A Net Gain for StarMedia.

• Author: Hardman, Chris
• Position: Brief Article

WITH $50,000 IN SAVINGS, entrepreneurs Fernando Espuelas and Jack Chen created the first Internet Service provider targeted toward Latin America.

Now their company, StarMedia, leads the industry of Spanish- and Portuguese-language sites. The short history of the Internet has been dominated by English-language sites created by English-speaking entrepreneurs. Espuelas, a native of Uruguay who now lives in New York, created a service provider that is designed specifically for Latin Americans and presented in Spanish and Portuguese.

At twenty-nine, Espuelas already had an impressive business resume. He worked for an advertising agency in New York, opened up a direct marketing agency for Ogilvy & Mather in Argentina, ran the American Express Latin American division from Miami, and then was recruited by AT&T to be managing director of marketing communications in Latin America. In 1996 he had his eye on another opportunity, and in partnership with his childhood friend Jack Chert, created StarMedia. At first, they found it hard to obtain funding for their visionary company.

"People did not understand the opportunity," Espuelas recalls. "If they were Internet investors, they had never even thought of Latin America for the Internet." Finally in 1997 Chase Capital Partners made a $3.5 million investment in the fledgling company. Six months later, StarMedia went public.

Called a portal, StarMedia is a gateway to the Internet. Computer users log on by selecting a language and country. Part of StarMedia's success is the ability to create innovative services for StarMedia users. "We launched Spanish- and Portuguese-language chat before Excite and Yahoo did in English," Espuelas says. "We innovated very, very quickly."

StarMedia is more than a business for Espuelas. He believes that StarMedia is part of a business revolution in Latin America. "One of the big challenges for business in Latin America is that it's very difficult to break into the big leagues--not because of a lack of good ideas, but because of a lack of capital. So suddenly, we're...