The number of active Internet users across the globe reached a total of 763 million in March 2007, according to the net-measuring firm comScore. These users viewed more than 2 trillion Web pages in March, which is 9 percent more than in the previous month. The U.S. and Europe remain the largest Internet markets, though the fastest-growing regions are Latin America and Asia-Pacific. A PricewaterhouseCoopers’ (PwC) study forecasts the global Internet advertising and access spending market to grow an annual 13 percent between 2005 and 2010. 

Broadband Connections Act as Catalyst for Entire Sector

The Internet industry will thrive in the years to come as broadband connections gain market share from traditional dial-up. “The rising broadband penetration, which shows no sign of abating, should be a catalyst for the entire industry,” says Credit Suisse Internet analyst Heath Terry. “Broadband’s declining cost and faster connection speed should spur the use of Internet and its various applications,” he adds. Global Internet penetration at household level should reach 47 percent by 2010 compared with just 17 percent in 2001 and 34 percent in 2006, according to PwC. 

Google Dominates as Search Engine

Search engines today reap the most visits on the Web, with Internet becoming a key source of information for many of its users. The Web’s attractiveness will continue to rise as search engine technologies improve further. About 80 percent of the global Internet population visit search engines, according to a Nielsen//Net Ratings study. Global search queries reach close to 22 billion every month, with Google’s market share reaching nearly two-thirds followed by yahoo! with a market share of close to a fifth. 

Online Advertisement Booming

As people spend more time online, advertisers have to follow them on to the Web. Credit Suisse estimates that online advertising spending rose 35 percent year-on-year to $17 billion in 2006. Global web advertising is expected to grow to $51.6 billion by 2010, according to PwC. E-commerce, the sale of goods and services where an order is placed by the buyer or a price is negotiated over the Internet or e-mail, is expanding at a rapid pace too. In the US, e-commerce sales are estimated to account for 2.8 percent, or $109 billion of total retail sales in 2006, according to data from the US Census Bureau. That is a 24 percent increase in U.S. e-commerce sales compared with 2005. 

Users Becoming More Comfortable With E-Commerce

“The e-commerce segment has been the most consistent grower in the Internet space, growing nearly 25 percent annually over the last four years,” Credit Suisse’s Terry says. “We believe this will continue as buyers become more comfortable with making larger transactions online and as the size of the more Web-accustomed younger users increases. Companies like eBay, Amazon and traditional retailers with strong Web operations should continue to benefit from this growth. With the e-commerce segment trading at 29 times their estimated 2008 earnings per share, a slight premium to the Internet group as a whole, we believe the space is attractively valued relative to its growth rate,” Terry adds.