Australian Cybermalls News

Australian Cybermalls News will be taking a brief Christmas break from Friday, 22nd December 2000 to Monday, 8th January 2001. We'd like to take this opportunity to thank you for visiting us this year and - on behalf of ourselves and all our Mall merchants - to wish you the very best for the Festive Season. During the last year Australian Cybermalls has expanded considerably with Search66.com, South Burnett Online and eservers joining our content network. This has only been possible because of the overwhelming support that you - and tens of thousands of other visitors like you - have shown for an independent Australian company and our merchants. During the coming year we'll continue expanding and developing the sites, services and facilities we can offer you; continue our ongoing mission to help great Australian businesses market themselves effectively on the Net; continue to create jobs and prosperity for the sort of Australia we'd like to call home; and (we hope) continue to earn your trust as a safe, reliable and surprisingly different place to shop online.

According to newly released statistics from Irish internet research company Nua Internet Surveys, the global audience of the Net has now expanded to 407.1 million people. This is more than double the number who had access in September 1999, when 201.05 million people were online. NUA report that growth was particularly strong in the Asia Pacific region this year, where the number of people with Internet access has now passed the 100 million mark. Almost 26% of the world’s online population lives in this region (including Australia, which NUA estimate currently has 8.42 million users - around 43% of the population). As expected, the USA still holds the bulk of of the Net audience (41%), but NUA note that growth slowed considerably in North America during 2000, with the Net access market there reaching near-saturation point. Europe currently holds 27.8% of the Net's audience, Latin America 4%, and Africa and the Middle East 0.8% and 0.6% respectively.

Controversial Australian web site CrimeNet - which publishes publicly-available information about criminals online - has been exonerated of prejudicing court proceedings by a Supreme Court judge, according to the site's owners. In May this year Victorian judge George Hampel aborted a murder trial because information about the accused was published on CrimeNet's web site. The judge said that he felt this information may have prejudiced the jury. This led Victorian Attorney-General Rod Hulls to threaten CrimeNet's operators with contempt of court charges and to demand that the site be shut down, pending a decision of the standing committee of Attorneys General in July - something the site operators refused to do. However, a different Victorian Supreme Court judge, hearing the murder retrial yesterday, cleared CrimeNet of having any influence on juries during court proceedings, saying that a "properly instructed jury" should not be influenced by the web site.

The NSW Cancer Council in Australia has received a AUD$1.2 million grant to fund a 5-year research effort into the health risks associated with mobile phones. The study - which is part of an international effort involving 14 countries - will investigate brain tumors, tumors in the nerve leading from the ear to the brain and tumors in the parotid gland located just in front of the ear. The study will be co-ordinated by Professor Bruce Armstrong. "At this stage researchers really know very little about what the health hazards [of mobile phone use]," Professor Armstrong said, "and it's hard to speculate about what the potential of the study might be. But we hope that this study will either find out the truth, or lay to rest public anxiety that mobile phone use can cause cancer in humans." Australia currently has one of the highest per-capita levels of mobile phone use in the world.

According to a report by Reuters, Asian dotcoms are suffering as many problems as those in the USA and Australia. In fact, the outlook for the Net in Asia over the next two years is generally regarded as bleak. Reuters note that valuations for most Asian dotcoms have collapsed as much as 95% this year and nearly all of them are now trading close to all-time lows. It's now widely expected (Reuters say) that most survivors won't reach profitability or see any upward movement in their share prices until at least 2002. Reuters also report that there have been several spectacular Asian dotcom crashes this year as the impact of falling dotcom valuations began to bite (including Hong Kong retailer AdMart, which went from 850 employees to nil as the months rolled by); and that the online market in Asia suffers many problems that don't occur in the West, making it much more difficult to turn a profit. These include comparatively low Internet penetration rates; a very small online advertising pool; language and cultural barriers; and national issues in some areas which prevent trans-border business. In vast potential markets like India and China, poor infrastructure, logistical issues and limited spending power are also proving a major hindrance to Net uptake rates.

Close to 6 in 10 Australian businesses now use the Internet, according to a new report by the Australian Bureau of Statistics (ABS). Releasing their study "Business Use of Information Technology" today, the ABS reported that 56% of all Australian businesses now have Net access (up from 29% in mid-1998) and 16% now have web sites (up from 8% in mid-1998) - though larger companies are much more likely to have web sites (68% of those with 100 or more employees) than smaller firms (just 9% of those with less than five employees have one). The ABS also report that less than 4% have integrated their web sites with existing technology infrastructure - such as accounting and stock control software - and less than 1% of all Australian business web sites currently offer online payment processing. Not surprisingly, the ABS also found that 44% of current web site owners are less than satisfied with the functionality of their company web sites. The ABS estimate that online transactions accounted for 0.4% ($5.1 billion) of total Australian business revenues in 1999-2000. This compared with 0.2% in Canada.

Despite the collapse of many high-profile Internet retailers this year, online shoppers in the USA have been spending in record numbers this yuletide according to BizRate.com, a US site which surveys consumers at the point of sale about what they've purchased and how much they've spent. BizRate estimate that since the Christmas shopping rush began on November 20th, US consumers have been spending close to $US200 million per day online. And more than $US1.2 billion is expected to be spent in the week before the online shopping season comes to a close on December 15th (December 16th in Australia). Jupiter Media Metrix also report that traffic to online shopping sites is significantly up on last year. The company report that traffic to the 400 ecommerce sites they monitor reached 11.8 million daily visits in the week ending December 3rd, up from 7.9 million in a comparable week the year before. Meanwhile in Australia, dStore report that they've been processing between 800 and 1000 orders per day for most of the month - a figure which may indicate that a similar seasonal boom is occurring in Australian online gift buying as well.

In a surprise move that may affect News Ltd's recent investment in Australian online property broker realestate.com.au, four of the country's largest real estate agencies announced today that they plan to launch their own independent commercial property site in March 2001, and expect it will be the largest online commercial property marketplace in the country from the day it begins trading. Colliers Jardine, Knight Frank, Jones Lang LaSalle and CB Richard Ellis - who are estimated to control more than 60% of Australia's major commercial, retail and industrial listings between them - announced plans to launch propertylook.com.au as a separate joint venture in both Australia and (as a .co.nz) New Zealand in the next 90 days. The new site is expected to carry at least 7,000 listings in its first year. Other agents will also be invited to add their listings to the site - either free or for a modest fee, depending on their level of membership and the exposure required. None of the four partners expect the site will be expensive to launch or operate, and all costs for the initial 3-year trial run of the venture will be met out of the partners' operating revenues.

New research by NOP shows that 30% of UK-based dotcoms made a profit last year and more than 50% expect to be profitable this year. Only one of 102 panel members in the British ecommerce survey expected they might not be in business within 12 months. According to NOP, most of the successful dot.coms are concentrating on converting registrants or site visitors into customers, rather than pour money into generalised, untargeted marketing to acquire additional site traffic. Instead, these types of companies plan to increase their use of targeted advertising campaigns with direct response measurement, such as direct mails and advertisements in trade publications. Companies in the US online retail sector are already taking this route to profitability, according to the Boston Consulting Group. A recent report found that spending on customer acquisition dropped substantially between the second and third quarter of this year. In an effort to reduce spending, US dotcoms have also cut back on offline advertising.

According to a report in the Weekend Australian, high-profile Australian etailer Wishlist is seeking an extra $10 million injection of funds to enable it to reach profitability. The Australian reported that Wishlist currently has less than $3.5 million cash and a reported burn rate of close to $1 million a month - enough to see it survive until the first quarter of 2001. The Australian also reported that Wishlist's high-profile agreements with Country Road and BP earlier this year hadn't proved as profitable as the online gift retailer had initially hoped, since they were risk and revenue sharing arrangements. The agreement between Wishlist and BP to distribute products to consumers had proven to be far less successful than either party had hoped, the Australian said.

According to a new study by Internet research firm eMarketer, 5% of the world's population over the age of 14 - around 230 million people - now regularly use the Net for at least 1 hour per week. Furthermore, this market is expected to almost triple to 640 million adults (ie 14% of the world's population) by 2004. However, eMarketer also report that the B2B market still dominates online commerce and seems set to do so for a long time to come. eMarketer estimate that B2B sales account for 79% of all ecommerce revenues at the present time, and that this will rise to 87% by 2004 - by which time the global ecommerce market will be worth anywhere between $US963 billion and $US3.48 trillion. eMarketer's data was gathered from a range of US Government data sources and worldwide research studies.

To the chagrin of the Federal Government, the ALP forced through last-minute amendments to Australia's controversial new Privacy Amendment (Private Sector) Bill today. The changes will give consumers the power to inspect and correct personal information held by private companies, including data collected before the legislation comes into effect late in 2001. The Government had originally proposed that the law would only apply to data collected after the law came into force - a blanket exemption that the ALP rejected. Federal Attorney-General Daryl Williams described the amendments as "heavy handed" last week, but was forced to back down when the Labor Party refused to pass the legislation in its current form. Mr. Williams said Australia's new privacy laws were a mid-level compromise between the laissez-faire approach used in the USA and the heavily regulated approach adopted by the European Union. Nonetheless, the legislation has continued to draw heavy criticism - partly because there are no penalties for companies which breach the law, and partly because the new laws will exempt small business, media organisations and political parties from its ambit.

A new study released by Oxford University's Said Business School suggests that the Net is a supplement to existing communications tools rather than a replacement for any of them - and that far from being life-changing or bringing about a "new economy", it shows some evidence of simply being a fad. The study, which summarises 22 separate investigations carried out by 76 researchers in 25 UK, Dutch, Danish and American universities over the last 3 years, found that teenage use of the Net appears to be declining; that the principal use of the Net is still for communication and social reasons rather than for pure commerce; and that there is some evidence that the current rapid rate of expansion of the Internet may taper off in the foreseeable future. The study also found that while the Net does pose serious problems for Governments attempting to control it, the true extent of social change being caused by the Internet may be more limited than many believe.

Staff at the Australian Broadcasting Commission (ABC) voted to go on a 24-hour strike from mid-day today - partly because of what representatives described as "management obsession with new media at the expense of core programming". The cash-strapped national public broadcaster, which has seen an exodus of senior staff since March this year when Mr Jonathan Shier was appointed the corporation's managing director, will be run by management for the duration of the strike. In August Mr Shier announced that he intended to spend $2 million to create 6 senior ecommerce roles in the ABC - a move that has increasingly rankled staff in the ABC's other divisions, who've had to endure continuing job and budget cuts in the wake of Mr. Shier's "New Media" push. Last month the Australian Federal Government refused to increase the ABC's funding for the next three years and today Communications Minister Senator Richard Alston also refused to intervene in the dispute, saying that "the Government doesn't interfere with the day-to-day management of the broadcaster." Mr. Shier also denied an "obsession", saying that he simply felt the ABC must have a "substantial" presence in new media to remain relevant.

Troubled Australian etailer dStore was sold to Adelaide-based retailer Harris Scarfe (HS) on Friday for $3 million. The surprise deal is unlikely to leave shareholders with much - if any - return on their initial $23 million investment, most of which was eaten up by the company's marketing operations during 2000. The cash-strapped etailer was unable to raise the additional AUD$6 million it believed it needed to reach profitability during the last few weeks and was taken over by the Scarfe group in a surprise fire sale. HS already operates a successful mail-order business online. Today HS announced that it intends to lay off a large number of dStore's staff and merge much of its operations into its own online businesses (though the dStore site would keep trading as a separate entity). dStore reportedly sells around $400,000 a week and has more than 150,000 customers on its loyalty programme. Shares in HS fell on news of the acquisition, dropping to a new low of $1.19 soon after the deal was made public.

The crash of technology stocks - which has seen most listed Australian dot.coms shed 90% or more of their value this year - hasn't dampened the enthusiasm of SME's to open up online, according to our monthly Australian Internet Growth Index. This month the AIGI recorded web site growth across all state and regional centres capitals. The December 1st figures (with November 1st figures in brackets) are as follows:

Australian Internet Growth Index November 2000
(Figures Show Estimated Live Sites)

Brisbane - 7,209 (6,615) Sydney - 31,345 (29,882) Melbourne - 21,128 (20,315) Adelaide - 6,021 (5,979)	Perth - 5,835 (5,814) Hobart - 2,182 (2,175) Canberra - 6,896 (6,882) *Darwin - 5,460** (5,381)
NB: The Darwin figure includes rural Australian sites