MS ESC: Gates Details Microsoft's LatAm Portal

MIAMI (03/21/2000) - Microsoft Corp. and Teléfonos de México SA (Telmex) provided details today about a joint venture announced in Oct. 1999 to operate a Web portal for Latin America, and pledged to dip into their deep pockets to support the project.

"We will devote all the resources necessary to make this venture a success," said Carlos Slim, Telmex's chairman of the board, during a press conference this morning at Microsoft's Latin America Enterprise Solutions Conference 2000.

Microsoft's Chairman and Chief Software Architect Bill Gates echoed Slim's pledge.

"We want to make this the leading Spanish-language portal for everybody in the world," Gates said.

The executives, however, did not specify the financial details of their commitment to the project.

This partnership brings together one of the Latin America's most powerful telecommunications companies and one of the world's most powerful IT companies, and makes Latin America's already crowded Web portal market even more competitive.

Telmex dominates the Mexican telecom market, including its ISP sector, and Microsoft has a broad presence in Latin America, where it has subsidiaries in 13 countries, and where its MSN Hotmail Web-based e-mail service has about 5 million users.

The joint venture announced today, called T1msn, is based on what the company is calling a "federation" concept, where T1msn will be a gateway serving as a first point of entry to a collection of Web sites associated with the joint venture and run by independent content and service providers.

"We will not put together an editorial team," said Gerardo Villarreal, T1msn's chief executive officer, during the press conference.

However, every site that is part of the federation will have a similar layout, Villarreal added.

T1msn will add country-specific local sections to its portal (http://www.t1msn.com/). The Mexican section is already up, and, over the next 12 months, T1msn plans to add sections for other countries, such as Argentina, Chile, Venezuela, Colombia and Perú. It also will have a section tailored for U.S. Hispanics. Cental American countries will also be targeted.

Microsoft will provide a variety of its branded services, such as Web-based e-mail MSN Hotmail, instant messaging service MSN Messenger, search engine MSN Search and user-authentication service MSN Passport for e-commerce. In fact, Microsoft is merging all of its Spanish-language MSN operations into this new portal, Gates said.

Telmex brings to the table a large customer base, especially in México, but in other countries including the U.S., executives said. Telmex also offers a massive telecommunications infrastructure in México and content, executives added.

However, T1msn has no immediate plans to enter Brazil's portal market, the executives said, because the company is focused on the Spanish-language market.

It wasn't clear whether Microsoft plans to form another joint venture to create a Portuguese-language portal to target Brazil, where almost half of Latin America's Internet users reside.

T1msn faces competition from the likes of Yahoo, America Online Inc., StarMedia Network Inc., Spain's Telefónica SA and Brazil's UOL Inc. These are some of the companies already battling it out in the region's Internet market, which is expected to explode in terms of e-commerce revenue and number of users in the coming years. Unlike T1msn, these companies peddle their portals and Internet access services to both Spanish and Portuguese speakers.

The portal's business model is similar to Yahoo Inc.'s, Gates said -- advertising driven. But T1msn will also provide e-commerce and online banking, executives said. T1msn plans to form partnerships with e-commerce specialists that will simplify the online shopping experience for Latin American shoppers by taking care of all aspects of the sales and fulfillment process, including customs clearance and home delivery, executives said. T1msn has already struck partnerships in this area with regional e-tailer Fiera.com and with Mexican retailer Sanborns.

MSN Passport is another part of the e-commerce piece of the portal, since it will allow users to enter their personal and credit card information once and have it stored in a secure server in the U.S. Users will then use MSN Passport's electronic wallet to make purchases within the T1msn "federation" of sites without having to enter their credit card information every time, executives said.

"Everybody believes that Latin America will move very strongly in the Internet area," Gates said during a keynote after the press conference. "Our commitment to Latin America is as strong as ever."

Gates' keynote also included a demonstration of a handheld wireless device, still in development, called the MiPad. The product features e-mail and calendaring, as well as voice-recognition technology. Users speak their commands at the machine and dictate the content of messages and calendar entries.

Gates also stressed the importance of XML for Microsoft products and for Internet applications.

Gates refused to answer questions about the company's antitrust legal problems in the U.S. during the press conference, saying the topic at hand was T1msn.

However, he did comment about the issue during a question and answer period during the keynote, saying that there is no way that Microsoft will be split into different companies as a result of the U.S. government's ongoing antitrust probe against Microsoft.

Gates also mentioned several Latin American companies that are using Microsoft products to do business over the Internet, including Argentine bank Bansud, regional online auction site DeRemate.com and Brazilian bank Banco Bradesco.

Microsoft is at http://www.microsoft.com/. Telmex is at http://www.telmex.com.mx/.

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