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PSINet Taps StarMedia to Launch Latin American Portal

Spanish and Portuguese-speaking content expert StarMedia Network and global service provider PSINet, Inc. Thursday joined forces to co-brand PSINet's Latin American portal.

PSINet's (PSIX) translated Web destination will be phased in regionally over the next three months and will serve as a homepage for its Latin American 250,000 subscribers.

Fernando Espuelas, StarMedia (STRM) chairman and chief executive officer, said its partnership with PSINet would introduce its services to an explosive Latin American market.

"We are constantly looking for new ways to bring together Spanish- and Portuguese-speaking audiences around the world, and this partnership enables us to significantly expand our global community," Espuelas said.

Philippe Kuperman, PSINet Latin America, said the deal builds upon the success of a strong regional business.

"We have been working to establish a strategic relationship with a key regional player," Kuperman said. "This portal will enhance our consumers' experience with the top-quality content and service that StarMedia delivers."

A recent survey by International Data Corp. reported that only 10 percent of Latin American businesses are engaged in online sales, while 25 percent of the same businesses are actively buying online.

However, signs of significant e-business enterprise transformations are emerging. Almost 70 percent of the businesses not presently engaged in e-commerce indicated they expected to be doing so by yearend.

Alex Manfrediz, IDC analyst, said a number of external factors have been conspiring to inhibit e-commerce development in Latin America, but the problems are beginning to be addressed.

"The telecommunications infrastructure is improving, several countries have mandated reductions of Internet access fees, security issues are still an issue but are being discussed, and free Internet access campaigns are exponentially increasing the number of Internet users," Manfrediz said. "All these improvements are working together to heighten ecommerce activity throughout Latin America during 2000.''

With its portal preparing for launch, PSINet has the Web tools required to organically grow its Latin American e-commerce seeking subscribers, after having acquired 20 Internet service providers in Latin America over the past ten months.

The co-branded portal will be supported by StarMedia's contain online technology and feature a full array of e-commerce sites. Both companies plan to share revenues from online advertising and e-commerce transactions.

PSINet currently provides Internet services in six Latin American countries with operations in Argentina, Brazil, Chile, Mexico, Panama, and Uruguay.