SEC Report:
January 20, 2000
AMERICA ONLINE LATIN AMERICA INC (AOLA)
S-1 Filing (SEC form S1)
America Online Latin America seeks to become the leading provider of interactive services in Latin America. We intend to bring to the Latin American market localized AOL-branded interactive services and the opportunity to join AOL's global online community of more than 20 million users in 15 countries and seven languages. We believe that our relationships with our founders and principal stockholders, America Online, Inc. and the Cisneros Group of Companies, give us significant competitive advantages. We will benefit from the technology, brand name, infrastructure and relationships of AOL, the world's leader in branded interactive services, and will draw on the relationships, regional experience and extensive media assets of the Cisneros Group, one of the leading media groups in the Americas.
Our mission is to be a leader in the development in Latin America of the global interactive medium that is changing the way people communicate, stay informed, are entertained, learn, shop and conduct business. Our family of AOL-branded interactive services will include the AOL-LA country services, our comprehensive online services which will be available to subscribing members, and the AOL-LA country Internet portals and our Latin American regional Internet portal. Our network of Internet portals will offer content, community and e-commerce opportunities to all Internet users.
We believe that our AOL-LA country services will be unique in their seamless integration of local, regional and global interactive communities and the Internet, and in their array of interactive tools, content and e-commerce opportunities. We expect to derive our revenues principally from member subscriptions to our AOL-LA country services, and we will seek to build our online service member base and portal user base in order to generate additional revenues from advertising and e-commerce.
We are beginning to offer our AOL-LA-branded interactive services in Latin America. Our three core target markets are Brazil, Mexico and Argentina. In November 1999, we concurrently launched our first AOL-LA country service, America Online Brazil, and our first AOL-LA country Internet portal, our Brazilian portal at www.americaonline.com.br. In 2000, we plan to introduce localized versions of the AOL-LA country services and portals in Mexico and Argentina, as well as our Latin American regional portal. Thereafter we intend to introduce our interactive services in additional countries in Latin America.
We currently have the exclusive right to offer AOL-branded PC-based online services in Latin America. Under our license agreement with AOL, we also have the exclusive right to offer AOL-branded TV-based online services in Latin America if AOL develops these services. In addition, we have the exclusive right to offer in Latin America any AOL-branded wireless-based online services developed by AOL for commercial launch before , 2004 (four years from the effective date of the registration statement for this offering). We also have the right in Latin America to promote AOL's ICQ service, which features leading, real-time communications software and an associated portal. The ICQ service enables its worldwide community of approximately 50 million users, including approximately 5 million users in Latin America, to find and communicate with each other in real-time. As local versions of the ICQ service are developed, we will engage in other marketing and cross-promotion activities with AOL. We do not have the right to offer Netscape, DigitalCity, MovieFone or any other non-AOL-branded interactive services owned by AOL other than CompuServe.
Our Opportunity
Although Internet use in Latin America is in a relatively early stage of development, the region is one of the fastest growing Internet markets. International Data Corporation projects that the number of Internet users in Latin America will increase at a compound annual growth rate of 34% from 1998 to 2003 and the number of Internet accessing devices will increase at a compound annual growth rate of 41% over the same period. The amount spent on advertising and e-commerce in Latin America is also projected to increase over the same period.
Our Strategy
Our strategy is to develop AOL-LA brand recognition, grow our member and user base and expand beneficial relationships with advertisers, content providers and e-commerce merchants. We intend to:
. provide superior online services that offer easy and reliable access to
local, regional and global communities, content and e-commerce
opportunities, seamless integration of the Internet, and free online and
offline customer service available 24 hours a day, 7 days a week;
. optimize the use of our management and business development teams in the
introduction of our interactive services in Latin America;
. develop our interactive services on a country-by-country and regional
basis and tailor them to local interests and preferences;
. establish a presence on the Internet through our AOL-LA country Internet
portals and our Latin American regional Internet portal to grow our
brand name, promote the AOL-LA country services and generate advertising
and e-commerce revenues;
. use extensive traditional advertising campaigns as well as innovative
marketing strategies, including the promotion of our interactive
services on ICQ in Latin America, to aggressively build our member and
user base; and
. expand our family of AOL-branded services to TV- and wireless-based
online services as they are developed by AOL.
Our History
Currently, our business is conducted by affiliates of AOL Latin America, S.L., a limited liability company organized in Spain in December 1998. AOL Latin America, S.L. is a joint venture between AOL and the Cisneros Group. Upon the effectiveness of this offering, we will indirectly own all of AOL Latin America, S.L. and its affiliates through a corporate reorganization in which AOL and the Cisneros Group will exchange their interests in the entities that own AOL Latin America, S.L. and its affiliates for and shares of our Series B preferred stock and Series C preferred stock, respectively. AOL will also receive the AOL warrant.
We believe that our relationships with AOL and the Cisneros Group are essential to our success and provide us with significant competitive advantages. Nonetheless, you should be aware that these relationships involve numerous risks. For a fuller discussion of these and other risks associated with investing in our Class A common stock, please see "Risk Factors."
To date, we have financed our operations primarily through capital contributed by the Cisneros Group. The Cisneros Group has agreed to contribute an aggregate amount of approximately $100 million to AOL-LA, the balance of which, $41 million, will be contributed in quarterly installments through July 2, 2001.
On January 10, 2000, AOL entered into a merger agreement with Time Warner, Inc. Under the agreement, a new holding company, AOL Time Warner, Inc., will form two wholly-owned subsidiaries that will merge with each of AOL and Time Warner. After the merger, AOL and Time Warner will be wholly-owned subsidiaries of AOL Time Warner. Time Warner shareholders will receive 1.5 shares of AOL Time Warner for each share of Time Warner stock they own. AOL shareholders will receive one share of AOL Time Warner stock for each share of AOL stock they own. The merger is subject to customary closing conditions, including receipt of required regulatory approvals and the approval of AOL and Time Warner stockholders.
Unless the context otherwise requires, "America Online Latin America, Inc.," "AOL-LA," "we," "us," and "our" refer throughout this prospectus to America Online Latin America, Inc. and our subsidiaries, and our predecessor, AOL Latin America, S.L. and its affiliates. "AOL" refers to America Online, Inc. The "Cisneros Group of Companies" or the "Cisneros Group" are names used to describe a group of investments, joint ventures, strategic alliances and affiliated companies that are engaged in diversified consumer businesses, including broadcasting and content production, in Latin America and elsewhere, and that are associated with two of our directors, Ricardo and Gustavo Cisneros, and their families.
Unless otherwise indicated, all information contained in this prospectus:
. reflects the reorganization transaction and the adoption of our restated
certificate of incorporation, restated by-laws and stockholders'
agreement upon the effectiveness of this offering;
. reflects the concurrent distribution by the Cisneros Group of shares
of Class A common stock to current and former employees of the Cisneros
Group under a separate prospectus; and
. excludes the possible issuance of additional shares of Class A common
stock to the underwriters pursuant to their rights to purchase
additional shares to cover over-allotments. |
