Net Literate

A US. education is no longer just for Latin America's elite.

AT 39, VERONICA GUTIERREZ DREAMED OF RETURNING TO school to study creative writing. But with two children, a demanding boss and a daily 80-minute commute to the closest public university, her options were limited. That is, until she learned about a writing class offered by a local university over the Internet. "During the week, I connect after midnight to do my homework," she says.

Thanks to the World Wide Web, Gutierrez can now enroll in a spate of online classes. She's not the only one. With an estimated 130 million Latin American students between the ages of 6 and 24, a host of e-schools, such as Edunexo.com, Contenidos.com and Elsabio.com in Argentina and Universitario.net in Brazil, are now targeting Latin America with their technology-based education products and services.

Most of the Internet companies are financed by powerful U.S. and Latin American investment funds that share the companies' optimism for this niche market, which generates an estimated US$100 billion a year in Latin America, according to a recent market study by Contenido.com, the region's first education Web site.

Edunexo, for example, secured a $1 million round of financing from a group of investors that included the Bank of America, a fund managed by the founders of online brokers Patagon.com and the auction site DeRemate.com. An initial public offering is planned for sometime in 2001, according to Edunexo CEO Gabriel Sanchez Zinny.

In its most recent venture, Edunexo.com signed an agreement with Nebraska-based Class.com, a privately held company that provides educational courses over the Internet for high-school students throughout the world. The alliance allows English-speaking Latin Americans to obtain a diploma from an accredited U.S. high school for the first time without leaving the comfort of their homes.

"The privilege of studying at a U.S. institution is no longer limited to Latin America's elite," says Sanchez Zinny, a graduate of Georgetown University. Instead of administrating classes, Edunexo and most of the other educational Web sites serve as brokers of the online classes that established foreign and local educational institutions offer as an extension of their independent study programs.

From Nebraska to B.A. Edunexo seems to be the most aggressive of the region's education sites. Since it was launched last February in Argentina, it has opened offices in Brazil, Chile, Mexico, the United States and Spain. And through its pioneering alliance with Class.com, which is associated with a University of Nebraska-run experimental high school, Edunexo receives a near 50% cut from the revenue generated by students who enroll via its site. Gutierrez, for example, pays $70 a month to take her creative writing class.

Edunexo also serves as a clearing-house for information about scholarships, schedules for English-language proficiency tests, or Test of English as a Foreign Language (TOEFL) exams, and courses offered by various institutions. Also in the works is an e-commerce site where educators and students can purchase a gamut of school supplies ranging from textbooks to photocopiers.

Yet, unlike other fields being exploited for the first time by the Internet, success in education requires much more than just an aggressive business plan and sexy marketing. "You need a track record in the real world of education to open up doors," says Diego Castrillo, general director of the 2-year-old Contenidos.com.

Many Web sites publicly profess their commitment to education, but few offer 5,000 pages of free educational material as Contenidos does. Its parent company, Programas Santa Clara, is a pioneer of classroom audio-visual media in Argentina. Since 1994, Santa Clara has provided four hours a day of free educational programming to more than 12,000 private and public schools in Argentina through a venture called Educable. Since the program is subsidized by the country's cable industry, Educable accepts no advertising. "Contenidos was a natural outgrowth of the experience we gained from Educable," says Castrillo.

Although Contenidos has been slower to expand into other markets than its better-financed competitors, Castrillo is confident that his firm will survive. He believes pan-regional sites won't be able to offer the local flavor that users want. "Local content providers always have the upper hand. That's why a company as well financed as StarMedia still can't generate more traffic in Argentina than [Internet service provider and local Web portal] Ciudad Internet," he says. Instead of going it alone in the region, Castrillo says Contenidos will create alliances with other sites that share its educational philosophy.

Private-sector sites are not the only ones attacking the educational niche. Educ.ar is the Argentine government's education portal. It is being financed by an $11.2 million donation from Internet entrepreneur Martin Varsavsky, who was a high-school student when his family fled Argentina's brutal military dictatorship of the 1970s. In 1998, he founded Jazztel, a Spanish telecommunications company that, even after the Nasdaq's April free fall, still had a market capitalization of $2 billion.

Although Educ.ar won't be launched until Sept. 11--Teacher's Day here--its status as the government's official education site entitles it to a number of competitive advantages. For example, Educ.ar's home page will appear on personal computers financed through a loan program sponsored by the state-run Banco Nacion.

Advertising on the site will help finance Educ.ar's other objective--connecting every primary and secondary school classroom to the Internet by 2004. "The aim is to add enough value for the government so that Educ.ar can be privatized within two years and the proceeds used to improve the educational system," says Varsavsky.

In a world where achieving economic security is increasingly dependent on a quality education, that goal is more important than commercial success, says the 39-year-old philanthropist. "Learning to use the Internet will never replace learning how to read or write," says Varsavsky, "but it is becoming more and more a basic tool needed to succeed in the global economy."

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