IDC Sees Explosion of Free 'Net Access in 2000

SINGAPORE (01/03/2000) - Internet stock corrections, the death of pure-play "dot.coms" and an explosion of free 'Net access services are the main predictions for 2000 made by International Data Corp. (IDC) Senior Vice President Frank Gens.

In the market research company's Fifth Annual Predictions report published last week, Gens' predictions for key trends, strategies, and events likely to occur in the coming year are as follows:

Financial reality will meet the Internet this year. There will be a broad correction in 'Net stock prices and consolidation in key electronic commerce segments, and dot.com companies will see a trend towards profitability, according to the IDC analyst.

Free Internet access, devices and software will be commonplace by the end of the first quarter of this year. Gens pointed to Kmart's deal with Yahoo Inc., offering free 'Net access to those who register at Bluelight.com, as an example of this growing trend.

Gens also predicted the demise of companies that exist solely on the Web.

Customers live in the real world as much as in the virtual one, which will force pure-play Internet firms to step up their bricks-and-mortar presence, he said.

The smart companies will put network effects to work in their business models, radically expanding their electronic channels, and becoming channels for others, according to Gens. Indirect channels will make a huge comeback, with growth in online shopping engines, virtual malls, digital marketplaces and affiliate marketing, he said. Even the head of Dell Computer Corp. Michael Dell, the poster child for direct marketing on the 'Net, will embrace the new breed of e-channels, according to Gens.

In the area of technology developments, Gens' predictions included the following:

-- broadband will account for more than 1 in 10 online households in the U.S. by the end of this year -- about 2.5 times the number in 1999; -- 38 percent of U.S. households with two or more PCs will also have a home LAN (local area network); and -- eWallets for wired consumers will reach critical mass just in time for the 2000 holiday season.

Gens also offered a grab-bag of miscellaneous predictions:

-- Microsoft Corp. will be broken up -- either by itself or by the Department of Justice in the wake of the current antitrust trial against the software giant; -- still more U.S. presidential candidates will seek credit for the Internet and e-commerce boom, despite the flak that U.S. Vice President Al Gore received over his 'Net claims last year. Unfortunately, according to Gens, the candidates will do so by proposing new legislation and regulation.

-- celebrity chief executive officers (CEOs) will jump to dot.com companies.

Wealthy middle-aged CEOs will look for new challenges in running Internet startups, with Scott McNealy of Sun Microsystems Inc. and Larry Ellison of Oracle Corp. being likely candidates for a move.

-- many Fortune 1,000 businesses will still bungle their path to becoming dot.com operations. Despite the many very visible examples about how not to run an Internet business, many Fortune 1,000 companies will still struggle getting their online initiatives to work. Expect a lot of vice presidents and presidents of Internet divisions to be fired, Gens said.

IDC, in Framingham, Massachusetts, can be reached at +1-508-872-8200 or at http://www.idc.com/.

(International Data Corp. is owned by International Data Group, the parent company of IDG News Service.)

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