25 Jun 2008

FRAMINGHAM, Mass., June 25, 2008 - Nearly a quarter of the world's population - roughly 1.4 billion people - will use the Internet on a regular basis in 2008. This number is expected to surpass 1.9 billion unique users, or 30% of the world's population, in 2012, according to IDC's Digital Marketplace Model and Forecast.

"The Internet will have added its second billion users over a span of about eight years, a testament to both its universal appeal and its availability," said John Gantz, chief research officer at IDC. "In this time, the Internet has also become more deeply integrated into the fabric of many users' personal and professional lives, enabling them to work, play, and socialize anytime from anywhere. These trends will accelerate as the number of mobile users continues to soar and the Internet becomes truly ubiquitous."

While the PC is currently the dominant means of gaining access to the Internet, IDC expects the number of mobile devices accessing the Internet will surpass the number of online PCs by 2012. Once on the Internet, users will continue to spend time on Web 1.0 activities like searching, shopping, and sending email. But Web 2.0 activities, such as watching user-generated videos, posting blogs, and participating in social networks, are quickly capturing the attention and time online of more and more Internet users. The latter will create new opportunities and challenges for online advertisers seeking to monetize the Internet experience.

Highlights from IDC's Digital Marketplace Model and Forecast include the following:

• Users will access the Internet through more than 1.5 billion devices worldwide in 2008, including PCs, mobile phones, and online videogame consoles. By 2012, the number of devices accessing the Internet will double to more than 3 billion, half of which will be mobile devices.

• China passed the United States in 2007 to become the country with the largest number of Internet users. China's online population is forecast to grow from 275 million users in 2008 to 375 million users in 2012.

• Nearly half of all Internet users will make online purchases in 2008. By 2012, there will be more than 1 billion online buyers worldwide making business to consumer (B2C) transactions worth $1.2 trillion. Business to business (B2B) eCommerce will be ten times larger, totalling $12.4 trillion worldwide in 2012.

• Worldwide spending on Internet advertising will total $65.2 billion in 2008, which is nearly 10% of all ad spending across all media. This share is expected to reach 13.6% by 2011 as Internet ad spending grows to $106.6 billion worldwide.

• Roughly 40% of all Internet users worldwide currently have mobile Internet access. The number of mobile Internet users will reach 546 million in 2008, nearly twice as many as in 2006, and is forecast to surpass 1.5 billion worldwide in 2012.

• The most popular online activities today are searching the Web, finding information for personal use, using Internet email, accessing news and sports information, and accessing financial or credit information. In addition to these activities, more than 50% of online users worldwide are using instant messaging and playing online games. The fastest growing online activities include accessing business applications, creating blogs, online gambling, accessing work-related email, and participating in online communities.

• Among mobile Internet users, the most popular online activities are searching the Web, accessing news and sports information, downloading music, videos, and ringtones, using instant messaging, and using Internet email. By 2012, downloading music, videos, and ringtones will become the number one activity among mobile Internet users worldwide.

IDC's Digital Marketplace Model and Forecast provides worldwide and regional data for a wide range of Internet categories and activities. Traditional Web 1.0 categories include Internet users, devices using the Internet, Internet buyers, and B2C and B2B eCommerce. Web 2.0 categories look more closely at what Internet users are doing online, with breakouts by activity and gender. The database also includes a detailed look at online advertising spending worldwide. Forecast data for the 2008-2012 period is supplemented by historical data from 2006 and 2007. The Web 1.0 categories include detailed information on more than 40 individual countries.

For more information or to purchase IDC's Digital Marketplace Model and Forecast, please contact Alex Manfrediz at 305-351-3037 and amanfrediz@idc.com.