MS and Globo Cabo's Portal Plans Collapse

MIAMI (03/21/2000) - The Internet samba in Brazil will have to go on without a Microsoft Corp. portal offering for now, because the company's most likely partnership didn't work out as had been originally planned, Microsoft executives said here today at the company's Latin America Enterprise Solutions Conference 2000.

"We haven't announced our consumer-portal strategy for Brazil yet. ...Someday, when it's clear (what we'll do) we'll announce it. But there's nothing concrete at this point. We're exploring a number of alternatives," said Bill Gates, Microsoft's chairman and chief software architect, during a press conference here this afternoon.

Microsoft bought a stake in Brazilian cable operator Globo Cabo in August of last year with a US$126 million investment. At that time, Microsoft said the partnership included the development of a portal, in addition to other Internet-related initiatives. [See "MS Invests US$126M in Brazilian Cable TV Company," Aug. 17, 1999.] That's not the plan anymore, said Mauricio Santillán, Microsoft's Latin America vice president. Globo Cabo is planning to launch a portal for Brazil this month, but Microsoft isn't involved in the project in any way, he said.

"We're studying several options in Brazil. Our investment in Globo Cabo has been a success. But we're not involved" in Globo Cabo's Internet portal, Santillán said.

Back in August, Globo Cabo and Microsoft put out a press release stating: "In this initial phase, Globo and Microsoft will create a joint Marketing and Technology Group that will evaluate potential business opportunities, including the creation of a joint portal that would merge the existing MSN Brazil service and Globo's portal (Globo.com) currently under development."

The companies intended to combine Organizações Globo's news, sports, entertainment and educational content with Microsoft's Internet services, such as the MSN (Microsoft Network) Hotmail Web-based e-mail service, MSN Messenger Service, MSN Web Communities, MSN search and directory and Microsoft Passport services, the companies said in that August statement.

Today, Microsoft detailed its joint venture with Teléfonos de México SA de CV (Telmex) for a Spanish-language portal geared towards Latin Americans and U.S.

Hispanics. But about half of Latin America's Internet users are in Brazil. [See "UPDATE - MS ESC: Gates Details Microsoft's LatAm Portal," March 21.]Meanwhile, many of the major players battling it out in Latin America's Internet market are already in Brazil, including Yahoo Inc., America Online Inc. (AOL), StarMedia Network Inc., El Sitio Inc., Terra Networks SA and, of course, strong Brazilian players such as UOL Inc., which has the country's largest share of the ISP (Internet service provider) business, and is one of the most visited portals.

Asked why Microsoft chose to partner with Telmex for its Spanish-language portal instead of going at it alone, Gates said that the company sometimes develops these kind of projects on its own and sometimes in partnership with others. He wasn't involved in the decision to pick a partner for Microsoft's Spanish-language portal, but he trusts that the joint venture with Telmex, called T1msn, will be successful, Gates added.

"It's natural for us to do a portal for this region because the Internet is exploding in Latin America," Gates said.

The strategy for T1msn will be to have country-specific sections of the portal because Microsoft believes that local content is key to success, Microsoft's Santillán said. The company's goal is to have 85 percent of T1msn's content to be local and 15 percent to be regional in nature, he added.

Currently, the portal asks users which country they live in. Those who answer México are taken to a section specifically for Mexicans, while all other users are taken to a section of the portal with regional content. But the plan over the next 12 months is to add more country-specific sections, so that most users will end up interacting with a version of the portal tailored for the country in which they reside, said T1msn Chief Executive Officer Gerardo Villarreal in an aside after today's press conference.

Microsoft, in Redmond, Washington, is at http://www.microsoft.com/.

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