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2)   Car Purchasers Rely on the Internet - The availability of information about cars and trucks on the Internet has enabled consumers to be better informed than ever before about buying a vehicle. Countless sites document new car models, options and prices, as well as trade-in values of used cars. Dealers’ web sites are now facilitating appointments for sales and service as well as orders for parts. Some dealers make it possible for consumers to search and view their entire car inventories online, including details about each vehicle’s color, accessories and price. The online market for used cars is greater than that for new cars. Used-car buyers generally tend to have a willingness to travel farther and try harder to find a car that meets most or all of their desires; therefore the availability of information online has been gaining popularity.

3)   Amazon Posts Growth While Other Retailers Suffer - Both online and storefront retailers are suffering staggering declines in business during the global economic crisis. Some retailers, such as Neiman-Marcus, posted declines in double-digits in same store sales during January 2009. An unfortunately large number of retailers have taken bankruptcy in recent months. Meanwhile, a significant retail success story is online leader Amazon.com. During the fourth quarter of 2008, the firm reported that net sales increased 18% to $6.7 billion compared to $5.67 billion for the fourth quarter 2007. Net sales for all of 2008 increased 29% to $19.17 billion. Many analysts credit Amazon’s phenomenal trend-bucking to its competitive pricing and convenience.

4)   Fiber-to-the-Home Gains Traction - The major telephone firms are looking for ways to increase revenues through enhanced services while retaining their customer bases. One such way is through the delivery of ultra-high-speed Internet access, combined with enhanced entertainment and telephone options, by installing true fiber-to-the-home (FTTH) networks. According to the FTTH Councils of Asia-Pacific, Europe and North America, there were 3.3 million U.S. households with fiber to the home in 2008, up from 1.01 million connections in September 2006. FTTH has been far more widely adopted in South Korea, Hong Kong, Japan and Taiwan. Collectively, they account for more than 27 million of the world’s 32 million fiber to the home connections as of mid-2008. Specifically, South Korea has almost 37% of its households connected to fiber, Hong Kong 27%, Japan 24% and Taiwan at 7.7%. The U.S. ranks 10th in the world with 2.9% market penetration behind several Scandinavian nations.

5)   U.S. Broadband Connections Rank Behind Other Nations - The U.S. Government has never adopted an aggressive broadband policy, despite rosy statements about the information superhighway by various politicians. In other nations, including South Korea, the government has accelerated and even subsidized broadband deployment with a goal of delivering the highest level of services possible to further such social goals as high-quality support for telemedicine, education, public services and industrial development. Instead of building broadband systems on one seamless standard, U.S. cable companies and telephone companies are battling for dominance with their two separate systems. WiMAX entrepreneurs are launching disruptive, competing services that further muddy the scene if they feel they can beat the incumbent cable and phone offerings. Relief with regard to broadband in the U.S. has been arriving continuously in recent months, as cable and telecom firms continue to roll out higher speeds at reasonable prices.

6)   Security Needs Flourish/Firefox and Google Chrome Grow - Any computer user who surfs the Internet or sends and/or receives email is vulnerable to viruses, worms, Trojan horses and unwanted software such as spyware. Along with access to a plethora of information, the Internet brings with it exposure to harmful code written by hackers, or code that is not intended to be harmful but may perform unwanted actions without the users’ knowledge or consent. In an effort to avoid the multitude of security risks (such as viruses, worms and Trojan horses), people are looking to alternative web browsers such as Mozilla’s Firefox 3 and Google Chrome. Firefox is an open source alternative browser designed to be less susceptible to viruses and spyware. Firefox’s global usage share is rising and, as of September 2008, has 19% of the global Internet browser market. Chrome is a free browser that allows users to run separate applications on separate tabs, while Google displays targeted ads. Chrome is a major departure for Google, which had previously backed Firefox.

7)   VOIP Use Soars and Threatens to Revolutionize Telecom - For the first time in history, local exchange telephone companies face a dismal market for local landlines. The proliferation of cellular phones is one reason, but an equally big threat to traditional phone lines is the Internet. In particular, the rapid proliferation of high-speed access to the Internet in homes and offices makes Internet-based telephony a logical next step for a wide variety of businesses and consumers. Most newly installed telephone systems in mid-size to large firms are based on Voice Over Internet Protocol (VOIP), with virtually all telephone equipment manufacturers now offering VOIP equipment. Likewise, massive numbers of consumers around the globe are adopting VOIP for their basic and/or long-distance services. The fact that phone service can be provided via the Internet enables cable companies to compete head-on with telephone companies, since cable offers Internet service as well as entertainment programming.

8)   Last Mile Challenges Tumble; Mass Broadband Markets Emerge - A mass-market “tipping point” of consumer broadband access to the Internet occurred during the first quarter of 2004, when more than 26 million U.S. homes and businesses had broadband connections of one type or another. The Age of Convergence, between television, the Internet, telephones, entertainment systems and computers, began in earnest. By the beginning of 2008, broadband connections in the U.S. reached an estimated 120 million homes and businesses. Fueling this growth has been intense price competition between cable and DSL providers. Internet access speeds continue to increase while prices are falling. For the high-end packages, as of early 2009, AT&T was offering 6 Mbps download speed and 1 Mbps upload starting at $35 per month for its Elite service (there are also packages with slower speeds that cost as little as $14.99 per month). In the near future, broadband in the home will be essential for everyday activities ranging from children’s homework to distance education for adults, from shopping to managing financial accounts, from renewing a driver’s license to filing an insurance claim.

9)   Health Information Research Remains a Leading Use of the Internet - In 2008, comScore, Inc. reported that about 72 million unique visitors consulted health web sites, up 14% from 2007. Studies by other firms have shown that nearly one-half of people seeking online health information do so to research information on a specific disease, while many others are interested in educational services, prescription drug information, fitness and alternative medicine. About 90% of those who searched for health care information online indicated that what they found was reliable. The Internet is also radically transforming the relationship between doctor and patient, since patients can obtain information previously not available from traditional resources. User-generated medical information is also flooding the Internet. While an online support group for neurology patients called BrainTalk Communities was one of the first social media sites in 1993, today’s user-generated health sites contain content that comes in forms as varied as videos, blogs and wikis.

10)  User Generated Content, Social Media, Video, Blogs and Wikis Abound - A plethora of homemade content is proliferating on the Internet. Dubbed “social media,” it combines blogs, chat, photos, home video, music and games created or compiled by Internet users and posted on personal and community sites for access by other users from across the street and around the world. An ongoing challenge facing social sites is revenue generation. IDC reported that only 57% of social network users clicked on ads during the year of 2008, and just 11% of those clicks led to a purchase. Social networks are going to have to become creative to find ways to generate revenue. Facebook Connect may have some potential for racking up revenue if participating sites purchase ads. Facebook’s almost unlimited depths of personal information could be mined for highly targeted ads catering to personal preferences. Personalization is a key element to the do-it-yourself social media concept. Users are creating sites using easily available tools to reflect their tastes and personalities, while including links to other sites.

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