So what's up with the Internet? Is it a fad that is slowly diminishing? Or is
it still a stunning revolution that will change human history entirely? The
dot com crash certainly put some tarnish on the ole boy. But it seems the
smudges are only on the perception of the Internet. It seem that online
consumer and business growth continues unabated, even in the midst of a
treacherous high-tech meltdown.
My new favorite analogy comes from the auto industry. At one point early last
century experts predicted there would be more than 500 automakers. When
consolidation began to hit in the nineteen teens and 1920s, with automakers
failing and getting gobbled up right and left, many feared the auto
revolution would come to an abrupt end. So much for expert opinions.
So let's look at some recent research to see what is actually occuring on the
Internet.
E-consumers become "power shoppers"
Online "power shoppers" spent an average of $1,200 online during the 12
months prior to a spring survey by iCustomer Observer. This compares to all
other e-shoppers who spent an average of $480 online during the same year.
These power shoppers constitute the top 33 percent of Internet consumers. The
average age of this high-dollar consumer is 38, with an average annual income
of $67,000. Regular e-shoppers are an average age of 55 with yearly salaries
of $34,000.
Net usage dropped slightly when school let out
Internet traffic dropped by 1 percent worldwide between May and June 2001
according to a usage report from comScore and Diameter, DoubleClick's
research group. The study reported there were 128.4 million unique Internet
visitors in the U.S. and 296.5 million worldwide in June 2001. The study
attributed the slight decline in U.S. traffic to summer vacation. The report
did note that travel sectors experienced a lift of 2.2 percent between May
and June, with 84.5 million visitors worldwide checking travel websites.
High-speed connectivity grows
For those who believe the Internet won't come fully into its own until
consumers experience the power of high-speed connections, the good news
continues. An August 2001 report from Parks Associates finds that as of
mid-2001, there are 8.6 million U.S. households using high-speed Internet
connections. That's up from 4.8 million U.S. households last year. The
company predicted the number will reach 11.3 million by year-end.
Print readership continues to decline
The Internet was supposed to draw revenues away from print magazines, but
during its early days, the Net did exactly the opposite. The dot com boom
created a binge of ad buying. Those days are sadly, and suddenly, over for
most magazines. And now the readership decline is on, complicating a dearth
of ad sales. Lyra Research found that 24 percent of Internet users in the
U.S. have canceled subscriptions to general news magazines since they began
using the Internet. A hearty 19 percent of Internet users claim they have
significantly decreased their magazine reading, while only 2 percent say they
have significantly increased their magazine reading since using the Net.
Consumers are using the Internet more
Has the dot com downturn affected the amount of time Internet users spend
online? In a study conducted in February and March of 2001, the Pew Internet
and American Life Project found that more than one half of Internet users in
the U.S. are using the Internet the same amount of time as they were six
months ago. The study found that 29 percent of users actually increased their
usage, while only 17 percent decreased time spent online. Newcomers and Net
veterans alike indicated that more than 60 percent of their Internet time was
just for fun.
So those are the facts. As we try to gain some understanding of how the
Internet is developing, it helps to get a well-defined view. The ongoing
development of Internet commerce has been beleaguered by hyped-up bubbles and
tales of complete decimation. In reality, e-business continues to grow.
About the Author
Rob Spiegel is the author of Net Strategy (Dearborn) and the upcoming
Shoestring Entrepreneur's Guide to Internet Start-ups (St. Martin's Press).
You can reach Rob at spiegelrob@aol.com