UOL, one of Latin America?s leading Internet service providers, is negotiating with telecommunications companies in a drive to achieve a drastic reduction in operating costs. Like other ISPs, it has been hurt by falling revenue from Internet advertising, according to a source in management. This may explain the rumors that circulated on Thursday, November 14, suggesting a bid for UOL by Telefonica. The rumors were fueled by release of UOL?s third-quarter earnings report showing a year-to-date loss of 239.4 million Brazilian Reals for the holding company (UOL Inc.) ? 84.7% more than in the corresponding period of 2001. Management blamed one-off amortization of the premium paid for Zip.net, falling advertising revenue, and currency depreciation. Net worth was minus 57.445m BRL at the end of September. Net revenue expanded 23.8% to 329.489m BRL. The subscriber base grew 16% year over year, ending September on 1.521m, for an increase of 7,000 in the third quarter. Advertising revenue fell 32% year over year in the first nine months, totaling 32.1m BRL in the period.
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