In its second-largest acquisition, Amazon buys the company for $970 million.
The number of cable modem subscribers, demand for Internet services, and m-commerce spending will grow.
The doom and gloom of the dot-com world is unwarranted, according to several new reports from researcher IDC.
First, IDC predicts that cable modem access to the Internet will boom to 57.5 million subscribers by 2005. That’s good news for online retailers whose desires to present products in high detail have been thwarted by the low level of homes with high-speed Internet access. ”Growth will be driven by the prevalence of image-rich and video-rich applications on the Internet," said Amy Harris, program manager with IDC`s Broadband Markets and Technologies program.
Worldwide, there are 7.2 million subscribers to cable modem services. Last year, the number of U.S. cable modem subscribers grew 171% to 3.8 million - more than three times as many as any other region and representing 53% of the worldwide market. However, during the next few years cable modems will begin to lose ground to DSL, and U.S. share of worldwide subscribers will fall to 36%. Meanwhile, cable modem use in Western Europe will significantly pick up. From 1 million in 2000, Western European cable modem subscriptions will soar to almost 17.7 million in 2005. During this time frame, Western Europe`s share of worldwide subscribers will jump from 14% to 31%.
Second, IDC predicts that spending on Internet services will more than triple from almost $22 billion in 2000 to close to $69 billion in 2005. "As a result of the dot-com bubble burst, there`s been much speculation that the opportunity for Internet services firms has evaporated. In fact, we believe while the opportunity is different, it is more powerful than ever," said Pooneh Fooladi, senior analyst with IDC`s Internet services research program. "E-commerce will continue to drive demand for Internet services. It`s becoming an integral part of organizations` overall strategies, and it`s becoming imperative to link e-commerce initiatives with other IT initiatives."
Third, while the much-hyped mobile commerce revolution hasn’t happened, it’s going to, IDC says. E-retailers’ tests with mobile devices today are only the start. IDC forecasts spending on mobile solutions will skyrocket from $1.4 billion in 2000 to almost $40 billion by 2005. "Corporations are no longer satisfied with solutions that are only available on fixed-wire devices. They`re looking to extend functionality on an increasing number of applications to an increasing assortment of mobile devices," Fooladi said. "This presents tremendous opportunity, not only for Internet services firms, but for all IT service and software providers."