Berger & Montague, P.C., Announces Class Action Lawsuit Against StarMedia Network, Inc.

Business Editors/Legal Writers

PHILADELPHIA--(BUSINESS WIRE)--Dec. 18, 2001

The law firm of Berger & Montague, P.C., (http://www.bm.net) filed a class action suit on behalf of an investor against StarMedia Network, Inc. ("StarMedia" or the "Company") (NASDAQ:STRME) and its principal officers and directors in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased StarMedia stock during the Class Period from April 11, 2000 through November 19, 2001.

The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 11, 2000 and November 19, 2001 concerning the Company's financial performance. The complaint alleges that Starmedia reported artificially inflated financial results in press releases and filings made with the SEC by improperly recognizing revenue in violation of Generally Accepted Accounting Principles ("GAAP"). Specifically, the complaint alleges that two of the Company's primary subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de C.V, had engaged in improper accounting practices which had the effect of materially overstating StarMedia's reported revenues and earnings by at least $10 million. On November 19, 2001, as alleged in the complaint, Starmedia issued a press release announcing that based on the "preliminary" results of an internal investigation into its accounting practices, it expects to restate its financial statements for fiscal year 2000 and the first two quarters of 2001 and that those financial statements should not be relied upon. The Company further reported that its Chief Financial Officer had "resigned." Immediately following the announcement of the restatement, the NASDAQ Stock Market halted trading in StarMedia stock, pending the receipt of additional information from the Company. StarMedia stock last traded at $0.38 per share, which is 98.5% less than the Class Period high of $25.50, reached on April 11, 2000.

If you purchased StarMedia common stock during the period from April 11, 2000 through November 19, 2001, inclusive, you may, no later than January 21, 2002 move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class members(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in StarMedia common stock during the Class Period, please contact Berger & Montague, P.C. at [e-mail] for a more thorough explanation of the Lead Plaintiff selection process.

The law firm of Berger & Montague, P.C. has over 50 attorneys, all of whom represent plaintiffs in complex litigation. The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years which have resulted in recoveries of several billion dollars to investors. The firm is currently representing investors as lead counsel in actions against Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:

"Class counsel did a remarkable job in representing the class interests." In Re: IKON Offices Solutions Securities Litigation. Civil Action No. 98-4286(E.D.Pa.) (partial settlement for $111 million approved May, 2000).

"...[Y]ou have acted the way lawyers at their best ought to act. And I have had a lot of cases...in 15 years now as a judge and I cannot recall a significant case where I felt people were better represented than they are here ... I would say this has been the best representation that I have seen." In Re: Waste Management, Inc. Securities Litigation, Civil Action No. 97-C 7709 (N.D. Ill.) (settled in 1999 for $220 million).

If you purchased StarMedia securities during the Class Period, or have any questions concerning this notice or your rights with respect to this matter, please contact:

Sherrie R. Savett, Esquire

Douglas M. Risen, Esquire

Kimberly A. Walker, Investor Relations Manager

Berger & Montague, P.C.

1622 Locust Street

Philadelphia, PA 19103

Phone: [phone] or 215/875-3000

Fax: [phone]

Website: www.bm.net

e-mail: [e-mail]