TELECOM Digest OnLine - Sorted: Web Spending Seen Rising by Double Digits to 2011

Web Spending Seen Rising by Double Digits to 2011

Gina Keating, Reuters (reuters@telecom-digest.org)
Thu, 21 Jun 2007 12:45:38 -0500

By Gina Keating

Internet advertising and access spending by U.S. consumers will rise
each year by double digits on average through 2011, fuelled by
high-speed connections and social networking and entertainment sites,
according to a forecast released on Thursday.

PricewaterhouseCoopers' Global Entertainment and Media Outlook expects
combined spending on Web advertising and fees paid by U.S. consumers
to Internet providers to reach $78.4 billion by 2011, up from $47.2
billion in 2006, a 10.7 percent average annual growth rate.

The United States has the world's largest online ad market, projected
to grow to $35.4 billion by 2011. But China will overtake the United
States to become the world's largest Internet territory in terms of
users by 2009, the report said.

"We expect that China will accelerate in use of the Internet from
where they are today -- in sheer numbers (of users) they are
incredible," said Joseph Rizzo, U.S. Advisory Technology Sector Leader
for PwC.

Consumer fees for access are expected to grow at a 7.1 percent annual
rate on average to $43 billion by 2011.

Rizzo said Internet advertising was being helped by a decline in
television viewing by key audiences for whom "the Internet has become
an integral hub of their daily experience."

The report cited "triple-play packages" for combined Internet,
telephone and television service as a driver for broadband growth in
each global region, including the United States, over the next five
years.

Telephone company investments in infrastructure will also contribute
to broadband growth, as consumers migrate from dial-up services,
causing spending on dial-up access to drop by an average of 25.5
percent annually, the report said.

Broadband access is expected to increase to $41.4 billion, an 11.9
percent compound annual advance.

By 2011, the number of broadband subscribers will grow to 89 million, an
average annual increase of 12.2 percent, the report showed.

Copyright 2007 Reuters Limited.

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