StarMedia starts over from scratch

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[miami] Just three years ago, StarMedia Networks was a model Spanish-language portal, with 1,000 employees in the U.S. and Latin America, a big marketing budget, and a charismatic founder with a vision of a Spanish-speaking online community stretching from New York to Buenos Aires. Since then, the company crashed, the staff was fired, shareholders filed lawsuits, and chairman-CEO Fernando Espuelas resigned. Now StarMedia is back under new ownership and must persuade a skeptical ad community that the StarMedia brand can be saved. Last October, French Telecom subsidiary Wanadoo, a profitable $2 billion European Internet and online directories business, acquired Spain's EresMas, an Internet company that bought StarMedia's name and URL.

"We're re-building the company from scratch, based on new technology and building a commercial operation for the U.S. Hispanic and Latin American markets," said Wanadoo Spain's head of sales, Aquilino Pena, who will oversee StarMedia. His first hire, Miami-based VP-Sales Harry Neuhaus, is a veteran of Yahoo! and Turner Broadcasting System. StarMedia still has five million free e-mail account users, they say.

"That's good news on eyeballs," said a U.S. Hispanic agency executive who is considering using StarMedia. "Now they need to do huge damage control on the media and marketing side."

StarMedia will be entirely ad-supported, using DoubleClick for ad serving, and offering large, square ads and rich media rather than banner and pop-up ads. Mr. Neuhaus said StarMedia will go after direct-marketing campaigns, since its e-mail accounts "are all opted-in permission marketing."

"Eventually we'll do a trade campaign that's very targeted to the Hispanic ad community to let people know we're still here," he said. The new theme is "Tu gente. Tu idioma" ("Your people. Your language.") To keep costs low, most content is from about 20 EresMas portals in Spain and covers areas like sports, cars and women. AdAge.com QwikFIND aao 52b

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