Retention rate
o CPMs
o Transactions
Industry Leading Revenue Growth
o EBITDA positive Q4 2001
o Long-term revenue mix:
o 85% Media
o 15% Access
[GRAPHIC OMITTED]
80% Growth
$900m
$500m
$280m
$97m
CY 1998 CY 1999 Projected Projected
2000 2001
o Pro-forma calendar year revenues for Terra and Lycos as if they were
combined for all periods presented
Source: Historical results based on Terra Lycos Management Reports. Projected
2000 and 2001 based on Terra Lycos Management Projections
Accelerated Revenue Growth
[GRAPHIC OMITTED]
o Bertelsmann revenue commitment
Advertising/
Commerce o Large and experienced sales force
o Advertising and commerce cross-selling
o Unique global platform
Leverage o Integration of Bertelsmann and Telefonica content
Content
Portfolio o Integrate Terra and Lycos content across network
Wireless o Joint Venture with Telefonica Moviles
Potential Revenue Upside
International Joint Venture Revenues
[GRAPHIC OMITTED]
Revenues from international Joint Ventures
Terra Lycos Pro-forma Revenues
$1,100m
$586m
$900m
$300m $500m
$101m $280m
$97m
CY 1998 CY 1999 Projected Projected
2000 2001
o Pro-forma calendar year revenues for Terra and Lycos as if they were
combined for all periods presented
Source: Historical results based on Terra Lycos Management Reports. Projected
2000 and 2001 based on Terra Lycos Management Projections
Accelerated Path to Profitability
o Process efficiency
Operating o Leverage scale to improve cost structure
Leverage
o Rationalisation of R&D activities
o Drive traffic among branded sites
o Single G&A function
Avoided o Terra avoids investments in Europe,
Investments Asia and North America
o Lycos avoids investments in Latin America
Successful Acquisition Track
Record
[GRAPHIC OMITTED]
Terra Growth Since Lycos Growth Since
Acquisitions Acquisition Acquisitions Acquisition
Ole! 338% tripod 312%
ZAZ 149% Angelfire 153%
infosel 478% Gamesville 172%
"Wasting Your Time
Since 1996"
GauchoNet 300% QUOTE.COM 204%
argentina en internet
CTC 400% Sonique 107%
INTERNET
Page view growth since acquisition
Future Acquisition Strategy
o $3 billion in cash and strong equity currency
o Lead consolidation across geographies
o Acquisition targets
o Vertical content
o Enabling technologies
o Audience aggregators
o Wireless
o Fundamental criteria for acquisitions
o Time to market
o Market share
o Management talent
o Cultural fit
o Financial momentum
Long-Term Operating Model
Media Access Total
----- ------ -----
Revenue 100 % 100 % 100 %
Gross margin 85-90 50-55 80-85
Research & development 10-12 2-5 8-10
Sales & marketing 30-35 30-35 30-35
General & administrative 5-8 3-6 5-8
Operating margin 35-40 % 10-15 % 30-35 %
Source: Terra Lycos Management Reports
FACT SHEET
o Accounting Spanish and US GAAP
o Fiscal year December 31st
o Revenue lines Media and Access
o Listing Madrid and NASDAQ
o Trading symbol Madrid - TRR
Nasdaq - TRLY
o Shares outstanding 560 - 600 million
o Proforma ownership* Lycos 47%
Terra 16%
Telefonica 37%
* Assumes midpoint of the range
Milestones
Globalisation
o Strengthened position in key geographic markets
o Consolidate markets through acquisitions
Convergence
o Worldwide wireless rollout
o Bertelsmann content integration
Profitability
o $900 million in 2001 revenue
o EBITDA positive in Q4 2001
Note: Profitability and revenue projections based on Terra Lycos Management
reports
Agenda
1 Introduction
2 Vision
3 Strategy
4 Global Leadership
5 Branding, Audience and Content
6 Wireless Opportunity
7 Financials
8 Summary
Investment Highlights...
o # 1 Global Footprint
o # 1 Revenue Growth
o # 1 Wireless Platform
o # 4 World-wide Access Provider
o Leading Cash Position
o Market's Leading Convergence Vehicle
...All With A Clear Path to Profitability
Note: Management estimates relative to Terra Lycos peer group