HispanicBusiness

By Derek Reveron

More than 8,000 Hispanic-oriented Web commercial sites existed at the end of this year’s first quarter, and the number is doubling every 13 or 14 months, according to a recent survey.

That explosion of sites – which range from mom-and-pop storefronts to giants such as StarMedia and quepasa.com – is reflective, in part, of the entrepreneurial traditions of Hispanics, according to Tony Dieste, president of Dallas-based Dieste & Partners, which conducted the survey.

"Whether you are Cuban, Puerto Rican, or whatever, everybody hangs out a shingle and sells something. Instead of doing it in stores or on street corners, tiny businesses put up Web sites. The quality of them has improved dramatically within the last year," notes Mr. Dieste, whose company handles advertising, including Internet placements, for a number of Fortune 500 firms.

The scramble for the Hispanic online audience also is being driven by an increasing recognition of their potential spending power online.

According to a recent Hispanic Business/Zogby poll, 37.8 percent of Hispanics say they spent more than $100 online in the previous three months, compared with 15.8 percent of Anglos.

As of March, 50 percent of U.S. Hispanic households could access the

Internet at home, school, work, the library, or another location, according to a survey by Forrester Research, a Boston-based research firm. That figure compares with 46 percent for Anglo households. Forty percent of Hispanics could access computers at home, compared with 38 percent of Anglos.

"The growth rate of U.S. Hispanics online is parallel to that of whites," says Forrester analyst Ekaterina Walsh.

Potential returns always attract investors, and major international Internet, telecommunications, media, and financial institutions have ponied up millions of dollars to acquire sites or build them. Cisneros Group, the Caracas, Venezuela-based media conglomerate, teamed up with America Online to develop Web offerings. Cisneros also owns part of El Sitio.com (www.elsitio.com), a Buenos Aires-based network that targets the United States as well.

Spain’s largest bank, Banco Santander Central Hispano, recently paid $529 million in cash to acquire 75 percent of Patagon.com. The Miami Beach-based site provides Spanish- and Portuguese-speaking nations with financial information and online stock trading. Telefonos de Mexico SA, Mexico’s largest phone company, teamed up with Microsoft to develop portals in the United States and Latin America.

Univision was expected to introduce its Web site in the first part of this year, and although few doubt it will have a major impact on the industry, dominance in television doesn’t automatically translate online.

Sites also continue to attract mainstream investors, and several have gone public. Recently, ElSitio.com and Terra Networks SA, a subsidiary of Spanish telecommunications giant Telefonica, joined quepasa.com and StarMedia among the major content-focused sites to launch IPOs. And while this route remains attractive to many sites, the road from IPO to riches isn’t always smooth.

StarMedia originally targeted Latin America before expanding to the United States last year. The company has been the subject of takeover rumors, but in March, Wall Street analysts downgraded StarMedia’s stock because of concerns about rising costs in Latin America. CEO Fernando Espuelas defended the stock, noting that the company remained on target to turn a profit by the last quarter of 2002. Still, StarMedia’s stock plunged more than 30 percent in one day, although observers predicted that the stock would eventually bounce back.