The long-term growth factors for the internet industry will continue to drive development of the Net marketplace, even though current market conditions will temporarily hinder their near-term effects, according to a new report from Jupiter Media Metrix (JMM).
According to a new Jupiter report, the key long-term drivers that initially made the internet so promising remain powerful and will become ‘self-reinforcing’ over time. These drivers include: continued consumer demand for internet services, more fulfilling online user experiences, growth in consumers’ average online tenure and business cost savings, says Jupiter.
Although current market constraints (including reduced financial market liquidity, weakened consumer confidence and reduced capital and marketing expenditures) have slowed growth in some sectors, such as online advertising revenue, business-to-business (B-to-B) trade and B-to-B infrastructure spending, their overall impact is expected to be relatively modest.
“While many internet businesses today are mired in financial difficulty, it’s important for all not to be overwhelmed by the negative hype that is distorting the long-term picture,” said David Card, vice president and senior analyst, Jupiter Media Metrix. “There are many hurdles and setbacks to be overcome in the months ahead, but most of these should prove to be short-term setbacks, the magnitude of which will be offset by continued long-term growth factors. This doesn’t mean that all of the internet companies around today will succeed, or that the stock market bubble will revive, or that there’s huge potential in niche markets. But, a few serious businesses across many internet sectors will have large, thriving markets to capture.”
Net users are seemingly unaffected by the dotcom fall-out, with the total number of unique visitors very much on the increase. JMM says traffic rose by 13% during the first half of this year, despite much negative publicity.
Jupiter, which is confident of the accuracy of its forecasts, is reducing slightly its growth predictions to 2005. It forecasts that online retail commerce will total $104 billion in 2005 ÂÂ- down 12% from the figure projected last year.
