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Archive: April 2002 News Headlines
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Online Newspapers Favoured News Source

In a study likely to have strong parallels in Australia, the Newspaper Association of America (NAA) has found that people looking for local news on the Internet are more likely to visit online newspapers than general news sites; that seasoned Net users will have a greater likelihood of going to newspaper web sites than Net newbies; and that consumers who read online newspapers make more money than web users in general; are better educated; and spend more time and money on the Net than the overall online population. The NAA carried out almost 15,000 phone and online polls and found that 62% of Net users go to newspaper web sites for local news and information while 55% visit Yahoo, 39% choose local TV station web sites and 37% consult AOL. The NAA also found that Internet users are big fans of traditional newspapers, with 55% saying they read the previous day's paper and between 65% and 75% reporting they'd seen one in the past seven days. The most favoured reasons for visiting online newspapers are breaking news (38%), searching archives and/or classified ads (34%), greater detail of a story in the paper's printed version (32%), and trying to find information not available in print (31%)


Domain Slide Continues

The fad of cybersquatting on domain names in the hope of being bought out for a high price may be petering out - and many participants may have been badly burned in the process. According to domain registry Snapnames (SN), the number of global internet domain names continued to fall in March and early April this year, marking almost six months of continuous decline in domain renewals worldwide. Over the last half year, SN report, some 2.5 million .com, .net and .org domain names - or roughly 12% of all domains registered in these areas - have expired and not been renewed as squatters elect to surrender the domains rather than pay renewal fees for them. This had led many US domain registrars to face falling profits and workloads. Other factors affecting cybersquatters have been the release of additional domain suffixes (such as .biz and .info); numerous decisions taken by WIPO (the World Intellectual Property Organisation) which tend to favour legitimate claimants over squatters; and a growing awareness amongst both businesses and consumers that the content located at a domain is more valuable than the domain name itself.


Honesty, Trustworthiness Beat Price

According to a new study by Cap Gemini Ernst and Young (CGE), shoppers demand honesty and respect from retailers more than the highest-quality merchandise or the lowest prices. CGE interviewed 6,000 consumers in nine European countries and found that honesty and reliability mattered significantly more than traditional notions of product and service to the majority of interviewees (CGE report that consumers in the USA, Australia and Thailand also returned similar results). CGE found that the 5 things that now matter most to consumers are courteous and respectful staff, consistently good merchandise quality, a clean and well-maintained store, unconditional merchandise return and clearly visible prices. CGE also found that "honest price" was more important than "lowest price" for the majority of both US and European consumers and that consistently high quality mattered more than savings for most interviewees.


Online Magazines Not Popular

In a new study that may have strong parallels in Australia, InsightExpress (IEx) report that while online news sites may be popular, online magazine sites are not. IEx found that 32% of Net users in the USA don't read magazines online because they consider them more inconvenient than traditional magazines and 54% dislike the banner ads, pop-ups, and ‘general distractions’ usually associated with online magazines. A further 47% cite the cost as a deterrent to reading online, while nearly 25% claimed that eyestrain was another reason why they disliked online magazines. And in what may be the final blow to putative online magazine publishers, only 22% of respondents said that they preferred to read online magazines to print versions while 73% said they wouldn't forego paper versions for online versions, even if the online versions were half the price.


AOL-Time Warner Loses US$54 Billion

New Economy darling AOL-Time Warner announced today that it had lost $US542 billion in the last quarter - the largest quarterly loss in US corporate history. The loss was largely forced on the company by changes to US accounting rules, slowed subscriber growth at AOL and a 31% decline in online advertising as lucrative contracts originally struck by AOL during the boom failed to be renewed. However, the declines suffered by AOL were not mirrored by the Time Warner portion of the business which saw modest rises in gross sales and profits during the same period. AOL acquired Time Warner in 2000 during the height of the boom for US$106 billion, giving the combined new company a capitalisation of US$209 billion when they merged. Today, however, the merged company is capitalised at around US$90 billion. Surprisingly, Wall Street investors were unmoved by the epic loss announcement - having figured it into the company's share price several months ago - and AOL Time Warner units rose slightly after the announcement.


China Now World's 2nd Net Market

China now has the second largest number of home Internet users in the world according to a study by Nielsen/Netratings (NN). NN estimate that China now has around 56.6 million households with access to the Net. While this is only equivalent to 5.5% percent of the Chinese population, it still represents a significant jump from the estimated 22.5 million users China had online at the end of January 2001. The USA remains the largest market with an estimated 166 million home users, while Japan has now slipped into third place with an estimated 51.3 million. They're followed by Germany in 4th position (32.2 million) and the UK in 5th (29 million). In the Asia-Pacific, China now ranks as the leading home usage market followed by Japan, then South Korea (27.8 million), Taiwan (11.6 million) and Australia (10.6 million). NN note that despite the impressive recent growth there are some upper limits to expanded Net usage in China at the present time. One is that only 36% of Chinese homes have telephones; another is that there are very few Chinese language web sites; and a third is that the level of broadband penetration in the country is currently negligible.


Australians Love The Net: NOIE

Australia is one of the leading countries in the world in terms of Internet infrastructure, penetration and use according to a new benchmarking study released today by the National Office for the Information Economy (NOIE). NOIE ranked 14 key countries across 23 statistical indicators to determine that 67% of Australian households now own or lease a PC; 52% of households are connected to the Net; 72% of Australians aged 16 years and over have Internet access from any location; 73% of Australian males and 72% of females aged 16 years and over have Internet access; and 80% of people aged 16-34 and 68% of people aged 35 years and over in Australia have Internet access. NOIE also found that Australia has a low ratio of users per ISP (generally 15,000 to 1 against 20,000 to 1 in the USA and 2.1 million to 1 in Korea) and the third-lowest peak time connection rates as well. Australia's worst score came in the area of Net connection speeds, with only 5% of home users having access to high speed connections compared to 87% of home users in South Korea.


US Senator Proposes Tough Privacy Law

In a slap in the face to the Australian Federal Government - which has largely followed the current loose US approach to privacy and anti-spam issues rather than adopt the much tougher position chosen by Europe - C/Net report that US Senator Ernst Hollings introduced an online privacy bill today that would force US companies to obtain explicit permission from individuals before collecting and sharing information about them and impose heavy legal penalties on anyone flouting privacy law. The new legislation - if passed - would make "opt-in" systems compulsory across the USA, effectively dealing a gut blow to spammers and crooked corporations who remarket data without user knowledge or permission. Sen. Hollings believes the legislation is necessary to foster the growth of the Net and end growing US consumer frustration with country's lax privacy laws. The Hollings' bill has been supported by the Electronic Frontier Foundation but has been opposed by the US Direct Marketing Association and the US Chamber of Commerce, both of whom prefer the current self-regulatory regime. In Australia, current privacy laws provide no penalty for anyone flouting them.


66% Of US Adults Now Online

A new study by Harris Interactive (HI) suggests that the Net is beginning to grow again in the USA after two years of negligible expansion. HI polled 2,038 adults in February and March of 2002 to estimate that 137 million US adults (or 66% of the adult population) now access the Net, up from 127 million in November 2001. HI attribute static growth in the previous two years to the collapse of the bubble and a slowing US economy, but note that penetration has nonetheless risen from 9% to 66% of the adult population in the last 7 years, showing just how integral the Net has become to US society. In the latest study, HI also found that women now outnumber men on the Net in the USA (51% to 49%) and penetration is roughly equal across all age groups, though it tapers off rapidly in the 65+ age group. Penetration also remains poorest amongst low income earners, blacks and Hispanics. HI found that 55% of US adults access the Net from home, 30% from work and 20% from a school, library, cyber cafe or other location (some people surf from two or more places).


W3C Approves New P3P Privacy Standard

After close to 5 years work on the matter, the World Wide Web Consortium (W3C) announced today that it formally recommended that the Platform for Privacy Preferences (P3P) be adopted as a new web standard to help consumers interpret web site privacy policies and make decisions about whether to accept or reject them. P3P uses web browser software to help consumers interpret privacy policies, and a limited form of P3P already exists in Microsoft's Internet Explorer 6. The decision by the W3C seeks to address growing concerns about how ecommerce sites use email addresses, shopping preferences and other personal data they collect. P3P has been criticised by a number of privacy groups who claim that it may provoke a sense of false security amongst users and make it harder to get tough privacy legislation passed offline. Privacy groups also complain that P3P won't prevent sites from collecting data or sharing the information with marketers, nor would it let users negotiate with sites on how information gets used. Nonetheless, the W3C believes the new system will be an improvement over the current situation and will push for its widespread adoption amongst reputable web sites.


Online Trust Levels Still Low

According to a new study of 1,500 online consumers by US-based Consumer Web Watch (CWW), less than 29% of Americans currently trust ecommerce sites and barely 33% trust sites that provide advice about such purchases or services. Surprisingly, this is lower than the number who trust the US Government (47%), newspapers or TV news (58%). CWW found that factors which build consumer trust include clearly stating who runs the site and how to reach those people if there's a problem, a clear and easily-found privacy policy and an equally clear statement about how the site deals with mistakes, whether informational or transactional. CWW found that 80% of respondents say it's very important to them to be able to trust the information on a web site - the same percentage that say that it's very important that a site be easy to navigate. Consumers also voiced concerns about the blurring lines between online advertising and content on sites. More than half of users (59%) say it's very important for news and information sites to label their advertising as such and distinguish it from news and information on the site. In addition most respondents (60%) had no idea some of the most popular search engines accept fees in exchange for listing some sites more prominently than others.


RBA Says Being Dumb Is OK

A new research report by the Reserve Bank of Australia (RBA) suggests that the Australian economy may be benefitting from Australians' high use of information and communications technology, even though the country manufactures very little of it and remains a net importer of high tech. RBA researchers John Simon and Sharon Wardrop suggest that Australia has actually done well out of the "new economy" and that high business investment in IT&T since the early 1990s has led to the country being amongst the highest per-capita users of IT&T products and services in the world. Simon and Wardrup say that they believe 50% of the gains from the use of IT&T can be attributed to price falls while the other half can be attributed to higher nominal expenditure. They suggest that Australia has experienced significant output growth related to computer use over the last decade from IT&T use and that there are substantial benefits to be gained from being a net user of IT&T, even though the country remains completely dependent on foreign corporations for most of it and consequently receives none of the benefits of being an IT&T producer.


Teleworkers Rising In NSW

Nearly 250,000 workers - around 8% of all employees - teleworked in NSW in the three months to October 2001,according to new data released by the Australian Bureau of Statistics (ABS) yesterday. In addition, a further 355,200 people (12%) worked at home after normal business hours; and another 500,000 would like to telework if they had the opportunity. The ABS report that most teleworkers are aged 35-44 years while those aged 45-54 years account for the largest proportion of employed people who spend all day in the office and only work at home after normal business hours. In addition, almost three-quarters (74%) of teleworking employees work in the private sector. However a greater proportion of public sector employees teleworked (10% in the public sector vs 7% in the private sector). The main reasons for teleworking were "work commitments/job requires it" (33%), "less distractions" (15%), "childcare/family considerations" (13%) and "greater productivity" (12%). Not surprisingly, childcare and family considerations were the main reason given by one-fifth of women, compared to less than one-tenth of men (21% compared to 7%).


Worst Of Dot.Com Bust May Be Over

The spectacular implosion of the boom may be coming to an end, according to US firm The site reported today that while at least 18 US Internet companies shut down or were declared bankrupt in February 2002, this nonetheless marked the lowest rate of casualties in the sector since August 2000 - a sign, perhaps, that the worst of the bust may be coming to an end. Webmergers report that there there have been 806 collapses in the USA since January 2000 with more than US$1 trillion going up in smoke. In other news: Microsoft released a major bugfix for its troubled IIS web server today following a string of embarrassing security gaffes in recent months. The new patch allegedly addresses 10 critical security flaws recently unearthed in the product. Microsoft has urged system administrators running IIS 4.0, 5.0 and 5.1 to download and apply the patch "immediately".


Spam Causes Federal Alarm

The growth in spam and its potential to threaten the stability of Internet services has caused alarm in the Federal Government. Research by the National Office of the Information Economy (NOIE) suggests that as much as 20% of all emails now being received by Australians are spam - largely originating from the USA and Asia - and that spammers are now starting to invade other Internet messaging services such as relay chat and instant messaging as well. NOIE is currently looking into the issue and has extended the date for a responses to a public spam questionnaire to April 19th in order to gather feedback from ordinary Australians about what they believe needs to be done to curtail spammers. NOIE is currently consulting with community and industry groups to assess the effectiveness of anti-spam measures. Solutions currently being looked at include education campaigns, self-regulatory practices and codes for ISPs and commercial associations - but tough anti-spamming laws may also be put in place of enough people call for them. The results of the NOIE's review are expected mid-2002


LookSmart Buys WiseNut

LookSmart - the Australian company which first introduced the idea of paying to be listed in search engines - announced today that it had acquired US search engine WiseNut in a share swap. Under the terms of the agreement, LookSmart will issue 3,835,387 shares of its common stock in exchange for all WiseNut's outstanding stock, valuing the relatively young company at $9.25 million. LookSmart CEO Evan Thornley said his company was acquiring WiseNut to integrate its "next generation" search technology into the company's own offerings. "The combination of high quality scalable search technology and strong listings revenue generation positions LookSmart as a clear leader in search targeted marketing," he said. Ironically, WiseNut draws many of its listings from Open Directory - a public search engine where listings are compiled completely free of charge by volunteers. Open Directory's database is now used as the basis of most major engines including Google, Netscape, MSN and AOL.


World Slow In Switching To Broadband

The hype surrounding broadband web access may be far removed from reality according to The Yankee Group (TYG). In a soon to be released report, TYG forecast that high-speed Internet access in the USA will grow from 10.3 million subscribers in 2001 to 41.1 million subscribers by 2007. They also speculate that around 15 million US households will be using a broadband connection by this time compared to 66 million homes with dial-up access - or in other words, that broadband access will still only be used by 18% of US households by 2007. TYG also believe that cable modems will continue to dominate the broadband market in the USA for at least the next two years. They forecast that 10.1 million US homes will still be using cable modems by the end of 2002, which will account for 66% the entire US residential broadband market. In Australia, a report by the Sydney Morning Herald's ICON team also found that of the three current broadband options (cable, ADSL or satellite), cable still outperforms ADSL and satellite by a healthy margin.


Yahoo Still Top Search Engine: Nielsen

Despite the rapid rise of Google during the last few years, Yahoo still remains the most popular search engine according to Nielsen/Netratings (NN) new MarketView Web measurement reporting system. NN reported today that during February 2002 Yahoo Search drew 35 million visitors. MSN came close behind with 32 million and Google occupied 3rd spot with 27 million. AOL (24 million) and Ask Jeeves (11 million) took out 4th and 5th search engine positions respectively. NN also found that Yahoo Finance was the world's most popular finance and investment site in February, drawing 8.3 million visitors against Quicken.Com (7.8 million) and MSN Money (6.9 million). Surprisingly, NN also report that Yahoo is now giving Amazon a close run in the Multi-Category Commerce segment, coming in second with 25.7 million visitors to Amazon's 30.3 million.


BigPond Shows Users The Way Out

Australia's largest ISP Telstra BigPond showed that it's taking Microsoft's "We Have The Way Out" message to heart (see yesterday's story) when it admitted today that it had accidentally erased more than 2,000 personal web sites from its servers. 80,000 of the company's customers who currently have Web Personal accounts have been unable to access their sites since March 28th due to a "software irregularity". And when services were finally restored, Telstra admitted that several thousand web sites had been completely erased during the "irregularity" and apologised for it. Affected users were sent an email explaining the situation. The email went on to suggest that recipients could reload their sites if they'd had the foresight to keep a backup, and offered a credit of one month's subscription fee as compensation. Not surprisingly - according to Netcraft - both and operate Microsoft's IIS web server on an NT4/Windows 98 platform.


Microsoft Gaffes Cause Red Faces

A new anti-Unix web site launched by Microsoft and Unisys seeking to persuade customers to switch from the Unix operating system to Microsoft software has been causing red faces all round at Redmond this week. Yesterday server monitoring firm Netcraft revealed that the site was running on machines powered by FreeBSD (an open-source version of Unix) and the Unix-based Apache web server. But when the site was moved to a server running Microsoft's IIS web server earlier today it promptly ceased to run, returning either a blank white screen or an "Error 403" authorization message for several hours until the problem was rectified. The "We Have The Way Out" web site is part of a multi-million dollar advertising campaign being run by both companies in an attempt to undermine Unix, the Net's dominant operating system. One ad on the site describes Unix as "an expensive trap", saying that it's inflexible; complex; and requires expensive experts to operate. Unix supporters have responded that Microsoft's "flexible, uncomplex" IIS server is both insecure and bug-ridden, pointing to a similar gaffe in March when US domain registrar Network Solutions moved several hundred thousand "parked domains" from Unix to IIS web servers and - according to Newsbytes - had thousands of them defaced by hackers within a matter of hours.


Australian Net Remains Static

After a major die-back in February, the Australian Internet remained fairly static during March 2002 according to the search engines we poll to construct our monthly Australian Internet Growth Index (which has been attempting to measure the number of live Australian web sites - as opposed to the number of registered domains - since January 1996). Most capital cities showed little change over the prior month, with the exception of Brisbane which had a notable 4.1% die-back. The April 1st figures (with March 1st figures in brackets) are as follows:

  Australian Internet Growth Index March 2002
  (Figures Show Estimated Live Sites)
  • Brisbane - 11,594 (12,090)
  • Sydney - 46,315 (46,242)
  • Melbourne - 43,922 (43,907)
  • Adelaide - 8,484 (8,478)
  • Perth - 9,602 (9,622)
  • Hobart - 4,002 (4,048)
  • Canberra - 8,545 (8,555)
  • Darwin* - 10,890 (10,916)
NB: The Darwin figure includes rural Australian sites

During March 2002 Australian Cybermalls hosted 66,558 visitors, a slight fall on February's 68,030 as we celebrated an early Easter. Our visitors viewed 336,347 page displays from our servers, which in turn consumed 16.24 Gb of bandwidth.

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