As part of the deal announced Thursday, Spanish-language music and other content will be available to Terra's users. The new music channel will be the largest such collection, with 20 Spanish music genres on more than 30 stations, the companies said.
Internet giants such as Terra Networks, which operates Terra.com, and America Online say Internet radio is growing in popularity and are trying to create niche services for diverse audiences.
But manyhave found the business unprofitable and suffered when they were ordered to pay royalties to the record industry for licenses to play music.
Live365 network said it has thousands of stations, spanning 150 countries, and more than 2 million listeners a month.
Terra Networks last month acknowledged that it isof its U.S. Lycos division.