You won't have America Online Latin America (OTC BB: AOLA) to kick around anymore. The company filed for chapter 11 bankruptcy protection over the weekend, a result of the difficulty it's had retaining its subscribers across Latin America.
Formed in 1998 to take advantage of the region's online migration, the once-promising appendage of Time Warner's
AOL Latin America's usage peaked in 2002, when the company had 1.4 million subscribers. That was the same year when AOL's domestic business topped out at 26.7 million members. The only problem is that while the stateside decline has been gradual -- with 21.7 million accounts today -- the Hispanic counterpart's user base had shrunk to a mere 400,000 users.
This is going to sting Time Warner in more ways than the obvious, given that AOL Latin America owes the bulk of its $182 million in debt to the parent company.
But let's not assume that Time Warner is turning its back on the lucrative Hispanic market in general. Just look at the healthy fundamental growth at Univision
I have one of my AOL screen names defaulted to the AOL Latino welcome page, and I have seen the service evolve for the better over the past year. What was once just a few token Spanish headlines that fed into English articles is now a worthy landing page for a wide variety of exclusive, Spanish-language content.
Then again, I don't know how much of that magnetic material AOL Latin America was developing. The way AOL has been focusing its growth efforts on providing universally accessible content, above and beyond and sometimes in lieu of its bread-and-butter subscriber business, it would shock me if the company didn't expand its Spanish-language content in the future.
No mas? Those would be fighting words for a company looking to win back eyeballs in the golden age of paid search.
You've got related links of interest:
- Univision turned in some heady gains this past quarter.
- Thinking about the Internet as a growth strategy isn't bad -- in theory.
- Check out the ultimate growth stocks making the Rule Breakers cut on this side of the millennium.
Time Warner is a recommendation of the Motley Fool Stock Advisor newsletter service.
Longtime Fool contributor Rick Munarriz has been an AOL subscriber since 1992 -- and speaking Spanish since he was born -- but he doesn't own any of the stocks mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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