just found this on the RB SHCC thread; look who posted it :-)
By: pmrandco
Reply To: 9495 by jb007 Monday, 16 Aug 1999 at 2:19 AM EDT
Post # of 9496
FYI SHCC SHAREHOLDERS (COMTEX) B: StarMedia Caters to Latin Americans
B: StarMedia Caters to Latin Americans
BOGOTA, Colombia, Aug 16, 1999 (AP Online via COMTEX) -- Shaking with
techno-music and shimmering in splashy colors, Bogota's year-old
WebCafe serves up pricey sandwiches and cheap Internet time, and Lucho
Sabogal is master of the machines.
A 23-year-old computer science student who helps cafe visitors navigate
cyberspace, Sabogal recently discovered StarMedia -- a much-ballyhooed
startup company that is bent on dominating one of the Internet's
fastest-growing markets.
''I like it. It's the biggest Internet community for Latin Americans --
it's true,'' he says, sounding like one of the company's ubiquitous
billboards and TV and radio ads across the largely Spanish-speaking
region.
Latin Americans are hopping online at a dizzying rate. Analysts expect
the region's number of Internet users to rise nearly fourfold to 19
million over the next 3 1/2 years.
StarMedia, founded by a young Uruguayan entrepreneur, aims to grab them
with a Spanish and Portuguese cyberspace ''portal'' similar to popular
services like Yahoo and AltaVista, both in English. So far, the company
leads an increasingly crowded pack of competitors in wooing the
region's computer-literate residents with native-tongue services.
But despite the praise from Sabogal, who spends 35 hours a week online
and uses StarMedia for e-mail, chats, games and news, he also
illustrates the obstacles facing the growth of the Internet in Spanish.
His English is limited, but that doesn't stop him from more frequently
using the very English-language sites StarMedia emulates. He trusts
those established services, even if he misses a word here or there.
Nelson Franco, a 32-year-old chemical engineer visiting the cafe, says
his English is also pretty rough. Still, the only thing he reads online
in Spanish are local newspapers.
''It doesn't make any sense to use the Internet in Spanish. English is
the universal language,'' Franco says. ''And, what you find in English
is more current.''
StarMedia's 32-year-old chief executive, Fernando Espuelas, has his
work cut out for him in attracting the allegiance of ''wired'' Latin
Americans.
According to StarMedia's figures, only 2 percent to 5 percent of all
Web pages are in Spanish. It is that corner of the Internet that
StarMedia users access when they browse the site's many topical
channels -- including news, sports, money, travel and shopping.
Latin America's vast wealth inequalities could be the key variable
affecting the long-term growth of native-language online services. Most
Net-savvy Latin Americans belong to an affluent minority that speaks
some English and can afford home computers.
But Espuelas is betting that as computer prices drop and access in
public schools rises, more people outside the upper crust -- many with
no knowledge of English -- will get online and need a service like
StarMedia.
Another snag could be Latin America's dearth of phones lines -- just 10
per 100 people, compared to 64 per 100 in the United States. Even if
more of the region's 500 million people had computers, most would have
no way to connect.
Despite the obstacles, StarMedia is buzzing with optimism -- and flush
with cash. The company's initial public stock offering in the U.S.
over-the-counter market May 26 brought it $105 million in operating
capital. The stock seesawed up from $15 a share to a peak of $70 on
July 1, but is now trading in the low $30s.
''The Internet has the potential to unify Latin America, to bring
people back together again,'' said Espuelas, recently named one of the
region's ''Leaders for the New Millennium'' in Time magazine's
international edition.
Beyond Latin America, the company is counting on picking up users in
Spain and among the rapidly growing Latino community in the United
States.
On July 21, StarMedia announced it had acquired one of the largest
Spanish-language services on the Net, Barcelona-based LatinRed. The
company has also purchased would-be rivals this year in Brazil and
Chile.
Colombia had an estimated 350,000 Internet users at the end of last
year -- about 1 percent of the population -- but the number is expected
to grow by 50 percent this year, according the Framingham, Mass.-based
International Data Corp.
IDC forecasts similar growth rates throughout the region, predicting
somewhat faster increases in Chile, Argentina and Mexico and slower
growth in Brazil.
StarMedia isn't alone in the market. Among its competitors: a joint
venture of America Online and Venezuela's Cisneros Group, an alliance
between Prodigy Communications and the Mexican phone company Telmex,
and the U.S. portal Yahoo, which offers a Spanish version.
But analysts say StarMedia, with its financial war chest and existing
operations in seven Latin American countries, has a strong hand.
''There's nothing that can stop StarMedia,'' said Jason Calacanis,
editor of the trade paper Silicon Alley Reporter. ''They can become a
superbrand like Coke or Disney.''
Copyright 1999 Associated Press, All rights reserved.
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By BENJAMIN CRAMER
*** end of story ***
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