Dell Widens Latin American Exposure With StarMedia Deal

Online Latin America network StarMedia (Nasdaq: STRM) announced today that it has formed a one-year e-commerce and marketing agreement with Dell Computer Corp. (Nasdaq: DELL) to promote Dell’s products and services throughout StarMedia’s properties.

“StarMedia’s strong affiliation with Latin America’s online consumers and Dell’s proven Internet direct business model make this a strong alliance in the sale and distribution of PCs throughout the region,” said Daryl Robertson, vice president and general manager of Dell Latin America.

StarMedia will feature promotional configurations of Dell’s computer systems and link to Dell’s online store for Latin American customers and Dell’s online store for Brazilian customers.

“Dell’s direct formula has proven to be very successful in the United States and in other countries, and we believe Latin American users will also welcome the power of buying direct,” said Tomas Melian, vice president of e-commerce for StarMedia.

StarMedia and Dell will also work together on co-marketing and branding.

Sales Growth in Latin America

Dell launched its Latin America site in May, and the site now accounts for 30 percent of the company’s total sales in the region. The Portuguese version of Dell’s online store for the Brazilian market was launched in November.

Additionally, Dell is banking on the growth of computer and Internet usage in Latin America. According to eMarketer’s 1999 eGlobal Report, e-commerce revenues in Latin America will exceed $84 billion in 2003.

Meanwhile, other reports indicate that Internet users in Latin America will grow from approximately 15 million in 1999 to approximately 34 million in 2000.

About StarMedia

StarMedia targets Latin America, as well as other Spanish and Portuguese-speaking markets.

In addition to operating its network of sites — including country-specific portal and destination sites — StarMedia operates a broadband services division and a wireless division.

StarMedia now has more than 600 employees in Latin America, the United States and Spain.

Stock Impact

This deal looks good for StarMedia because it has added a well-known technology company as a partner and will generate revenue through the deal.

Shares of StarMedia were up 1-3/16 to 29-5/16 in early trading today. The stock, which went public at $15 a share in May, is well off its high of $70.

Shares of Dell were up to 45 in early trading today. On Monday, CIBC Oppenheimer upgraded Dell from hold to buy and gave the stock a 12-month price target of $55.