AOL Latin America may cease operations

Company is running out of cash and may shut down or file for bankruptcy protection.

The story "AOL Latin America may cease operations" published March 22, 2005 at 4:43 AM is no longer available on CNET News.

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[Stnarg]

'02 Yankee Group Predicts AOLA Demise

Looks like they hung on for 3 months more than forecast. Quite an accomplishment for their talent. I bet they wish they had studied the power of local telecoms before entering this market. These days, Cisneros couldn't even enter Venezuela.
***********NYT Exerpt**8/15/02*****************
Paying the Prics Overseas for Replicating U.S. Online Service
By SAUL HANSELL

At the same time that America Online's domestic service is faltering, the strains in its nine overseas operations are becoming more apparent, too.

As in the United States, AOL overseas is confronting a weak advertising market, slowing growth in subscribers and trouble competing with phone companies for high-speed service. In addition, it faces high telecommunication costs in some markets, economic turmoil in others and the disadvantage of being a late entrant in most.

AOL Time Warner has attracted 8.6 million subscribers outside of the United States by trying to replicate its cheerful formula for family-friendly Internet. But it has done so by incurring huge losses in largely trying to copy its blitzkrieg marketing style, with frequent television advertising, bountiful dissemination of software disks, and in some cases generous subsidies to make pricing plans attractive.

This year, AOL expects the losses to come down sharply, as it scales back marketing costs. And it is close to turning a profit in Britain and maybe France. But Germany, its largest overseas market, with 2.6 million members, is still hobbled by high telecommunications costs.

And its Latin American unit, which is publicly traded, is in grave shape. Its shares now trade for 44 cents, giving it a market value of $30 million and prompting Nasdaq to start delisting proceedings.

Indeed, analysts wonder that as AOL's new management, Don Logan and Jonathan Miller, look to streamline operations, they may well focus on its international units, especially AOL Latin America.

"This is not a business," said Grant Smith, a Latin American analyst at the Yankee Group, a telecommunications research firm. "We don't think they will exist in 2004."

[acarlos1000]

Terra Brazil is very well succeed

I do not agreed with the mention that Terra Lycos did not have success in Latin America. terra Brazil is the biggest broadband ISP and actually is responsible for 68% of total Terra Lycos revenues compared with 12% from Terra Lycos Spain