Is the Internet Becoming a Luxury?

The toll a lackluster economy is taking on Wall Street, manufacturing orders, and tech firm profits are well-known facts at this point. Tightening state and local tax revenues are also apparent. For households, less cash usually translates to changes in vacation travel plans and fewer purchases of luxury items, like bigger cars, expensive jewelry and – Internet access? 



Recent netScore Internet Traffic reports by comScore Networks, Inc. and Diameter reveal a five-percent decline in U.S. Internet usage over the past two months. While U.S. Internet traffic originating from colleges and universities is expected to drop off each summer, increases in household and business Internet use have historically more than made up for the decline. But not this year. In fact, household usage dropped in both June and July. 



Internationally, Internet traffic also declined, from a total of 299.7 million unique visitors in May to 296.4 million users in July – the lowest level since March. U.S. users now represent only 42 percent of the total world web market. 



The impact of the decline in usage on future e-business growth may be significant, leading to more market consolidation and dot-com failures. netScore executives suggest that “to be successful, many on-line marketers must including response to the challenge of generating sales in a medium that is no longer showing explosive growth.” 



As travel and entertainment-oriented sites largely dominate web traffic (and porn sites are excluded from the data set), encouraging other uses such as e-commerce, distance learning and telecommuting becomes more challenging. 



A recent UPI article analyzing the netScore data finds how the web is used may be increasing the economic chasm between less educated and more educated Americans. More educated Americans tend to use the web for professional development, economic gain and as part of their careers. Less educated web surfers tend to seek amusement or entertainment first. 



From a policy perspective, the findings seem to suggest the strategies of many state and local economic development organizations to address the Digital Divide through increasing Internet access and broadband availability need to be reoriented away from household audiences to specific needs for the business and industrial sectors. 



Fortunately, work-related use of the Internet is the one group still growing, according to the netScore reports. The work segment of U.S. Internet usage accounted for more than 52 million unique visitors in July, nearly 42 percent of all U.S. Internet traffic. For comparison, the work figure was only 47 million visitors in May. 



Some public efforts have begun focusing on the business community. With more than 70 centers across the country, the Manufacturing Extension Partnership of the National Institute of Standards & Technology has developed an eBusiness initiative to assist manufacturers in understanding and capitalizing on the power of the Internet as a business tool. See http://www.mep.nist.gov/index2.html for more information. 



Public programs that help targeted populations to gain a better understanding of ways to use the Internet to improve their economic and professional position include the U.S. Department of Education’s network of Community Technology Centers. See http://www.ed.gov/offices/OVAE/CTC/ 

More information about the netScore reports and the UPI analysis can be found at: http://www.comscore.com