It seemed like a no-brainer. Web sites and portals that target the booming Latino community with culturally relevant English, Spanish or bilingual content would be big hits.

But while the number of users grew at a steady pace, advertisers stayed away and investors evaporated when the market tightened up, forcing many pioneering sites like Latino.com and QuePasa.com to fold, and many others to announce layoffs.

'We always had to scramble over the full six years we were in business,' says Lavonne Luquis, the former president and chief executive officer of Latino.com, the first Internet startup to target the U.S. Latino audience. 'If we knew the market was going to behave the way it did, we would have marshaled our resources and been more frugal.'

Without a doubt, Latino Web sites were hurt by the same things that hobbled many mainstream Web sites and portals: They grew too fast, they lacked sound business plans, and the market tanked.

Latino-oriented companies, however, faced ? and continue to face -- additional hurdles. Ethnic media of any sort have always had to fight harder to attract investors and advertisers. Research on Latinos and the Internet is relatively slim and sometimes contradictory. Although Latino sites by definition target a very specific niche, there are many niches within that category that make creating appropriate content, services and advertising messages extremely challenging. And Latino sites have had to compete against big international sites as well as popular mainstream English-language sites.

As a result, some industry watchers believe the only Latino-oriented Web sites with any shot at success are those that belong to large media companies with deep pockets, solid brand names, and large, defined audiences. 'They have to be part of an overall publishing empire,' says Abbott Wool, a contributing editor to Hispanic Market Weekly.

Take the special June 11 issue of Time magazine about the U.S.-Mexico border titled 'Welcome to Amexica' that was produced with help from America Online. Both Time and AOL are owned by AOL Time Warner Inc.

Readers could go to AOL?s new Latino channel or its AOL Latin America Web site and listen to samples of the new nortec music style or click on an interactive 'geo-cultural' map with video and audio clips. They could view four photo essays at Time.com. And they could participate in an El Paso town-hall meeting that was televised by a local Time Warner cable channel by posting messages via AOL, among other things.

Besides AOL?s Latino channel, experts say among the most likely Latino-focused sites to succeed are Univision.com, Terra.com, StarMedia. com, La Musica.com, Yahoo en Espa?ol, and Hispanic Online. Other candidates are major newspaper sites such as Los Angeles? La Opini?n, New York?s Hoy and Miami?s El Nuevo Herald, all of which save money by simply posting print stories online instead of creating much original Web content.

Little Consistency

The Latino community across the United States is soaring, but still struggling for investment and advertising dollars ('Advertising Dollars in Latino News Online'). Relatively speaking, there also is a lack of uniformity when it comes to research about Latinos and the Internet. For instance, although it appears that Univision.com leads the pack, it is virtually impossible to get a solid ranking of the most popular Web sites for U.S. Latinos.

Nielsen//Net Ratings released a ranking of the top sites used by Latinos based on a random survey of 62,000 people. It showed that during April, Univision.com had an unduplicated audience of 205,000, and that Latino surfers comprised 88.46 percent of that unique audience.

However, the ranking was computed using only the answers from respondents who are mostly English-dominant and identified themselves as Hispanic. To get a good cross-section, a certain sample size must be Spanish-dominant, says Gene Bryan, President of Hispanic-Ad.com, which tracks the Latino online industry.

ABC Interactive, which audits audiences for individual Web sites, reported that Univision.com in March attracted more than five million unique users. Univision.com says that makes it the most popular Spanish-language Web site. But ABCi typically does not release any sort of ranking, so there?s no way to know for sure.

Adzone Interactive in March placed two defunct sites in the top 10 -- Latino.com as number one with more than $1 million in ad revenue, and QuePasa.com in fifth place with $390,000. Meanwhile, Univision.com ranked 13th with $233,000.

Adzone Interactive computes ad revenue by using each site?s rate card, but that?s 'very unscientific,' says Luquis of Latino.com, which launched in 1995 and went offline in March. ?There?s no way of knowing by looking at any Web site how much money is being made off ads. Deals are struck in a variety of ways.?

Segmented Market

The Latino audience is also segmented by language, level of acculturation, income, technological know-how, education and country of origin, which can make it difficult for Latino Web sites to provide appropriate content and services, for advertisers to identify a 'typical' Latino Internet user, and for retailers to sell products online.

In a study last year of Latinos in Los Angeles, Houston, Miami, New York and Chicago, the Tom?s Rivera Policy Institute found that 63 percent preferred English-language sites, 12 percent preferred Spanish-language sites, and 25 percent preferred bilingual sites. It, along with many other studies, also found that Latinos preferred mainstream portals.

However, research associate Matt Barreto points out that the results may be driven by the fact that there are far fewer Spanish-language sites, and Latinos may not be aware of the one that do exist. 'So part of it is that you tend to prefer what?s available,' he says. In addition, many Latino-oriented sites are in English, and respondents may have been referring to those.

Another soon-to-be-released study found that while bilingual content was extremely desirable, there was no consensus on what kind of Spanish was appropriate. 'Some wanted Spanglish, others abhor it; some feel strongly that it should be standard university Spanish, while some felt Puerto Rican or Mexican Spanish was best,' says Dr. Elsa Macias, director of the Institute?s Information Technology Research.

'From the point of view of content, every Latino site needs to overcome cultural differences between Latino groups, decide whether to publish the site in English, Spanish or both, and choose whether to cater to Latin American Internet users as well as U.S. users,' says Joe Vidueira, editor of the English-language Hispanic Online.

Another language -- cyberspeak -- can be intimidating to Spanish speakers because many terms such as 'mouse,' 'click' and 'chat' don?t have exact translations. To make the Internet more accessible, the Institute and World.com created Tecnogu?a, a searchable Spanish-English glossary with more than 1,000 high-tech terms.

Stiff Competition

Several big companies ? AOL Latin America, Univision, StarMedia and Terra -- are fighting for the Spanish-dominant market worldwide, as are several other Latin American-based Web sites and portals.

But some sites are targeting English-dominant or bilingual U.S. Latinos. That means they are competing against these Spanish-language giants and mainstream behemoths such as Yahoo en Espa?ol and AOL Latino.

'Latino.com and QuePasa.com suffered because they were fighting the big boys in the mainstream market, and the big boys in the Spanish market,' says Bryan. 'They had their feet planted in both worlds, but you can?t do that. Sometimes you have to pick a stronger leg.'

AOL is in a uniquely strong position because it has already built a solid U.S. audience, and provides services in Argentina, Brazil, Mexico and Puerto Rico. The Latino channel is being programmed mostly in English by U.S. Latinos, and will provide content from several U.S. magazines including People en Espa?ol, Hispanic Business, Super Onda, Gusto and the Spanish wire service EFE. It also will link to AOL?s Latin American sites that provide information in Spanish and Portuguese.

'Any niche site will have an uphill battle to build a successful business model because you need scale to work,' says Guy Garcia, the vice president of content and programming for AOL Latin America who is overseeing the Latino channel. 'But I think this is an extremely promising area. Advertisers are interested in reaching Latinos. Latinos are such an important part of American life right now that I don?t think any kind of business can afford to ignore them.'

Still, the only Latino Web sites that may be able to survive the next three to five years, experts say, are those that belong to companies with lots of financial resources and ready-made audiences. Besides Univision, Yahoo, AOL and StarMedia, there?s Spain-based Terra.com, which acquired Lycos; La Musica.com, which is owned by the SBS radio network; and Hispanic Online, which is part of Hispanic Publishing Group that produces Vista and Hispanic magazines.

'It certainly helps to be associated with a brick-and-mortar company such as Hispanic Publishing,' says Vidueira of Hispanic Online. ?But it would be short-sighted and wrong to say that new upstarts have no chance of succeeding against better-known rivals.'

There may be room for some independent successes, but Luquis predicts that some sort of hybrid will have to emerge that combines subscriptions, advertising and e-commerce to create a steadier revenue stream.

James Garcia, editor of PoliticoMagazine.com, an online English-language magazine focusing on Latino politics, agrees. He plans to use his site?s affluent and educated user base to go after a combination of advertising, some e-commerce -- the sale of Latino books, CDs, and other items, for instance -- and a subscriber service for so-called premier services such as access to a regularly updated, specialized databanks of Latino politicos nationwide or polling information.

The big impediment, particularly for Latinos, has been the technological lag, says Garcia. Once a critical mass of Web surfers are using high speed Internet access, then the job of selling anything online will be that much easier.

'News and information about Latinos in the United States is a specialized product people have already proven they want in print and on radio,' says Garcia. 'Those mediums have been making money for years and are now booming. Latino online ventures will do the same in the coming years. It's inevitable, but it's going to take some time.'