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Cisneros, America Online pact for service

MIAMI — In its latest step to reinvent itself as a Pan-Latino media giant, Venezuela’s Cisneros Group of Cos. (CGC) has pacted with America Online Inc. to launch a dedicated Internet service for Latin America.

CGC will invest an initial $100 million in the service, to be marketed simply as AOL, and take it into key markets Brazil, Mexico and Argentina; rollout into other countries will follow.

In what is a 50-50 partnership, AOL will contribute its brand, content and services, drawing upon its experience as the world’s largest Internet service provider, with 14 million subscribers.

Move marks another grand pan-regional step for CGC, a $3 billion a year conglom that is already a 20% investor in $1 billion satcaster Galaxy Latin America.

AOL subsid CompuServe is already available to some 20,000 Latinos, but the new service will be in Spanish and Portuguese, offer content tailored to local needs, provide local customer support and aim to rack up subs in the millions.

CGC chief exec Gustavo Cisneros said Latin America, which has new communications infrastructure and shows double-digit growth in computer penetration, has huge potential for AOL.

“We expect to launch the first of our country services in about a year,” AOL Intl. prexy Jack Davies told Daily Variety, adding that Brazil would probably be the debut market.

Davies said 15 million Latino households have PCs and 2.5 million are Internet users, half of them in Brazil, but there is as yet no dominant regional service provider.

CGC managing director Eduardo Hauser said the service would base itself in South Florida, which is also home to CGC affils and subsids including Galaxy, pay TV programmer the Cisneros TV Group and novela distrib Venevision Intl.

Davies added that AOL Intl.’s experience in launching into eight arenas, including the U.K. where it is market leader, would serve the partnership well. AOL Intl. has 2.8 million subs.

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