Story in Sunday Newsday. I've placed the QuePasa parts in bold type:
Se Habla Espa¤ol
Increasingly, it's a lucrative language on the Internet
By Mark Harrington
Staff Writer
DEFYING LACKLUSTER PC marketing efforts to Hispanic-Americans and a widely acknowledged digital divide, Spanish-language Internet portals and service providers are sprouting at a zesty pace, vying aggressively for investment capital, advertising dollars and the eyes of an increasingly influential market.
While dominant rival portals such as Yahoo! and long-established Internet service providers like Prodigy attempt to build on their traditional English-speaking customer bases by translating to Spanish, the dedicated Hispanic sites are working overtime to build large national and international communities by appealing to home-grown sensibilities and tastes.
"Yupi.com is built by Hispanics and owned by Hispanics,? said Carlos Cardona, founder and chief technology officer of Yupi.com, a Miami Beach-based portal company, describing a common sentiment among the portals.
Much is at stake. Though estimates vary on how much Hispanics are being courts, Hispanic Business magazine says that American companies spent $1.7 billion to advertise to the U.S. Hispanic community last year, mostly on television. While only a fraction of that was spent on Internet ads, that's expected to change rapidly as the 13 million U.S. Spanish households and 2.3 million small businesses get online.
"The interest and the availability of Spanish-language portals has really boomed,? said Eva May, a partner of Espanol Marketing and Communications, an advertising agency in Cary, N.C., that is targeting the Hispanic community.
What's more, the most visible Spanish-language portals have large international audiences, feeding on both increased PC penetration in Latin America and U.S. communities eager to communicate with them. The link could prove a potent advertising tool -- so long as the portals can differentiate among their audiences, May said.
Like all things Internet, the race is on among Spanish-language portals to raise capital to outgrow the competition, regardless of cost. Earlier this year, StarMedia Network Inc., whose business plan initially targeted the broader Latin American market, filed for an initial public offering, and has this year expanded its base to the U.S. Hispanic market. In April, Quepasa!com, a service based in Phoenix and serving primarily the Hispanic-American market, filed its IPO and has been expanding and advertising to build its base. Other high-profile firms like Yupi.com, eHola and Latinolink.com, hint at similar capital interests.
While companies point to the Latino community as the fastest growing population base online, the numbers collide with U.S. Commerce Department estimates that say Hispanic-Americans on the whole remain a digitally excluded demographic. Hispanic households, for instance, are "still roughly half as likely to own a computer as White households, and nearly 2.5 times less likely to use the Internet,? according to the Commerce Department study completed in July entitled Falling Through the Net: Defining the Digital Divide. It also concludes that "the gap in access to new technology between White and Hispanic households has grown significantly.?
Some Hispanic Internet companies dispute those figures but acknowledge that their efforts in targeting Hispanics may be outpacing users' ability or interest in getting online.
"The Hispanic portals are probably a little ahead [of the community], but not by much,? said Gary Trujillo, chairman and chief executive of Quepasa!com, which he joined in April.
STARTUPS AND upstarts like eHola.com, Yupi.com, StarMedia Network and El Sitio International (www.elsitio.com) say the number of unique visitors to their sites each month is accelerating on par with or exceeding those of English-only portals.
Web portals, which serve as a customer's gateway to the Internet by pooling large amounts of content and services, serve a particularly important role in the Spanish-speaking community because of the overwhelming presence of English-only sites.
That provides unique opportunities for the portals to attract advertisers.
"We started the company focused on technology, but now we're starting to attract more advertising,? said Cardona of Yupi.com. Like other Internet visionaries with humble beginnings, he launched the company three years ago as a Spanish-language Internet directory and search engine, in part to "explain to my dad why I spent 10 hours a day on the computer.?
Since then, through partnerships and internal growth, the company has bolstered the portal with a range of services and links to a large catalog of Web pages. In six months, the company has grown from 20 to 200 employees, he said, and the heavily advertised Yupi site generates 103 million page views a month, he said.
Rival eHOLA.com, a Delray Beach, Fla., portal and Internet service provider, launched in May by Latin-America technology conglomerate Global Datatel Inc., is attempting to control an even bigger portion of the market.
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'If you want to be a truly Spanish portal, you have to take care of your users in Latin America. You have to have a localized [Latin American] presence for content, support and Internet access, and that's what we're doing.?
-- Rene Serrato, director of business development at eHOLA
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"If you want to be a truly Spanish portal, you have to take care of your users in Latin America,? said Rene Serrato, director of business development at eHOLA. "You have to have a localized [Latin American] presence for content, support and Internet access, and that's what we're doing. It differentiates us from everyone else.?
eHola's service comes loaded on certain IBM computers sold throughout Latin America.
That the company has no similar arrangement in the American market is both an acknowledged shortcoming and a signal of the tepid efforts of PC makers' U.S. marketing arms to target the market.
Gateway, the San Diego-based direct PC marketer, earlier this month said it would specifically target Hispanic-Americans with a $2.5-million marketing budget, dedicated Spanish-speaking sales and tech support staffs and PCs that are configured for Spanish.
'IT'S AN UNDERSERVED market,? said Hector Placencia, director of Hispanic marketing at Gateway, which has been beefing up bilingual sales help in its Country Stores as well. "Technology is lacking in the Hispanic community.?
Rivals say they are studying the market but moving cautiously.
"We're not doing too much,? said Ray Aldrich, spokesman at Hewlett-Packard, when asked about the company's plans to market PCs to Hispanics. "We're selling down in Mexico,? he said.
Dell spokesman Bob Kaufman said, "I'm not sure we do a whole lot in the [U.S. Hispanic] consumer space at this point.?
Cognizant of those minimal efforts and the financial barriers at lower income levels, eHOLA plans to offer low-cost set-top browsers, or devices connected to a user's TV set, under its own brand name that will come with eHOLA Internet service. The product is already offered in Latin America, Serrato said, and will be introduced in major U.S. cities in coming months, including New York.
Surprisingly, even large American consumer-goods companies that spend liberally advertising to Spanish Americans have largely ignored Spanish-speaking Internet users. A quick tour of corporate America's Web sites shows few willing to make their sites even partly bilingual.
May of agency Espanol Marketing said its an indicator of the infancy of the market, one that has limited ad dollars spent, albeit not for long.
"None of my clients at this point are in,? she said. Clients like Barton Beers, which distributes the Mexican Corona beer brand here, have yet to take the Web-advertising plunge, for instance. But while the Hispanic Internet market is "much less developed as a category than it should be,? she said she expects that'll change soon. First, companies will do Spanish-language Web pages for products on their own sites, then work toward the portals, whose aggressive activity is increasing visibility.
The good news for advertisers is that the Internet provides an opportunity to reach the most sophisticated Hispanic consumers, who are leading their communities in getting online. That opens the market for items like luxury goods.
"Your typical company that's been successful in the U.S. doing Spanish language advertising is looking at a lower-income category than the general market consumer,? she said.
COMPANIES WITH longer histories targeting Hispanic Web surfers say new exposure to portals is giving them a boost, while allowing them to parlay their veteran status.
Latinolink.com, which was launched five years ago primarily as a news-based content site, recently completed its first round of outside financing and plans to upgrade to a full-service portal with a new name: Latino.com.
Photo by Larry Brazil
Lavonne Luquis, president and co-founder of Latino.com, said her company was started to fulfill an editorial purpose, not strictly as a money-maker; many of her more recent rivals, she says, are financially minded startups.
Lavonne Luquis, president and co-founder, said the company has the advantage of having started to serve an editorial purpose. Many of her more recent rivals, she noted, are financially minded startups.
"News and community has been our focus,? she said, with Latinolink getting 4 million page views a month. Under the broader portal approach, Latinolink.com will become one of many subsites, and the company will develop partnerships for content with publishers, Web service firms, perhaps even offer its own Internet service. To increase exposure, the company recently began buying ads on search engines like Infoseek. The strategy appears to be paying off. Luquis said Latinolink had sold out all ad space availability on its site for the past two months. To continue the growth, she said, "I can see an IPO in the future.?
Quepasa!com, already flush with public funding after only a year of operation on the Web, is also pushing its Hispanic-American niche, said Trujillo, the chief executive.
"Is there competition? Yes, everyone's starting to realize the importance of this market,? he said. "But the ad dollars are just barely coming online ... I think it's going to be huge . . . The growth in Hispanic professionals and the population is large, but there's also economic growth. We buy a lot of products.?
The advantage the Hispanic portals have over the translated versions is focus, he said.
"Yahoo/Espanol is clearly a competitive force in the market, but Yahoo sees Hispanics as a second-tier audience,? Trujillo said. "We see them as first-tier customers ... We've spent a lot of money building a brand that's just as powerful as Yahoo! in the Spanish-speaking market.?
Quepasa!com expects to be profitable by 2001, he added.
StarMedia, perhaps the largest portal by dint of the markets served, counted 151 million page views in its most recently tallied month, a 167 percent increase, 11 percent of which were U.S. customers.
BEATRIZ MARTINEZ, general manager of the Puerto Rico market, said StarMedia's ability to work with advertisers to create Spanish-language microsites is beginning to win it some big-time fans.
"The largest advertisers for U.S. Hispanics are developing Internet initiatives as we speak,? she said, noting Pepsico as an example. It hasn't been easy. "We really have had to push for companies and advertisers to understand the value of the market. It's been a constant education process with ad agencies and clients.?
StarMedia now has 160 advertisers, and Martinez expects that to increase sharply next year.
The efforts have been bolstered by stepped up development and marketing efforts by Internet service providers like Prodigy Communications Inc., which earlier this year launched an edition of its service that allows users to toggle between Spanish and English.
Roberto Ruiz, director of multicultural marketing, said while the field for Spanish-language ISPs is less competitive than the portals, Prodigy is taking a lesson or two from the portals' marketing plans to help draw an audience.
His aim is to cut into the estimated 61 percent of Spanish-dominant U.S. Hispanics who don't have access to the Internet.
"We're going to people who really prefer to speak Spanish,? he said. The effort includes TV ads, Latino magazines and radio, as well as working with community leaders, he said.
The expectation, he said, is that the efforts will truly hit critical mass by the end of next year. In any case, he said, "We're committed to this market, and we'll spend whatever is needed to get a significant portion of it.?
For those who indicate the Hispanic market has largely been ignored by technology companies, such commitments provide hopeful expectation.
"There's a real viral effort taking place in the Hispanic community in leveraging computers for kids right now,? said Trujillo. That's good news to a market that "has traditionally been overlooked.? |
