Part of the Telefónica Group (the former Spanish public telephone monopoly), Terra operated as a web portal or Internet access provider in the United States, Spain and 16 Latin American countries.

[citation needed] This process sparked a lot of public controversy in Spain, where thousands of small investors acquired shares of Terra during the boom.

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.

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.

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.

In the early 2000s, Terra was the largest Latin American online media company, ranked as the 31st most popular Internet destination in the world.