Press release

Mobile World Congress, Barcelona, 11 February 2008 – Telefónica rolls out a €20 million a year programme to invest in innovative and entrepreneurial technology companies.

The venture capital programme has been set up by Telefónica’s Executive Committee to support the company’s innovation strategy and has already signed up three pioneering start-ups.  By the end of 2008 there will be approximately 10 to 12 companies in Telefónica’s strategic portfolio.

Russ Shaw, Director of Innovation at Telefónica SA said: “The primary focus of the VC programme is to find the very best-of-breed innovators out there – vibrant, young start up companies that can bring new experiences, capabilities, and technologies to Telefónica and our customers”.

The three investments made to date have been mobile advertising solutions specialist Amobee, user recognition innovator GestureTek, and multimedia social networking specialist Kyte. 

GestureTek has been selected as a finalist in the 2008 GSMA Mobile Innovation Global Awards for its innovative gesture-controlled mobile gaming and navigation software, EyeMobile Engine. Fifteen finalists were selected from several hundred entrants worldwide. Award winners will be announced during the Mobile World Congress in Barcelona.

EyeMobile is the world’s first gesture-controlled user-interface for mobile devices, providing camera phone users with the ability to play games, scroll menu items, navigate maps and browse web pages simply by tilting or moving their mobile phones. 

Shaw added: “The focus of the innovation agenda is to help the company to find new revenue streams and ways to differentiate the customer experience.  Although a financial return is important, the main focal point is to find companies who have a strategic fit with Telefónica in key areas of potential future growth.  A collaborative working relationship between the start-up and the various Telefónica operating businesses is encouraged right from the very outset”.

Telefónica takes a minority interest in each start up, and once the deal is closed, each start-up is assigned to a Telefónica Business Sponsor who will work closely with the company to ensure that it is getting the support and access that it needs within the Telefónica family of companies.

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About Telefónica
Telefónica is one of the largest telecommunications companies in the world in terms of number of clients and market capitalisation. Its activities are centered mainly on the fixed and mobile telephony businesses with broadband as the key tool for the development of both. The company has a significant presence in 24 countries and a customer base that amounts more than 218 million accesses around the world. Telefonica has a strong presence in Spain, the rest of Europe and Latin America, where the company focuses an important part of its growth strategy. Telefónica is a 100% listed company, with more than 1.7 million direct shareholders. Its share capital currently comprises 4,773,496,485 ordinary shares traded on the Spanish Stock Market (Madrid, Barcelona, Bilbao and Valencia) and on those in London, Paris, Frankfurt, Tokyo, New York, Lima, Buenos Aires and São Paulo.

About GestureTek Inc.
GestureTek is the pioneer, patent-holder and world leader in computer vision and gesture-recognition technologies for information, presentation and entertainment systems.  The company’s revolutionary video gesture control software lets users control interactive content, access information, manipulate special effects or immerse themselves in an interactive 3D virtual world - simply by moving their hands or body in free space. In the past 20 years, GestureTek has delivered nearly 4000 interactive displays, kiosks, exhibits, games and other interactive solutions for museums, science centers, location-based entertainment facilities, retail stores, real estate presentation centers, corporate boardrooms and showrooms, television networks and game developers.  The technology is also used by healthcare organizations specializing in rehabilitation, sensory stimulation, activation and recreation. GestureTek Mobile is the business unit of GestureTek that is focused on bringing gesture-controlled games and applications to the mobile market. GestureTek’s clients include CNN, NASA, BMW, Ford, Oracle, Intel, IBM, Federal Express, Autodesk, Panasonic and more.  Software licensees include Microsoft, Sony and Hasbro.  GestureTek is headquartered in Silicon Valley, with additional offices in Toronto, Ottawa, New York City and Asia. GestureTek was formerly known as JesterTek. For more information visit http://www.gesturetek.com/ or call (800) 315-1189.

About Amobee Media Systems:
Amobee Media Systems has built and designed the first and only telco-grade ad-serving solution dedicated to mobile operators, allowing them to dynamically insert advertising impressions in all forms of mobile communication and content: WAP Browsing, Video & Music, SMS, MMS, and Games etc... Amobee’s complete ad serving solution is designed to facilitate the launch of advertising campaigns for brand building, direct response and lead generation campaigns helping mobile operators and their subscribers “get more for less”. The company has also engaged advertisers and media buying agencies to directly purchase ad inventory as part of Amobee’s growing advertising network..  Amobee’s media system is capable of supporting everything from in-game and in-video to in-wap and in-message mobile impression insertions. The insertions occur with full user consent and are made in a relevant, contextual and non-intrusive manner thus increasing the media value while giving users control over the engagement.  Headquartered in the San Francisco, the company enjoys financial backing from some of the biggest names in venture capital: Accel Partners (http://www.accel.com/), Sequoia Capital (http://www.sequoiacap.com/), and Globespan (http://www.globespancapital.com/). The company is also enjoyed the backing of the world 2 leading operators: Vodafone and Telefónica. Amobee has commercial offices in London and San Francisco, with R&D in Herzliya, Israel.

About Kyte
The Kyte social communications platform enables partners – including media companies, social networks and mobile operators – to offer their users an easy way to create embedded interactive channels and produce multimedia shows in real-time from their mobile phones or the web that are broadcast to multiple destinations including social networks, blogs and other mobile phones. Using the hosted platform and developer API, Kyte partners provide their users with an exciting way to stay connected through a next-generation social communications experience. For more information, please visit: http://www.kyte.tv/.  The service is operated by decentral.tv, a San Francisco-based company backed by global investors, including Atomico (co-founded by Niklas Zennström), Draper Fisher Jurvetson, Draper Richards, Ron Conway, Telefónica, Nokia Growth Partners, DoCoMo Capital, Swisscom, Holtzbrinck Ventures and leading European angel investors.

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