• by John Hallenborg , October 1, 2000

Bilingual portals target a young, fast-growing market.

Latinos are hooking up to the Internet in greater numbers, but unlike some other ethnic groups, they have not created high-profile, cultural niches online. However, according to a Forrester Research brief (“Truth About the Digital Divide,” April 2000), among leading ethnic groups in the U.S., Hispanics rank second in terms of household Internet penetration, with 47 percent. This is a jump from 36 percent in January 1999. The brief also reveals that in the last two years, Hispanic-Americans lead all groups in percentage of households purchasing PCs, with 62%.

Other U.S. trends in accessing the Internet include an increase in the percentage of Latinos logging on at home, at nearly 40 percent in 2000, compared to 30 percent in 1999, and at work, with about 25 percent in 2000, versus 20 percent in 1999.

Forrester puts the median age of Hispanic Internet adopters at 40, younger than all groups other than Asian (36). As might be predicted, Latinos aged 18-29 commonly use the Internet, as about 60% of that age bracket are web-connected. Indeed, a survey of Latino-oriented sites attests to the fact that those targeting this market are aiming young, at between 14-34, for the most part. Music, therefore, is a dominant theme. However, a few of the more “mature” sites acknowledge that Latino adults will congregate online if their preferences are seamlessly interwoven with points of more general interest (news, sports, etc.).

Abelardo de la Peña Jr., editor and chief operating officer of LatinoLA.com, which reaches Hispanics in Los Angeles, reports that “Latinos use portals such as Yahoo as frequently as other ethnic groups. Those interested in business are going to be English-dominant, for the most part. An exception might be in Miami.” He senses that within Latino communities nationwide, there has not been much demand for segregated portals.

The Forrester brief indicates that income is the strongest predictor of online use. For example, for Hispanic households earning $100,000 or more per year, 72 percent are hooked up to the Net, whereas for those earning $25k-35k, only 40 percent are online.

As to PC ownership, the brief puts Hispanic households at 49 percent, which coincides with the rate for all U.S. households. Once online, however, the Forrester study reveals that regardless of ethnicity, U.S. consumers use the Internet 1.) as a quick and inexpensive means of communication, 2.) to access information, 3.) to have fun (games, other entertainment).

Lavonne Luquis, the president of latino.com, is pleased with the growth of her site. She reports 800,000+ visits (a visit defined as a session comprising at least a half-hour uninterrupted) in August 2000, up from 500,000+ in February. Latino.com’s revenue is advertising and sponsor driven right now, but Luquis says that once the site draws a consistent 1 million visits per month, e-commerce may begin to dominate their business model.

Characterizing the appeal of niche sites for this community, Luquis says “Latinos share about issues such as how they are perceived at work. They understand each other using a sort of shorthand. Cultural reference points help our users know immediately what each person is referring to” in an online chat session, for example. “People find that very comforting,” she adds.

Latino.com’s direct competitor is quepasa.com, a publicly traded company. This bi-lingual portal features many click-on links to both general information (sports, news, etc.) and information pertinent to Latinos (e.g., immigration) and Latino World, which offers an overview of modern and historical figures.

The Forrester study also confirms that the formal education level of Hispanics is another strong indicator of online usage. College-degreed Latinos are three times as connected as those with less than a high school education, at 60 percent versus 20 percent.

Marketwide, however, others are skeptical about the niche’s scope. Ekaterina Walsh, author of the Forrester brief, says that “none of the Hispanic sites generate enough hits per month to make it into web analysts’ coverage.” However, as cultural meeting places and as ethnic information dissemination portals, there are but a few sites that address Latinos from a national perspective.

Luquis says that her company has taken a long view of the Hispanic community’s rather unique needs, dating back to 1995. “New users especially tend to gravitate to things that are of special interest to them, whether it’s a hobby site or a community site.” Latino.com’s national focus represents a paradigm that has garnered strong corporate support. Saturn cars and Microsoft, for instance, had banner ads there recently. Latino.com’s news channel is perhaps the most definitive manifestation of the site’s commitment to its community. With headlines such as Latinos Lose Out at MTV Awards, a friendly bias is unmistakable.

But Forrester’s analysis indicates this ethnic focus is risky. The brief concludes with a gloomy prediction for most of the players in the ethnic portal/site segment, stating that only about three broad-based portals will remain by 2004. “Niche sites hold the best chance of survival, and this trend applies to ethnic sites, too. With their clear differentiation, batanga.com—which specializes in alternative Hispanic music for 16- to 28-year olds—and minorityinterest.com —promising to connect minority users with minority-owned businesses—have an edge amid the clamor of broad based ethnic portals.”