Today, firms based in Miami-Dade, Broward and Palm Beach counties provide Spanish-language content and a search engine (Yupi.com), Internet auctions in Spanish (Subasta.com) and financial news and information in Spanish (Consejero.com). A New York-based website with a Miami regional office (StarMedia.com) plans to launch an Internet access service in Latin America later this year.
Just as players in the Latin American cable TV industry settled in south Florida a few years ago, now pioneers in the embryonic and high-risk Latin Internet market seem to be doing the same. "We're trying to reach a critical mass," says Ricardo Costa, Subasta marketing vice president. Executives at the other firms say the same. All but one of the startups are privately held, and they're brutally competitive and likely to lose buckets of money for a while.
If launching an Internet venture is risky in the U.S., it's dramatically so in Latin America, where relatively few (estimates vary wildly, but perhaps just a few million) now use the Internet; many users have older PCs and slow modems or substandard telephone service.
Established, public Internet companies such as Yahoo! and America Online offer versions of their sites in Spanish, adding to the challenge faced by startups. But the potential is enormous for those who get a foothold in the region; more are expected to open shop in south Florida. So far, investors are enthusiastic about cyberspace en Español. "When we started a few years ago, people thought we were nuts," says Peter Blacker, a StarMedia vice president. "Now we have 200 advertisers."
CONSEJERO.COM
Financial News -- en Español
One of the newest niche players is financial news site Consejero.com. A unit of North Palm Beach-based Intelligent Life, owner of Bank Rate Monitor, this site (the name means "adviser" or "consultant") offers links to Latin American financial markets and major newspapers and magazines as well as currency conversion, news briefs and columns.
'Enormous need'
Business development director Janet Perales says much of the traffic since its launch several months ago has come from the U.S., Mexico and Spain. "There's an enormous need for this information," she says. "Our target is Spanish-speaking users, wherever they are."
SUBASTA.COM
Bargaining
Also launched earlier this year, Subasta ("auction") is modeled closely after eBay, the hugely popular English-language Internet auction site. But Fort Lauderdale-based Subasta lets shoppers browse by country as well as product.
Costa says most Internet visitors coming to the site are from Argentina, the U.S. and Spain.
Most popular products: electronics, including computers and video games. Items for sale are posted for a limited time, and most bidding action happens in the last couple of hours.
'Way of life'
Although usage is free now, once traffic grows the site plans to charge 25 cents to post an item, as well as a 5% commission on sales. "Bargaining is more of a way of life in Latin America than it is here," Costa says. "It's addictive."
The founder of Subasta is no stranger to this business, either: Craig Doriot helped found Yupi.com in Miami Beach.
STARMEDIA.COM
A Latin AOL?
StarMedia Network (starmedia.com), like Yupi, claims to be the world's most popular Spanish-language site of its kind. Launched in 1996, StarMedia bills itself as both gateway and destination; it contains content on a wide variety of topics at its own address, and offers search capability to other websites.
Published in both Spanish and Portuguese, it is now public and has attracted by far the most money and national attention to date. "StarMedia created this industry in Latin America," says Peter Blacker, the company's vice president for sales strategy.
Choose your language
Content is tailored to the language and country of each user, who chooses language and place of origin when signing on. "No one else is doing that," Blacker says.
Supporters think StarMedia could become the AOL of Latin America. And those supporters include big-name investors: Hearst Communications, National Broadcasting Co., Intel, GE Capital, Morgan Stanley and Warburg Pincus.
Still, the company is a long way from making money on operations. Last year, StarMedia had revenues of some $5.3 million and lost $46 million. But when the company went public in May, StarMedia's market value almost doubled in the first day of trading, to a capitalization of $1.3 billion.
YUPI.COM
Acquisitive
Three-year-old Yupi, Spanish for the exclamation "yippee," offers users access to its search engine, 12 channels organized by topic (such as entertainment, news, sports), free e-mail, classifieds, chat rooms, etc. Yupi says most visitors hail from Spain, Mexico and the U.S.
In May, Yupi acquired Ciudad Futura, a Madrid-based Internet entertainment site. The combined company has about 80 employees and offices in Argentina, Colombia, Spain and Mexico as well as its Miami Beach headquarters. And in August, Yupi announced a deal with Sony Pictures and Sony Music, in which Sony will give Yupi entertainment-related content in exchange for promotion.
Capital
Also last May, Yupi landed $13 million in capital from two sources: $10 million from Miami-based Interprise Technology Partners, a venture capital fund. The rest came from IFX Corp., a Latin America Internet service provider based in Chicago. Not bad for a website that Carlos Cardona, Yupi's chief technology officer, says he initially created so that his Spanish-speaking father could surf the Net.