Acquisition

Telefonica SA
7 August 2000


The agreement includes the acquisition option of up to 51% of the Brazilian
company

TPI ACQUIRES 20% OF GUIALOCAL, ONE OF BRAZIL'S MOST IMPORTANT CITY GUIDES IN
INTERNET


- Guialocal offers the most complete information on Internet regarding
entertainment, culture, gastronomy and tourism in six of Brazil's most important
cities, at the same time as providing this same information for electronic
diaries, mobile telephones with WAP technology and e-mail.

- TPI will incorporate a data base in Guialocal that will include the companies
and professionals that appear in 'Guia Mais', its Yellow Pages for Sao Paulo,
which will boost the development of city guides and further strengthen TPI
Brasil's commercial strategy as this operation will enhance the advertising
investment of its customers.

Telefonica Publicidad e Informacion (TPI) and the Brazilian company Guia Local
Network S.A have reached an agreement by which the former will acquire 20% of
Guialocal, one of Brazil's main city guide portals on Internet, for the amount
of 2.5 Brazilian reals (approximately 254 million pesetas). This agreement
includes an acquisition option of up to 51% of the Brazilian company.

Guialocal (www.guialocal.com.br) is the portal for Brazil's city guide that
offers the broadest range of functions. It provides complete information on life
in six of Brazil's main cities (Sao Paulo, Rio de Janeiro, Belo Horizonte,
Brasilia Distrito Federal, Salvador de Bahia and Niteroi) with a total of almost
80 million inhabitants.

Guialocal offers update information on all these cities, in both general and
local terms; entertainment (cinemas, theatres, shows, discos...); culture;
sports, gastronomy and tourism (including public transport). At the same time,
it offers price comparisons, promotions and a searcher centre, and even a card
for discounts on purchases. It also allows the customer to receive information
through PDAS (Palm Pilot electronic diaries), WAP mobile telephony and e-mail.

TPI will provide access, through Guialocal, to the database of its Brazilian
subsidiary, Telefonica Publicidad e Informacao. In this way, Guialocal will have
at its fingertips the most exhaustive database on companies and professionals in
the area of Sao Paulo. It is in this same area where TPI Brasil has launched a
commercial campaign on the publication of five Yellow Page guides under the name
'Guia Mais'. Coinciding with this, the agreement with Guialocal will allow TPI
Brasil to offer its 'GuiaMais' customers greater yield on their advertising
investment, as it will have more information supports and, therefore, greater
data visibility.

Guialocal increases TPI's range of city guides, adding to that it already has in
Spain which is considered to be the website that offers the most complete guide
to cities, as it has specific and update information on 52 Spanish provincial
capitals (offered through both WAP mobile telephony and Internet) regarding such
aspects as:

- Local, national, international, economic, society and cultural news.

- Entertainment: events, information and recommendations on restaurants,
  'tapas'  bars, hotels, trips, the films and shows on offer and their          
respective reviews.

- Information on lotteries, betting, horoscopes, TV programmes, sports,
  weather, etc.

- Commercial information regarding shopping areas, recommended establishments
  and access to Yellow Pages.

- Other information, services such as White Pages, information on day trips
  round the city and the sending of e-cards of the city.


  The acquisition of Guialocal represents a step forward in TPI's expansion
strategy in Brazil. Telefonica Publicidade e Informacao, as well as initiating
its publicity campaign for the launching of its paper Yellow Pages, has also
launched the Brazilian directories' market's first multi-product offer,
combining, under the trade name of 'GuiaMais', information and publicity, on
paper, on Sao Paulo's companies and professionals, telephone service and
Internet.

  Brazil is a further foothold in TPI's international expansion strategy, which
also includes the incorporation of Telefonica Publicidade e Informacao, the
agreement reached to undertake the management and control of Publiguias, Chile's
leading company in directories, and the initiation of negotiations with
Telefonica, following the success of its Public Tender Offers launched on
Telefonica de Argentina and Telefonica del Peru, in order to integrate the
directory assets in these countries into its group.

  TPI, (www.paginas-amarillas.es) is Spain's leader in the publishing and    
marketing of directories, information content and advertising services, both on
paper and Internet. Among its many products, those of particular importance are
paper Yellow Pages, Yellow Pages Online, Spoken Yellow Pages, White Pages and
Europages. In 1999, and in non-consolidated terms, TPI registered a net income
of euros 82.83 million (Ptas 13,781 million), reflecting a 93% increase,
including the impact of extraordinary results which amounted to a gross figure
of euros 336.26 million (Ptas 55,949 million).  Yellow Pages Online recorded
growth in revenue of 187%, totalling euros 2.6 million (Ptas 432 million).

                                                       Madrid, August 7, 2000