America Online Latin America seeks to build on the global awareness of the America Online brand to become the leading provider of interactive services in Latin America. The company launched services and its first core market portal in Brazil in late 1999. It expects to begin services in its two other core markets, Mexico and Argentina, in the third calendar quarter of 2000, after which it intends to introduce interactive services in additional countries across Latin America. The potential market opportunity, while not of a similar magnitude as the U.S. market alone, is still significant. The company's small revenue base is growing very rapidly, but there are reasons for concern.
Most customers pay local or long distance toll charges, in addition to their subscription fee.
The development of unlimited access services without additional toll charges, as in the U.S. and increasingly in Europe, is crucial for the long term development of the company's markets. The company has partnered with local firms with significant presence in its core markets. Banco Itau, one of the largest banks in Latin America, will promote and subsidize a co-branded service for its interactive financial services customers. Proceeds from the offering will be use to develop and expand interactive services and telecommunications network capacity. We concur with the company's expectation that it will need additional sources of capital as soon as the end of 2001.