AOL to launch service for Hispanics in U.S.

The Internet service provider plans to tap the underserved Hispanic audience with a new service it hopes will attract new customers and help stave off a decline in subscribers.

America Online plans to tap the underserved Hispanic audience in the United States with a new service it hopes will attract new customers and help stave off a decline in subscribers.

The AOL online services unit, owned by AOL Time Warner, is hoping the new bilingual service debuting Wednesday will help bolster its dial-up service, from which most of the unit's revenue is derived.

The Hispanic population in the United States is estimated at 39 million.

U.S. subscribers to AOL fell 846,000, in the second quarter from the first, to 25.3 million. The company said it removed 45 percent of those subscribers for nonpayment and other reasons.

Focus-group studies conducted by the company helped it identify the Hispanic market, which has evolved into one of the country's fastest-growing ethnic markets.

But AOL needed to look no further than People en Espanol, published by the company's Time division, which has been hailed by analysts as a success. Since its launch in 1996, it has grown steadily to a 2002 year-end circulation of 413,545, up 16.1 percent compared with 2001.

"I don't think corporate America has the luxury of ignoring this market," said David Wellisch, vice president of AOL Latino. "There are few things that make people switch. Spanish matters."

A recent Forrester Research study found that the growth in online users in the U.S. Hispanic market outpaced other ethnic demographics. In the past three years, the online Hispanic market grew 11 percent, compared with 6 percent for African-Americans and Caucasians.

Despite AOL's simple-to-use mantra, the company discovered that its flagship service alienated Spanish speakers who had never been online and bilingual families. To appeal to this market, it re-created its flagship's products, instead of just translating AOL.

"It's not just AOL in Spanish," said Wellisch, pointing out online music and music videos that appealed to the audience. He also showed clips of a Jennifer Lopez interview conducted entirely in Spanish.

The company has signed program and content-partnership deals with Spanish-language U.S. newspapers including New York-based El Diario-La Prensa, Univision Communications, Knight Ridder and Spanish versions of the BBC, Consumer Reports and the National Football League.

Technology industry analysts, who were shown prelaunch versions of the service applauded the results.

"AOL has a problem with dial-up numbers going down," said Charlene Li, a media analyst at Forrester. "Having a Hispanic portal is their effort to serve their particular community very well."

Li said services such as a section within AOL Latino that helped kids and their parents with schoolwork was a good example of creating areas that appealed to the market's cultural nuances.

"The real challenge will be to find out how to program to an audience that we don't know well," said Juliana Deeks, an analyst at Jupiter Research.

Story Copyright  © 2003 Reuters Limited.  All rights reserved.

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