Be There or Be Square
The Web revolution has reshaped the modern business marketplace
By Newt Barrett The pace of growth and change on the Internet has been so overwhelming during the 1990s that Net professionals speak of "Internet Years," which work just like dog years -- seven of theirs for every one of ours. This astonishing pace is driven by the collective realization that we are in the midst of a revolution. The Internet revolution is sparked by technology and investment that, in turn, drive massive behavioral changes. Indeed, the amount of brainpower and venture capital being poured into the Internet is virtually unprecedented in U.S. history. Although the telephone, the automobile, and television have had a comparable impact on American society, never has the concentration of effort from every corner of the economy been as intense. There is a very good reason for this. The Internet and its graphical offspring, the World Wide Web, will affect how almost all of us live our lives. In November 1995, Eric Schmidt, who was then Chief Technical Officer of Sun Microsystems, stated in an Internet World keynote speech that the Internet was not being overhyped -- but that it was being underhyped. What seemed then to be an overstatement about hyperbole turned out to be right on the money. Symbolically, Internet World that year was held at Boston's compact Hines Auditorium and spilled into tents outside the building. Today there are multiple Internet Worlds, the largest of which is now held in New York City's huge Javitts Center, which alone is many times larger than the Boston facility. But, back in 1969, who knew? The Internet phenomenon began as a relatively modest network that connected a few university and research center computers as shown below in a hastily scribbled graphic from December of that year. The Internet has grown like a snowball rolling down hill, gathering mass and momentum as it goes. In 1971, there were only 23 computers hooked to the Internet. Ten years later the number had grown to just 281 computers. But by 1990, the number was 100,000 -- and by 1996, 10,000,000 computers of all types and sizes were connected to the Internet worldwide. People Meeting People The incredible increase in the number of computers hooked to the Internet is impressive. But, it's the number of people online that is even more meaningful. In 1980, probably none of us knew anybody who was linked to the Internet. In 1998, almost everyone we know is connected -- and a high percentage of them are active users. A recent study from Intelliquest indicates that there are currently 62 million individuals, aged 16 or older, using the Internet in the United States. This represents 30 percent of the adult population and is a 32 percent jump from the year before. In first six months of 1998, 7 million more adults are expected to join the throngs of users. This would bring the online population to 70 million by June and would represent a 100 percent increase since June of 1996. A separate study from CommerceNet shows similar numbers and projects continued robust growth. Not only are more people using the Internet, but more people are using it more frequently. A study by Find/SVP concludes that daily use has increased dramatically from 36 percent of all users in 1995 to 49 percent in 1997. Moreover, the Net is beginning to look more like the real world; 40 to 45 percent of users are women, according to major research firms. Florida ranks very high in Internet usage and in growth. Among the twelve states with the most Internet users, Florida achieved the highest growth rate, according to a nationwide usage survey by CommerceNet. Not surprisingly, although California boasted the most users, the number of Internet users in Florida jumped from 1.7 million to 3 million between 1996 and 1997. The roots of the Internet lay in the sharing of information among scientists and engineers. Its growth derives in large part from its role as a massive and searchable repository of information on every subject from manatees to March Madness. Five years ago, we could access historical data of all kinds. Today, we count on up-to-the-minute information from online versions of The New York Times, the Wall Street Journal, MSNBC, WINK-TV, and now, Southwest Florida Business magazine. The Internet: Transactions Are Us The World Wide Web is now much more than a provider of information. The Web is a place to do business and is increasingly a transaction-oriented environment. In fact, online transactions totaled $9 billion in 1997, according to Forrester Research. Dell Computer Corporation accounted for $1 billion of that total. sold $27.9 million in books in the second quarter of 1997, a 74 percent increase over the year before. Microsoft's travel site, Expedia, did $100 million in sales last year. According to J.D. Power and Associates, 1.5 million cars have been sold with the help of online shopping services such as Auto-by-Tel and Carpoint. But these figures pale in comparison to what lies just around the bend. By 2002 online transactions will skyrocket to $201.6 billion. Entertainment and travel tickets will hit $10 billion, according to Forrester. Internet Advertising Parallels Web Growth Web advertising revenues continued to surge in the third quarter, up 225.9 percent from the same quarter last year. Simba Information's Advertising and Marketplace Report newsletter estimates $169.8 million in revenue as opposed to last year's $52.1 million. Third-quarter revenues surpassed the previous two quarters in 1997. This underscores the growth of Web advertising since advertising is typically at its lowest ebb in the summer season. Continued growth in advertising revenues through 2001 is projected by the research firm, IDC. Internet Advertising: Why is it Growing So Fast? Advertising is growing for several reasons. Total Internet usage is up. Users are actually buying products on the Net. It is possible to measure the number of users who go to any given site, where they come from, and what they do on each site. In other words, advertisers are getting a whole lot of measurable and meaningful activity from the banner ads that they place. The Nielsen I/PRO Web Index is an average of the audited traffic at a selected group of Nielsen I/PRO I/AUDIT clients, which represents the performance and user characteristics of ad-supported Web site traffic. The sites, which comprise the individual segments, represent the various types of ad-supported sites on the Web. In all but gaming and entertainment, traffic on advertising supported sites continues its dramatic increase. The Effect of the Internet on Traditional Media James Adams, veteran journalist and current CEO of United Press International (UPI) stated at the March 1998 Seybold Conference, "We are watching the demise of the traditional media as we know it in this century." But newspaper publishers seem unwilling to confront the problem that the Web presents, he said

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