HispanicBusiness

A new study shows that the Latino Internet population is growing twice as fast as the white Internet population on a percentage basis. But at the same time, many large-scale Latino-oriented Web sites are struggling to survive.

Eleven million Hispanic adults in the United States use the Internet, according to a study released Wednesday by the Pew & Internet American Life Project. That represents a 25 percent growth rate from 2000, almost double the 13 percent growth rate for non-Hispanic whites.

Latinos are surging on the Internet because they are newer to the arena and have more room for growth, said Lee Rainie, director of the Pew project. "Hispanics weren't the early adopters of the Internet," Rainie said. "We think the network effect is taking hold."

Fifty percent of Hispanics in the United States 18 and older go online, compared with 58 percent of whites and 43 percent of African-Americans.

But the growth in the Latino online population doesn't translate into more business for Web sites that target the Latino market.

Spanish-language search engine Yupi.com, which secured more than $120 million in funding in 1999 during the dot-com hoopla, canceled plans to go public this year and laid off 60 percent of its workforce. It was recently bought by the Microsoft Network. Quepasa.com, a site that offered news in English and Spanish and had John Elway as an investor, shut down this year. Another Spanish-language portal, Latino.com, also folded despite landing singer Gloria Estefan as a spokeswoman.

"One of the interesting anomalies is that although the number of Hispanic users is going up, the number of Spanish-language sites is decreasing," Rainie said. "One reason could be that most of the users are bilingual and can move smoothly from English and Spanish and don't care what language their content is in."

Most Hispanic Internet users actually prefer content in English over Spanish, according to a study conducted last year by the Tomas Rivera Policy Institute, a nonprofit research organization. The study found that nearly two-thirds of Hispanics prefer Web sites that are in English. Only 12 percent preferred Spanish-language sites, and 25 percent favored bilingual sites. The numbers mirror those for television, radio and newspapers. Another reason some of the Latino-oriented sites failed was that they didn't offer unique information, said Garrison Krause, president of Solomujeres.com, a site in Spanish based in Boulder.

"They ran into problems because they were supplying information that English-speaking Hispanic-Americans could get anywhere," said Krause, whose site targets women and provides health-related information.

He added that, much like other Internet start-ups, major Spanish-language sites hit the market before they had solid business plans. "Some of the capital was raised prematurely, before the ripening of Internet access among Hispanics," Krause said. "They just didn't have the staying power to get to the point where they could make business sense."

Another problem could be attracting advertisers, because Hispanics are less likely than whites to make a purchase online, according to the Pew study.

But Hispanics are more likely to bank online than white and black Internet users. A fifth of online Hispanics bank on the Internet, compared with 17 percent each for whites and blacks.

The study also found that the online Hispanic population is younger than other Internet populations. Just more than 60 percent of online Hispanics are 34 or younger, compared with 37 percent of white Internet users and 54 percent of African-American users.

The Pew study was based on random phone interviews from March 2000 to February 2001.