Whoever did not read this it is a MUST!!!
Upbeat article on *StarMedia - Read on:
Sunday August 15, 8:13 pm Eastern Time
StarMedia Caters to Latin Americans
By BENJAMIN CRAMER
Associated Press Writer
BOGOTA, Colombia (AP) -- 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.'' |
