Shareholders of Telefonica Internet subsidiary Terra approved a Euros761m amplification of capital on Thursday (June 8) which will allow the company to complete its proposed 100% buy-out of US portal Lycos. The new company, Terra Lycos, will have corporate centres in Barcelona, Boston and Miami.

"With Lycos, we are creating a new platform not just to enter the North American market but to aspire towards world leadership," Telefonica president Juan Villalonga said at the shareholders' meeting in Madrid.

If the Terra-Lycos deal represents a giant step towards globalisation for Telefonica, Villalonga has no plans to stop there. A report in the New York Times yesterday suggested that Telefonica may renew merger talks with Dutch telecoms giant KPN if the Spanish government finally decides not to stand in the way. During the shareholders' meeting, Villalonga reportedly pointed to Asia and Turkey as new areas of interest for his rapidly expanding company.

"It is our conviction that only those companies which consider the world their objective market will have the possibility to prosper in the new economy," Villalonga said.