IDC Predicts Major Web Portal Shakeout,
Men Become the New Internet Minority and
Web Access in Retail Stores
08:17 a.m. Dec 30, 1998 Eastern
FRAMINGHAM, Mass., Dec. 30 /PRNewswire/ -- A
significant consolidation of Web portal giants, as well as
a dramatic Internet stock correction, loom for the online
industry in 1999, International Data Corporation (IDC)
predicted today. These Internet market developments are
among IDC's Fourth Annual Predictions of key Internet
trends, strategies and events that will reshape business
and society.
Major predictions for 1999 by Frank Gens, IDC's Senior
Vice President, Internet Research are:
-- Mergers and Acquisitions: Yahoo! Partnering with
TimeWarner or CBS,
Microsoft to purchase a major Portal, a global financial
services
company such as Citigroup or Wells Fargo buying
E*trade
-- Web access will become available in many retail
stores, while live
salespeople can be reached through retail Web sites
-- PC prices will drop to the $400 price range and finally
penetrate more
than half of U.S. homes
-- Men become the new minority on the Web, as does
the U.S. as a whole
-- Internet usage will rocket to 147 million users, larger
than the
population of Japan
-- On-line spending will total nearly one trillion dollars by
2002
-- Disruptions from Y2K will be as low as 0.2% for
business-critical
applications
"Just as everyone thinks they know where the Internet is
going in 1999, we are going to shift into a decidedly new
phase in the Internet revolution," Gens said. "The Internet
is going to closely mirror reality in who the Internet
shopper is and where they live, how businesses succeed
on the Net and how Internet stocks are valued in the
market."
These Internet market shifts will create new opportunities
and risks, resulting in new winners and losers. Gens'
predictions -- which have been more than 70 percent
accurate over the last three years -- rest solidly on IDC's
in-depth research.
Three years ago, IDC shocked the market by predicting
$800 to $1,000 PCs and last year, predicted major
strategy shifts by Microsoft, Intel, Compaq and other key
players. "The success of our predictions has been not to
focus on what suppliers say they'll do. Instead, we focus
on what the market will require them to do."
Competitive Realities Spawn Market Corrections,
Consolidation Frenzy In 1999, IDC predicts the stock
market will begin to correct artificially high values for
Internet stocks. These deflated valuations, coupled with
growing cash needs, intensifying competition, the need
for critical mass and a possible recession, will drive a
trend toward acquisitions of Internet companies by "real
world" companies and mergers among Internet
companies.
Possible additional deals include:
-- NBC buying more of CNET and Snap
-- Compaq selling off AltaVista
-- Infoseek merging with Lycos
Internet Commerce Boom Includes Web Access Entering
Retail Stores IDC predicts that Internet commerce will
more than double to $68 billion, making it the same scale
as the gross domestic product (GDP) of Ireland and
Poland. "For the first time ever, Internet commerce
volume will exceed Bill Gates' wealth," said Gens.
Certain trends will emerge:
-- Fifty percent of U.S. households who are online will buy
online
-- Virtual sites will become voice-enabled to give
customers live sales
assistance and customer support
-- "Brick-and-mortar" retailers will introduce Internet
kiosks into their
stores to give customers the information resources of the
Internet
-- Personalization will be the ante for successful
commerce sites
-- There will be a growing demand to measure the value of
online sites in
terms of "Lifetime Value of Customers"
-- Reaching international customers will become a critical
success factor
"Not having an Internet presence and an Internet
Commerce strategy is a recipe for market share loss,"
noted Gens. "In the U.S. market, starting in 1999, the
virtual market is reality."
New Technology Landscape
Changes on the technology front will continue in 1999:
-- PC prices will drop to the $400-$600 range among
industry heavyweights
such as Compaq and HP
-- More than three million Net TVs will be installed and
activated
-- Home networking will roll out
Shifts in Demographic Profile, Men and U.S. No
Longer the Majority on 'Net
In 1999 women become the online majority in the U.S.
and the U.S. becomes an online minority:
-- Women will break through the 50 percent mark in
online populations
-- For the first time, a majority of Internet users -- 51
percent -- will
live outside the U.S.
"The feminization of the Internet is a very important shift,
because women seek out different Web destinations than
men, spend less time surfing online and are the primary
decision-makers in the majority of household purchases,"
noted Gens.
The Y2K Effect Will Be Minimal
IDC predicts that -- contrary to many current views -- the
Year 2000 crisis will cause only modest disruptions. "A
mere two-tenths of one percent of Y2K bugs will cause
business-critical problems," Gens said.
The full text of Gens' Predictions will be on the IDC Web
site at www.idc.com. For additional information about
IDC's Internet research program, contact Karen Proffitt at
508-935-4771 or at kproffitt@idc.com.
About IDC
International Data Corporation is the information
technology industry's most comprehensive resource on
worldwide IT markets, trends, products, vendors, and
geographies. IDC provides data, analysis and advisory
services to the world's leading IT suppliers as well as IS
professionals in finance, insurance, entertainment,
advertising, consumer goods and publishing. IDC's
research and opinions are based on the results of more
than 300,000 end-user surveys, in-depth competitive
analysis, broad technology coverage, and strategic
analysis. IDC is committed to providing global research
with local content through its 500 analysts in more than
40 countries worldwide. Additional information on IDC can
be found on its Web site at idc.com.
IDC is a division of International Data Group, the world's
leading IT media, research, and exposition company.
All product and company names may be trademarks or
registered trademarks of their respective holders.
SOURCE International Data Corporation |
