Strategic Alliance

Telefonica SA
9 February 2000

            STRATEGIC ALLIANCE BETWEEN TERRA AND AREMATE.COM.INC.


TERRA, a Telefonica's subsidiary, has signed a strategic alliance with the North
American company AREMATE.COM, INC., (known throughout the Latin American market
as AREMATE.COM), Latin America's leading on-line auctioneers. As a consquence of
this alliance TERRA will take up a 30% participation in the aforementioned
company through a exchange offer.

TERRA, in turn, will offer AREMATE.COM, INC. the opportunity to acquire a
participation in its share capital. 

This transaction places TERRA as one of Latin America's leaders in the on-line
auction business, at the same time as strengthening its electronic sales
strategy within the Spanish and Portuguese speaking market.

TERRA and AREMATE.CO, INC. will work together to launch auction gateways in each
of TERRA's websites.