CMGI's 1stUp.com is teaming with Latin American portal StarMedia Network and several blue-chip venture capitalists to form a company south of the U.S. border aimed at providing free dial-up Net access across the region.
Dubbed Gratis1, the company will launch operations in Brazil and Argentina before moving to Mexico and the rest of the continent, the partners said today.
The venture is aimed at kick-starting the Net market in a region that has lagged well behind the United States and Europe in Internet use. Free Net access in the United States has targeted people who are unwilling to pay monthly service fees, a potentially large market in Latin America.
"(We will) help democratize the Internet in Latin America by opening a new world of online opportunities to users that had been previously excluded by high access costs," StarMedia chief executive Fernando Espuelas said in a statement.
1stUp.com has been one of the most successful companies to catch the free ISP wave in the United States and Canada, winning contracts to provide service to AltaVista, Excite@Home and a handful of smaller companies. The start-up wasby CMGI late last year for an undisclosed sum.
Other companies, such as NetZero and Freei.net, have helped turn the free Net access market into a respectable business. The trend moved into the mainstream late last year, even spurring giants like Yahoo and Kmart to offer their own free services.
The new joint venture won't be the only free service in Latin America. Late last year, Compaq Computer said it had plans to launch its own free ISP in the region, beginning in Mexico and expanding south.
The Gratis1 venture will have the weight of StarMedia's Spanish-language portal behind it, however. StarMedia is one of the leading Latin American Web sites, competing with recent arrival America Online.
Also backing the venture are Chase Capital and venture capitalist firm Flatiron Partners.