America Online Inc yesterday announced a 50/50 joint venture with the Cisneros Group, a Venezuela-based media, entertainment and telecommunications company, to offer internet and content services across the Latin American market. During a press conference yesterday, the companies said the Cisneros Group will make an initial investment of $100m to fund the joint venture, which will operate localized services initially in Brazil, Mexico and Argentina, with other markets to be added in the future as the service takes off. AOL declined to say how much it was putting forward, but given it’s a 50/50 deal we can reasonably expect its contribution to be in the same league, or more. Under the joint venture, AOL will draw upon the Cisneros Group’s management, operations and marketing expertise throughout Latin America to offer internet connectivity, localized content services, email and instant messaging to potential customers. Apart from one notable service provider, New York based Star Media, which made a name for itself in the region by signing deals with local phone companies to offer Net services, Latin America remains a relatively untapped market. Chairman and CEO Steve Case said the move represented a huge opportunity for the company. Do you know why we’re excited? he asked the audience of reporters and analysts, because more people live in Latin America than live in the United States of America. Case said he didn’t expect to sign up the 450 million people over night, rather the company expected to grow the subscribers, in accordance with the gradual take up PCs and telephony services in the region, over a number of years. But Gustavo A Cisneros, the chairman and CEO of the Cisneros Group of Companies, said the market for internet connectivity and content services was growing all the time. He said there were already 1.3 million internet users in Brazil; 221,000 in Argentina and some 228,000 in Mexico. Across the whole of Latin America, it’s gone from 200,000 online users in 1995 to 2.5 million in 1998, he said. Case said the Spanish and Portuguese language services would also be accessible to foreign-language speaking AOL members in the US, and elsewhere around the world. The joint venture will also be responsible for the development of the CompuServe brand in Latin America, he said. The service will be offered through AOL’s International division, Case said, adding that it was the fastest growing division of AOL. The full service is expected to roll out a year from now, AOL said, and prior to that the company will introduce versions of AOL.com into the markets.
