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Dell deal pushes Latin American reach

Dell Computer inks a broad alliance with Latin American Internet firm StarMedia, part of a growing industry trend towards establishing an international Internet presence to bolster worldwide PC sales.

Dell Computer today inked a broad alliance with Latin American Internet firm StarMedia, part of an industrywide effort to bolster worldwide PC sales by improving the global Internet experience.

Dell and StarMedia today jointly announced a wide-ranging strategic alliance to promote Dell e-commerce and product information across StarMedia's Latin American Internet sites. Dell paid an undisclosed amount of money for the deal.

The one-year agreement will include promoting Dell's Latin American stores on StarMedia and providing direct access to Dell PC and peripherals.

"This agreement helps extend our products and services into the growing Latin American market," said Daryl Robertson, vice president of Dell Latin America, in a statement. "StarMedia's strong affiliation with Latin America's online consumers and Dell's proven Internet direct business model make this a strong alliance."

By investing in the Latin American content market, Dell is joining other industry heavyweights like Microsoft and Intel, who recognize that without compelling online content and services, Latin American residents will have little reason to purchase computers and software. Hewlett-Packard inked an earlier deal to provide free hardware to StarMedia to set up e-commerce sites. HP will receive a share of the commerce generated by those sites.

Already, Latin American PC and Internet use is booming. There are about 7.4 million people in Latin America using the Internet now, with about 46 percent of those in Brazil. That number is expected to grow to as many as 34 million users by 2003, according to a Lehman Brothers report.

Just as Internet access is by far the number one reason behind U.S. consumer PC purchases, worldwide PC users must be given appealing local content if PC and technology companies are to successfully recreate the phenomenon on a worldwide basis.

Intel, an investor in StarMedia, has aggressively pursued a similar strategy. In the past year, the chipmaker has made investments in Rediff on the Net, a portal in Mumbai, India, and various Chinese portals and access providers.

PC makers, of course, also see emerging markets as untapped customer bases. Along those lines, Dell announced last month it has opened its first factory in Brazil, with the intention of becoming the leading PC maker in the region. Currently, the company has 3.7 percent of the market, according to market research firm Dataquest. Compaq is leading the market with 23.6 percent and IBM is the third largest with 8.7 percent of the market.