In its second-largest acquisition, Amazon buys the company for $970 million.
Jupiter Media Metrix expects long-term growth online, but says current market conditions are hindering near-term development.
New York-based Jupiter Media Metrix says continued consumer demand for Internet services, more fulfilling online user experiences, growth in average consumer online tenure and business cost savings will ensure long-term growth in the online sector. Current market conditions, including reduced financial market liquidity, weakened consumer confidence and reduced capital and marketing expenditures, have slowed growth but are not expected to have a big overall impact in the long term, Jupiter says.
Short-term setbacks have pushed out original 2005 revenue targets to 2006 or 2007 in some cases. For example, Jupiter analysts now forecast that online retail commerce will total $104 billion in 2005, down only from the initial projection last year. The adjustment was necessary largely due to fallout in the online grocery sector. Online managed business travel is another sector that has been hit by the slowdown in corporate spending and Jupiter has consequently lowered its 2005 revenue target in that sector to $25 billion from the $33 billion originally forecast last year.
Jupiter analysts have found that consumers are seemingly oblivious to the dot-com shakeout. Media Metrix online traffic data show that total unique visitors grew by more than 13% in the first half of 2001, despite the negative reports about the online economy.