Study: European ISPs Expect E-Commerce to Pay Big

LONDON (03/03/2000) - As early as next year, western European ISPs (Internet service providers) expect electronic commerce to drive over a quarter of their revenues, according to a report from U.K.-based market research company Datamonitor PLC.

In a new report titled "PC-Based Consumer Internet Access in Europe, 1999-2004:

5th Edition," Datamonitor estimated that by 2001 some 26 percent of ISP revenues will come from activities related to e-commerce -- such as fees generated from transactions through an ISP portal site or charges for tenancy on the site -- with an additional 25 percent to come from advertising.

Online advertising will mostly be in the form of banner ads and page sponsorship deals, Datamonitor said in a statement.

This year, ISPs in western Europe are taking in more money from online advertising than from e-commerce because areas such as online retailing, though growing quickly, are not expanding at the rates previously expected, Datamonitor said.

If an ISP is to generate revenues from e-commerce, the report advises, successful Web portals must be established that extend beyond an ISP's user base. Furthermore, customers cutting out the portals by going directly to the online retailer, or e-tailer, will significantly cut into an ISP's e-commerce revenues, the report warned.

Datamonitor, in London, can be reached at +44-207-316-0001, or via the Web at http://www.datamonitor.com/.

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