Acquisition

BRITISH TELECOMMUNICATIONS PLC
26 August 1999

                      BT BUYS YELLOW BOOK USA

            Acquisition to become part of Yellow Pages


BT announced today that it has acquired Yellow Book USA, the

largest independent yellow pages publisher in the US, for

$665million (£430 million). Yellow Book will become part of BT's

growing Yellow Pages business which will now have combined revenues

of nearly $1billion.

     Yellow Book is headquartered in New York, publishes nearly 300

directories with a circulation of 19 million, has over 150,000

advertisers and employs 1,400 people in 32 offices located in 13

states and Washington DC.

     John Condron, managing director of BT Yellow Pages, said:

'Yellow Book is the most exciting classified information business

in the US with an aggressive, energetic and talented management

team.

     

'They have an outstanding record of business building in the

past few years and the synergies achievable with our own highly

successful business will enable us to create a new force in this

industry with the potential for enormous growth'.

     Condron added: 'The opportunity for developing major new

revenue streams from organic and inorganic growth in the core

directory business is paralleled by the emerging strength of our

position in the world of e-commerce.  We have trusted customer

relationships, the channel to market and the information with which

to make a real impact in the 'e' space.

     'The success which Yellow Book is already achieving with

YellowBook.com combined with our experience with our own award

winning portal, Yell, provides us with an excellent foundation for

our ambitions in the US'.

     Joseph Walsh, Yellow Book's chairman and CEO, said: 'We are

excited to be part of BT Yellow Pages, the fastest growing and

largest yellow pages publisher in Europe.  As a global market

leader, BT's Yellow Pages interest in Yellow Book USA is validation

of our approach and will accelerate our plans to strategically

expand Yellow Book's presence in additional markets.

     

     'When we combine Yellow Book's reputation as an aggressive

marketeer with BT Yellow Pages advanced systems and sophisticated

marketing techniques, the result is a potent combination that will

enable us to achieve our goals more quickly. YellowBook.com will be

incorporated into BT Yellow Pages Yell Internet site propelling

Yell's e-commerce capabilities to a global platform.'

                                 

Rothschild Inc & NM Rothschild & Sons acted as Financial Advisors
to BT in this transaction.