AOL Launches México Service

FORT LAUDERDALE, FLORIDA (07/11/2000) - America Online Inc.'s Latin America joint venture on Tuesday launched its proprietary online service for México, the region's second-largest Internet market in terms of users and electronic-commerce revenue.

The launch of the online service in México follows a beta testing process that, after four versions, is now officially closed, said Tricia Primrose, an AOL spokeswoman based in Dulles, Virginia.

"We're bringing a terrific offering to the market in México," she said.

México is the second Latin American country where America Online Latin America Inc. launches its proprietary online service. The company, a joint venture between AOL and Venezuela's Cisneros Group of Companies, was founded in December 1998 and launched its first operation in Brazil in late 1999 with a portal and Brazilian version of its proprietary online service. AOL Latin America plans to do the same in Argentina in the coming months.

AOL Latin America has stated that it is feeling considerable pressure from companies offering free and lower-cost Internet access in the region, which has led to "higher than expected subscriber cancellations in Brazil," according to the prospectus filed by the company with the U.S. Securities and Exchange Commission (SEC). AOL Latin America filed its ninth and latest prospectus amendment with the SEC on Monday. [See "AOL Struggles in Latin America" July 10.]The filing states that as of June 25, 2000, AOL Latin America had 129,000 subscribers in Brazil, a country that had 5.8 million Internet users in 1999, according to Jupiter Communications Inc.

The company is confident that as it continues expanding throughout the region and spending in marketing it will be able to get its message across to consumers that the monthly fee AOL Latin America charges in Brazil and now in México buys users more services and content than offerings from other providers, Primrose said.

"We offer a premium service that is unique in terms of the offering ... and that differentiates us in terms of what we offer," she said.

The company is also having trouble collecting from subscribers in Brazil, is struggling to protect its domain names and trademarks in the region, and faces a lawsuit from a Brazilian consumer protection group, according to the SEC filings.

"We have taken steps over the last couple of months" to improve the collections in Brazil, Primrose said.

AOL Latin America's México online service has been tailored for Mexicans by a local staff, although subscribers can also interact via chat rooms and instant messaging with AOL subscribers elsewhere in the world. AOL has 23 million subscribers in 16 countries. México's online service is AOL's first in Spanish.

Mexican users will find content and services organized into 17 channels, such as news, finance and education. Subscribers get access to e-mail, instant messaging, chat rooms, message boards and parental control features.

AOL and the Cisneros Group have plans to take AOL Latin America public this year, although a date hasn't been set, Primrose said.

AOL Latin America, based in Ft. Lauderdale, can be reached at +1-954-229-2100.

Its Mexican portal is at http://www.americaonline.com.mx/, from where the software for the proprietary online service can be downloaded.

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