From...

February 7, 2000
Web posted at: 10:40 a.m. EST (1540 GMT)

by Juan Carlos Perez

(IDG) -- Lycos plans to expand its Internet services for Latin America by adding features such as chat, instant messaging, local news and games to its sites for the region, said Robert Davis, the company's president and chief executive officer, in an interview last week.

These services will bolster the sites that Lycos launched in October 1999 for Brazil, Mexico, Argentina, Colombia, Chile, Perœ, Venezuela and for Hispanics in the U.S. All those sites are in Spanish, except for Brazil's, which is in Portuguese.

"If you look at the size of the Latin American market, it's very critical for us to have a strong presence there. You can't be a global company without a strong presence in Latin America," said Davis, who announced these new services Friday during his keynote at the Business Outlook 2000 event in Miami. The official announcement will be made on Monday. The services are already up and running.

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Market researchers are predicting an explosive growth of Latin America's Internet market, in terms of number of users, e-commerce transactions and revenue for Internet service providers.

For example, Jupiter Communications forecasts that the number of Internet users in the region will grow from 9 million in 1999 to 36 million in 2003, at which point still only about 7 percent of the region's population will have access to the Internet, leaving much room to grow. Only 2 percent has access today.

International Data Corp. (IDC) expects e-commerce transactions to grow from $170 million in 1998 to $8 billion in 2003, a figure that includes both business-to-consumer and business-to-business transactions. Meanwhile, a survey done by advertising agency Nazca Saatchi & Saatchi in October 1999 concluded that online sales could grow to $525 million in 2000 in the region, from $240 million this year.

Recent figures released by IDC show that between 1999 and 2004, the Latin American ISP market will experience a compound annual growth rate of 42 percent, with revenues rising from $1.41 billion in 1999 to $8.13 billion in 2004.

Another sign that the Internet market in the region is gathering speed is the increase in venture capital flowing into Latin America. Japan's Softbank recently created a fund for Internet companies in Latin America, and start-ups are raising plenty of cash. Patagon.com, for example, recently closed a round with over $50 million in investments.

Some of the major companies getting into the Latin American Internet market include Microsoft, Yahoo, America Online and Spain's Telef—nica.

The sites that Lycos launched in October were basically Web directories for each of those countries, along with Lycos' Tripod sites for building and hosting home pages, but the new services being announced today bring them more in line with the services Lycos offers in its other sites, including its main U.S. portal. The services also include financial services and information and car-buying guides, Davis said.

Davis will also announce that Lycos has about 24 partners that will provide a variety of content for its Latin America sites.

Friday was also the official launch of Lycos' Miami office. Lycos also has offices in Brazil and Mexico, and plans to add more offices in the region this year. Its Latin America operation currently consists of about 40 staffers, Davis said, a number also expected to grow this year.

In the coming weeks, Lycos will launch what the company claims will be the largest MP3 song catalog in Spanish to date, Davis said.

Also in the next few weeks, Lycos will strengthen its electronic commerce offerings for Latin America by announcing co-branded partnerships with merchants that sell wares to the region. These merchants will be featured in the Lycos sites, where there will be links to their own sites. Eventually, this e-commerce service will evolve into a more integrated offering, hosted within Lycos' Latin America sites, similar to the shopping area in Lycos' main site, Davis said.