Australian Cybermalls News

According to a report by APT Strategies, an astonishing $US6.3 million is currently being spent on Australian online advertising campaigns - and this is expected to grow to $US95 million within the next 24 months. The results - drawn from APT's 'Online Readership Study' - show that the profile of the average Australian Internet user very closely matches the general Netizen demographic reported in the USA and elsewhere. According to APT, who drew their study from the survey responses of 3,500 Internet users who visited 33 leading Australian web sites in August and September 1998, 54% of Australian surfers are male, 46% female. In addition, 64% of those surveyed said they made the principal purchasing decisions for their households, and 57% said there were also no children in their households. APT also found that 47% of their survey's respondents work in the private sector, 23% are self-employed and 21% work in the public sector, with 69% of all respondents living in urban areas. In other news: Australian Cybermalls was relocated to a faster server this weekend. This move took us off air for 12 hours and zeroed all our counters. We apologise to anyone who was inconvenienced by this yesterday.

Australia is celebrating its inaugural Online Australia Day today to draw the attention of offline households to the attractions of the information superhighway. Organised by the National Office for the Information Economy (NOIE), the event has attracted the support of more than 4500 schools, most libraries and hundreds of volunteer organisations nation-wide, as well as many of Australia's most popular web sites. The day of celebrations comes hard on the heels of Wednesday's announcement by the Australian Bureau of Statistics that close to 4.2 million Australians are now online - approximately 25% of the population. Australian Cybermalls' Managing Director Dafyd Martindale (who also happens to be celebrating his birthday today!) will be contributing to the event at the Hervey Bay IT Expo, where he'll be speaking at two introductory Internet sessions and an advanced session on effectively marketing a business on the Net at the invitation of Queensland's Department of State Development. This month Australian Cybermalls will break the 1-million-visitors-a-year barrier, a little less than 33 months after the site began broadcasting in April 1996. All talks are free and open to the public.

America Online (AOL) reached an agreement today to acquire Netscape for $US4.2 billion through a share swap which will give Netscape's owners 0.45 AOL shares for each Netscape share they currently hold. Sun Microsystems will assume control of Netscape's software technology, repaying AOL with an ongoing royalty stream from the sales it generates. AOL, in turn, will take over control of Netscape's NetCenter portal site and what is probably the Net's best-known brand name and still its most popular browser. To the surprise of many analysts, AOL said that it intends to keep the bug-stricken Internet Explorer as its browser for the present because its deal with Microsoft assures AOL a prominent place on Microsoft's Windows95 and Windows98 online services folder. However, analysts speculate that another reason may be that Netscape's browser doesn't currently allow the level of badging and customisation that Explorer does, and cautioned that AOL's position may change when Netscape provides these facilities. The takeover - foreshadowed last weekend - came only days after Netscape had announced that it was downsizing the Australian office it opened only 18 months ago in Melbourne and relocating its main Asia-Pacific offices in Singapore.

The number of Australian households with Internet access increased by 46% between February and August this year, according to the Australian Bureau of Statistics (ABS). In a new study released today, the ABS estimated that there are now 1.25 million households connected to the Net, covering approximately 18% of the country's population. According to the ABS, almost a third of the total Australian adult population - around 4.2 million people - accessed the Net at some point during the year to August. Of these, 1.9 million accessed the Net from either work or home, with 935,000 accessing the Net from a friend or neighbour's house, 933,000 accessing it from a tertiary institution and 395,000 people accessing it from public libraries. The ABS also found that 425,000 adults used the Net to buy or order goods and services this year, executing an estimated 1.3 million transactions. The ABS also found that 77% of Australian online shoppers paid for their purchases over the Net too, with 68% of buyers ordering from home and 69% of purchases being made overseas. In a setback for bankers, however, the ABS also found that so far only 1% used the Net to pay bills or transfer money (against 35% who do so by telephone, 60% who use EFTPOS and 69% who use ATM machines for the same purposes).

The outrageous cost of Australian bandwidth - which has forced many of the country's most successful web sites into being hosted from the USA, and severely restricted the options of rural consumers - is to be examined by a high-level Federal Government inquiry. A spokesman for Communications and IT Minister Sen. Richard Alston confirmed today that the minister was reviewing potential terms of reference for the inquiry and what form it would take, but hoped to have these matters resolved before Christmas. The inquiry will attempt to gather a broad range of submissions from carriers, service providers and industry associations and will look at alternate delivery mechanisms including cable, satellite and wireless. In Australia, the current effective wholesale rate for bandwidth varies between 16.8c and 19c per Mbyte. The current US rate, however, is closer to 2c to 3c per MByte. In other news: Australian Cybermalls affiliate Artuframe changed its name to Art.Com yesterday. The move was prompted by the company's recent acquisition of the domain and its search fore a shorter, more memorable URL.

Newsweek and the Wall Street Journal both reported today that Netscape, AOL and Sun have been locked in serious buyout talks over the weekend. Although all companies have refused to comment and experts have cautioned that the deal is still not "set in stone" and could fall apart before a formal announcement (which is expected to be made later this week), both media report that under the terms of the takeover deal AOL would acquire Netscape's NetCenter portal site and browser technology for a $4 billion stock swap, and would then pass Netscape's business software operation on to Sun Microsystems in exchange for a share of ongoing royalties. If successful, the deal would give AOL a portal with potentially more grunt than MSN.com (Microsoft's portal) and put the world's largest ISP on a level footing on the Net against Microsoft, the world's largest software company. Since AOL would also be likely to dump Microsoft's troubled Internet Explorer browser in favour of Netscape's Communicator if the deal goes ahead, any buyout would also strip at least 10% to 15% off Explorer's market share, reducing it - once again - to the ranks of a bit player in the browser market. The move would also likely put and end to Microsoft's attempts to build a "WinTel Java" - and attempt that the company to lose in court last week.

According to a survey of 10,000 randomly-selected Net users conducted by research firm Intelliquest, Amazon and CDNow are now the most commonly recognised product brands on the Internet. Furthermore, a number of new and emerging "e-brands" now have more consumer recognition than many of the off-line retailers they mimic. However, the study also concluded that there were "no clear leaders" yet emerging, and cautioned that it's only early days in identifying leading Net brands. The survey found that a small number of vendors commanded much greater awareness levels than others, and that more than 400 different branded sites and products held a share of mind in the survey sample group. However, the following leaders were identified: Amazon.Com (books), CDNow (music), Microsoft (software), Dell (hardware), The Gap (clothing), AOL, Yahoo and Travelocity (travel) and Yahoo (cars). The survey also found a growing acceptance of online buying amongst consumers, with over 63% reporting that they had already made at least one online purchase, and over 80% saying that they intended to make an online purchase in the coming year.

Microsoft have lost the first round in a suit bought against them by Sun over their attempt to splinter the Java language by producing a "WinTel Java" that only runs on Microsoft platforms. A US District Court judge ruled today that Sun Microsystems is likely to prevail on the merits of its licensing case against Microsoft, and ordered Microsoft to either modify every product the company sells which incorporates Java technology so that it passes Sun's Java compatibility suite, or withdraw them from the market. This includes all versions of Windows98 and Internet Explorer, Microsoft's Java development kits and several new products the company has ready for release. In a stern 31-page ruling, Judge Ronald Whyte also prohibited Microsoft from "advertising any product that contains, implements or emulates the Java technology as the 'official' Java reference implementation." Whyte also ruled that Microsoft must also notify all its customers of the order within 15 days, but said that the company will be allowed to seek an extension of the 90-day period if it can show good cause. Microsoft immediately issued a statement saying that it will comply with the ruling, but adding that no products will need to be recalled, nor will there be any impact to customers currently using Microsoft products. Judge Whyte also slammed Microsoft's business practices relating to the Windows95/NT logo licensing program, and its designation of its virtual machine as the "Official Reference Implementation of Java on Windows 32-bit platforms," calling the former "unfair" and the latter "misleading."

In a report which closely mirrors conditions reported by Australian ISPs, the Yankee Group released a report today which concluded that American small and medium enterprises (SME's) haven't strategically embraced the Net as a business tool yet, nor grasped the unprecedented opportunity the Net offers to level the economic playing field. The Yankee Group study found that although an astonishing 61% of small businesses and 83% of medium-sized enterprises reported that they had some form of Net access, only 30% stated that the Net was important to achieving business goals. The report concluded that most SME's go through a 3-phase process, using the Net first to improve internal information-gathering and communications resources; then using it to improve customer and supplier communications; and then moving into e-commerce. It concluded that the majority of US SME's have yet to move into the second phase of the process. According to the Yankee Group, which rated small businesses as those with 2-99 staff and medium enterprises as those with 100-450 staff, SMEs account for 98% of US business, represent about 50% of gross national product, and spend approximately $445 billion annually on information technology products and services.

Mr John Cookson, the chief executive of AOL's Australian operation, resigned from the company late last week citing "personal reasons" less than 7 months after being appointed, and only a few weeks after AOL began appending its 100-hour free disks to every computer and Internet magazine in the country. In a statement issued after Cookson's announcement, AOL Australia said it had appointed Australian marketing director Ms Carole Veriga to take over Cookson's job, effective immediately. Cookson, who spent his earlier career at retailers David Jones, Woolworths and the merchandising division at Disney, was appointed in April this year and had been seen as a consumer marketing expert who would target AOL at mainstream customers, differentiating the service from the 650 internet service providers already active in Australia. He oversaw AOL's launch in October - a launch which came under attack from some customers over AOL's $4 an hour pricing policy soon after services began.

Australian company AllClear 2000 Pro^® opened a storefront at Australian Cybermalls today. This world-leading Y2K testing software for PCs is produced by a small software company at Rochedale in Queensland and is one of Australia's quiet success stories. AllClear 2000 is now being widely used by Government departments and agencies, universities and Fortune 500 companies world-wide. Owner Patrick Simonis has been featured in The Australian's computer section several times this year - most recently when his software disclosed that most of the motherboards being shipped into Australia until comparatively recently were not Y2K compliant and would fail on January 1, 2000. AllClear 2000 Pro is targeted at large organisations who need to test dozens, hundreds or thousands of PCs quickly and authoritatively. It can operate automatically over a LAN and allow network administrators to test network PCs remotely and have all test reports logged into a database. And unlike almost all Y2K test software on the market, AllClear 2000 Pro issues a complete and authoritative certification report at the end of each test to verify each PC's compliance level (from 1 to 4) and suggested remedies for PCs that fail full Y2K compliance.

Australian .Com.Au domain registry Internet Names Australia (INA) have announced a partnership with BIG Colour Pages to produce Australia's first complete, authoritative guide to Australian businesses on the Net. The new publication - the Official INA Directory - is expected to be launched online and in book form in mid-1999, and the partners believe it will also be a world first. The directory will have a telephone book format and will carry advertising, similar to the Yellow Pages. All businesses with a .com.au domain will receive a free listing and can pay extra to have their listings enhanced with additional details or advertising. The directory will also contain free and complete listings of all the .org.au, net.au, .gov.au and edu.au domains, but will omit the controversial .au.com domain maintained by rival NetRegistry. Sales canvassing by BIG Colour Pages staff is expected to begin early in 1999.

Free site hosting service GeoCities announced today that it will acquire Starseed and its WebRing free web ring service in an effort to link the enormous number of sites it hosts into communities of common interest. GeoCities said it will issue up to 775,000 shares of its stock and pay $2 million in cash for the deal, which values Webring at a slightly more than $30 million based on GeoCities' current stock price. GeoCities host 2.8 million member sites and WebRing has 900,000 members and 66,000 "affinity groups, expanding GeoCities' potential audience reach to slightly under 4 million.. Reaction to the announcement was muted on Wall Street, however, and stock in GeoCities fell 6% soon after news of the acquisition was made public.

Microsoft will release Explorer 5.0 in 1999 in a new push to unseat Netscape as the most popular Internet browser. The company, which began issuing beta versions of the software to corporate test sites today, hopes the new Explorer will help it chip further points off Netscape, which currently holds 63% of the market according to Australian Cybermalls' site logs, and 50% according to Microsoft. Early betas disclose that the new Explorer promises to be more a consolidated bugfix for all the troubled 4.x releases than a revolutionary new product. However, the new browser will run faster than 4.x and will incorporate URL fill-in, a popular feature available in Netscape Communicator for some time. Meanwhile, Netscape have also announced plans to release a 5.x beta of their product by year's end, with a complete version timed for release slightly after Microsoft's new browser appears. The new Communicator 5.x will bring Netscape into full compliance with W3C standards for the first time and is expected to incorporate a fast, Pure Java compiler to significantly speed up access to Java sites. Both browsers will continue to be available free from Microsoft and Netscape.

According to a survey released today by VISA, 46% of Internet users expect to do some of their Christmas shopping online this year - and up to 60% of those will be making their first- ever online purchase. VISA's survey of 1,012 adult PC users with Internet access at home or work was conducted by NFO Research. It found that 60 percent of existing Net shoppers do so from home, and that 37% reported that the most difficult person they had to shop for is a spouse or partner. However, 65% said that shopping online made it easier to find gifts for the hard-to-shop- for. And surprisingly, the research disclosed that this Christmas clothing (24%) is likely to outsell both CDs (9%) and books (20%). 29% of respondents also indicated plans to purchase something online for their children this Christmas, with 11% looking at toys. The study also disclosed that most Net shoppers do not plan on doing much browsing over the festive season (86% report that they will have specific items in mind when they shop). However, the sheer convenience of Net shopping (24 hours a day and global reach) is gradually winning over Net shoppers, with the total volume of online purchases being made this Christmas expected to more than double over 1997's figures.

Queensland's largest online jewellers Gillett's opened a storefront at Australian Cybermalls today. The company, founded 30 years ago, operates from retail premises in the prestigious Queen Street Mall in central Brisbane. Owner Don Gillett started out as a 15 year old apprentice with a few files, some hand tools and a progressive attitude to jewellery merchandising, and now operates the largest online jewellery site in Australia. Gillett's new site - which is designed to be viewed at 800 x 600 or higher - features a large array of Australian-manufactured quality jewellery, a free newsletter, weekly specials and a wide range of information. The site will be regularly updated with fresh content on a monthly basis. All Gillett's prices are quoted in Australian dollars (currently $US63c), but the company are happy to process orders from anywhere in the world, and provide an online currency converter, secure SSL ordering and multiple payment methods to service customers online.

Microsoft furthered its expansion plans on the Net today by acquiring the popular LinkExchange banner exchange service for a reputed $250 million. The surprise move follows Microsoft's purchases of Sidewalk in 1997 and HotMail in January this year. The deal will provide the company with targeted information on 800,000 users of the LinkExchange network, as well as help the software giant acquire another channel to promote its services. San Francisco -based LinkExchange has 100 employees and was originally funded by venture capital firm Sequoia Capital. For the past year, the Microsoft has been significantly ramping up its Net efforts by launching and acquiring a number of Web properties to join its existing commerce and information sites such as CarPoint, real estate service HomeAdvisor, and travel resource Expedia. In July, Microsoft announced that all of these sites would be moved onto its otherwise lacklustre MSN network site in order to offer advertisers larger packages with greater reach. All the re-packaged Web sites will have "MSN" added to the beginning of each name, allowing the MSN.com portal to incorporate and promote more Microsoft content under one unified brand. Microsoft is currently embroiled in a legal battle with the US Justice Department and 20 US states, which have charged the software maker with using its dominant position in the operating systems software to control the browser market and possibly the fledgling Internet market.

Cable & Wireless Optus has become the latest telecommunications carrier to launch its own Internet service, following in the footsteps of Telstra's Big Pond, One.Tel's One.Net and Primus' HotKey. Yesterday Optus launched two Internet products for householders and announced that it intends to debut a retail Internet service on November 13th. Optus will be offering a prepaid product called Optus Internet Express which will provide monthly Net access in 3, 8, 20 and 35-hour blocks for $10, $20, $35 and $50 respectively. But consumers who prefer a "pay-as-you-go" approach will be able to use Optus Direct Access, which has an hourly rate of $5. As with other telcos, Optus will be offering consumers the opportunity to have all their accounts - phone, fax and Internet - serviced on one monthly statement. At present, the Optus Internet service is dependent upon Telstra's monopoly over the trans-Pacific cable to provide international Net connections. However, this is likely to change late next year when Optus open their alternate Southern Cross cable.

According to a new study released by the Australian Bureau of Statistics (ABS), 85% of frequent computer users between the ages of 5 and 17 use a home PC for games, compared with only 44% of adults. And a full 93% of the estimated 408,000 frequent computer users in Australia between the ages of 5 and 9 use their home PC for almost exclusively for games and entertainment. The ABS found that contrary to popular belief, very few young children currently access the Net, with less than 4% between the ages of 5 and 9 reporting any online access at all during surveys conducted in February and May this year. And in older groups of children, Net access is still very limited. The ABS concluded that half of all Australian children now frequently access computers. It also found that as children matured into teenagers, learning activities via computers increased. The ABS surveys found that 84% of 17 year olds used computers for learning, rising to as high as 93% around exam time.

Analog modems will still be the primary means of accessing the Net in the USA in 2003, according to a study by the Gartner Group. The study predicts that the number of Internet access lines in the US will reach 46 million by 2003, with 63% of US consumers continuing to use an analog modem to connect to the Internet at that time. Of the 37% using higher speed connections Gartner estimate that 14% will use a cable modem, 12% will use an XDSL line, 8% an ISDN line, while the remaining 3% will access the Internet via a hybrid satellite connection. Gartner also believe that the Internet will also be the dominant means of conducting business by 2003. The Net, however, will continue in its present form: TCP/IP based, with 80% of companies using virtual private networks to gain remote access. However, changes are in store for the Net industry and Gartner expects that by 2004 the majority of companies will begin to provide extensive intranet services, available in-house, and extranet services, available to paying clients.

The Australian Internet rebounded last month after a succession of diebacks over the winter (as reported in previous months). According to the engines we monitor to construct our monthly Australian Internet Growth Index, all capitals showed a rise over the last month. Sydney - with at least 8000 sites - is now the nation's undisputed site leader with Melbourne (at 5900) a distant second. The November 1st figure (with October 1st figures in brackets) are as follows:

Australian Internet Growth Index October 1998
(Figures Show Estimated Sites)

Brisbane - 2,387 (2,043)
Sydney - 8,013 (7,076)
Melbourne - 5,881 (5,123)
Adelaide - 2,171 (1,843)

Perth - 2,651 (2,347)
Hobart - 883 (821)
Canberra - 2,031 (1,460)
Darwin - 2,159 (1,588)