Acquisition

Telefonica SA
18 July 2000


In just 15 months the Company already has businesses in 16 countries


TERRA ACQUIRES THE PORTAL 'LA CIUDAD' TO BECOME THE LEADER IN COLOMBIA'S 
INTERNET MARKET

*  The portal acquired by Terra has as its partners 4 of the local media's most
important entities, which will join forces to form the website 'laciudad.com'.

*  This project includes an agreement by which these partners, El Tiempo,
Semana, El Colombiano and El Pais will provide exclusive content for the new
Terra portal.

Terra Networks, Telefonica, S.A.'s Internet subsidiary, has gone a step further
in its aim to strengthen its leadership position in the Spanish and Portuguese
speaking Internet market, through its purchase of a majority stake in 'La
Ciudad', one of Colombia's main portals.  To be precise, this new Terra portal,
which mainly provides quality pastime and entertainment content, is one of the
country's most strategic portals.

'La Ciudad' has four local partners, El Tiempo, Semana, El Colombiano and El
Pais, which are among the country's leading newspublication, as well as holding
a position of prestige in the field of Internet.  As a consequence of this
agreement, each of these partners will incorporate its respective Internet
portal in 'la ciudad.com', making this the country's leading portal with over 20
million visits.

Likewise, this project includes an agreement by which the partners will provide 
content in exclusivity to Terra's portal in Colombia, therefore providing it
with the country's most complete range of content in terms of pastime, culture,
economy, sports and education- both on a national and international scale.

El Tiempo is Colombia's leading news group and owns the country's most visited
website.  It has national newspapers and magazines, and is responsible for the
distribution of such significant publications as The Wall Street Journal or
Time.  It also has agreements with the Circulo de Lectores, Cinemark and Tower
Records.  It owns the television station City TV and has stakes in Sky, TV Cable
and Yellow Pages.

Semana is Colombia's leading magazine publisher.  Among its many publications
those of most significance are Semana, Dinero, Coleccion and Jet Set.  The other
two partners, El Colombiano and El Pais, are the most important newspapers in
Medellin and Cali, respectively.

With this entrance in Colombia, and following the launching of Terra Venezuela
and Terra Uruguay in June of this year, the Company not only further strengthens
its position of leadership throughout the Spanish and Portuguese speaking world,
with a market potential of more than 500 million people, but also enhances its
goal to become the market leader in these three countries.  Terra Networks is
already the leader in Peru and Chile.

To be precise, Terra, apart from its presence in Spain, is already present in
Brazil, Mexico, Chile, Peru, Uruguay, Guatemala, Argentina, Costa Rica,
Venezuela, Colombia, El Salvador, Honduras, Nicaragua, Panama and the United
States.  Thanks to this and other projects, Terra, by June of this year, had
already registered more than 1,000 million pages visited, reflecting a 410%
increase compared with the same period of last year, and already had more than
2.6 million ISP customers, reflecting 500% growth compared with last year.