Internet and e-Business Joint Venture

British Telecommunications PLC
1 February 2000


       BT, VERTICALNET, INC. AND INTERNET CAPITAL GROUP TO
                                
      LAUNCH EUROPEAN INTERNET AND E-BUSINESS JOINT VENTURE

BT, VerticalNet, Inc., a US-based owner and operator of Internet

business-to-business trading communities, and Internet Capital

Group, a US-based Internet holding company actively engaged in

business-to-business e-commerce through a network of partner

companies, announced today the formation of a joint venture

company to create powerful Internet business communities across

Europe.

     Called VerticalNet Europe, it will be supported by more than

$227 million (£141 million) in cash and assets from the three

partners. The combined cash contribution of $107 million (£66

million) in financing is one of the largest amounts raised for a

business-to-business Internet company. BT will have a 33 per cent

stake valued at around $75million (£47 million) and VerticalNet,

Inc., will be a majority shareholder in the joint venture.

     As part of this deal, VerticalNet Europe and BT have agreed

immediately to create VerticalNet UK Ltd., as a joint venture.

VerticalNet UK will be co-branded by VerticalNet and BT. It will

enable British companies to benefit quickly from tightly-focused

online trade communities where they can obtain news and

information about their industry, communicate with other

companies in the sector and engage in e-commerce and auction

activities.

     Within each distinct VerticalNet Web site, businesses can

meet, seek and exchange information and buy and sell products and

services. The sites will contain tailored editorial content

including white papers written by key sector personalities, news

updates, product information, classified advertisements and job

listings.

     Ben Andradi, managing director, BT Internet and eBusiness,

said: 'This joint venture with VerticalNet is part of our

strategy of working with winning companies to bring the best

Internet ideas and proven applications to our customers. The

formation of VerticalNet Europe will enable thousands of

businesses throughout Europe to reap immediate e-business

benefits. The sheer variety of information, communication and

trading opportunities will make the concept of trading

communities virtually impossible to ignore.

     'And with global business-to-business e-commerce predicted

to be worth $1.3 trillion by 2003 it is vital that we provide

European businesses with the right tools to get involved.'

     Mark Walsh, VerticalNet president and chief executive, said:

'The rollout of international operations is a tremendous landmark

for the company. With VerticalNet Europe we are entering the

Internet's next hypergrowth market. Partnering with BT and ICG

will allow us to exploit this opportunity very rapidly, as our

simultaneous creation of VerticalNet UK demonstrates.

     'BT's considerable presence, reach and alliances within

Europe along with Internet Capital's network of partners and

expertise form a strong combination with VerticalNet's know-how

in business-to-business trading communities. Establishing strong

regional positions with global distribution channels will offer

the most effective end-to-end e-commerce services for our

members.'

     Walter Buckley, President and CEO of Internet Capital Group,

said: 'This initiative is a powerful and important boost for the

European business-to-business market. Internet Capital is

committed to providing the operational and strategic support

necessary to build its partner companies on a global basis. We

are very happy to to support VerticalNet's European expansion

through our European office.'

     Mario Shaffer, VerticalNet Vice President of Business

Development and International, was named acting CEO of

VerticalNet Europe.  Mario Shaffer said: 'We are actively seeking

employees, partners, and acquisitions for the joint venture to

enable us to expand quickly.'