“Now that we’ve gotten to a scale that’s large,” says Fernando Figueredo, vice president of corporate communications for AOL LA, “we’ve stepped back and tried to encourage the quality of members.”

Toward that end, the company announced a number of initiatives on June 28 “to better target higher value members and to focus on improving collections.” In other words, deadbeats get disconnected.

One consequence of these moves has been a 10 percent decline in the company’s membership base during the second quarter. David Joyce, an analyst with Miami-based investment bank Guzman & Company, contends that AOL LA’s strategy is sound. “In the U.S., cable operators also disconnect the no-pay or slow-pay customers,” he says.

But as Figueredo observes, what works in the U.S. doesn’t always translate abroad. He points to the fact that credit cards, for example, are not as widely used in Latin America.

In Brazil, the company estimates that as of March 2002, 62 percent of its subscribers pay using boletos bancarios, a costlier transaction. AOL LA sends each member a boleto (a kind of bill) and the member pays the boleto at a local bank, which in turn sends the payments to AOL LA’s designated banks. The company’s annual report notes “collection rates from members opting for the boleto payment mechanism have been lower and less timely.”

Design and content also need to be different, Figueredo explains, noting that what works for Brazilians may not be appropriate for Mexicans or Argentineans. Budget accordingly.

So while America Online may dream of a global empire, every conquest is local. In Latin America, it’s hard enough just following the money.