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<PAGE>
Slide Graphics
The Creation of a Global Leader in
Internet, New Media and
Communications
Terra
Lycos
Telefonica
Bertelsmann
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<PAGE>
2
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's 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's 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 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.
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<PAGE>
3
Mission Statement
To be the leading global provider of
Access
Content
and Commerce
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4
The Creation of a Global Leader in Internet,
New Media and Communications
Global presence 37 Countries
Scale: 175 Million page views per day
More than 40 Million unique visitors
$600 Million -- 2000E revenues
Growth in Major Areas Latin America 37%
Asia 31%
U.S. 23%
Europe 22%
Diversified Revenues Advertising 52%
ISP 26%
E-Commerce 22%
Strategic Alliances Telefonica
Bertelsmann
Broadband Access ADSL
Cable
Satellite
Wireless
* # of Internet users
<PAGE>
5
Transaction Summary
Exchange Ratio: $97.55 dollars for every Lycos share
Collar: Symmetrical 20%
Structure: Tax free exchange of shares
Accounting: Purchase
Listing: Madrid, NASDAQ
Closing Conditions: Shareholder votes
Regulatory approval and other customary conditions
Expected Closing: Calendar 3Q '00
Telefonica Bertelsmann
Telefonica will underwrite a $2 Billion Bertelsmann commits to a
Terra rights offering at $56.13, to be broad world-wide alliance
commenced prior to the closing and enters $1 Billion,
5-year commerce agreement
Telefonica Mobile will form a joint venture
with Terra Lycos for a global wireless unit.
<PAGE>
6
Summary of the Multiples of
the Transaction
Implied Price per Lycos Share $ 97.55
Implied Equity Value(a) $ 12.9 bn
Less Cash and Cash Equivalents $ (0.6)bn
- ------------------------------ --------------
Implied Enterprise Value $ 12.2 bn
- ------------------------------ --------------
Enterprise Value as Multiple of:
Revenues ($ m)
LTM 315 38.9 x
2000E(b) 321 38.2 x
2001E(b) 442 27.7 x
Unique Visitors (m) 33 $ 372.3
o Based on 132 million fully diluted Lycos shares
o Analyst consensus
7
<PAGE>
<TABLE>
<CAPTION>
Description of the Collar
Amount of
New Terra Implied Implied
Terra Shares to Lycos Terra
Average Exchange be Issued Market Market % Lycos/
Price(a) Ratio(b) (m) Cap(c) Cap(d) % Terra
<S> <C> <C> <C> <C> <C> <C>
Upper End $68.06 1.433x 189.2 $12.9bn $21.7bn 37%/63%
Central $56.72 1.72x 227.0 $12.9bn $18.1bn 42%/58%
Reference
Lower End $45.37 2.150x 283.8 $12.9bn $14.5bn 47%/53%
o Average closing price of Terra shares for the ten days ending on the tenth day prior to the closing date of the transaction
o Number of Terra shares per each Lycos share
o Assuming 132 million fully diluted Lycos shares
o Including the shares issued in the forthcoming $2bn rights issue (I.e. 35.6 million shares)
<PAGE>
8
Analysis of Relative Contributions
Relative
Contribution
(US$ million, unless
otherwise specified) Terra Lycos Combined Terra Lycos
<S> <C> <C> <C> <C> <C>
Revenues
LTM $133 $315 $448 29.7% 70.3%
2000E(a) 155 321 476 32.6 67.4
2001E(a) 279 442 720 38.7 61.3
EBITDA
1999 $(79) $(3) $(82) NM NM
LTM (221) 13 (208) NM NM
2000E(a) (227) 42 (184) NM NM
2001E(a) (205) 103 (102) NM NM
Unique Visitors ('000) 11,700 32,900 44,600 26.2% 73.8%
Daily Page Views (m) 26 120 146 17.7 82.3
Market Capitalisation
As of 15 May 2000 $16,138 $8,194 $24,332 66.3% 33.7%
Max 90 Days 39,725 10,355 50,080 79.3 20.7
Min 90 Days 14,542 4,537 19,080 76.2 23.8
o Analyst consensus
</TABLE>
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9
Key Investment Highlights
o Creation of a unique global Internet player
- Valuable strategic partners: Telefonica and Bertlesmann
- Global presence in 37 countries, being leader in key Internet
markets
- 175 million page views per day
- Diversified revenues of $110 million
o Unparalleled depth and breadth to access platforms and technologies:
fixed, wireless, satellite, ADSL, cable
o Strong content base through Telefonica Media, Endemol and strategic
relationship with Bertlesmann
o 49% of mobile multi-access portal
o A "must buy" network for advertisers and e-commerce partners
o Opportunity to fully exploit market premium assigned to first movers
o Substantial synergy potential
o Strong management team
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The most complete and best prepared investment vehicle on the
road to convergence
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Terra Lycos Leadership
o Senior management
- Chairman: Juan Villalonga
- CEO: Bob Davis
- COO: Abel Linares
- CFO: Ted Philip
o Board of directors
- 14 Total, 7 Independents, 4 from Telefonica/Terra and 3 from
Lycos
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11
Terra Lycos Strategic Vision
Value for Consumers and Shareholders Will be Created by Leading
the Convergence of Media and Communications Globally
Fixed Telephony
Web TV/Media
Mobile Communication
Cable Modems
terra LYCOS
Multiple-Access Portal
(MAP)
Wireless
PDAs
Web Phone
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The Global Convergence Race
The only company with...
terra LYCOS
Global Presence X
Content X
Fixed Telephony X
Wireless X
ADSL X
Cable X
Satellite X
Multi Access Platform X
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13
Terra Networks
The Leading Global Spanish and Portuguese
Language Internet Access and Content
Company
terra
o 2 million subscribers
o 14 countries
o Multiple access offerings
o Rich/compelling content
o Network model
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14
Terra Networks: Leadership in Spain
and Latin America
"Think Global, Act Local"
United terra
States terra
Argentina terra
Brazil Spain
Costa Rica
Chile
El Salvador terra
Guatemala
Honduras
Mexico terra
Nicaragua
Panama
Peru
Venezuela
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15
The Internet's Leading Multi-
Brand Network
Lycos
o 46% U.S. reach
o 148 Million page views per day worldwide
o Four of the world's top 20 internet sites
o 29 countries
o Network model
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16
Lycos: Leadership in North
America, Europe and Asia
Lycos
Canada
Lycos Lycos
Europe Korea
Lycos Lycos
Greater China,
Asia, and the
Pacific Rim
Lycos
Japan
Lycos
Americas
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17
The Leading Telecom Group
in Spain and Latin America
Telefonica
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
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18
Telefonica Access
Terra Lycos: Multiple Access Through Strategic Alliance with Telefonica
Fixed Telephony
Cable
Wireless
Broadband
Telefonica Servicios
Telefonica Telefonica Media Moviles, S.A.
o 40 Mil. lines 2.3 Mil. Subscribers 20 Mil. Subscribers
o ADSL Cable Broadband Wireless Broadband
62.3 Mil. Total
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19
Creation of Wireless
Multi Access Portal (MAP)
o Joint Venture Terra Lycos
(49%) & Telefonica Moviles
(51%)
o Access through
wireless
platform
o Content
Telefonica Servicios distribution to terra LYCOS
Moviles, S.A. 20 million
customers
o Realtime
E-Commerce
o Anytime Anyplace
o Killer
applications
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20
Endemol's Strong Presence in Key Markets
Endemol is the leading independent TV producer in the Netherlands, Spain,
Italy, Portugal, Poland & Scandinavia and in the top 3 in the remaining
countries where it operates
Belgium Scandinavia Poland
o Endemol o Metronome o Endemol
Belgium Neovision
United Kingdom Germany
o GMG Endemol o Endemol
Entertainment
France Productions
o Groupe ASP o Non Fiction
Endemol o GAT
o Flamingo Film
Portugal o Meta
o Endemol o Helkon
Portugal
Spain The Netherlands
o Gestmusic Endemol o John de Mol
o Zeppelin Producties
o Telepolis.com Italy o Joop van den
o Medicinatv.com o Aran Ende TV
Producties
o Rene Stokvis
Producties
o SBSnet.nl
South Africa
o Endemol South Africa
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Telefonica Media
Telefonica Content
Antena 3 TV Via Digital Pearson Onda Cero Hispasat
48.6% 47% 5% 100% 22.78%
Recoletos
95% Lolafilms 50%
Movierecord 100%
Unedisa
30% Azul TV 50%
Audiovisual Sport
40% TELEFE 100%
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Bertelsmann delivers leading content worldwide
as the premier content provider on Terra Lycos
Bertelsmann Committed $1 bn in revenues
over a 5 year period
Representative Brands o Bertelsmann is
o Random House (#1 publishing house the most
worldwide) international
o CLT-UFA/Pearson TV (#1 TV producer media company in
worldwide, # 1 TV distributor in Europe) the world and
o Gruner + Jahr (#1 magazine publisher in the leading
Europe) media company on
o BMG Entertainment (#4 music company in the Internet
the world)
o BertelsmannSpringer o Bertelsmann
o (#1 in professional information in occupies leading
Germany) market positions
o Bertelsmann Direct (#1 in clubs worldwide with
worldwide, #2 in media e-commerce over 600 companies
worldwide) in 54 countries
o Bertelsmann Arvato (#1 Printing house in
Europe, # 1 in distribution/services)
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terra LYCOS
The Creation of a Global Leader in Internet,
New Media and Communications
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24
Terra Lycos: Global Internet Leadership
o Global presence in 37 countries
o 175 Million page views per day
o Diversified revenues of 110 Million dollars (March Quarter) spread
between advertising (52%), ISP (26%), e-commerce (22%)
o #3 Internet company in the world
o Alliances with Telefonica and Bertelsmann
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25
Terra Lycos Leads in
Growth Regions
1999-2003 CAGR (%)*
37
31
27
23
22
World Latin Asia U.S. Europe
America
#3 #1 #1,#3 #1,#4 #2
* Number of Internet users.
Source: International Data Corporation
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26
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
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27
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre
Lycos Free
Commundo
Terra Line
Terra Premium
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28
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
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29
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
WIREDNEWS
BigBrother
LYCOS ZONE
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30
Terra Lycos: High Value-Added Content
Telefonica Media Bertlesmann
o #1 Broadcast TV terra o World's 3rd
in Spain & LYCOS Largest Media
Argentina Conglomerate
o #2 Pay TV in Present in 54
Spain & Countries
Argentina o Active in:
o Radio Endemol - New Media
- Book publishing
Leading independent - Music
TV producer in the - TV broadcasting
Netherlands, Spain, - Periodicals
Italy, Portugal,
Poland & Scandinavia
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31
The Terra Lycos Value Proposition
Providing Aggregating Offering Rich Monetizing
Access Audience Content Traffic
Terra Libre terra QUOTE.COM LYCOShop
Lycos Free LYCOS GAMESVILLE WINGSPANBANK.COM
Commundo HOTBOT terra BARNES&NOBLE
Terra Line Angelfire sonique BBVA
Terra Premium tripod invertia.com De Remate.com
WIREDNEWS
BigBrother amadeus
LYCOS ZONE
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32
Advertising and E-Commerce
A "must buy" network for advertisers
and e-commerce partners
o Global coverage and content
o Multi-national advertising platform
o Only significant English and Spanish Internet company
----
o Improved content will yield increased stickiness
o Sales staff of 300+
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33
Advertising and E-Commerce
A&E El Corte AMERICAN COMPAQ BMW LYCOShop
AandE.com Ingles EXPRESS
MEXICANA Fidelity E-LOAN WINGSPAN Nobel
Investments BANK.COM Livrario a papelaria O
prazor do lor
Procter & BARNES & De BRITISH
Gamble NOBLE Remate. AIRWAYS
com
GAP Coca-Cola intel IBM BBVA THE WALL
STREET
JOURNAL
amadeus Banco AT&T Nintendo Forbes Via Plus
Zaragozono by MAGAZINE Super-
Gradiente tienda
SONY Eddie Bauer Kodak UNIVANCO Marriott.com
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34
Synergies and Value Creation
Potential
Additional
Annual
Revenues ($)
Revenue O Advertising revenues up to 200m
Synergies O Cross fertilization of content up to 45m
O e-commerce 45m
O Bertelsmann deal 200m
O Total potential additional revenues up to 500m
Avoided O Lycos expansion into Spanish & Portuguese world 1bn
Costs O Terra's expansion into the US 3bn
O Terra's expansion into Europe 2bn
O Total avoided costs 6bn
Mobile O Potential access subscribers in 18 months = $4m
Portal O Current value of Terra with 2 million access
subscribers = $18bn
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35
Terra Lycos: Creation of
Shareholder Value
o Ideally positioned as the global leader
o Large scale, broad scope of diversified revenue streams
o Unparalleled depth and breadth of access platforms and technologies
o Valuable strategic partners - Telefonica and Bertelsmann
o The most complete and best prepared investment vehicle on the road
to convergence
o Opportunity to fully exploit premium assigned to first mover
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36
Terra Lycos: A Global Leader
in Key Internet Regions
Canada, #1
Western Europe, #2
U.S. Hispanic, #1 Japan, #2
Total U.S., #4
Korea, #1
Latin America, #1 Asia Pacific, #1
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