Trouble is, competition is heating up even faster, with new Web sites sprouting up daily. The sudden reversal in investor sentiment is evident in the stock prices of the few Latin Net companies that trade publicly. Still, StarMedia is doing better than most. Countless smaller sites have been forced to merge with rivals or close down. Bonchristiano admits that Submarino's backers will have to kick in more cash to keep it afloat until the end of 2001, when he hopes to break even.
Consolidation is all but inevitable.
That's the route the Buenos Aires-based Web portal El Sitio chose. This is a moment to balance the skills of the Old and New Economies,'' says El Sitio co-founder Roberto Vivo. The trend will be more and more merging online with offline,'' says South-Net CFO Sebastian Villa. That's because barriers to e-commerce are high in Latin America. That means sites must set up alternative payment methods, such as bank transfers.