By: Lee Shelden

Data collected by the Boston Consulting Group indicate online sales more than tripled last year’s pace. On average, year-over-year revenue grew by275% while the average number of orders placed grew by 203%, BCG said. The growth is consistent with that reported a few weeks earlier by the consulting group, which projected total online retailer sales and revenues for198 would be greater than $13 billion. Retailers in apparel, computer goods, food and wine, home and garden, gifts, and entertainment contributed data to their study.

By 2003, one in three households inn Europe will have Internet access, according to a new study produced by Datamonitor. With only 12.5 million European households currently using the Internet today, usage is expected to increase by 250% to over 43 million users by 2003, according to the report.

The average revenue-generating retail site has seen its monthly sales triple to $40,000, compared to a year ago, according to market analyst ActiveMedia Research. Retail sites also reported generating income from Web advertising.

The exponential growth rate of the Internet and the World Wide Web is absolutely unprecedented.

WASHINGTON - Traffic on the Internet is doubling every 100 days, the government said Wednesday in the latest snapshot of the exploding information technology industry. Business use is growing fastest, but as many as 62 million Americans are now using the worldwide network and are even getting comfortable making credit card purchases. The Commerce Department said 10 million people across the United States and Canada make purchases - from airline tickets to books to automobiles - on the World Wide Web by the end of 1997. Up from 7.4 million people six months earlier. It said business-to-business purchases, such as the wholesale purchase of supplies, could reach $300 billion by 2002 and routinely save some of America's largest companies hundreds of millions of dollars by lowering their costs and reducing inventory. "What is the report telling us? That the digital economy is alive and well and growing," Commerce Secretary William Daley said. But the department cautioned that consumers "must be more comfortable that credit-card and personal information given online will not be tampered with, stolen or misused" before the potential of digital commerce is realized.

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Some customers how already have made purchases say they aren't particularly worried about the chance for credit theft. Edith Sorenson of Houston said she often buys books and makes travel arrangements, but generally only from established Web sites she's familiar with. "I usually feel pretty comfortable with it," Sorenson said. "I'm a terrible shopper, anyway. I hate to leave my house. And with books it like three or four days to get here. "I bought a cigar humidor on the Internet and a print of a picture I saw at a museum, and in both cases I used my credit card," said Peter Lucth of Washington, D.C. "I felt as comfortable doing that as giving it over the phone, maybe even more because of the encryption technology [retailers] are using. Information technology is truly driving the U.S. economy - more than previous estimates relealed." Said Rhett Dawson, president of the Information Technology Counsel, a Washington-based trade group of U.S. information technology companies. The report recommended that governments stay out of the growing industry, saying electronic commerce shouldn't be "burdened with extensive regulations, taxation and censorship." Last month the National Governor's Association and local officials endorsed legislation by Rep. Christopher Cox, R-Calf. to impose a three-year moratorium on new Internet taxes. President Clinton also supports the bill, which is pending in Congress.

Small businesses may not be embracing the opportunities the Internet offers them, and the reason may be a lack of the proper tools, and the traditional concerns of cost and security.

A survey of small and medium businesses (SMBs) conducted by The Yankee Group illustrates that the overwhelming majority of SMBs have not strategically embraced the Internet as a business tool, nor do they grasp the opportunities the Internet presents to level the playing field with larger companies.

Among the small (2-99 employees) and medium (100-499) businesses surveyed by the Yankee Group, an average of only 30 percent stated that the Internet was "important to achieving business goals." In fact, although 61 percent of small businesses and 82 percent of medium businesses report they have some form of Internet access, only 50 percent of all PCs in small businesses and 31 percent within medium businesses have Internet access, according to the Yankee Group.

A recent report by Cahners In-Stat Group showed that only 28 percent of small business Internet commerce implementers have enabled online ordering and only 19 percent accept online payments. The point: small companies may have been among the first to get on the Internet, but they are slow in moving beyond "brochure" sites.

"The chief obstacles to implementing e-commerce identified by the small businesses surveyed are cost, security concerns, difficulties in implementing and maintaining commerce sites, and customer service concerns," said Cheryl Ball, Director of the In-Stat Group's Internet Commerce and Applications Information Service.

According to the In-Stat report, consulting services and modular products that make implementation easy and safe may be the key to getting small business to become players in the Internet game.

The Yankee Group findings also found that small businesses have yet to move beyond a simple Web presence to an interactive site.

"We have identified a three-phase process that SMBs undergo over time as their Internet commitment strengthens -- connectivity, customer connections, and commerce," said Chris Gwynn, senior Analyst in the Yankee Group's Internet Market Strategies program. "More than two-thirds of the companies we surveyed have yet to even move into the customer connection phase."

According to the Yankee Group research, most companies are still in the earliest phase of Internet adoption, with only 31 percent of small and 51 percent of medium size businesses maintaining some type of Web presence. Approximately 55 percent of small businesses and 66 percent of medium businesses without Internet access have no plans to add it.

"SMBs account for 98 percent of all US businesses, represent about 50 percent of the Gross National Product, and spend approximately $445 billion annually on information technology products and services," said Joseph Villarosa, director of the Yankee Group's Small & Medium Business Communications program. "There is no question that service providers, as well as equipment manufacturers, have a huge opportunity to turn these companies into 'Internet believers' through substantial education efforts and long-term relationship building."

President Clinton, touting electronic commerce as an engine for global economic growth, said his administration is taking steps to promote buying and selling on the Internet. They include pushing for better consumer protection against cyber-fraud. He said his administration wants the on-line industry - not the government - to provide the protection.

The President also said his administration would work with the FCC and U.S. trading partners to promote the development of faster Internet connections.

Clinton sited projections that this year more than 40% of Americans with home computers will shop for holiday gifts on-line, compared with 10% last year.

Internet shopping
By Sandra Block
USA TODAY

Dazzling projections of Internet growth

Many investors say the Internet will be the fastest-growing sector of the economy for the next decade. So they've abandoned traditional methods of valuing stock, such as price-earning ratios.