Terra Networks, S.A. is a Spanish Internet multinational company with headquarter in Spain and offices in Brazil, Chile, Colombia, Mexico, United States and Peru. Part of Telefónica Group (the former Spanish public telephone monopoly), Terra operates as a web portal and/or an internet access provider in the U.S., Spain, and 16 Latin American countries. Terra was publicly traded on NASDAQ under the symbol TRLY and on the Spanish stock market under the symbol TRR.
Terra was founded in 1999 by Juan Villalonga, Telefónica's president between 1996 and 2000, and quickly turned into a major internet player through the aggressive acquisition of several local startups in Spain and the main Latin American markets: Olé (Spain), Brazil, Mexico, Gauchonet, Donde (Argentina) and Chevere (Venezuela).
Terra has also created several vertical portals, like Invertia, a successful finance portal, and Educaterra (e-learning). It also has had or has stakes in other internet ventures: Uno-e (online banking), Rumbo (travel, in partnership with Amadeus), Atrea (real estate, in partnership with Spanish bank BBVA), Azeler (car selling, also with BBVA), and Maptel (online maps).
In November 1999, still during the period known as the "Internet bubble", Terra had a high-profile IPO both in the U.S. and Spain, and its shares skyrocketed from an initial price of 11.81 euros up to 157.65 euros in just 3 months. After that, the price fell sharply until it reached 2.75 euros in October 2004. This process sparked a lot of public controversy in Spain, where thousands of small investors acquired shares of Terra during the boom. Despite this problematic image, Terra managed to hold leading positions both as a web portal and as an ISP provider in several countries, and specially in Spain.
During 2003 and 2004 Terra expanded aggressively into the paid content business, mainly in Spain, Brazil, and Chile, launching ventures with Disney and Spanish football clubs Real Madrid and FC Barcelona. It also started several entertainment services, including an online multiplayer gaming platform (Terra Games) and a digital music service (Terra Música Premium) similar to Apple Computer's iTunes.
Terra and Lycos
In April 2000, Terra surprised the internet market with the acquisition of Lycos, the U.S. portal, in a stock swap valued at US$12.5 billion. By that time, Lycos was the third most visited portal in the U.S., according to Nielsen//NetRatings, and had a strong presence in key European and Asian markets. Specialists expected that the combination of Lycos with Terra's dominance in Latin America would create a powerful company, able even to challenge giants like AOL, Yahoo!. Lycos CEO Bob Davis was moved to the position of CEO of the combined company, from where he stepped down in January 2001, being replaced by then Chairman Joaquim Agut.
Part of the deal was also German media giant Bertelsmann, owner of a stake in Lycos Europe. In exchange for keeping the control over Lycos Europe, Bertelsmann agreed to spend US$1 billion worth in advertising at Terra Lycos through a five-year period. That spending was crucial for Terra to survive the times of the internet crash, when several Latin American-based internet companies like Quepasa, Starmedia or El Sitio lost cash up to the point of filing for bankruptcy or being taken over by bigger companies.
In 2003 Bertelsmann executed an option to get itself out of the agreement, transferring to Terra's parent company Telefónica the obligation to keep the ad spending. Soon after that, Telefónica decided to get more control over Terra and launched an offer for shares of Terra still floating on the stock market. Although it granted Telefónica control over more than 70% of Terra's stock, the move was not successful enough to let Telefónica take Terra out of the public, as it was allegedly its objective.
In October 2004, following Telefónica's decision to re-focus their businesses, Terra sold Lycos to South Korean Internet portal company Daum Communications for US$105 million. Kim Faura was Terra's last chairman. Joaquim Agut was the previous one, and now he is chairman of Endemol.
In February 2005, Telefónica announced its intention of taking full control of Terra by giving Telefónica' shares in exchange for Terra's remaining shares in the stock market. After this plan was approved by both Telefónica and Terra shareholders meetings, Terra's shares were finally excluded from the market on July 15, 2005.
From that moment, Terra Networks S.A. was merged into Telefónica, S.A. and, therefore, disappeared from a legal point of view. A small portion of the former corporate headquarters became "Terra Networks Asociadas, S.L.U." (a new company) and local Terra operations (and assets) were transferred to local fixed-line Telefónica companies.
Terra is the largest Latin American online media company, ranked as the 31st most popular internet destination in the world. Offering Entertainment, News and Sports to the 100 million people who visit its portals monthly, Terra was named by Fast Company in 2011 as one of the most innovative company in the music area, "for a multipronged, and profitable, music-focused content model".
With 100 million unique visitors per month, Terra is present in 17 Latin American countries as well as in USA. It has offices in cities such as São Paulo and Porto Alegre (BRA), Buenos Aires (ARG), Santiago (CHI), Lima (PER), Bogota (COL), Mexico DF (MEX), Miami and New York (USA). Among Terra's most successful products and channels are Sonora (music) and Terra TV (premium video content) and the Planeta Terra annual music festival.