CMGI-Backed Free ISP Launches Service in LatAm

FORT LAUDERDALE, FLA. (04/13/2000) - Free lunches may be hard to come by, but free Internet access is becoming increasingly easy to find in Latin America.

Gratis1.com Inc., a free Internet service provider whose backers include StarMedia Network Inc., CMGI Inc., 1stUp.com, Flatiron Partners and Chase Capital Partners, has launched its services in Brazil, México and Argentina, the region's three largest Internet markets, the company announced today.

Gratis1.com joins a growing number of companies that are giving away access in Latin America, a region where cost is often cited as a big deterrent to Internet use. Companies that provide free Net access typically hope to make money by displaying advertisements on their customers' computer screens.

Companies that are either offering free Internet access now or plan to do so in the near future in countries in Latin America include Spain's Terra Networks SA, Lycos Inc., IFX Corp., UOL Inc. and Libertis.net. Several large banks in Brazil are also offering free access to their customers.

Gratis1.com's backers will invest US$200 million over the next three years in the company, which was announced in February. [See "StarMedia Launches Free-Access ISP for LatAm" Feb. 16.]StarMedia, which runs a variety of portals and sites in Spanish and Portuguese aimed primarily at Latin Americans, will provide content and services for the company's portal (http://www.gratis1.com). Content will include news, while services will include e-mail accounts.

PSINet Inc. is a partner in this venture. The ISP signed a two-year deal to provide wholesale Internet connectivity to Gratis1.com.

PSINet has a separate partnership with StarMedia for a joint portal. [See "StarMedia, PSINet Hop Into Bed" March 16.]The population of Latin America is estimated at about 500 million, but at year-end 1999 there were only 10.6 million people with Internet access in the region -- about 2 percent of the region's population -- according to estimates from Jupiter Communications Inc. in New York.

About 75 percent of all Internet users in Latin America are in Brazil, Argentina and México, according to Jupiter.

Gratis1.com, based in Buenos Aires, Argentina, can be reached at http://www.gratis1.com/.

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