Internet and E-Business Trends in 2004

What shaped the Internet and e-business landscape in 2004? eMarketer brings you the top ten Internet and e-business trends for the year.

December 30, 2004 – According to eMarketer’s CEO Geoff Ramsey, “The Internet is back!” But this time, it’s got a solid foundation. Ramsey explains, “Companies are making money online. Advertisers are investing in online advertising � which is now the fastest growing ad medium in the US. Businesses large and small, around the world, are adopting e-business technologies in virtually every facet of their operations. Firms like Google, Yahoo!, and eBay are changing the way business is conducted and adding real value to the economy.”

In the scope of its coverage of the Internet and e-business, eMarketer finds the following top ten trends for 2004.

  1. Paid Search Advertising: The main story in Internet advertising in 2004 has been paid search, reports Senior Analyst David Hallerman. Spending rose like a rocket, with 51% growth to $3.9 billion in the US alone, according to eMarketer. Press coverage of Google’s IPO, and the mind share that bought, highlighted the entire marketing concept.

  2. Cross-Channel Shopping: This was the year that cross-channel shopping became a phenomenon to be reckoned with. Several studies pointed to the notion that the true influence of online buying is greater than just its percentage of total retail buying. Senior Analyst of Consumer E-Commerce Jeffrey Grau explains that this is because online browsing for product and pricing information drives in-store purchases. Furthermore, more consumers are dividing their purchases among bricks-and-mortar stores, Internet retail Web sites and mail order catalogs. The best part? Multi-channel shoppers tend to spend more than single-channel shoppers on purchases.

  3. Blogs and Really Simple Syndication (RSS): eMarketer’s Director of Research, Yael Marmon, says RSS and corporate blogs have been key online content developments in 2004. Integration of RSS within MyYahoo and the popularity of Mozilla’s latest Web browser, Firefox, have helped promote RSS as a pervasive form of content syndication. Corporate blogging has also become popular in 2004, with usage by both Microsoft and Yahoo!.

  4. Strong Broadband Adoption: Japan, China, the UK and France: Ben Macklin, Senior Analyst covering the broadband market, comments, “When broadband is available for less than $30 per month, take-up is rapid as seen in the most competitive broadband markets.” France, for example, was once an Internet laggard, but now has one of the most competitive broadband markets in the world.

  5. Mobile Service: Wireless phones and wireless phone services have finally come of age in 2004 and are starting to deliver on their technological promise. Handhelds are now also well on their way to becoming far more simple communication tools. Dr. Noah Elkin, eMarketer Senior Analyst covering the wireless market, explains that although South Korea and Japan have been leading the way in the wireless space for a while now, the US is finally beginning to catch up, as operators roll out high-speed wireless networks. US consumers are looking to their phones for more than just talking, as evidenced in the widespread adoption of camera phones.

  6. IT Overseas Outsourcing: According to a 2004 Accenture survey of executives worldwide, IT is the most commonly outsourced business function. eMarketer’s Offshore Business Process Outsourcing explains that as companies look to outsource business process, they are expanding their scope of countries to consider.

  7. Health Care and IT: A ten-year plan for several IT initiatives was rolled out in July 2004 by the US Department of Health and Human Services for the country’s health care sector. Among the plan’s top goals is the creation of an interoperable network through which health care providers will be able to share the electronic medical records of individual patients. Other countries also initiating ten-year IT plans for health care are Australia, Canada and the UK.

  8. VoIP: Service Offerings: Business and consumer awareness of VoIP began to grow this year, as leading telecom and cable companies started to unveil their VoIP services. User growth has been slow, however, but eMarketer expects it to pick up in 2005.

  9. Linux: According to eMarketer Senior Analyst Steve Butler, author of the Linux: Usage and Trends report, “A significant milestone in the development of the Linux operating system occurred in September 2004, as several leading technology firms announced their acceptance of the Linux Standards Base (LSB). With these companies demonstrating their long term commitment to Linux, businesses can feel more confident in adopting Linux-based technology.”

  10. China: Major IT Consumer: China has become one of the three largest producers of IT hardware. IDC estimates total IT spending in China will reach $25 billion in 2004, with a spending growth for the year second only to India.

Stay tuned to eMarketer next week when a companion article to this piece will be published covering what to look out for in 2005.

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