Terra (company)
Encyclopedia
Terra Networks, S. A., usually referred to as "Terra", is an Internet multinational company with headquarters in Spain
. 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.
, Telefonica'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), Zaz (Brazil
), Infosel
(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
.
, 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!
or MSN
. 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 Telefonica the obligation to keep the ad spending. Soon after that, Telefonica decided to get more control over Terra and launched an offer for shares of Terra still floating on the stock market. Although it granted Telefonica control over more than 70% of Terra's stock, the move was not successful enough to let Telefonica take Terra out of the public, as it was allegedly its objective.
In October 2004, following Telefonica'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
.
. After this plan was approved by both Telefonica 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 Telefonica, 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.
study.
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
. Part of Telefónica
Telefónica
Telefónica, S.A. is a Spanish broadband and telecommunications provider in Europe and Latin America. Operating globally, it is the third largest provider in the world...
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
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
under the symbol TRLY and on the Spanish stock market under the symbol TRR.
History
Terra was founded in 1999 by Juan VillalongaJuan Villalonga
Juan Villalonga Navarro is an influential Spanish businessman. He was a partner at McKinsey & Company in the 1980s, CEO for Credit Suisse First Boston and Bankers Trust in Spain in the early 1990s, and CEO of Telefónica from 1996 to 2000....
, Telefonica'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), Zaz (Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
), Infosel
Grupo Reforma
Grupo Reforma is the largest printed media company in Mexico and Latin America. It publishes ten daily newspapers in five cities, including the leading newspapers in Mexico's three largest cities: Reforma in Mexico City, El Norte in Monterrey and Mural in Guadalajara...
(Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
), Gauchonet, Donde (Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
) and Chevere (Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
).
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
Amadeus CRS
Amadeus is a computer reservations system owned by the Amadeus IT Group with headquarters in Madrid, Spain. The central database is located at Erding, Germany. The development center is located at Sophia Antipolis, France...
), Atrea (real estate, in partnership with Spanish bank BBVA
Banco Bilbao Vizcaya Argentaria
Banco Bilbao Vizcaya Argentaria, S.A. is a multinational Spanish banking group. It was formed in 1999 from the merger of Banco Bilbao Vizcaya and Argentaria, both of which in turn had previously amalgamated three important banks in Spain, namely Banco de Bilbao, Banco de Vizcaya, Banco Exterior de...
), 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
The Walt Disney Company
The Walt Disney Company is the largest media conglomerate in the world in terms of revenue. Founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio, Walt Disney Productions established itself as a leader in the American animation industry before diversifying into...
and Spanish football clubs Real Madrid
Real Madrid
Real Madrid Club de Fútbol , commonly known as Real Madrid, is a professional football club based in Madrid, Spain. The club have won a record 31 La Liga titles, the Primera División of the Liga de Fútbol Profesional , 18 Copas del Rey, 8 Spanish Super Cups, 1 Copa Eva Duarte and 1 Copa de la...
and FC Barcelona
FC Barcelona
Futbol Club Barcelona , also known as Barcelona and familiarly as Barça, is a professional football club, based in Barcelona, Catalonia, Spain....
. 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
Apple Computer
Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
's iTunes
ITunes
iTunes is a media player computer program, used for playing, downloading, and organizing digital music and video files on desktop computers. It can also manage contents on iPod, iPhone, iPod Touch and iPad....
.
Terra and Lycos
In April 2000, Terra surprised the internet market with the acquisition of LycosLycos
Lycos, Inc. is a search engine and web portal established in 1994. Lycos also encompasses a network of email, webhosting, social networking, and entertainment websites.-Corporate history:...
, the U.S. portal, in a stock swap
Stock swap
A stock swap, also known as a share swap, is a business takeover or acquisition in which the acquiring company uses its own stock to pay for the acquired company. Each shareholder of the newly acquired company receives a certain number of shares of the acquiring company's stock for each share of...
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
AOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
, Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
or MSN
MSN
MSN is a collection of Internet sites and services provided by Microsoft. The Microsoft Network debuted as an online service and Internet service provider on August 24, 1995, to coincide with the release of the Windows 95 operating system.The range of services offered by MSN has changed since its...
. 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
Bertelsmann
Bertelsmann AG is a multinational media corporation founded in 1835, based in Gütersloh, Germany. The company operates in 63 countries and employs 102,983 workers , which makes it the most international media corporation in the world. In 2008 the company reported a €16.118 billion consolidated...
, 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
Quepasa
Quepasa Corporation is a US-based social media technology company catering to Latin Audiences worldwide. Quepasa owns and operates Quepasa.com, a social network, Quepasa Games , a social game development studio, and Quepasa Contests, a social media advertising solution -About:Headquartered in West...
, Starmedia
Starmedia
StarMedia is a leading Latin Internet brand, co-founded in August 1996 by Fernando Espuelas and Jack Chen as the first pan-regional Internet portal for Spanish and Portuguese speaking audiences...
or El Sitio
El sitio
Latin internet portal founded in 1997, by Roberto Vivo-Chaneton and Roberto Cibrian-Campoy. Founded in Argentina, El Sitio was considered one of the principal Spanish language internet companies of the late 1990s dot-com boom.-Company history:...
lost cash up to the point of filing for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
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 Telefonica the obligation to keep the ad spending. Soon after that, Telefonica decided to get more control over Terra and launched an offer for shares of Terra still floating on the stock market. Although it granted Telefonica control over more than 70% of Terra's stock, the move was not successful enough to let Telefonica take Terra out of the public, as it was allegedly its objective.
In October 2004, following Telefonica'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
Endemol
Endemol is an international television production and distribution company based in the Netherlands, with subsidiaries and joint ventures in 23 countries, including the United Kingdom, the United States, France, Mexico, Spain, Italy, Germany, Brazil, Chile, Argentina, Dominican Republic, Poland,...
.
Telefonica take-over
In February 2005, Telefonica announced its intention of taking full control of Terra by giving Telefonica' shares in exchange for Terra's remaining shares in the stock marketStock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
. After this plan was approved by both Telefonica 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 Telefonica, 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 domain in Brazil
The domain terra.com.br attracted almost 2 million visitors annually by 2008 according to a Compete.comCompete.com
Compete.com is a web traffic analysis service of Compete, Inc. which operates in the United States and publishes the approximate number of global visitors to the top 1,000,000 web sites in the world...
study.