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To: Art Baeckel who wrote (21224)	8/3/2000 7:59:09 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 22640

Terra Named Best Portal and ISP in Latin America PR Newswire - August 02, 2000 14:39 Jump to first matched term - The Award is Given by PC World Latinoamerica, the Leading IT Magazine in Latin America, and Terra was Selected From Among 81 Finalists - MADRID, Spain, Aug. 2 /PRNewswire/ -- Terra Networks, S.A. (Nasdaq: TRRA), the Internet subsidiary of Telefonica, S.A, has been named best portal and best ISP in Latin America in the latest awards by PC World Latinoamerica, Latin America's leading IT magazine. Terra beat out competition from 81 finalists in various categories. The finalists were named by 45 high-tech companies in the sector while the jury was made up of 20 judges selected by 10 PC World editorial teams in the region. This award validates Terra's strategy of consolidating its leading position in the Spanish- and Portuguese-speaking Internet business, a potential market of 550 million people. Last June, Terra launched Terra Uruguay and Terra Venezuela, and the company recently announced the acquisition of the "La Cuidad" portal, making it the Internet leader in Colombia. With these initiatives, Terra is now present in 17 countries. In addition to Spain, the Telefonica subsidiary is also present in Brazil, Mexico, Chile, Peru, Uruguay, Guatamala, Argentina, Costa Rica, Venezuela, Colombia, El Salvador, Honduras, Nicaragua, Panama and the United States. PC World Latinoamerica is the publishing division of IDG (International Data Group), a leader in IT services in Latin America. IDG publishes more than 290 titles in 75 countries, reaching 40 million readers worldwide. IDG also organizes 168 IT-related exhibitions in 35 countries. IDG's research division, International Data Corporation, is the leader in IT research through its 49 offices in 43 countries. ABOUT TERRA NETWORKS Terra Networks is the world's leading provider of both ISP services to residential and small office (SOHO) clients and content for the Spanish-and- Portuguese-speaking markets. Its ISP business has approximately 2.7 million clients and hosts 1,032 million pages per month, while Terra portals receive 86 million log-ins per month. In the first half of 2000 Terra's revenues increased 180% and advertising revenues continued their strong growth, rising 540% with respect to June 1999 and 84% on the previous quarter. E-commerce revenues multiplied 6-fold in the first half and the number of clients has doubled in 6 months and increased 5 times in a year. On May 16, 2000, Terra announced the proposed acquisition of Lycos to create the first global Internet portal. This operation will allow the convergence of Lycos in services, contents and distribution with operations in 37 countries. Terra currently provides ISP services in Spain, Brazil, Mexico, Chile, Peru, Guatemala and the United States and operates portals in Argentina, Venezuela, Uruguay, Costa Rica, El Salvador, Honduras, Nicaragua and Panama. Recently Terra announced the acquisition of the "La Ciudad" portal to lead the Internet market in Colombia. Terra is developing on-line advertising, marketing, e-commerce and other related initiatives in all of its markets. The company also combines a wide range of international content with other content of a largely local nature to reflect the individual communities of its users as well as their everyday interests and concerns. Terra Networks, S.A. is a subsidiary of Telefonica, S.A. and is listed on the Spanish stock market (TRR) and on Nasdaq (TRRA) in the United States. SOURCE Terra Networks /CONTACT: Teia Chalmers of Kekst and Company, 212-521-4886, for Terra Networks, or Press Office of Terra Networks S.A., +34-91-452-30-47, +34-91-452-31-46, or e-mail, comunicacion@corp.terra.com/ (TRRA)

To: Art Baeckel who wrote (21224)	8/3/2000 10:26:56 AM
From: Art Baeckel	Respond to of 22640

AOL struggles to claim territory in Latin America By Jim Hu Staff Writer, CNET News.com August 2, 2000, 2:25 p.m. PT The delay of AOL Latin America's public offering yesterday has splashed cold water on the region's emerging Internet market and has raised questions about the Internet leader's efforts abroad. The Fort Lauderdale, Fla.-based AOL Latin America, a joint venture between Venezuelan media giant Cisneros Group and America Online, yesterday slashed its IPO price to $8 to $10 from its previous $15 to $17 range. The company also delayed its IPO until later this week or next week to persuade skeptical investors to buy its stock. The company originally filed in January to raise $575 million in its IPO. Yesterday, the share cut pushed the value down to $250 million. One major issue behind investor caution lies in AOL Latin America's competitive position in the region, where it lags behind more entrenched players, analysts say. In Mexico and Brazil, AOL Latin America faces local services including Universo Online (UOL), Telefonica de Espana's Terra Networks and Telefonos de Mexico. The combination of a risky market and the challenges of starting behind entrenched leaders may present a difficult climb for AOL Latin America, not unlike the struggles the Internet service provider (ISP) faces in Europe and Japan. "Companies (in Latin America) have taken to heart what AOL did in the U.S. and said, 'That's not going to happen here,'" said David Simons, managing director of Digital Video Investments, an institutional money management researcher. "What's happening in Latin America is happening in Europe." AOL's samba The Latin American Internet market remains in its infancy. PC, and even telephone, penetration remain low among the general populace. Regional economies are often volatile, as the rifts between the wealthy and the poor increasingly expand. At the end of 1999, only 2 percent of Latin Americans were online, with numbers expected to hit 12 percent by 2005, according to a study conducted by Net research company Jupiter Communications. Only 4 percent of Latin American households own computers; that figure is expected to reach 13 percent by 2005, the study said. "Most residents can't even get the Internet, let alone a phone," said Abhishek Gami, an equity analyst at William Blair. "It's not what we expected in terms of an Internet market." Nevertheless, Latin America remains a nascent market that could potentially explode. A rapidly developing region such as Latin America could offer many opportunities for U.S. Internet companies trying to get in on the ground floor. And capitalizing off a small percentage in this highly populated region could help the company reap considerable revenues. "It's the leading edge of the last frontiers in the development of telecommunications," Simons said. "It's a huge population, which means relatively small percentages translate into big numbers." Despite the potential, AOL Latin America has gotten off to slow, late start. The company had 129,000 subscribers in Brazil as of June 25. A familiar story Part of AOL's headaches come from the recent entry of free ISPs into the region. UOL, the market leader in Brazil, launched a free ISP shortly before AOL Latin America launched its service in Brazil. UOL's subscriber numbers demonstrate the difficulty in dethroning a leader. It has reported having roughly 1 million paid subscribers and 2 million free ISP subscribers. Despite these figures, AOL Latin America continues to pursue "slow, organic growth, which could prove to be more healthy," said Lucas Graves, an analyst at Jupiter Communications. "A lot of these enterprises may fall by the wayside while AOL chugs along." AOL's battles against entrenched, regional Internet services are not new. The company has had its share of headaches in Europe and Japan, two regions where it has faced stiff competition and regulatory barriers that favor local services. In Europe, for instance, Net users have to incur potentially expensive fees each time they go online. That's because people must pay metered phone rates for local calls, whereas local phone calls are billed as a flat fee in the United States. This telecommunications structure has sparked the launch of numerous free ISPs and has favored the local phone monopoly. Many of these local differences have been problems for AOL. "The competitive landscape is very different, particularly in Europe, which is a very heterogeneous marketplace, full of regions as opposed to broad national distribution," said Jordan Rohan, an equity analyst at Wit SoundView. Many of AOL's U.S. competitors are also aggressively competing in the same regions. Web giant Yahoo, for example, has made significant inroads in Japan and Europe. The portal has developed a model of creating local versions of its site and then marketing them heavily in specific areas. An IPO still means cash In contrast to AOL, Web portals do not need to invest resources in building an Internet access service, which requires modems, network expenses, billing and customer service management, Rohan added. "Yahoo was the first mover in many of the Asian and European territories," he said. "And it does not rely on an ISP service, which takes longer to build." Regardless of region, international expansion remains crucial for Internet companies to continue growing aggressively. Despite skepticism over AOL Latin America's market position, an initial public offering could give the company the boost it needs to compete with local rivals. "The IPO is not for just cash or capital," William Blair's Gami said. "It's to give themselves currency to acquire homegrown talent and build their own business to compete side-by-side with local players."