In the fourth quarter of 2002 and for the ninth consecutive quarter, the Company met its EBITDA and revenue projections made to analysts.

• Terra Lycos used transparency and prudent conservative accounting criteria to bring the book value of past investments in line with the current market situation.
• These non-cash charges resulted in a net loss for the year of 2 billion euros. Net income for the year, excluding these asset write-downs and applying the same tax rate as in the previous year, amounted to 423 million euros, a 25% improvement over 2001.
• Write-down of goodwill was 857 million euros, of which 81% corresponded to the acquisition of Lycos, while the write-down of the tax credit amounted to 453 million euros.
• In the fourth quarter of 2002, revenues were 173 million euros, applying the same exchange rate of the third quarter, exceeding the guidance of 160-170 million euros provided in the third quarter conference call. This is an increase of 19% over the third quarter on a constant euro basis (SEE APPENDIX I).
• The effect of the devaluation in 2002 of all currencies outside the euro zone where Terra operates yielded a negative impact of 19 million euros in the fourth quarter. Taking into account the exchange rate impact, revenues were 154 million euros, 5% more than the previous quarter.
• Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter was -21 million euros, an EBITDA margin of -13%, also in line with the Company's guidance (between -11% and -14%). EBITDA for the year was -120 million euros, a 48% improvement over 2001, equivalent to 112 million euros.
• At the end of December 2002, Terra Lycos had a total of 3.1 million paying access, communications services and portal subscribers, an increase of 24% over the previous quarter and 88% over 2001. The Company ended the year with 378,000 ADSL customers, an increase of 11% over the previous quarter and 62% over 2001.

Madrid - February 26, 2003 - In the fourth quarter of 2002 and for the ninth consecutive quarter, the Company met its EBITDA and revenue projections made to analysts.

Terra Lycos (MC: TRR; NASDAQ: TRLY), the global Internet leader, presented its financial results for the fourth quarter and fiscal year 2002 today. During a year shaped by an adverse macroeconomic backdrop and the prolongation of the advertising market crisis, Terra Lycos maintained positive and constant progress towards profitability. The Company carried out significant write-downs in assets at year end and recently signed a strategic agreement with Telefónica, reinforcing Terra Lycos' business model by boosting future growth.

ASSET IMPAIRMENT

Terra Lycos employed transparency and prudent conservative accounting criteria to bring the book value of past investments in line with the current market situation via an asset write-down totaling 1.4 billion euros.

The write-down of goodwill was 857 million euros, of which 81% corresponded to the acquisition of Lycos, with the remainder due to other acquisitions. In keeping with this, a write-down of the tax credit amounted to 453 million euros. The rest of the write-downs, up to 1.4 million euros, correspond to other asset entries. These write-downs, which did not result in any cash disbursements, led to a net loss for the year of 2 billion euros. Net income for the year, excluding asset write-downs and using the same tax rate as in the previous year, amounted to -423 million euros, a 25% improvement over 2001.

Fourth Quarter

Revenue in current euros, taking into account the exchange-rate effect, was 154 million euros, an increase of 5% over the previous quarter.

The transition of the Company's business model was reflected in results for the fourth quarter of 2002, with the diversification of Company revenue being especially noteworthy. During the quarter, 33% of total revenue came from access subscriptions, 35% from advertising and e-commerce, 22% from portal subscriptions and communications services, and 10% from other sources, including corporate and SME services.

During the fourth quarter, Terra Lycos launched value-added communications services, including Terra Messenger in Spain, inaugurating a new strategy based on real-time communications services. Terra Messenger was just one of several value-added products rolled out within the framework of the O.B.P. model in 2002, which also included the launch of a for-pay e-mail service in Brazil, which offers the protection of anti-virus and anti-spam filters and which already has almost 480,000 customers.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2002 improved by 21 million euros over the same period of the previous year, to -21 million euros, advancing the continual improvement in EBITDA over the last two years. The EBITDA margin was -13%, in line with the Company's guidance for the quarter (between -11% and -14%) an increase of 5 percentage points over the third quarter and 12 percentage points over the same period of the previous year (SEE APPENDIX I).

FISCAL YEAR 2002

Terra Lycos' revenue increased quarter by quarter.

Revenue for fiscal year 2002 amounted to 622 million euros. At a constant 2001 exchange rate, revenue for 2002 would have amounted to 692 million euros. Despite an adverse macroeconomic environment, this is a figure similar to that reached the previous year, although it has greater quality because it is based on growth in profitable segments.

At the close of 2002, and applying to each quarter of the year the foreign exchange rate effect for the twelve month period, Terra Lycos' revenues increased quarter by quarter throughout the year as you can see in the following graph:

EBITDA for the year was -120 million euros, a 48% or 112 million euro improvement over 2001. The EBITDA margin for the year was -19%, a 14 percentage point improvement over the previous year.

Operating Expenses

In 2002, Terra Lycos continued to combine effective management with process improvement and created an organization consistent with its global presence, enabling the gradual reduction of operating expenses. During the year, the Company reduced costs by 22% from the previous year, a savings of 123 million euros.

Net Income

In 2002, the Company posted a net loss of 2 billion euros, due to the asset write-down of 1.4 billion euros.. Excluding this non-cash charge, and applying the same tax rate as in 2001, net income would have reached 423 million euros, 25% higher than the year before.

Cash

Terra Lycos has one of the strongest cash positions in the sector, allowing it to fund its operations and explore new business opportunities in order to boost profitability. Skilled cash management enabled the Company to end 2002 with 1.8 billion euros.

Operating Results

Revenue in current euros, taking into account the exchange-rate effect, was 154 million euros, an increase of 5% over the previous quarter.

The transition of the Company's business model was reflected in results for the fourth quarter of 2002, with the diversification of Company revenue being especially noteworthy. During the quarter, 33% of total revenue came from access subscriptions, 35% from advertising and e-commerce, 22% from portal subscriptions and communications services, and 10% from other sources, including corporate and SME services.

During the fourth quarter, Terra Lycos launched value-added communications services, including Terra Messenger in Spain, inaugurating a new strategy based on real-time communications services. Terra Messenger was just one of several value-added products rolled out within the framework of the O.B.P. model in 2002, which also included the launch of a for-pay e-mail service in Brazil, which offers the protection of anti-virus and anti-spam filters and which already has almost 480,000 customers.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2002 improved by 21 million euros over the same period of the previous year, to -21 million euros, advancing the continual improvement in EBITDA over the last two years. The EBITDA margin was -13%, in line with the Company's guidance for the quarter (between -11% and -14%) an increase of 5 percentage points over the third quarter and 12 percentage points over the same period of the previous year.

2002 SUMMARY:

EBITDA:
This remains the key measure used by analysts of Internet companies. For the ninth straight quarter, Terra Lycos outperformed the guidance and met its commitments. In 2002, EBITDA increased by 112 million euros and the EBITDA margin by 14 percentage points.

CASH:
Terra Lycos boasts one of the strongest cash positions in the sector, which leaves it in a comfortable position to carry out operations to drive growth.

TERRA LYCOS-TELEFONICA AGREEMENT:
This agreement is aimed at tapping existing synergies between the two companies, while for Terra Lycos and its shareholders it provides a long-term guarantee for its business model.

GOODWILL:
The significant write-downs and the restructuring of assets and fiscal credits in the 2002 financial statements are all part of Terra Lycos' aim of maintaining a high level of investor transparency.

MANAGEMENT:
Reorganisation of the global group realized efficiencies and redundancies in the organization that led to management changes. The aim is to bring the size of the teams in line with the desired objectives, while complying with prevailing labour laws. This need was particularly evident in 2002.

U.S.:
The U.S. is one of Terra Lycos' most important markets. The company intends to maintain its presence there, both because of its position (it is the country's fourth-largest portal) and because of its technological leadership, which can be exported to the rest of the world.

SPAIN AND LATIN AMERICA:
They are both the natural markets in which Terra Lycos will continue its operations maintaining its leadership position.

About Terra Lycos

Terra Lycos is a global internet group, with a presence in 42 countries in 19 languages. The group, which resulted from Terra Networks, S.A's acquisition of Lycos, Inc. in October of 2000, operates some of the most widely visited web sites in the US, Europe, Asia and Latin America, and is the largest access provider in Spain and Latin America.

Terra Lycos' network of websites includes Terra in 17 countries, Lycos in 25 countries, Angelfire.com, Atrea.com, Azeler.es, Direcciona.es, Educaterra.com, Emplaza.com, Gamesville.com, HotBot.com, Ifigenia.com, Invertia.com, Lycos Zone, Maptel.com, Matchmaker.com, Quote.com, RagingBull.com, Rumbo.com, Tripod.com, Uno-e.com and Wired News (Wired.com), among others.

Terra Lycos, with headquarters in Barcelona and operating centers in Madrid and Boston, as well as elsewhere, is listed on the Madrid stock exchange (ticker: TRR) and on the NASDAQ electronic market (ticker: TRLY).