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M-Web listing draws on huge Internet growthr
15/02/98

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Vital role for information providers

IN JUST two decades, the Internet has grown from a Cold-War antidote to US paranoia into an industry with an annual turnover of billions of dollars.

Initially, the Internet was part of a project to create a network capable of reliable communications in the event of a nuclear attack.

Until the early 90s, due to the complex series of commands required, it was used mostly by the academic community. However, in 1993, with the emergence of simple PC-based tools such as the Netscape browser, search engines such as Yahoo! and the availability of cheap PCs with high-speed modems, the Internet exploded both in terms of the numbers of users as well as the wealth of services and information available.

As the Internet evolved, an industry service model developed with two distinct service segments: Internet service provision and information provision.

The former is the provision of a connection to the Internet.

The latter supply information-based services or content (including online advertising) which are accessible via the Internet.

Typically, in the residential sector, information providers offer information which is accessible via Web sites.

The availability of the services of information providers is critical to the development of the Internet, since the ability to access information is the main driver for subscription to the Internet.

Information providers get revenue in three ways:

ý By charging subscriptions fees;

ý By charging advertisers; or

ý By charging sponsors for space on the most popular pages.

Increasingly, information providers are offering services where financial transactions take place on the Internet. These E-commerce-enabled services benefit both suppliers and consumers.

For example, consumers can get to a broader range of goods or services, while businesses get direct feedback on consumer behaviour.

E-commerce is still in its infancy, however, with users still wary of providing credit card information over the Internet.

As the technology needed to provide secure financial transitions improves, another class of information provider is appearing - the E-commerce provider. These companies provide the infrastructure needed by businesses for secure financial transactions. They derive their revenues from transaction fees which represent a small percentage of the value of each enabled transaction.

Thanks to the interactive capability of the Internet, advertisers can gain instant feedback on the success of a campaign from the number of click-throughs from users.

as an advertising and promotional vehicle is critically determined by its design. Therefore,

M-Web believes that the growth in Internet subscriptions will be matched by a similar growth in information available on the Internet and the revenues derived directly from it.

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