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2006 Global Internet - The Emerging Internet Economy


Attention: There is an updated edition available for this report.

Annual report on: Internet, e-mail, permission based marketing, B2B, B2C, e-retailing, e-commerce, triple play, Spam, Cybercrime, websites, web hosting, search engines.

Report also contains:

Global market and industry overviews and analyses
B2C (E-Retailing), E-Payments, B2B Market Statistics
Industry and Market Trends and Developments
Business and Marketing Strategies
User statistics
Revenues and forecasts
ISP Markets
Industry issues and regulatory


With over 1 billion people worldwide having access to the Internet, revenue from the large range of available content and services is rapidly increasing and contributing to the overall Internet Economy. Travel, gambling, adult content, music and health services have proved extremely popular with more growth ahead, and sites based on User Generated Content (UGC) are flourishing.

Businesses are also increasing their use of the Internet for e-activities such as transactions, online trading, website marketing, email and other forms of related communications. It is estimated that around one million companies worldwide now rely on the Internet economy for more than 50% of their revenue.

In addition, we are clearly starting to catch glimpses of the new, converged world in which companies such as Google, eBay/Skype, Yahoo!, Vonage, AOL, MSN, News Ltd and Amazon are jockeying for position, with alliances and mergers on the board. Many of the traditional media and telecoms companies will crumble under the changes and be broken up into segments that are easier to merge into the converged industries that lie ahead.

There will also be more and more structural separation between content and distribution, and the one-size-fits-all telecoms, broadcasting or newspaper model is on the way out. New digital media distribution formats around the Internet, triple play, IPTV, podcasting, DVRs and blogging are already emerging. The key reason that the market is suddenly turning towards digital media is the opportunity for attracting new revenues, especially from advertising. Companies will need to develop new business models to succeed in this highly competitive and customer-centric market.

This report discusses business models for the new Internet economy, and examines the underlying trends that are occuring. An overview and statistics of the Internet is provided, including analysis of the net neutrality debate. The report also includes information on the major categories of online content and services, such as travel, gambling, music, health etc. It discusses the recent activities of some of the key players in the Internet Media space, including Google, eBay/Skype, Yahoo!, AOL, and News Ltd. Information and statistics on Internet hosts, domain names, the World Wide Web, search engines and the ISP market is also included, along with detailed technical information on Internet infrastructure.

Key Highlights:
Internet communications are very significant for hundreds of millions of users worldwide, for social, political and business reasons. With the increase of high speed broadband connections, the Internet economy is poised for growth.
Growth in websites reached an all time high in 2006, and ISPs are thriving despite dire predictions over the years.
With only around 16% of the global population online, there is still room for enormous growth of the Internet, and mobile applications will assist this.
As Internet companies increasingly rely on Internet infrastructure for their success, new opportunities to provide support functions will emerge for ISPs and Broadband Service Providers (BSPs).
The enormous increase in video based applications from 2008 onwards will see a rapid demise of the old telecoms infrastructure. The national backbones will need to be dramatically upgraded to cope with the increased traffic. If unchecked; incumbents may use this situation to try and limit video-based access to the Internet media companies, and tax them for their use. This will test the neutrality of the Internet and create some serious regulatory battles.
Google is one of the key Internet Media players, as for many years it has had the lion’s share of the search engine market and as a result, attracts a large proportion of advertising spending. Google retains all advertising revenue from its own websites, and around 22% from its partner sites.
Yahoo! may be in second place to Google, but it is also growing substantially, with around 42% growth in net advertising revenue in 2005.
User Generated Content (UGC) websites, such as Flickr and Wikipedia were among the fastest growing websites between 2005 and 2006.
In most global markets, online travel is one of the few successful B2C e-commerce categories. Travel is the largest category of online spending and one of the most competitive markets on the Internet.
Gambling and gaming is showing some of the fastest growth on the Internet, but the uncertain regulatory environment is creating problems for entrants to this market.

1. INDUSTRY OVERVIEW
1.1 The Internet and the web
1.2 Historical growth of the Internet
1.2.1 The Pentagon Internet (GIG)
1.3 Internet hosts
1.4 Domain names
1.4.1 Native language Internet addresses
1.5 Web server software
1.6 The World Wide Web
1.6.1 Introduction
1.6.2 Browsers
1.7 Search engines
1.7.1 Google still the leader
1.8 Websites
1.8.1 Website growth
1.8.2 Website audience statistics
1.8.3 Internet portals
1.9 The ISP market
1.9.1 ISPs conquering the world
1.9.2 ISPs and the Internet Economy
1.9.3 Marketing strategies: the role of ISPS
1.10 Grid commuting will change the Internet - analysis
2. THE INTERNET ECONOMY
2.1 Market overview
2.1.1 Key parameters
2.1.2 The rise and rise of the Internet economy
2.1.3 Broadband - a trillion dollar industry in the making
2.1.4 How to develop the broadband economy
2.2 Internet economy analysis
2.2.1 One million companies already depend on the Internet economy
2.2.2 Internet economy is looking for bypasses
2.2.3 Net neutrality - an important element for the Internet economy
2.2.4 Changing Internet business models
2.2.5 Permission based marketing
2.3 Internet economy services
2.3.1 E-commerce
2.3.2 Tele-education and Tele-Health
2.4 Internet economy statistics and forecasts
2.5 Consumer content and services overview
2.5.1 New emerging business models
2.5.2 The online content market
2.5.3 Key online content and services
2.5.4 Digital Rights Management (DRM)
2.6 Blogs and user generated content (UGC)
2.6.1 User Generated Content (UGC)
2.6.2 Blogging and web publishing
2.6.3 Social networking
2.6.4 Statistics and forecasts
2.6.5 Ad spending statistics
2.7 Market statistics
2.7.1 Statistics and forecasts
2.7.2 Internet traffic and bandwidth statistics
2.7.3 Language statistics
2.7.4 Time spent online in 2006
2.8 Net neutrality analysis
2.8.1 Introduction
2.8.2 Network neutrality - a global issue
2.8.3 Carriers in competition with content providers
2.8.4 Developments in the USA
2.8.5 No-one owns the Internet
3. DIGITAL MEDIA
3.1 Internet media companies
3.1.1 From old to new media
3.1.2 Google
3.1.3 Yahoo!
3.1.4 News Corp and subsidiaries
3.1.5 Amazon and online entertainment
3.1.6 AOL - redefining its future
3.1.7 Digital media applications
3.1.8 Internet media bypassing the telcos
3.2 Industry business models
3.2.1 The role of the telcos
3.2.2 The role of the broadcasters
3.2.3 The role of the content providers
3.2.4 The role of the IT industry
3.2.5 Triple play business models
3.2.6 Internet economy based business models
3.3 Advertising strategies, overview, revenues
3.3.1 Measuring digital media revenues
3.3.2 Internet advertising
3.3.3 Advertising statistics and market trends
3.3.4 Dubious ‘advertising’ tactics
3.3.5 Advertising and the digital media - analysis
3.3.6 Interactive advertising
4. REGIONAL OVERVIEWS
4.1 North America
4.1.1 USA
4.1.2 Canada
4.2 Latin America
4.3 Europe
4.3.1 Western Europe
4.3.2 Eastern Europe
4.4 Africa / Middle East
4.4.1 Africa
4.4.2 Middle East
4.5 Asia
4.5.1 Market overview
4.5.2 Cultural and regulatory issues
4.5.3 Public Internet access
4.5.4 Internet advertising
4.5.5 Internet data centres
4.5.6 Broadband TV (IPTV)
4.6 Pacific Region
4.6.1 Australia
4.6.2 New Zealand
5. TECHNOLOGY
5.1 Overview
5.1.1 Introduction
5.1.2 Conclusion
5.2 TCP, UDP
5.2.1 Introduction
5.2.2 UDP, TCP packets
5.2.3 IP Addresses
5.2.4 Transition to IPV6
5.3 Web browsing, routing and flexibility
5.3.1 A web browsing example of TCP and HTTP
5.3.2 Routing, speed and reliability
5.3.3 Flexibility and contrasts with the phone system
5.4 The Domain Name System - DNS
5.4.1 Text names and IP addresses
5.4.2 Name servers
5.4.3 Example of a primary name server
5.4.4 Sub-domains
5.4.5 IDNA - non-latin characters in domain names
5.4.6 Top Level Domains
5.4.7 Registering a Domain Name
5.4.8 DNS in action - translating a name into an IP address
5.5 Email
5.5.1 Clients and servers
5.5.2 Simple Mail Transport Protocol - SMTP
5.5.3 Security limitations of SMTP
5.5.4 Encryption for security and authentication
5.5.5 Protocols for retrieving emails
5.5.6 Attachments
5.5.7 Operational guidelines and plain-text formats
5.5.8 Email discussion lists
6. GLOSSARY OF ABBREVIATIONS
Exhibit 1 - The phenomenon of the 1990s
Exhibit 2 - Implications of ending net neutrality
Exhibit 3 - Advantages of tele-medicine
Exhibit 4 - Advantages of Tele-medicine
Exhibit 5 - Applications of Microsoft’s Virtual Earth
Exhibit 6 - Social networking websites - examples - 2006
Exhibit 7 - Implications of ending net neutrality
Exhibit 8 - Intermix Media and MySpace
Exhibit 9 - Media centre devices
Exhibit 10 - Digital media marketing commandments
Exhibit 11 - Implications of ending net neutrality
Exhibit 12 - Asia’s broadband market - countries ranked by household penetration - June 2006
Exhibit 13 - An 8 address TCP/IP subnet
Exhibit 14 - Traceroute of Routers between Melbourne and Iceland
Exhibit 15 - Generic Top Level Domains
Exhibit 16 - Australian Second Level Domains


Table 1 - Internet users - 1990 - 2006
Table 2 - Growth in the number of Internet hosts - 1984; 1991 - 2005
Table 3 - Number of Domain Names by country - August 2006
Table 4 - Major domain names by host - 2003 - 2006
Table 5 - Internet users by language - 2002; 2005
Table 6 - International domain names registered by country - 2004
Table 7 - Web server market share - 2003 - 2006
Table 8 - How people find websites
Table 9 - Percentage of online searches conducted on leading search engines in the US - 2006
Table 10 - Global market share of Google and Yahoo! - November 2005
Table 11 - Top 3 worldwide websites - 2006
Table 12 - Top 6 US websites and audience - combined home and work - March 2006
Table 13 - B2B global revenues - 1998 - 2005
Table 14 - US online spending revenue for top 4 product types - 2006
Table 15 - Amount spent online by US consumers - 2004 - 2005
Table 16 - Consumers who have used Internet dating in European countries - 2005
Table 17 - Top 5 e-government countries - 2005
Table 18 - Forecasts and estimates of US online travel revenues - 2003 - 2009
Table 19 - Total and online US travel revenues and estimates - 2003 - 2009
Table 20 - Unique visitors to the most popular blogging service worldwide - 2005 - 2006
Table 21 - Unique visitors to top 3 US blogs - May 2006
Table 22 - Unique visitors to top 10 US social networking sites - May 2006
Table 23 - Worldwide ad spending on social networking sites - 2006; 2010
Table 24 - Regional Internet users, growth and penetration - March 2006
Table 25 - No. of Internet users - top 15 countries - 2005
Table 26 - Active home Internet users by selected countries - 2004 - 2005
Table 27 - Proportion of total time spent online by activity in the US - 2004 - 2005
Table 28 - Internet users by language - 2002; 2005
Table 29 - Top 10 web languages - March 2006
Table 30 - Top 5 countries - time spent online - March 2006
Table 31 - Percentage of online searches conducted on leading search engines in the U.S. - 2006
Table 32 - Global market share of Google and Yahoo! - November 2005
Table 33 - Top ten ranking by country for Internet users - June 2006
Table 34 - Top ten ranking by country for Internet penetration - June 2006
Table 35 - Top 10 ranking by country for number of host computers and annual growth - 2004
Table 36 - Broadband access amongst Internet households - 2001 - 2006
Table 37 - Forecast Internet penetration - low and high - 2006 - 2010; 2015
Table 38 - Forecast online retail sales - low and high - 2006 - 2010; 2015
Table 39 - Forecast online advertising - low and high - 2006 - 2010; 2015
Table 40 - Internet users, annual change and penetration - 1996 - 2005
Table 41 - Total online searches - 2005 - 2006
Table 42 - Top 10 search engines, year-on-year growth and percent share - June 2006
Table 43 - Top ten portal websites - 2005
Table 44 - Fastest growing web sites - 2005 - 2006
Table 45 - Top 10 online advertisers, spending and impressions - July 2006
Table 46 - Top 10 website advertisers by parent company - July 2006
Table 47 - E-commerce spend by specific category and annual change - 2005 - 2006
Table 48 - Online retail sales and annual change - 2003 - 2006
Table 49 - Top-10 ISPs, access type, subscribers, market share and annual change - April 2006
Table 50 - Annual email volume and annual change - 2000 - 2007
Table 51 - Major email clients - 2006
Table 52 - Source of spam by country - 2006
Table 53 - Canadian residential broadband Internet subscribers - DSL versus Cable - 2001 - 2005
Table 54 - Broadband access in Internet households - selected countries - 2002 - 2006
Table 55 - Internet users, annual change and penetration - 2000 - 2005
Table 56 - Internet users, annual change and penetration - top 10 countries for users - 2005
Table 57 - Internet users, annual change and penetration - top 10 countries for penetration - 2005
Table 58 - European Internet users, penetration and user growth - September 2006
Table 59 - European broadband subscriber penetration - March 2006
Table 60 - Broadband connections and penetration of Eastern European EU countries - March 2006
Table 61 - Eastern European DOI and E-government rankings - 2004 - 2005
Table 62 - Internet users in Africa - 1995 - 2005
Table 63 - Top five African Internet user markets - 2005
Table 64 - Middle East Internet usage by country - 2005
Table 65 - Internet user growth in Asia - 1999 - 2006
Table 66 - Top 10 Asian countries by Internet user penetration - December 2005
Table 67 - Internet and broadband subscribers for selected Asian markets - December 2005
Table 68 - Asia’s International Internet bandwidth - 2000 - 2005
Table 69 - Broadband in Asia - Major markets by subscribers and penetration - 2005/06
Table 70 - Major broadband access types (by subscribers) - March 2006
Table 71 - WiFi hotspots in Asia - 2004 - 2005; 2009
Table 72 - Dial-up subscribers per major ISP - 2001 - 2006
Table 73 - Market share of top 10 dial-up ISPs - 2001 - 2006
Table 74 - Annual change in dial-up subscribers - 2001 - 2006
Table 75 - ADSL retail subscribers per major ISP - 2002 - 2006
Table 76- Annual change in ADSL subscribers - 2003 - 2006
Table 77 - Market share subscribers (wholesale) - 2002 - 2006
Table 78 - Market share subscribers (retail) - 2002 - 2006
Table 79 - Broadband subscribers and annual growth - 2001 - 2007
Table 80 - Residential Internet dial-up access ARPU - 1995 - 2006
Table 81 - Residential Internet dial-up market revenues - 1996 - 2006
Table 82 - Business market Internet revenue - 1997 - 2007
Table 83 - Residential Broadband ARPU per month and yearly change - 2004 - 2006
Table 84 - Business Broadband ARPU per month and yearly change - 2004 - 2006
Table 85 - New Zealand retail broadband subscribers - residential and annual change - 2003 - 2006
Table 86 - Telecom NZ - retail broadband subscribers- residential and business - 1999 - 2006
Table 87 - Telecom NZ - Broadband subscribers (residential, business) and (wholesale, retail) - 2005 - 2006
Table 88 - Telecom broadband and Internet subscribers - March 2006

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