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News > Companies
Starmedia turning corner
August 8, 2000: 7:27 p.m. ET

Spanish/Portuguese Web firm beats 2Q estimates, sees profits ahead
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NEW YORK (CNNfn) - Spanish- and Portuguese-language online network StarMedia Network Inc. on Monday reported a smaller than expected loss for its second-quarter.

Revenue for the New York-based Internet media company more than tripled to $13.8 million from $3.9 million a year ago and page views surged to 2.7 billion for the quarter, up 30 percent from the quarter ended March 31 and quadruple the year ago figure.

StarMedia reported a loss of $44 million, or 67 cents a diluted share, compared with a loss of $22.1 million, or 43 cents on a pro forma basis in the year-ago period. Wall Street analysts had expected the company to post a loss of 70 cents a diluted share, according to First Call/Thomson Financial.

graphic"That was exactly as expected. When we did our IPO a year ago, we projected that second quarter of this year would be our peak. We will see now a narrowing of per-share loss in the subsequent quarters, going towards profitability," said Fernando Espuelas, president and CEO of StarMedia on CNNfn's Before Hours Tuesday.

"Well the Street has our target date for breaking even at fourth quarter of 2002, and we think it might actually happen earlier," Espuelas said. "We have real momentum - both in our audience and in our monetization of that audience. So we can see the numbers moving in the right direction, very quickly." (371K WAV) or (371K AIF)

Espuelas has raised over $500 million dollars in private equity funding to support StarMedia (STRM: Research, Estimates) and has secured more than 175 content and e-commerce strategic partners for the company. He has been honored as one of the "Leaders of the Millennium" by Time Magazine and was presented with the 1999 Business Award by New York Magazine.

Founded in 1996, StarMedia Network consists of 12 leading brands including StarMedia.com, Cade?, AdNet, LatinRed, and Zeek!, and operates wireless division StarMedia Mobile, and broadband services arm StarMedia Broadband. StarMedia Network's strategic relationships include Netscape Communications, RealNetworks, Billboard, Dell Computer, Reuters, eBay, NBC and Hearst Communications.

"We have a very strong brand, all over Latin America. We built our business in a vacuum. We had no competitors for two years. We were the only advertisers of the Internet in 18 markets for two years. So we have a very, very high-brand awareness. There is always work to be done, obviously, because this is a fast-moving business," said Espuelas.

"Advertising revenue is growing very, very quickly. According to Goldman Sachs, we have about a 45 percent market share in advertising revenues, so, we are the leader in the industry; we're the leader in terms of audience; we have a 46 percent market share in terms of audience. We are sourcing as much economic value out of the market as is available today," he said.

"Now, by 2004, Jupiter is projecting a $2 billion advertising market. So we can see very quickly how the dollars are starting to get invested, and we'll be able to take our fair share out of that," Espuelas added. Back to top

-- compiled by Staff Writer Lucy Banduci

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