Studies Show Consumers Still Bullish on Web

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Several studies published this month show that despite growing pains, the Internet continues to show strong growth worldwide.

An eTForecasts study predicts that the number of people online worldwide will rise from 400 million in 2000 to 1.17 billion by 2005, with less than half coming from the United States and Western Europe and the balance from Latin America, Eastern Europe and Asia.

The research firm, based in Buffalo Grove, IL, also noted that Western Europeans online will outnumber Americans for the first time in 2005 -- 246 million vs. 214 million. Wireless Internet access will grow most rapidly everywhere except in the United States, where acceptance is low.

Egil Juliussen, the author of the study, said that last year only 2 million Americans used wireless Internet access and only 83 million will do so in 2005. That compares with 7 million Europeans currently with wireless Web access and a projected 168 million in 2005.

In developed countries wireless access will continue to be supplemental to the PC, but in regions where penetration is low, he said, wireless devices "will be the primary or only Internet access device.

"The wireless Internet will take off rapidly once always-on service and useful content for the small displays of wireless devices are available," Juliussen said. "As the wireless Internet user experience improves, an increasing portion of dormant Web-enabled phones will become active Internet devices."

Forrester Research predicts that online advertising will grow sharply this year despite the recent rash of dot-com failures. Analyst Marc Cohen said ad revenues would grow 74 percent in 2001.

He put the value of Web ad spending at 1.2 billion euros (about $1 billion), up from 690 million euros last year. But he said most of the increase would come in the second half of the year.

Cohen credits the shift to the eagerness of old-economy companies to go online and their recent willingness to risk sizable sums to establish a viable presence on the Internet.

That is a major difference in outlook from a year ago, when a majority of European companies told researchers that they needed a presence on the Web but did not expect to make money anytime soon.

Britain's grocery chains are the most successful example of the new attitude. A Datamonitor study of online grocery sales in eight European countries found that Britons bought $580 million worth in 2000, far more than anybody else.

The study said 2000 was a watershed year in the United Kingdom, with "most UK grocers offering an online service."

Tesco was looking for online sales of $310 million to stay ahead of Dutch rival Ahold Group, which fattened sales through its acquisition of Peapod, the largest U.S. online grocer.

And the British face competition not only from the Dutch, who come closest to approaching national coverage, Datamonitor said. The French and the Swedes are coming up fast.

"France will have the most dynamic online market in 2001 as online shopping services are rolled out by Carrefour, Cora, Auchan, Galeries Lafayette and Casino," Datamonitor said.

The reason is simple: the rapid growth of people online in France.

Jupiter MMXI estimated that 7.4 million French were online in January, up 9 percent over December, and that they spent an average of 7 hours a month online, an hour and fifteen minutes more than in December.

Some 2.2 million French home users looked for winter vacation information on the Web or bought tickets online from Air France or the French Railroad sites.


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