Report Predicts Strong Growth in Euro E-Business

Forrester Research Inc. today announced the launch of its newest service, European New Media Strategies, along with a debut report that paints a bright picture for Internet revenues in Europe.

The study, “Europe’s Internet Growth,” predicts that online revenues in
Europe from business trade, consumer retail, and content will climb from a
combined $1.2 billion in 1998 to $64.4 billion in 2001.

Most of the growth ($56.7 billion) will result from business-to-business commerce, with consumer retail and content accounting for $4.6 billion and $3.1 billion respectively, the report said.

“Business trade will be the engine of Internet growth in Europe, due to its focus on regional and international markets, the start of transactions in euros, and higher Net penetration in the workplace,” said Joe Sawyer, analyst in Forrester’s European New Media Strategies, and author of the report. “Consumer-focused areas like retail and content will be eclipsed as they struggle with modest online penetration in the home and a focus on fragmented national markets.”

Although the report contends that Internet growth will vary from nation to
nation, it appears that Germany and the UK will emerge as the online leaders in Europe. They are poised to produce nearly half of all online revenue in
Western Europe in 2001, generating $16.1 billion and $12.9 billion respectively, analysts predict.

With its Minitel users moving online in 2000 and 2001, France comes next on the list with expected revenues of $8.4 billion. Scandanavia will lead Europe in online penetration and will generate around $6.4 billion in 2001, according to the report.

“Although we’re forecasting healthy online growth, there is hard work ahead for companies that want to capture a piece of this market,” said Sawyer. “We foresee three particularly onerous obstacles: the glacial pace of telecom deregulation, the difficulty governments will have in bringing people online, and the lag between business’ understanding of the Net and its execution. This will hold the online population relatively low–53.2 million by 2001–and keep overall revenues at one-third of those in the United States.”

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