America Online Latin America ("AOL-.LA") hopes that there's more in a name than Shakespeare would have people believe. AOL-LA, which registered its IPO last month, says that the Latin American market is fertile ground for Internet development, and it is counting on the globally recognized AOL brand name to give it a significant advantage over the competition.

Internet use in Latin America is in a relatively early stage of development, but the region is one of the fastest growing Internet markets. According to Int'l. Data Corp. estimates, the number of Internet users and Internet accessing devices will increase at an annual growth rate of 34% and 41%, respectively, from 1998 to 2003. The amount spent on advertising and e-commerce should also increase significantly over the same period.

AOL-LA acknowledges that there are currently hundreds of Internet access providers in Latin America and that new portals are being launched every month. But the company believes that its affiliations with AOL and the Cisneros Group can give it an edge in the Latin American market. AOL-LA will bring not only localized AOL-branded interactive services to Latin America, but also the opportunity to join AOL's global online community of more than 20 million users in 15 countries and seven languages.

In fact, the connection to AOL has already proven beneficial. AOL-LA acquired AOL's Latin American CompuServe Classic subscribers in December 1998, the same month it began operations. By the end of 1999, AOL-LA had approximately 7,500 CompuServe Classic members, the majority of whom are located in Mexico.

AOL-LA has the exclusive right to offer AOL-branded PC-based online services to Spanish- and Portuguese-speaking audiences in Latin America. AOL-LA's online services consist of country services and country Internet portals, as well as a Latin American regional Internet portal. AOL-LA's country services, which will offer comprehensive online services tailored to local interests, will be available to subscribing members. AOL-LA will derive most of its revenues from these membership subscriptions. The Internet portals, which will offer most of the same opportunities as country services, will draw on local cultures and interests to organize content and will be available to all Internet users.

In November 1999, AOL-LA launched its local services in the first of three intended countries. As a result, AOL-LA now offers its country service and a country Internet portal in Brazil. The company plans to launch similar services in Mexico and Argentina, and to develop a Latin American regional portal later this year. After it completes these immediate plans, the company intends to introduce its interactive services in additional countries in Latin America.

AOL-LA notes that its competition comes from both global and local market participants. For example, on the global front, Internet heavyweight Yahoo! recently launched its own Internet portals in Brazil and Mexico. AOL-LA also names El Sitio, Inc., StarMedia Network, Inc. and Terra Networks, S.A. as chief local competitors.

El Sitio, a British Virgin Islands company that completed its IPO in December 1999, offers country-specific and regional Internet content that is similar to AOL-LA's services. El Sitio's audience, however, includes certain areas of the U.S. as well as Latin America. During the second half of 1999, El Sitio launched country Web sites for Argentina, Brazil, Mexico, the U.S. and Uruguay. In the first three months of operation, registered users increased by approximately 69%, and the number of pages viewed per month increased by over 250%. The company plans to expand its services to Colombia, Chile and Venezuela in the next year.

Four months after completing its IPO in May of last year, StarMedia launched its Internet access service in Brazil. StarMedia differs from AOL-LA in that most of its revenues come from the sale of advertisements and sponsorships on its network. This enables StarMedia to provide content and community features to its users for free. StarMedia targets mainly individuals, but may expand its offerings to businesses in the future.

The Spanish company Terra Networks, on the other hand, offers its Internet services to both small offices and individuals in Spain, Brazil, Mexico, Peru, Chile and Guatemala. It also operates Internet portals that serve these countries and Argentina. In addition, Terra Networks recently launched Internet access service in the U.S. through a joint venture. The company expects to launch additional portals in the U.S. and other Latin American countries shortly.

Terra Networks has some name recognition of its own. As a majority-owned subsidiary of Telefonica, S.A., the company benefits from its relationship with the largest and strongest telecommunications group in Spain and Latin America, with over 54 million customers and significant media assets.

Internet Access Is Now Moving to Hand-Held Devices

Just when you think you have finally mastered the Internet, the technology industry introduces the wireless Internet to simplify your life. The wireless Internet allows a computer or mobile phone to connect seamlessly to the Internet or a network to which the user has access. Recently, there appears to be an explosion in the wireless industry as technology and computer companies rush to offer the latest in products and services. Sprint PCS and joint ventures of Microsoft and Ericsson, and Microsoft and Qualcomm Inc. have all introduced wireless Internet services. This is a mere fraction of the companies that now offer wireless Internet services.

GoAmerica, Inc., a provider of wireless Internet services, notes that the market for wireless services has become "increasingly competitive." The company plans to use some of the proceeds from its upcoming IPO to acquire and implement new automated subscriber airtime monitoring systems. "We expect that we will compete primarily on the basis of the functionality, breadth, quality and price of our services," the company states in its Form S-1 registration statement. GoAmerica acknowledges that many of its competitors have an advantage technically and financially in addition to having greater marketing and distribution resources. "The widespread adoption of industry standards in the wireless data communications market may make it easier for new market entrants and existing competitors to introduce services that compete against ours," the company notes.

An oft-cited barrier to e-commerce and wireless data services is the security of confidential information. MasterCard and Sonera, however, may have hurdled this issue. Sonera SmartTrust Ltd. ("SmartTrust") and MasterCard Int'l. have launched a joint venture that will allow MasterCard customers to make secure payments by mobile telephone. Under the agreement, SmartTrust will enhance its secure wireless e-commerce solution to support MasterCard payment products by using SmartTrust's digital signature and encryption technology. Once implemented, customers will be able to conduct a variety of mobile banking services using their cell phones. SmartTrust is a wholly-owned subsidiary of Sonera, a leading international mobile, data and media communications company.

According to Peter Matthews, a computer science graduate student and current technology director for a Web-based Japanese firm, the wireless Internet is not a recent phenomenon. "People want the convenience of communicating any time, any place but don't want the burden of having to do it. I think that the idea most likely began to crystallize when people realized and saw the relative success of cellular phones. The industry began to say that maybe this is possible," he said.

The emergence of the wireless Internet is indicative of how much the Internet has changed in the decades since it was first introduced. Since its market introduction it has grown to include over 5,000 networks. According to Int'l. Data Corp., a research firm that forecasts worldwide international markets, use of local area networking ("LAN") globally is projected to increase to over four million units by 2003. The firm also projects that LAN revenues will reach $1.6 billion in the same year.

Aironet Wireless Communications, Inc., a company that provides wireless LAN solutions designed to provide wireless network connectivity and Internet access, has noticed an increase in the number of companies entering the wireless industry. Like GoAmerica, the company acknowledges that the amount of competition in the industry may have adverse effects on its future success. The company uses advanced radio frequency and data communication technologies to wirelessly connect users to data networks which range in size and complexity from enterprise-wide LANs to home networks. According to Aironet, some of the competitive factors in the wireless LAN market include brand name, the size and scope of the distribution network and the adoption of emerging industry standards.

The company may have been referring to Microsoft's recent announcement that it has joined Ericsson in partnership to develop end-to-end solutions for the wireless Internet. The partnership will focus on building, marketing and deploying solutions that use MS Windows NT Server and Ericsson's infrastructure and mobile Internet technology. The companies hope that the joint venture will provide wireless operators access to reliable and feature-rich communications and mobile data infrastructure. "Bringing together Microsoft's strengths in Internet enterprise messaging software and our leadership as an open communications solutions provider of mobile voice and data will offer tremendous ease of use for consumers all over the world," Ericsson's president, Kurt Hellstrom said.

Recent developments including certain industry standard adoptions for wireless LANs, and the availability of wireless single piece PC card adapters have resulted in the emergence and growth of wireless LAN and the wireless Internet industry. According to Int'l. Data Corp., the number of international Internet users is expected to increase to 500 million by the end of 2003. Communication technology has gone from the rotary telephone to cordless phones to mobile phones. Thus, it would seem as if the wireless Internet is merely a natural progression in the evolution of the Internet.