Digital Island to Provide 2Way Web Services to Pearson Businesses Including FT Group, Pearson Education, and Penguin.

Business Editors/High-Tech Writers

SAN FRANCISCO & LONDON--(BUSINESS WIRE)--Oct. 16 2001

Five-Year Agreement Supports New Business

Opportunities and Reduces Costs

Digital Island, a Cable & Wireless company (LSE:CW)(NYSE:CWP), today announced an agreement to provide 2Way Web Services(TM) to Pearson plc, an international media and education company with annual revenues of (pound)4 billion and operations in 60 countries. Digital Island has been appointed Web services partner for all Pearson companies, including the Financial Times Group, Pearson Education, and the Penguin Group.

By the end of the year Digital Island will manage more than 200 Pearson Web sites, representing the first phase of implementation. Pearson's 2Way Web Service design includes modules from Digital Island's 2Transact(TM), 2Deliver(TM) and 2Manage(TM) service families to increase e-business transactions and lower costs per transaction through reliable, fast, secure and scalable Internet infrastructure and application services.

"Our business is built on world-class content. We are underpinning that with world-class online facilities to deliver profitable new services to our customers," says Douglas Kubach, chief technology officer, Pearson Education. "This agreement will drive significantly lower costs and improve reliability as we continue to introduce premium online services in education, consumer publishing and business information."

Pearson Education is the world's leading education company, with brands including Addison Wesley, Allyn & Bacon, Longman, Scott Foresman, NCS Pearson and Prentice Hall. It publishes more than 2,000 online textbooks and provides interactive resources for professors, teachers and their students. Digital Island's 2Way Web Services provide Pearson with a scalable 2Way IP platform, designed to support highly transactional Web content, and to enable fast large-file downloads and real-time, graphically rich interactivity. Services distribute content to global audiences consistently and efficiently, while ensuring the completion of e-commerce transactions.

In addition to managing the global Internet infrastructure for existing Pearson businesses, Digital Island is working closely with Pearson Education in the development and launch of innovative new services. For example:

-- Pearson Education, the world's leading publisher for students of English as
a second language, is launching Longman English Success, a new online service
to deliver interactive multimedia English language instruction.

-- NCS Pearson, the largest commercial processor of student assessment tests in
the United States, is launching an electronic test delivery system,
eMeasurement(TM) Services, to provide secure online tests for statewide testing
programs. Virginia and Georgia, the first states in the US to pilot online
testing programs, have recently awarded the contracts to NCS Pearson.

-- Prentice Hall School is launching SuccessNet, an online resource center for
teachers and students that supports the delivery of online textbooks.

"Pearson demonstrates how the Web is being used for mission-critical applications. The sites are revenue-based businesses with high volumes," said Ruann Ernst, chief executive officer, Digital Island. "They are looking to leverage the reach and cost-efficiencies of the Internet, but must ensure transactions are completed in a safe and reliable environment. This is where Digital Island comes in and provides the high level of security, reliability and efficiency required to enable more transaction at a lower cost per transaction."

FT.com, the Internet partner of the Financial Times, was successfully launched with Digital Island in 1998 and is now the U.K.'s most popular online commercial news service. The Financial Times Group is integrating its FT-branded Internet assets, including FTYourMoney, FTCareerPoint, Investors Chronicle, FT Expat and FT Advisor behind the FT.com brand. Working with Digital Island, FT.com estimates that it will reduce technology infrastructure costs significantly, while providing a robust platform for new revenue businesses.

"Digital Island is helping FT.com to drive out unnecessary cost and provide the agility that is essential to our business," says Ian Cohen, chief technology officer, FT.com. "In addition, we are working with Digital Island to develop and exploit content distribution technologies that will allow us to deliver new value-added services and meet our online revenue targets."

Supporting an audience of two million unique users making thousands of search queries and generating 40 million page views per month, FT.com is implementing Digital Island's 2Manage and 2Deliver services. Digital Island 2Manage services provide FT.com with value-added applications such as geographic intelligence and site monitoring to support FT.com's wide range of revenue models, including research services, content syndication, click-through referrals, highly targeted advertising, mobile and iTV services. 2Deliver services provide enhanced Content Delivery services with support for live and on-demand streaming Webcasts.

Important Notice

Digital Island, and the Digital Island logo are registered trademarks of Digital Island, Inc., a Cable and Wireless company. 2Way Web Services, 2Transact services, 2Deliver services and 2Manage services are trademarks of Digital Island, Inc., a Cable and Wireless company. All other marks are property of their respective owners.

This news release contains certain forward-looking statements, including, without limitation, statements concerning Cable & Wireless' and Digital Island's operations, economic performance and financial condition. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Actual results could differ materially from the results referred to in the forward-looking statements. These forward-looking statements are based largely on Cable & Wireless' and Digital Island's current expectations and are subject to a number of risks and uncertainties, including, without limitation, changes in external market factors, changes in business or growth strategy or an inability to execute strategy due to changes in such company's industry or the economy generally, the emergence of new or growing competitors, various other competitive factors and other risks and uncertainties indicated from time to time in Cable & Wireless' and Digital Island's filings with the U.S. Securities and Exchange Commission. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements contained in this news release will in fact occur. Additionally, neither Cable & Wireless nor Digital Island makes any commitment to disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements.

About Pearson

Pearson plc is an international media company with market leading businesses in education, business information and consumer publishing. Pearson has approximately 28,000 employees based in more than 60 countries. 96% of Pearson's employees own shares in the company.

Pearson Education is the world's leading learning company. The company's textbooks, online learning tools and testing and assessment programs help to educate more than 100 million people worldwide every year.

The Penguin Group publishes an unrivalled range of fiction and non-fiction, bestsellers and classics, children's and reference works for audiences in over 100 countries.

The Financial Times and its network of business and financial newspapers and online services informs the daily decisions of more than 4 million business people and investors worldwide.

About Digital Island

Digital Island(R), a Cable & Wireless company, is the industry's first provider of 2Way Web Services that enable enterprises to leverage the Internet to increase the profitability of online operations, increase customer value and decrease costs. Digital Island provides robust managed hosting, content delivery and network infrastructure and applications required to transact, deliver, and manage profitable transactions and interactions. As a Cable & Wireless company, Digital Island operates data centers in the United States, Asia-Pacific region and Europe and has a global content delivery network that reaches more than 35 countries worldwide. Digital Island also leverages Cable & Wireless' advanced IP network reaching 70 countries. Digital Island is headquartered in San Francisco. www.digitalisland.net

About Cable & Wireless

Cable & Wireless is a major global telecommunications business with revenue of over (pound)8 billion (US$11 billion) in the year to 31 March 2001 and customers in 70 countries. Cable & Wireless' focus for future growth is on IP (Internet Protocol) and data services and solutions for business customers. It is developing advanced IP networks and value-added services in the US, Europe and the Asia-Pacific region in support of this strategy. With the capability of its global IP infrastructure and its strength in key markets, Cable & Wireless holds a unique position in terms of global coverage and services to business customers. For more information about Cable & Wireless, go to www.cw.com.