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                                                                   EXHIBIT 10.27


                                LETTER AGREEMENT

         This Letter Agreement, dated as of February 17, 2000, evidences the
undersigneds' desire to enter into a two-year strategic alliance (the
"Alliance") among Iberoamerican Media Holdings Chile S.A., a Chilean company,
and/or its affiliates ("Iberoamerican"), Red de Television Chilevision S.A., a
Chilean company, and/or its affiliates ("Chilevision" and together with
Iberoamerican, "IRC") and El Sitio, Inc., a British Virgin Islands company,
and/or its affiliates ("El Sitio"). The Alliance shall commence on the date
hereof. It is the intent of the undersigned to negotiate and execute a final
definitive agreement that will incorporate the terms contained herein and such
other terms and conditions as the parties hereto shall mutually agree to
include, on or before March 15, 2000 (the "Agreement"). This Letter Agreement
is, and shall remain a binding agreement, inuring to the benefit of all parties,
until such time as the parties hereto execute the Agreement. The essential terms
and conditions are as follows:

         1.       Purpose. The purpose of this Letter Agreement and the
Agreement shall be as follows:

         a.       El Sitio shall assist IRC in the development of Web Sites (the
                  "Site(s)") for (i) several radio stations that are owned
                  and/or managed by Iberoamerican, including, but not limited,
                  to: "Rock & Pop," "Corazon," "Pudahuel," "Music One," "FM
                  Dos," "FM Hit," "Futuro" and "Aurora" and (ii) four additional
                  Web Sites for broadcast television stations managed by
                  Chilevision, known as "Chilevision." To the extent
                  Iberoamerican acquires additional radio stations after the
                  date of this Letter Agreement and during the term of the
                  Agreement, such stations shall be included as part of this
                  Letter Agreement and the Agreement (the current and future
                  radio and television stations hereinafter collectively
                  referred to as the "IRC Network").

         b.       Iberoamerican shall provide El Sitio with administrative,
                  accounting, legal (excluding litigation services, licenses
                  referred to in Section 4(b) below and copyrighting and
                  licensing referred to in Section 4(c)), human resource,
                  payroll and collection services; provided, however, that such
                  services will be limited to El Sitio's operations in Chile,
                  including, without limitation, with respect to the El Sitio
                  Site in Chile (the "ESC Site"). In accordance with this Letter
                  Agreement, IRC shall provide local content for the ESC Site.

         2.       IRC's Responsibilities. IRC shall have the following
obligations and responsibilities:

                  a.       IRC shall use commercially reasonable efforts to
                           provide El Sitio with IRC's proprietary programming,
                           promotions, celebrities, local news and other
                           similarly situated content and materials (including
                           any similar content of any third party to which IRC
                           has the right to sublicense such content to El Sitio)
                           (the "IRC Content") for the development and


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                           promotion of the ESC Site to the extent such
                           programming, promotions, celebrities, local news and
                           other materials are available for use on the Site(s)
                           and to which IRC has the right to provide such IRC
                           Content to El Sitio. IRC shall not provide IRC
                           Content to any other Internet portal, site, network
                           or Internet service provider. In the event El Sitio
                           wishes to publicly perform any musical works or sound
                           recordings contained within the IRC Content on the
                           ESC Site, El Sitio will have to obtain a separate
                           license from IRC for such musical works and sound
                           recordings.

                  b.       Subject to the provisions of Section 2.a above, IRC
                           shall cause its employees to provide IRC Content to
                           El Sitio on a timely basis for the development and
                           maintenance of the Site(s).

                  c.       Throughout the term of this Letter Agreement and the
                           Agreement, any new stations developed or acquired by
                           IRC shall become subject to the terms hereof and of
                           the Agreement. In the event IRC develops or acquires
                           additional radio stations, or in the event that any
                           such station is sold or dissolved, the parties shall
                           in good faith adjust on an equitable basis the
                           compensation provided for in section 5 below.

                  d.       Iberoamerican shall serve as the exclusive sales
                           agent for marketing and selling the advertising for
                           the Site(s) and the ESC Site within the Republic of
                           Chile, provided that El Sitio will have the right, in
                           its sole discretion, to object to the delivery of
                           reasonably objectionable advertisements on the ESC
                           Site which could damage El Sitio's image (e.g., guns
                           and pornography). Notwithstanding the foregoing, El
                           Sitio shall have the right to market and sell
                           advertising for the Site(s) and the ESC Site outside
                           the Republic of Chile. IRC shall be solely
                           responsible for establishing rate cards for the sale
                           of advertising on the Site(s), and El Sitio shall be
                           solely responsible for establishing rate cards for
                           advertising on the ESC Site. Iberoamerican shall not,
                           without the prior approval of El Sitio, make
                           discounts from the ESC Site rate cards or accept
                           barter arrangements with respect to advertising on
                           the ESC Site.

                  e.       Iberoamerican shall provide El Sitio with office
                           space for the operation of El Sitio in Chile, the
                           location and size of which to be mutually agreed upon
                           by Iberoamerican and El Sitio, and which shall
                           measure approximately 110 square meters by 170 square
                           meters. Iberoamerican shall also provide office
                           furniture and equipment as deemed reasonably
                           necessary in the judgment of both parties.

                  f.       Iberoamerican shall be solely in charge of all
                           billing and collection related to the sale of
                           advertising within the Republic of Chile and
                           generated from the Site(s) and the ESC Site;
                           provided, however, that said billing and collection
                           shall be made on behalf of El Sitio.

                  g.       Iberoamerican shall be El Sitio's exclusive provider
                           of administrative, accounting, legal (excluding
                           litigation services, licenses referred to in


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                           Section 4(b) below and copyrighting and licensing
                           referred to in Section 4(c)), human resource, payroll
                           and collection services in the Republic of Chile;
                           provided, however, that such exclusive services will
                           be limited those services related to El Sitio's
                           operations in Chile, including, without limitation,
                           the ESC Site.

                  h.       IRC shall hire personnel necessary for the provision
                           and updating of the IRC Content for the Sites, as IRC
                           reasonably determines.

         3.       El Sitio's Responsibilities. El Sitio shall have the following
obligations and responsibilities:

                  a.       El Sitio shall not design any World Wide Web pages
                           for any competitor of IRC in the Republic of Chile.

                  b.       Within sixty (60) days after the execution of this
                           Letter Agreement, El Sitio shall establish a Chilean
                           entity for the purposes of fulfilling its obligations
                           under this Letter Agreement and the Agreement. El
                           Sitio agrees to maintain corporate control of such
                           Chilean entity at all times during the term of the
                           Letter Agreement and the Agreement.

                  c.       El Sitio shall be responsible for the development of
                           the Sites for each radio station of the IRC Network.
                           El Sitio's services hereunder will include web
                           design, hosting, housing and maintenance services.
                           Furthermore, El Sitio shall develop the ESC Site to
                           host local content in the Republic of Chile
                           (including IRC Content, El Sitio's global content and
                           other content) and with a focus on serving users
                           within the Republic of Chile. El Sitio will design
                           each Site to have links to and from the ESC Site.
                           Each Site shall be developed in such a manner that
                           they retain the "look and feel" of the radio stations
                           in the IRC Network while at the same time meeting the
                           standards and practices of El Sitio. Each Site shall
                           contain a border linking the Site(s) to the ESC Site
                           and other El Sitio properties. The "look and feel" of
                           the Site(s), as well as the borders, shall be
                           preapproved by IRC, which approval shall not be
                           unreasonably withheld, prior to the Launch Date, as
                           defined below. The ESC Site shall maintain the "look
                           and feel" of El Sitio properties. El Sitio shall host
                           the Site(s) on its servers and El Sitio shall use
                           commercially reasonable efforts to provide a level of
                           server capacity necessary for the effective operation
                           of the Site(s). El Sitio shall also provide mailbox
                           and e-mail features to the visitors of the Site(s).
                           All visitors to the Site(s) shall be deemed
                           registered users of and traffic for El Sitio. The
                           Parties agree that the Sites shall be the property of
                           IRC and the ESC Site shall be the property of El
                           Sitio. El Sitio shall use commercially reasonable
                           efforts to provide the support necessary for IRC to
                           audit traffic associated with the Site(s) (for
                           example, third party audits by entities such as
                           Double Click, I/PRO Nielsen or some other similarly
                           situated entity), the timeliness and accuracy of
                           which shall be the sole responsibility of such
                           third-party provider.


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                  d.       El Sitio shall use its best efforts to have the
                           Site(s), including the ESC Site, on-line and
                           operational on or before April 1, 2000 (the "Launch
                           Date").

                  e.       El Sitio shall be responsible for hiring all
                           personnel necessary for the operation of El Sitio in
                           Chile. El Sitio shall be responsible for all expenses
                           incident to the office space provided by
                           Iberoamerican in Chile, including, but not limited
                           to, utilities, communications, electricity and other
                           similar expenses. El Sitio shall be responsible for
                           purchasing and maintaining the computers and
                           equipment necessary to perform the services
                           contemplated in this Letter Agreement and the
                           Agreement.

         4.       Other Agreements. The parties shall have the following
obligations and responsibilities:

                  a.       With respect to the IRC Content, IRC shall be
                           responsible for developing materials for inclusion
                           into the Site(s). The parties shall cooperate with
                           each other in order to effectuate the transmission of
                           IRC Content into the Site(s) and the ESC Site. The
                           frequency and nature of updates to IRC Content by
                           IRC, as it relates to each Site hereunder, shall be
                           agreed upon by the parties in accordance with
                           commercially reasonable standards.

                  b.       Each party shall be responsible for obtaining all
                           licenses and satisfying any and all other legal
                           requirements (including any costs associated
                           therewith) necessary to operate within their
                           respective jurisdictions.

                  c.       Each party shall be responsible for copyrighting and
                           licensing their respective content (including any
                           costs associated therewith). The parties agree that
                           their respective trademarks and service marks (the
                           "Marks") shall remain the property of each party and
                           that no ownership rights to any such property shall
                           be transferred to the other party under this Letter
                           Agreement or the Agreement. All of the IRC Content
                           developed by IRC on the Site(s) shall be the property
                           of IRC. Each party grants to the other a
                           non-exclusive license to use such party's content,
                           trademarks or other properties throughout the term of
                           the Agreement, solely for use with respect to the
                           Site(s) and the ESC Site; provided, however, that
                           none of the parties shall use the others'
                           intellectual property in any way which could harm or
                           impair the value thereof. In addition, each party
                           shall use all reasonable skill and care in the
                           provision of any services pursuant to its use of
                           another party's Marks; shall comply with applicable
                           laws and regulations; and shall provide such services
                           at the standard of quality commensurate with those
                           provided by the party that owns the Mark in question.
                           At any time, a party may request information from
                           another party in order to verify such other party's
                           proper use of the party's Marks; provided, however,
                           that such party shall maintain all such information
                           received in strict confidence, shall not disclose any
                           such information to any other party and shall use
                           such information solely for the purposes of


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                           any such verification. The use of intellectual
                           property shall be consistent with the terms of this
                           Letter Agreement and the Agreement.

                  d.       IRC and El Sitio shall work together on a good-faith
                           basis to develop a marketing campaign for the Site(s)
                           and the ESC Site, with the objective of increasing
                           traffic to the Site(s) and the ESC Site.

         5.       Compensation & Revenue Sharing. Iberoamerican and El Sitio
shall share in the net revenues collected on advertising sold within the Site(s)
and the ESC Site, calculated after subtracting (i) commercially reasonable sales
commissions (which shall not exceed 15%) actually incurred, (ii) commercially
reasonable advertising commissions (which shall not exceed 15%), to the extent
that such commissions are actually incurred to a third party not affiliated with
or employed by Iberoamerican, and (iii) taxes paid to any governmental authority
(hereinafter referred to as "Net Advertising Revenues"). Iberoamerican and El
Sitio shall share in the Net Advertising Revenues that Iberoamerican has
collected from clients, with 70 percent to be allocated to Iberoamerican and 30
percent to be allocated to El Sitio. Notwithstanding the foregoing,
Iberoamerican guarantees that El Sitio's share of Net Advertising Revenues for
year one and year two of this Letter Agreement and the Agreement shall not be
less than Three Hundred Thousand Dollars ($300,000.00 U.S.) and Six Hundred
Thousand Dollars ($600,000.00 U.S.), respectively (the "Guaranty Amounts"). In
the event El Sitio's share of Net Advertising Revenue shall be less than the
Guaranty Amounts, Iberoamerican shall pay El Sitio the difference in cash (or in
such other manner as mutually agreed upon by the parties at the end of the
relevant period).

         In the event Iberoamerican sells advertising for other El Sitio sites,
Iberoamerican shall be entitled to and receive a commission of twenty-five
percent (25%) of all Net Advertising Revenues with respect to such advertising.
In the event El Sitio sells advertising for the Site(s), El Sitio shall receive
a commission of twenty-five percent (25%) of all Net Advertising Revenues with
respect to such advertising. All payments required hereunder shall be paid on a
quarterly basis. To ensure compliance with the terms of the Agreement, IRC shall
have the right, at its own expense, to direct an audit of all of the accounting
and sales books and records of El Sitio which are relevant to the Agreement;
provided, however, that IRC shall only be permitted to conduct such audits
during El Sitio's regular business hours and at a frequency no greater than once
per year during the Agreement and this Letter Agreement.

         As partial consideration for the relationship established hereby,
thirty days following the execution of the Agreement El Sitio shall issue and
deliver to Iberoamerican One Million and 00/100 Dollars ($1,000,000 U.S.) Class
B preferred shares of El Sitio, with a value per share of $9.00, and shall issue
to Chilevision Five Hundred Thousand and 00/100 ($500,000 U.S.) with a value per
share of $9.00, provided that El Sitio had obtained the necessary waiver from
Credit Suisse First Boston Corporation, Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Salomon Smith Barney Inc. and Wit Capital
Corporation, if applicable, for such issuance. El Sitio shall do its best
efforts to obtain from Credit Suisse First Boston Corporation, Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney
Inc. and Wit Capital Corporation, if necessary for purpose of the foregoing, a
waiver for the issuance of the Class B preferred shares herein referred during
the "lock up" period currently applicable with respect to the issuance of
capital stock by El Sitio resulting from El Sitio's initial public offering of
common stock. The Class B preferred shares of El Sitio granted herein to IRC
shall be "restricted stock" as defined in Rule 144 (d) under the Securities Act
of 1933, as


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amended (the "Securities Act") and cannot be disposed of by IRC for a period of
twelve (12) months after the date hereof or otherwise as required by U.S.
securities laws.

         Iberoamerican shall pay El Sitio the amount of Twenty Thousand and
00/100 Dollars ($20,000.00 U.S.) per month for the web design and support
services contemplated in Section 3(c) herein. El Sitio shall pay Iberoamerican
the amount of Twenty Thousand and No/100 ($20,000.00 U.S.) on a monthly basis
for provision of the office space and administrative, marketing and legal
support as contemplated in Sections 2(e), (f) and (g) herein.

         6.       Confidentiality. IRC and El Sitio each agree to treat as
confidential and proprietary all information disclosed to each other in
connection with this Letter Agreement and the Agreement. Both parties shall use
commercially reasonable efforts to protect the confidentiality of any
proprietary information disclosed to the party by the other party. The parties
acknowledge that the documents and discussions may contain or have involved
customer or client records, processes, marketing plans, business ideas,
financial data, prices, advertising, future plans and any other information
which are valuable, special and unique assets. At no time during or after the
term of this Letter Agreement or the Agreement will any party use personally or
for profit any confidential or proprietary information of another party. Except
as required by law or legal process, no party shall disclose to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, any confidential or proprietary information of another party.

         7.       Expenses. Each party will bear its own expenses in connection
with the preparation of this Letter Agreement and the Agreement; provided,
however, that any party instituting legal proceedings to enforce any provision
hereof (including those that survive termination of this letter agreement) or to
remedy any breach hereof, shall be entitled to recover reasonable attorney's
fees incurred in connection therewith, if that instituting party is successful
in any such proceedings.

         8.       Public Announcements. No party hereto will make any public
announcement or issue any press release or disclose to any other person (except
as otherwise provided herein) any information regarding this transaction, this
Letter Agreement, the Agreement or the subject matter hereof, without the prior
written consent of each other party hereto, unless otherwise required by law. El
Sitio shall however have the right to disclose the transactions contemplated
hereby and by the Agreement in any offering statement(s) or presentations to
third parties incident to its share offerings.

         9.       General.

                  a.       Affiliates; Assignment and Amendments. Each party
                           agrees to cause its affiliates to take any action
                           necessary to permit such party to meet its
                           obligations hereunder. None of the parties to this
                           Letter Agreement shall assign its rights or
                           obligations hereunder without the prior written
                           consent of the other parties. No amendment,
                           modification or discharge of this Letter Agreement
                           shall be valid or binding unless agreed to in writing
                           by all of the parties hereto.

                  b.       Governing Law and Submission to Jurisdiction. Without
                           regard to its principles of conflicts of laws, the
                           laws of the State of New York shall


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                           govern and control the validity, interpretation,
                           performance and enforcement of this Agreement. To the
                           extent permitted by law, the parties agree that all
                           actions or proceedings arising in connection with
                           this Agreement shall be tried and determined only in
                           the state and federal courts in the County of New
                           York, State of New York, United States of America,
                           and each party hereby submits to jurisdiction of the
                           state and federal courts located in the County of New
                           York, State of New York, United States of America.

                  c.       Notices. Unless otherwise provided herein, all
                           notices, requests, consents and other communications
                           hereunder to any party shall be deemed to be
                           sufficient if contained in a written instrument
                           delivered in person or duly sent by first class,
                           registered, certified or overnight mail, postage
                           prepaid, or telecopied with a confirmation copy by
                           regular mail, or telecopied, as the case may be, to
                           such party at the address or telecopier number
                           provided herein, subject to written change by such
                           party:

                           (1)      If to El Sitio:
                                            Avenida Ing. Huergo
                                            1167 Buenos Aires, Argentina
                                            Attention: Walter Forwood
                                                       Guillermo Bellati
                                            Telecopier:  (011)(5411) 4339-3750

                           (2)      If to Iberoamerican:
                                            Eleodoro Yanez 1783
                                            Comuna de Providencia
                                            Santiago, Chile
                                            Attention:Gerencia General
                                            Telecopier:  (562) 381-2026

                           (3)      If to Chilevision:
                                            Inez Mate Urrejola 0825
                                            Santiago, Chile
                                            Attention:Gerencia General
                                            Telecopier:(562) 252-5109

                  d.       Severability. Any provision of this Letter Agreement
                           that is prohibited or unenforceable in any
                           jurisdiction shall, as to such jurisdiction, be
                           ineffective to the extent of such prohibition or
                           unenforceability without invalidating the remaining
                           provisions hereof, and any such prohibition or
                           unenforceability in any jurisdiction shall not
                           invalidate or render unenforceable such provision in
                           any other jurisdiction.

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         IN WITNESS WHEREOF, the parties hereto, each being duly empowered and
authorized to do so, have duly executed this Agreement as of the date first
above written.


EL SITIO, INC.


By:  /s/ Walter Forwood
     ---------------------
     Name:
     Title:



RED DE TELEVISION
CHILEVISION S.A.


By:  /s/ Jaime Vega
     ---------------------
     Name:
     Title:





IBEROAMERICAN RADIO
HOLDINGS CHILE S.A.


By:  /s/ Jaime Vega
     ---------------------
     Name:
     Title:


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