Sale of Lycos shares

Telefonica SA
06 October 2004


TERRA NETWORKS, S.A., a Telefonica, S.A. subsidiary, pursuant to the provisions
of article 82 of the Spanish Stock Market Act, hereby communicates the following



                                 RELEVANT FACT

Pursuant our Relevant Fact communication dated on August 2nd , 2004, we inform
that on October 5th , 2004, TERRA NETWORKS, S.A. (hereinafter, TERRA) and the
Korean company DAUM COMMUNICATIONS Corp. have executed the stock purchase
agreement by which the former sells to the latter the entire stock of LYCOS,
Inc., a TERRA subsidiary, once the administrative authorisations that might be
necessary, and in particular, the approval by the US authorities for the Defence
of Competition have been obtained.


Madrid, October 6th , 2004



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