BuddeComm, an independent Australian telecommunications research firm has released a study that indicates strong new businesses models and booming growth in online advertising are rapidly building the foundations of the new Internet economy.
The research found that about $2 billion is projected to be spent on social network advertising in the U.S. by 2010. Social networking and user- generated content will play a major role among a variety of new applications in the Web 2.0 arena.
Paul Budde managing director at BuddeComm said, “It is the burgeoning number of households and businesses with broadband connections, which has been the main driver behind the current boom,” Budde said. “In several European countries, 75 percent, or higher, of households have the Internet, which gives e-commerce a strong platform from which to do business.”
This year Internet advertising spending is estimated to reach $31 billion globally, up from $24.4 billion last year. The $31 billion is 7 percent of overall ad spending across all media, up from 5.8 percent of the total in 2006. In 2008 Internet ad spending will account for around 8 percent of all spending and over 8.5 percent, or $43 billion out of a total of $495 billion, in 2009.
Online payment services such as PayPal have made a crucial contribution to the growth of ecommerce, creating easier ways for people to pay for products and services online.
The report finds that there are early indications, despite the strong growth of Web 2.0 that online spending growth may slow faster than first thought, to around 10 percent instead of 20 percent by the decades end. It could also indicate that ecommerce is maturing.
