Has the World Wide Web hit its high-water mark?

New research seems to indicate Internet economy heading into a "seventh inning stretch"

Has the World Wide Web hit its high-water mark?

San Francisco, February 12, 2001 - Internet growth is slowing and even stalling in parts of the world, according to Ipsos-Reid, a leading international research firm. The company's study, The Face of the Web, shows that usage is highly concentrated in a few countries, exhibits signs of slowing growth in several others, and that up to a third of the world has neither heard of the Internet nor has any intention of going online anytime soon.

The Face of the Web's projections peg the worldwide Internet population at about 350 million regular users, up about 16% year-over-over, which is a decent showing but far below growth levels in previous years, says Dr. Angus Reid, Chairman and CEO of Ipsos-Reid. The number is still a long way from the 1 billion users by 2005 predicted by some industry analysts, and represents only 6% of the world's total population.

While his company's research shows that Internet adoption rates are plateauing in some places, Reid warns that this does not translate into a general Internet "cool down."

Doom and Gloom Isn't the Natural Conclusion

Reid doesn't discount the disturbance that countless dot-com business failures and the high-tech slowdown has caused to the industry. At the same time, he says, "to project from these inevitable phases in the lifecycle of a technology to the notion that the Internet is in decline is off-the-mark."

Reid believes that some people confuse the current "seventh inning stretch" the Internet economy is going through with the "end of the season." He adds that, "As a sociologist, I am always amazed by our society's tendency to swing from euphoria to despair in a heartbeat."

"What we're witnessing today is an equal but opposite reaction to all the insane hype we've heard for years about the Internet. Like other inventions and technologies, the Internet has been over-sold and over-promised in its early stages. People have come to expect infinite growth patterns for the Internet. But that's just unrealistic."

Slower Growth Doesn't Mean Demise

The Web is taking hold in almost every aspect of modern life - and no more so than with youth where it has reached near universality in some countries. In fact when Ipsos-Reid recently tried to survey teenagers and young adults who hadn't tried the Internet, the company couldn't find enough of them to report statistically relevant findings in many countries, Reid says.

Some of the company's ongoing global Internet research shows that:

  • Online talk is cheap: Nine-in-ten young Internet users have used e-mail, and seven-in-ten participate in chat rooms regularly.
  • Music downloading: 36% of all adult Internet users and 41% of teens and young adult Internet users have downloaded music from the Web in MP3 or similar formats.
  • Research tool: More than nine-in-ten teenagers in U.S. and Canada use the web to help with homework.
  • E-commerce: Nearly 120 million Internet users worldwide have already made a purchase or transaction online, with as many as one in four purchases made on impulse.
  • Banking and investing: Internet users in Europe are among the world's most enthusiastic online banking customers, ahead of those in the United States.

The company has found that the Internet is most deeply embedded in the social fabric of countries where "commerce and communications" are on equal footing with "convenience and interactivity."

Anytime, Anywhere Access Key To Future Growth

Now that the Web has achieved critical mass, the key to future growth involves breaking down barriers to access, says Reid.

"In developing countries, many people can't afford the relatively large initial cost of owning a home computer -- which is how most people access the Net today -- and which is likely to be the main drag on Internet growth," he adds.

"In the 30-plus countries we surveyed, home Internet access trails behind almost every other household consumer electronic device in terms of ownership and usage. Nearly all respondents have a TV, about half own a cellular telephone, four-in-ten have home computers, but only one-in-five have home Internet access."

Reid believes for some, making home access cheaper and easier - through TV-top boxes and game consoles - will be the answer. But the real promise of Internet growth lies with wireless Internet devices.

"There is a tendency to assume the `North American' model of Web access from a home PC is the only way the Web will continue to develop. The `Euro-Asian' model of wireless Web access on cell phones and palmtops and public access to the Web in cafes and kiosks must play a greater role," Reid adds.

"For the Internet to grow, let alone reach the magic 1 billion user mark, second-generation wireless technology needs to achieve mass appeal. So if there's any kind of digital divide, it's more about creating universal access with cheaper and easier technologies than concerns about language and literacy."

Established in 1979, Ipsos-Reid is among the world's leading research companies, providing a full array of marketing and social research services to the private and public sectors. Founded by Dr. Angus Reid, Ipsos-Reid has conducted extensive research in 80 countries and in 40 languages and serves 1,200 clients around the world through 11 offices and 1,300 staff.

For more information about Ipsos-Reid's internet-related research, visit The Face of the Web

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