Study: Five Industries to Lead E-Profit Growth in 1998

Market research firm ActivMedia said its latest study shows the online business sectors poised for the fastest growth in 1998 are computer hardware and software, real estate, publishing and information services, finance and Internet services.

Online executives across all business sectors responding to an annual survey
anticipate revenue growth of 63% in 1998–slightly higher than the 58%
growth actually experienced in 1997, ActivMedia said.

According to data in ActivMedia’s latest “Real Numbers Behind ‘Net Profits” study of electronic commerce, the top sectors expected growth rates of 150% or more over 1997.

Same-site annual revenue growth of 100% to 149% was projected by managers in B-to-B services, telco and broadcast, travel and
distribution/transportation/wholesale segments.

Modest growth expectations of “only” 50% to 99% over 1997 revenues were
anticipated in B-to-B products, consumer products, consumer services (other
than travel, real estate and information), and Internet mall and transaction

ActivMedia’s Vice President of Market Research Harold Wolhandler said he sees
e-commerce initiatives in the business-to-business sector rapidly expanding.
“Today B-to-B Web sites are viewed as communication vehicles that support off-
line sales and relationships. Only 28% of B-to-B Web sites reported online
sales activity while just over half of consumer-oriented Web sites sell
directly. This trend will shift dramatically over the next 12 to 24 months now
that businesses understand the cost savings of e-commerce and also better
understand the scope of integrating online transactions with their current
legacy systems.”

Of B-to-B sites that generated revenue from the Web, the average total for
1997 was a little over $100,000. For three in ten, revenues were under $1,000
and another one in five had revenues between $1,000 and $10,000. The real
difference in revenue generation is at the high-end; only one in a hundred B-to-B online businesses generated revenues above $1 million, the study found.

The annual “Real Numbers Behind ‘Net Profits” study is available to purchase as a single report copy for $2,995.

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