U.S. conexiones

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Microsoft Corp.'s MSN weighed the next phase of its Latin American expansion-and opted to focus on the United States.

Last month T1msn, MSN's joint-venture with Mexican phone company Telefonos de Mexico, bought ailing Spanish-language portal Yupi to drive its regional development, and U.S. Hispanics are its first priority. The move comes as MSN, along with online ventures such as AOL Latin America and StarMedia Network, begin focusing an increasing amount of their resources on Latin Americans inside the U.S. rather than mainly Latins outside the U.S.

The U.S. Hispanic online market has had its fair share of dot-com meltdowns, like the defunct Quepasa.com and Latino.com, but holds growing appeal for online companies looking for Spanish-speaking customers and ad dollars targeted at Latins. Last year there were almost as many Spanish-speakers online in the U.S. as in all of Latin America, and despite the U.S. ad market slowdown, Hispanics are regarded as a fast-growing segment highlighted by Census 2000's count of the U.S. Hispanic population at 35 million.

That's why AOL Time Warner's AOL Latin America started an AOL Latino site for the U.S. in June and travel site Travelocity has been quietly exploring ways to develop a Spanish-language presence in the U.S.

The most dramatic entry so far is from the dominant Spanish-language TV network Univision with Univision Online. In less than a year, Univision.com is drawing 7 million unique visitors a month, according to ABC Interactive's monthly audit.

The focus on U.S. Hispanics is being driven by corporate America, said Adriana Kampfner, senior VP-global ad sales for Latin American portal StarMedia Network. "Companies that had a general ethnic department all of a sudden are trying to analyze who their Hispanic consumers may be."

Leveraging relationships cultivated in Latin America into the U.S. Hispanic market, StarMedia in April extended its L'Oreal-sponsored women's site cadamujer.com (in English, every woman) into the U.S. Spanish-language market. Next, StarMedia will co-brand products with its new investor Primedia for the U.S. Hispanic market.

As Latino use of the Internet grows, so does discontent with the lack of accurate measurement of the online Hispanic audience. Nielsen/NetRatings is in talks with leading portals like Terra Lycos, Univision.com, AOL and StarMedia Network about developing a separate Hispanic panel as Nielsen Media Research did years ago for TV ratings. Complicating measurement is the way Hispanics are split linguistically between Spanish-only, Spanish-dominant, bilingual, English-dominant and English-only.

"U.S. Hispanic is included in [NetRatings'] current sample and reports, but all recruitment and installation materials are English-only, so they exclude Spanish-dependent and Spanish-dominant," said a research executive at one of the online companies. "You're really just getting English-dominant and some bilingual [people]. As a result, it understates usage to Spanish-language sites and which are the top Hispanic sites and overstates English sites."

Estimates vary, but between 6% and 9% of the U.S. online population is Hispanic and, according to Cheskin Research, about 38.7% of the U.S. Hispanic population is online. "Internet adoption is going through the roof," said Javier Saralegui, president of Univision Online. "It's going up 1% to 2% a month."

With Univision already capturing about 80% of Hispanics through network and cable TV, the Univision brand has strong appeal to potential online advertisers. With a focus on news, sports and entertainment, Univision Online has signed up 25 advertisers this year, including Gateway, Colgate-Palmolive Co., Coca-Cola Co., Cingular Wireless and MasterCard. Fannie Mae approached Univision and a wide-ranging area on home financing was developed, while six months of talks with General Motors Corp. led to sponsorship of road travel information on the site.

"Television integration, television promotion, site design, sensitivity to U.S. Hispanics," said Mr. Saralegui. "We'd better be No. 1 with these assets."

While others try-and often fail-to become regional portals, Univision unabashedly ignores Latin America. "Our Brazil strategy is the same as our China strategy," Mr. Saralegui said. "We don't have one."

Further targeting the U.S. Hispanic market, Univision formed with search engine Ask Jeeves a joint venture called Ask Jeeves en Espanol, which launched the Spanish-language search engine Pregunta.com in April. In one of three commercials for the site, from Enlace Communications, Los Angeles, a little boy asks difficult-to-answer questions and his mother suggests asking Pregunta.com. In each spot, a laptop drops from the sky.

Harry Neuhaus, who moved last month to Ask Jeeves en Espanol as VP-sales, business development, from Yahoo!, where he was director of Latin American sales, said the spots have tested well on Univision. Pregunta.com is the default search engine for Univision Online.

AOL estimates 2 million U.S. Hispanics already use its English-language service each month. For those who prefer Spanish or simply more content of interest to Hispanics, AOL is phasing in a Spanish-language site incorporating additional AOL Time Warner content such as monthlies People en Espanol and Gusto.

"You're starting to see a new hybrid culture of young, savvy, acculturated Latinos who are also interested in their roots," said Guy Garcia, VP-content at AOL Latin America, who is based in Fort Lauderdale.

Univision, MSN and AOL are entering the U.S. Hispanic market later but with deeper pockets than previous Spanish-language dot-coms. "I think those other guys were maybe too early," Mr. Saralegui said.

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