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2007 Global Internet - Volume 2 - Online Content and Services

1. INTERNET INDUSTRY
1.1 Internet industry overview
1.1.1 The Internet and the web
1.1.2 Historical growth of the Internet
1.1.3 Internet hosts
1.1.4 The World Wide Web
1.1.5 Search engines
1.1.6 Websites
1.1.7 The ISP market
1.1.8 Internet elasticity
1.1.9 Grid commuting will change the Internet - analysis
1.2 Internet usage and penetration statistics
1.2.1 Statistics
1.2.2 Internet traffic and bandwidth overview
1.2.3 Language statistics
1.2.4 Time spent online
2. KEY ONLINE CONTENT & SERVICES
2.1 Internet content and services
2.1.1 New emerging business models
2.1.2 The online content market
2.1.3 Online content and services
2.1.4 Digital Rights Management (DRM)
2.2 eHealth
2.2.1 Scope
2.2.2 E-health - killer app on true broadband
2.2.3 Massive costs of healthcare
2.2.4 IT key to sustainable healthcare
2.2.5 E-health project examples
2.2.6 Published market statistics and forecasts
2.2.7 Conclusion
2.3 Online gambling and gaming
2.3.1 Introduction
2.3.2 In-game advertising
2.3.3 Online gambling
2.3.4 Online gaming
2.4 Virtual worlds
2.4.1 Introduction
2.4.2 Trends and developments
2.4.3 2007 virtual world statistics and forecasts
2.4.4 Case study: Second Life
3. TECHNOLOGY
3.1 Graphic and multimedia file formats
3.1.1 Joint Pictures Expert Group (JPEG)
3.1.2 Graphics Image Format (GIF)
3.1.3 Portable Network Graphics (PNG)
3.1.4 Scalable Vector Graphics (SVG)
3.1.5 Adobe Flash
3.1.6 Adobe Portable Document File (PDF)
3.2 Web 2.0 and the future
3.2.1 New methods of linkage
3.2.2 Blogs and discussion sites
3.2.3 User generated content
3.2.4 Pay-per-click advertising
3.2.5 New traffic patterns
3.2.6 Network Neutrality and QoS
3.2.7 New user interfaces
3.2.8 Web services and mashups
3.2.9 New markets - the long Tail
4. GLOSSARY OF ABBREVIATIONS


List of Exhibits


Exhibit 1 - Examples of Web 2.0 developments
Exhibit 2 - Most popular domain name suffixes - 2007
Exhibit 3 - The phenomenon of the 1990s
Exhibit 4 - Applications of Microsoft’s Virtual Earth
Exhibit 5 - Online music sector
Exhibit 6 - Advantages of e-health
Exhibit 7 - Popular health-related websites in the US - 2007
Exhibit 8 - Anarchy Online by Funcom
Exhibit 9 - Major players in gaming industry sectors - worldwide - 2006
Exhibit 10 - Top 3 mobile games worldwide - 2006
Exhibit 11 - Characteristics of virtual worlds
Exhibit 12 - Definition of an online avatar
Exhibit 13 - Examples of virtual worlds
Exhibit 14 - Examples of virtual worlds for younger users
Exhibit 15 - Linden Labs ban on gambling
Exhibit 16 - Examples of large companies established in Second Life
Exhibit 17 - Second Life user statistics - 2007
Exhibit 18 - Second Life financials - February 2007


List of Tables


Table 1 - Worldwide Internet users - 1990 - 2007
Table 2 - Growth in number of Internet hosts - 1984; 1991 - 2006
Table 3 - Number of domain names by country - August 2006
Table 4 - Generic top level domains - top 5 countries - market share - 2006
Table 5 - Major domain names by host - 2003 - 2006
Table 6 - Percentage of Internet users by top languages - 2002; 2005; 2007
Table 7 - Worldwide market share of top 5 browsers - 2007
Table 8 - Web server market share top 6 developers - 2003 - 2007
Table 9 - How people find websites
Table 10 - Percentage of online searches conducted on leading search engines in the US - July 2006; Feb 2007
Table 11 - Global market share of Google and Yahoo - November 2005
Table 12 - Top 10 worldwide website properties - May 2007
Table 13 - Top 3 worldwide website properties - 2006
Table 14 - Worldwide Internet users - 1990 - 2007
Table 15 - Worldwide Internet users and penetration by region - 2007
Table 16 - Top 15 countries by Internet usage and growth - 2006 - 2007
Table 17 - Regional Internet users, growth and penetration - March 2006
Table 18 - Worldwide broadband subscribers and market share by access technology - 2006
Table 19 - Households with access to a home computer and the Internet - selected countries - 2005
Table 20 - Internet users by top languages - 2002; 2005; 2007
Table 21 - Top online activities - 2005; 2007
Table 22 - Top 5 countries - time spent online - March 2006
Table 23 - Top 10 dating websites in the US - February 2007
Table 24 - Consumer use of Internet dating in European countries - 2005
Table 25 - Worldwide e-learning market value - 2005; 2008
Table 26 - Top five e-government countries - 2007
Table 27 - Top five e-government countries - 2005
Table 28 - Worldwide online music sales - 2004 - 2006
Table 29 - Worldwide online music revenue - 2006 - 2012
Table 30 - iTunes catalogue breakdown - 2007
Table 31 - US online spending revenue for top 5 product types - 2006
Table 32 - Projected regional increases in total healthcare spending - 2020 - 2050
Table 33 - Market value and growth of telehealth - 2012
Table 34 - US IT health market - value of sales - 2005 - 2006; 2011
Table 35 - Spending on IT by Western Europe healthcare sector - 2005; 2009
Table 36 - Value of e-health industry - Europe - 2003, 2010
Table 37 - Money spent on gambling per head - Australia, Hong Kong, United States
Table 38 - Worldwide online gambling revenue growth - 1997; 2001; 2004; 2006
Table 39 - Worldwide revenue from all forms of gambling - 2006 - 2010
Table 40 - Revenue from all forms of gambling - Asia Pacific, EMEA - 2006; 2010
Table 41 - Total value of bets placed via mobile gambling - 2006; 2010
Table 42 - Internet gambling users in selected countries - February 2005
Table 43 - Global online gaming revenues and annual change - 2000 - 2006
Table 44 - US videogame revenue for console, PC, online and wireless - 2008
Table 45 - Worldwide mobile gaming revenue - 2006; 2007; 2011
Table 46 -Mobile gaming revenue - Asia Pacific, Western Europe, North America - 2007; 2011
Table 47 - Top 10 mobile game publishers worldwide - market share - May 2006
Table 48 - Market share of Second Life active users by country - 2007

This annual report offers a wealth of information on the worldwide development of the Internet economy. Volume 2 of this report provides an insight and analysis into the trends and developments taking place in the revived Internet economy. It includes information and statistics on the Internet industry, beginning with an historical look at Internet growth. Information and statistics on Internet hosts, domain names, the World Wide Web, search engines, websites, the ISP market, Internet users and penetration is also provided. An overview of some of the key online online services such as adult entertainment, dating, e-education, online financial services, e-government, mapping and online music is also incorporated. Covered in more detail are the sectors of ehealth, online gambling/gaming and virtual worlds. Also provided is technical information on web development related to Web 2.0. Please note that Social networking, UGC and online video media are covered BuddeComm’s other publication: 2007 Global Internet - Volume 1 - Web 2.0 Revives Internet Economy.

Subjects covered include:

  • Internet industry overview and statistics;
  • Internet user and penetration statistics;
  • Internet content and services overview and statistics;
  • eHealth overview and statistics;
  • Online gaming and gambling overview and statistics;
  • Virtual Worlds;
  • Technical information.
Please Note: There is an update to this report.


The emergence of the next generation of Internet technology and applications has led to the coining of the term Web 2.0, to indicate that the Internet now has more capabilities than ever before. The Internet Media companies such as Google, News Corp and Yahoo are just some of the leaders taking advantage of this with the introduction of new services and applications. This revival of the Internet has also led in part to the re-emergence of the Internet economy, and more specifically e-commerce. The increase in broadband connections is another factor that has led to this revival.

Revenue from the large range of content and services available from the Internet is rapidly increasing globally; travel, gambling, adult content, music and health services are particularly popular and social networking services are flourishing. For more information, see chapter 2.1, page 21.

By 2010 it is estimated that over $2 billion will be spent on social network advertising in the US alone. The Internet economy is increasingly relying on the underlying Internet infrastructure for its success, and this has also opened up a range of new support functions for ISPs and BSPs, with some already beginning to diversify their operations.

New video applications have also emerged as the Internet media companies seek to exploit the added speed and capacity of broadband infrastructure. This will result in a whole range of applications continuing to enter the market over the next decade. As can already be observed, the killer application on these networks is video based communication, nearly half of which is produced by users themselves. Commercial video entertainment will eventually account for only a quarter of these services. Sites that started as social networks, such as Facebook, are also expanding into video based services in order to compete. As commercial websites try and enter this space, there is no sign of this growth abating.

Web 2.0 technologies have shifted the consumer’s web experience to interactive and collaborative applications which a growing number of people can access and contribute to. Online payment gateways such as PayPal have facilitated consumer use of e-commerce, facilitating services coming to market. The success of social networking and sites based on UGC clearly shows that the ‘consumer-led’ era has begun and this heralds the end of those with vested interests being able to control what they present to their users. In future consumers will be not only be able to actively participate; they will also be in a position to challenge the way things have been done in the past and expose failures and misconduct.

A key to success in this new era of digital media revolves around advertising and the ability to attract new revenues. We are now seeing the emergence of new business models as the industry gains confidence and begin to change their more traditional models. Driving this confidence is the phenomenal growth in online advertising revenues. It is estimated that over $25 billion dollars will be spent worldwide on online advertising this year.

E-health is also rapidly shaping up as one of the key killer apps on the truly high-speed broadband networks. Around the western world we are facing a massive dilemma in relation to healthcare. New technologies are increasing life expectations and improving our lifestyle. The cost of this however is enormous, and we simply can no longer afford to finance these huge advances through the public health systems. In countries with proper broadband infrastructure we see e-health shaping up as a way that will allow us to enjoy these advances in medical technology and medical services, at a more affordable cost. For more information, see chapter 2.2, page 28.

The Internet has joined the road and rail networks, the postal system and the global telephone network as a vital communications system in developed countries. The principle known as Network Neutrality allows Internet users to access any web content or applications they choose, without restriction or limitation. This is taken for granted by the billions of people who access the Internet worldwide. However a concerning precedent is taking place in the US, where carriers would like to be able to charge for tiered network service - and it will have global implications if it succeeds. However despite the importance of the issue, it may be some time yet before the US government determines the country’s net neutrality path.

Volume 2 of this report provides an insight and analysis into the trends and developments taking place in the revived Internet economy. It includes information and statistics on the Internet industry, beginning with an historical look at Internet growth. Information and statistics on Internet hosts, domain names, the World Wide Web, search engines, websites, the ISP market, Internet users and penetration is also provided. An overview of some of the key online online services such as adult entertainment, dating, e-education, online financial services, e-government, mapping and online music is also incorporated. Covered in more detail are the sectors of ehealth, online gambling/gaming and virtual worlds. Also provided is technical information on web development related to Web 2.0. More detailed information on social networking, UGC and online video media can be found in BuddeComm’s other publication: 2007 Global Internet - Volume 1 - Web 2.0 Revives Internet Economy.

Key Highlights:
There are now around 100 million websites in existence worldwide and around 16% of the population is online - leaving room for more growth ahead which will be assisted by mobile applications. For more information, see chapter 1.1, page 1.
Travel is the largest category of online spending and one of the most competitive markets on the Internet.
The future of the music industry lies in online/digital distribution. Around 10% of all worldwide music sales are now purchased through digital channels; this is expected to climb to around 25% by 2010.
Worldwide online music revenue - 2007; 2012

Year Revenue ($ billion)
2007 2.9
2012 7.2

(Source: BuddeComm based on industry data, 2007)
Online virtual worlds are just one example of the developments occurring as part of the Web 2.0 evolution, and the number of virtual worlds in existence is doubling every two years. For more information, see chapter 2.4, page 47.

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