Globalization Will Be Terra Lycos' New Groove

WASHINGTON (07/19/2000) - With a presence in 38 countries, Terra Lycos Inc., the company that will be created by the merger of Lycos Inc. and Terra Networks SA, has a great footprint on which to build a strong international Internet presence, said Robert Davis, chief executive officer and president of Lycos.

Davis is due to become CEO of Terra Lycos when the merger is completed.

Terra Networks, the ISP (Internet service provider) arm of telecommunications provider Telefónica SA, based in Madrid, Spain, and Lycos announced their US$12.5 billion merger in May. [See "UPDATE - Terra to Buy Lycos in US$12.5B Stock Deal," May 16.] Davis said the German media company Bertelsmann AG, which entered into a wide-ranging relationship with Lycos when the merger was announced, will be another pillar in Terra Lycos' global strategy.

"What Terra Lycos is all about is globalization," Davis said in a speech to the National Press Club Wednesday. The number of countries in which the company has a presence is 65 percent more than any other portal and Internet access provider, he added.

"In all sectors of the economy... companies are waking up to the realization that you will quickly become nothing more than a regional player if all their revenues are in the United States," Davis said.

Davis said the projected revenue growth for Terra Lycos in fiscal 2001 is 80 percent or $900 million. That's two to five times the growth rate of its competitors, who include America Online Inc. (AOL) and Yahoo Inc. Davis also said he was confident that Lycos would report its fifth consecutive profitable quarter in mid-August.

Lycos Wednesday also began offering a Hindi-language version of its site for customers in India, Davis announced. [See "Lycos Asia Launches India Portal," July 19.]There has been speculation that Lycos will use the $3.2 billion in cash that has appeared on its balance sheet since the announcement of the merger with Terra on investment in Asia, but Davis declined to say where the company is shopping when he was asked directly about Lycos' acquisition plans. [See "Asian Telecom Heavyweights Begin Portal Battle," May 31.]When the merger was announced, Terra and Lycos together had some 50 million unique Internet users. The merger gave the Web portal business 550 million new potential customers in the Spanish- and Portuguese-speaking world.

Lycos' network of sites, which offer commentary, news, e-mail, games and Web searching, is the fourth-most visited on the Internet, according to Web ratings firm Media Metrix Inc. Davis said Lycos will continue to build its name around a family of 15 brands, including the Web sites Tripod.com, HotBot.com, WiredNews.com, Quote.com and Gamesville.com.

Davis also gave examples of how the Internet already is overhauling the social order in both developed and emerging countries. He said that Lycos has a wonderful vantage point from which to observe the revolutionary developments taking hold on the Web.

"We have a bird's eye view of activism on the Web, and we see a very definite clustering effect when a government state represses (a movement)," he said.

Whenever there is unrest, "you can be sure a dissident Web site will take root and mushroom very, very literally overnight and the power of these sites to mushroom and grow is inspiring."

The Internet is "the ultimate instrument of democracy," he said.

Davis also detailed how the Internet was used to counter government forces during the wars in Kosovo and Indonesia, and he spoke about its use by the Zapatista separatist movement in the southeastern Mexican state of Chiapas. The 1997 Nobel Laureate Jody Williams also cited the Internet when asked how she was able to coordinate the International Campaign to Ban Landmines, he added.

"Depending on where you sit, that is either an exciting notion or an appalling one, and I imagine to all of us it's probably a little bit of both," Davis said. "But it's very much the reality we live in today."

Lycos, in Waltham, Massachusetts, can be reached at +1-781-370-2700 or at http://www.lycos.com/.

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