WASHINGTON, June 10 (Reuters) - All those Furbies,
Tamagochis and "Star Wars" toys bought at Web auctioneer eBay
sure add up.
While some have estimated annual Internet sales in the tens
of billions of dollars, a new study from the University of
Texas and financed by Cisco Systems Inc. <CSCO.O> found that
U.S. companies generated a whopping $301 billion in revenue
last year from online-related goods and services.
The total, derived from interviews with about 3,000
companies participating in the Internet economy, included $102
billion of Internet commerce, such as sales of books by
Amazon.com <AMZN.O>, toys at eToys.com <ETYS.O> and even
subscriptions to thestreet.com <TSCM.O>.
Sales by intermediaries, like stock trades and online
travel agents, totaled $58 billion in 1998, the study found.
Nearly half the total came from the hardware and software
used to build the infrastructure of the Internet and electronic
commerce.
The study found $56 billion was spent last year on
software, consulting and training to provide Internet services
and another $115 billion was spent on hardware and software to
run the lowest layers of the global computer network.
To avoid double counting some revenues, the $301 billion
total included a $30 billion reduction from the sum of the four
separate categories.
The end results "seem to exceed all prior estimates," said
University of Texas Associate Professor Anitesh Barua, who
co-authored the study. Starting from almost no online commerce
three years earlier, "the growth rate is nothing short
astounding," he said.
The study also estimated that 1.2 million U.S. jobs were
involved in Internet commerce.
Lehman Brothers senior economist Ethan Harris said the
study demolished an assumption by many analysts that Internet
sales were concentrated among a few big companies.
"What they found, in fact, is that there are thousands of
companies selling on the Internet," Harris said. "That argues
for continued growth."
The figures also put the Internet portion of the economy on
par with other more established sectors like automobiles and
telecommunications.
E-commerce "has already achieved a status of great
prominence in the U.S. economy," said Cisco development manager
Doug Karmin. Cisco, the leading provider of Internet switching
gear, has seen its stock skyrocket in recent years, already
rising more than 20 percent so far in 1999, on the back of the
Internet growth wave.
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