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Web Usage Growth Flatlines in U.S., Other Mature Markets

  |  March 21, 2005   |  Comments

Emerging markets hold opportunities for online business expansion.

Over the last year, users in mature Internet markets such as the U.S., Brazil, Germany, Spain, Switzerland, Sweden, and the U.K. have shown minimal to flat growth in terms of average time spent online at home, according to a report by Nielsen//NetRatings.

For companies seeking to rapidly expand their online business, attractive growth opportunities exist in markets NetRatings classifies as "emerging." These include Australia, France, Hong Kong, Italy, and Japan, all of which demonstrated double-digit growth in time spent online at home in the last year.

In contrast, the U.S. showed a two percent decline in average time spent online, the only country exhibiting negative growth in that usage category. (Overall, NetRatings tracks Internet usage of 12 separate countries, accounting for 70 percent of world usage.)

Year-Over-Year Growth in At-Home Time Spent Online, February 2005
Country Time Spent Online,
February 2005
(hr:min:sec)
Year-Over-Year Growth (%)
Hong Kong 21:53:24 25
France 14:25:38 19
Italy 7:59:57 15
Japan 14:50:42 12
Australia 11:39:06 10
United Kingdom 11:20:34 8
Sweden 10:29:33 8
Switzerland 10:52:28 7
Brazil 13:13:58 6
Spain 11:36:56 5
Germany 12:31:22 4
United States 13:44:04 -2
Source: Nielsen//NetRatings Global NetView Analysis, excluding Internet Applications and Proprietary Channels, March 2005

"The low-hanging fruit in the U.S. has already been picked," said Kaizad Gotla, senior Internet analyst at Nielsen//NetRatings. "Overseas, peoples' usage patterns are less developed. So it's a good time for Internet companies to invest in these markets. Certainly, the large portals and search companies are already pretty diversified in these countries. But there is also an opportunity for smaller niche companies to create a strong brand over there, because usage patterns aren't as established as they are in the U.S."

NetRatings finds the majority of usage growth has come from increased frequency of access or user session growth in the last year. At the head of the curve, Australia, France, Hong Kong, and Italy exhibited double-digit growth in the number of monthly user sessions.

Year-Over-Year At-Home Internet Session Growth, February 2005
Country Sessions in February 2005 Year-Over-Year Session, Growth (%)
Hong Kong 30 26
France 27 17
Australia 21 15
Italy 15 10
Switzerland 23 9
United Kingdom 21 9
Japan 25 9
Spain 22 8
Sweden 20 7
Brazil 19 5
United States 25 0
Germany 23 -1
Source: Nielsen//NetRatings Global NetView Analysis, excluding Internet Applications and Proprietary Channels, March 2005

The U.S. showed zero growth in average monthly sessions, ranking next-to-last in the study's year-over-year analysis. In last place is Germany, which posted a one percent decline in sessions per month.

Diminished growth in average time spent online and monthly sessions in the U.S. don't spell an end so much as a leveling off before the next significant step forward, Gotla predicts.

"In the U.S. market, have we reached a saturation point? No. With increasing broadband connectivity, online advertising, and investments in the online channel, we are set for the next big thing," he avers.

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