CYBER-MALL MADNESS.

BY THE END OF NEXT YEAR, EVERY REMOTE CITY, TOWN AND VILLAGE IN Argentina's vast territory will have access to a shopping mall backed by financier George Soros.

AltoCity, a Soros-supported, Buenos Aires-based company that creates local and regional web sites, has signed a joint venture with Telefonica Argentina to "physically place our shopping malls everywhere," says AltoCity CEO Daniel Kielmanowicz. "We will reach those places where it makes no sense to build a US$70 million to $80 million mall."

By the end of 2001, Telefonica Argentina, which purchased 50% of AltoCity.com for $24 million last December, will allow Argentines without Internet access to visit computer terminals at 230 public telephone offices nationwide. "This project is unique in Latin America, because of its size," says Julio Lescano, vice president of the Argentine Chamber of E-commerce.

If the venture proves successful, Soros will have cornered yet another market.

Another Soros-backed venture, real estate fund Inversiones y Representaciones Sociedad Anonima (IRSA), already owns seven shopping malls in the Greater Buenos Aires area and another in the northern province of Salta. In Rosario and Neuquen, IRSA has also begun building new malls, which are scheduled to open in 2001. Last year, Soros's eight shopping centers, which contain 400 stores, received 80 million visitors and earned $1.2 billion, or roughly 63% of the nation's total mall sales.

The idea for AltoCity.com occurred two years ago after IRSA Chairman Eduardo Elsztain recognized the potential of Internet sales in Argentina. He then asked Kielmanowicz to develop the project. Kielmanowicz eventually brought in Mexican marketing guru Sergio Zyman, the former Coca-Cola executive known for reorganizing that company's worldwide marketing strategy and author of The End of Marketing As We Know It. Zyman agreed to develop a business strategy for the fledgling company and consider a position as director of regional Internet projects.

When AltoCity.com finally goes online in April, it will provide cybersurfers with 400 stores, offering products ranging from wine and refrigerators to leather belts and diamond rings. Customers can purchase items from all stores with a single shopping cart and bill. There will also be services such as a virtual model to pose in clothing offered by website stores." Our aim is to sell products to millions of people," says Kielmanowicz.