July 13, 2001

Microsoft and Telmex Joint Venture, Tlmsn, to Acquire Yupi Internet, Accelerating Expansion in U.S. Hispanic Market

Tlmsn, a joint venture between Microsoft Corp, and Telmex, today announced the launch of its Spanish-language portal for the U.S. Hispanic market, with the announcement of plans to acquire Yupi Internet Inc., a leading portfolio of Spanish-language Internet sites. Building on momentum of the number of U.S. Hispanics visiting MSN and Tlmsn's No. 1 reach in Mexico, and the No. 1 position of MSN Hotmail with Spanish-speaking users in Latin America, Tlmsn is launching Yupi/MSN, a Spanish-language portal. Through the acquisition, Tlmsn, whose audience has grown to more than 5 million unique users since its launch just over a year ago, is expanding its services beyond Mexico to all Spanish-speaking consumers in the United States and Latin America.

"MSN and Yupi share a vision of bringing the richest and most diverse Internet experience to Spanish speakers throughout the Americas," said Yusuf Mehdi, vice president of MSN and the Personal Services Business Group at Microsoft. "The strong MSN portfolio of integrated Internet services, such as MSN Hotmail and MSN Messenger, will combine with leading Spanish content from Tlmsn and the unique, rich content that Yupi provides to offer a premier online service for Spanish-speaking consumers in U.S. Hispanic and Latin American online markets."

"Tlmsn has a solid reputation of delivering unique Spanish-language content to consumers, and Telmex has expertise in understanding U.S. and Latin American consumers as well as proven experience in sales and marketing in both regions," said Arturo Elías Ayub, Chairman of the Board, Tlmsn and Vice President of Strategic Ventures, Communication and Institutional Relations, Telmex. "With the talented team and compelling offerings provided by the Yupi network, I am confident that together we will create the most rewarding Internet experience for Hispanic consumers and become the leading Internet destination for Spanish-speaking users in the Americas."

Under the terms of the acquisition, Yupi Internet will combine with Tlmsn's operations and the new company will operate as Tlmsn in Mexico and as Yupi/MSN in other North and South American markets. Tlmsn will continue to offer users services such as MSN Messenger Service and the MSN Hotmail Web-based e-mail service, which has nearly 8 million consumers using the service in Spanish. This will be supplemented by the range of Spanish-language content offered by Yupi, which includes local news sites for Spanish-speaking consumers and a specialized site focused on the interests of Spanish-speaking women.

"As part of the Tlmsn and MSN family, Yupi solidifies its leadership position among Spanish-speaking Internet users," said Oscar Coën, president and CEO of Yupi Internet. "Our collective users will now enjoy the best-in-class services, content and technology of MSN, and our combined business partners will further benefit from our custom-tailored online marketing solutions to effectively reach our large Spanish-speaking audience across the Americas region."

Tlmsn, in combination with Yupi, will be well-positioned with both the U.S. Hispanic population, one of the fastest-growing Internet segments in the United States, and Latin America, whose online population is expected to soar from 22 million in 2000 to 77 million in 2005 according to Jupiter Media Metrix Inc. In addition, the new operation will continue to establish and deepen its relationship with marketers and business partners, which have products and services to offer this growing audience. As a result, marketers will be able to purchase space regionally, in Spanish, helping them reach their target audience across the Americas on MSN.

"Tlmsn is a success story in Mexico, reaching the leading position among Mexican portals in only one year and further strengthening its commitment to Spanish-speaking users today," said Gerardo Villarreal, CEO of Tlmsn at Microsoft. "Both Tlmsn and Yupi have complementary, high-quality content. With this acquisition, we will make the Internet an enjoyable place for Spanish speakers throughout the Americas."

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