• by Gavin O'Malley  @mp_gavin, May 11, 2006

In an effort to better serve the Web's growing number of Hispanic users, Yahoo and NBC Universal's Spanish-language network Telemundo announced plans to merge on Wednesday. The new property, Yahoo Telemundo, will combine Yahoo services with Telemundo content--taking the place of Yahoo en español and Telemundo.com.

The deal comes as Hispanics constitute an ever-larger portion of U.S. Web users, and advertisers are responding in kind. eMarketer estimates that Hispanic-targeted online ad spending will grow 32 percent this year, to $132 million. By contrast, the total U.S. online ad market is expected to increase 25 percent to $15.6 billion this year. The population of 16 million U.S. Hispanics online is expected to grow about 30 percent over the next five years.

Industry watchers say the influx of Hispanics online is unavoidable. "Everyone's noticing there's a big market out there that should be capitalized on," said Robert Passikoff, president of the market-research firm Brand Keys.

Yahoo Telemundo will include content offerings tailored to first, second, and third-generation U.S. Hispanics with Spanish-language, bilingual and English-language content. The strategy is designed to help advertisers reach a range of U.S. Hispanic constituencies on a single property. Luis Romero has been selected to lead sales efforts for the co-branded property.

"Before this deal, our video content was limited to music videos," said Jose Rivera Font, general manager, Yahoo North Latin America. "The deal gives us video in areas like sports, entertainment, and movies, which will increase the video we offer significantly."

Under the terms of the agreement, Yahoo and Telemundo.com are merging staff and will share ad revenue, although neither company will make equity investments in the other.

Yahoo's network of sites already attracts more Hispanics than its rivals--11.6 million unique visitors in March, according to comScore MediaMetrix. Microsoft's MSN followed in March with 10.7 million uniques, while Time Warner's AOL drew 10.6 million, and Google attracted 9.2 million visitors in March, according to comScore.

Telemundo was a particularly attractive partner for Yahoo because it owns its content--as apposed to rival Univision, which licenses content, according to a Yahoo spokeswoman.

Passikoff added that there are special considerations to make when marketing to Hispanics in the United States. For example, Hispanics are about 20 percent more brand-conscious than the rest of the U.S. population, according to a Brand Keys customer loyalty index, which surveys 16,000 consumers from 9 U.S. census regions. "That means they're more likely to base their decisions on their perception of a particular brand, whether it's an Internet company or a product," Passikoff said.