Microsoft Venture Buys Spanish-Language Portal Yupi.com

T1msn, a joint venture of Microsoft (Nasdaq: MSFT) and Mexican phone company Telmex, said Thursday it is acquiring Yupi Internet and launching YupiMSN, a Spanish-language portal.

With the acquisition, T1msn, whose audience has grown to more than 5 million unique users since its launch a year ago, will expand its services beyond Mexico to reach additional Spanish-speaking consumers in the United States and Latin America.

"T1msn is a success story in Mexico, reaching the leading position among Mexican portals in only one year and further strengthening its commitment to Spanish-speaking users today," said Gerardo Villarreal, chief executive officer of T1msn at Microsoft.

The new company will operate as T1msn in Mexico and as YupiMSN in other markets, including Argentina, Colombia and the United States.

Across the Americas

Miami, Florida-based Yupi Internet, which was founded in May 1996, includes within its properties Yupi.com, a Spanish-language content and services site, MujerFutura.com, a community site for Spanish-speaking women, and CiudadFutura, an online community with over 200 Webmasters.

In addition to broadening its base of consumers, Microsoft said the new site will allow it to "continue to establish and deepen its relationships with marketers and business partners." T1msn plans to offer marketers the ability to purchase Spanish language ads regionally on the network of sites.

"Our combined business partners will further benefit from our custom-tailored online marketing solutions to effectively reach our large Spanish-speaking audiences across the Americas region," Yupi Internet president and CEO Oscar Coen said.

Financial terms of the deal were not announced.

Growing Market

Although Microsoft is hoping to gain a foothold in Latin America with the acquisition of Yupi, the acquisition may not translate into increased revenues from e-commerce anytime soon.

A report released in March by IDC concluded that the majority of local and regional portals in the area still have a long way to go before they become a viable e-commerce force.

The report warned that the failure of portals to beef up their online shopping capabilities -- and meet surging consumer demand -- will have a chilling effect on the overall growth of e-commerce in Latin America.

Portal Shakeout

IDC also warned that like their North American counterparts, consumer portals in Latin America are in the midst of a "significant" shakeout.

"Driving this shakeup is the failure of portals to meet consumer demands for communications, content, and e-commerce features and consequently attract and retain loyal Internet users," IDC said.