Australian Cybermalls News

According to a new study by the Intermarket Group, the average conversion rate of online window shoppers into buyers is now around 2.7%. Intermarket found that 62% of current online merchants have a conversion rate 2% or less, 33% have a conversion rate of between 2% and 6%, while a slim 5% report conversion rates of 6% or higher. According to Intermarket's study, only one-third (32%) of Internet users have made a purchase online, but almost two-thirds (64%) have used the Net to research a purchase later concluded offline. The main barriers to higher online sales were pricing (77%), potential problems with returns (67%), concern about credit card security (65%) and personal privacy issues (58%). Significantly, 35% of users who've yet to make an online buy reported difficulty navigating merchant sites - a complaint shared by almost 48% of those who have. One quarter of all buyers (25%) also complained about the length of time it took to receive their orders.

In its third major security fiasco in a month, Microsoft admitted today that it has just discovered and patched a "hole" in its free email service HotMail which allowed hackers to access any HotMail account with nothing more than a user name. Although Microsoft claimed that it had "just found" the flaw and that it could only be exploited by people who had knowledge of "advanced web technologies", at least two web sites have been advertising the existence of the flaw on the Net for at least 3 months in the UK and Sweden and advising visitors how easy it is to penetrate the HotMail system. Hotmail has suffered a number of serious problems since its acquisition by Microsoft last year. These included the company's failed attempt to move HotMail from Unix to its own NT platform (which soon proved unable to handle the load, necessitating a quick about-face) and numerous outages and service delays. The latest security fiasco is particularly unsettling for the software behemoth, however, coming just days after similar fatal flaws were found in its new Messenger product and its Internet Explorer browser. In other news: Australian Cybermalls is continuing its relocation from Ontario to Texas. Our site may experience small glitches during the next 24-48 hours, which will quickly disappear as full delegation takes effect.

After several years of watering down its annual profit figures with enterprise-wide redundancy payments and "one-off" dividends to the Federal Government, Telstra had little choice but to display the full scope of its profitability yesterday when it announced that it had made $3.486 billion post-tax profit out of Australia's 19 million consumers in 1998/99 - a domestic corporate record. Although Internet access and service provision accounted for only 7% of total revenues, Telstra noted that revenues from the "non-traditional" data, text and Internet services division grew 13% to $2,483 million, second only to mobile market revenues (which rose 17.8%). As a result, the corporation believes that revenues from Internet services are set to rise significantly in future. In other news: Australian Cybermalls is relocating to our own hosting company eservers this weekend. Our site may experience slight malfunctions over the weekend while this move occurs, and we apologise in advance to any visitor who's inconvenienced by this. We hope to be completely back to normal by Monday when the delegation process is complete.

Another fatal security flaw which could put users at risk has been found in Microsoft's Internet Explorer 5.x. The flaw, discovered a few days ago by a Bulgarian programmer and since confirmed by Microsoft, could allow random programs to execute on a user's computer and expose the machine to malicious hackers. The bug affects both IE 5.x and Microsoft Outlook. According to Microsoft, the security hole is related to an ActiveX control that ships with IE5. While Microsoft says that it has has not received any reports of customers being affected by the security hole, it plans to have a patch posted on its Windows Update site within the week. In the meantime, it has advised any customers concerned with the issue to disable the ActiveX controls and plug-ins using the "Internet Options" setting in IE5. ActiveX has been criticized in the past for being less secure than other component models. It was originally built by Microsoft as a counter to Java, and touted as a Web-based component architecture for building Internet applications. The company has since recast ActiveX as a technology best suited for use across corporate networks. However, the programming market has largely ignored it since release once the poor quality of ActiveX became well-known.

Digital televisions which will go on sale in Australia in January, 2001 are likely to be unable to display digital signals at the same quality they're broadcast and are may cost as much as a small car, according to TV manufacturer Phillips. Calling on the Government to drop its HDTV format in favour of the European SDTV format today, Phillips said that while SDTV is of a lower standard, it would mean that consumers would be able to buy digital TV's for around $A2500, ensuring a much quicker uptake of the technology. However, the Federation of Australian Commercial Television Networks (FACTS) has disputed the Phillips claim, saying it is motivated by little more than marketing considerations. FACTS general manager Mr Tony Branigan said that SDTV sets could be fitted with a HDTV encoder which would allow them to display all the features of a digital broadcast with only a slight degradation in HDTV format. He said that using SDTV as an intermediate stepping stone would be likely to cause as much confusion as the switch from analogue to digital mobile phones, and that Australia was better off - in the long term - adhering to a world-class digital TV standard.

Almost 6 in 10 Australians favour blocking objectionable content on the Net, according to an international study released today by the Australian Broadcasting Authority (ABA). The study - funded by the Bertlesmann Foundation - surveyed consumers in the USA, Germany and Australia to determine national differences in attitudes towards censorship. Of the 1,000 Australians included in the study, the ABA found that while the majority felt that content should be regulated to meet societal norms, up to 77% believed that content policing measures were likely to be ineffective. Almost half (48%) of Australian respondents said they felt that individual users were the best monitors of content, followed by ISPs (42%) and a government agency (37%). Surprisingly, the survey found great similarities in the views of both Australians and Germans on a range of censorship related questions, with citizens in both countries wanting their governments to police the Net. However, only 26% of Americans thought Government involvement was a good idea - and fewer than 2% of US respondents thought their government could be trusted.

In an attempt to answer its arch rival Holden, Ford Australia announced today that it hopes to unveil a new site in October which will allow consumers of its high-performance T-series cars to custom-build a vehicle, arrange finance and then follow the car's manufacture .... all via the Internet. The Ford Tickford Experience is a marketing initiative by the company created to answer a similar service provided by Holden for its HSV series. Both companies hope that the web sites will boost sales of high-performance cars in the market. The move is the latest in a series of current or proposed motoring sites designed to make new car buying an "arms-length" process. The idea - first promoted by Toyota on the Australian Net in 1995 - is to offer an "all-in-one" motoring service that obviates any need to see a new car dealer. Not surprisingly, the idea has met with little real enthusiasm from the automotive trade to date.

In what has become an increasingly familiar story for its long-suffering customers, Microsoft announced today that it has found a fatal security flaw in its new MSN Messenger product which can severely compromise office network security. The company said that it was advised last week that when MSN Messenger is used in conjunction with MSN's HotMail service, an intruder can use the flaw to gain access to the victim's HotMail username and password, allowing the interloper to read and send emails from the account without the owner's knowledge. Microsoft said that they hope to have a fix for the flaw within the next 24 hours. The newest glitch is the latest in a seemingly endless line of security holes, errors and other glaring examples of poor software engineering practice which have bedevilled the software behemoth for the last ten years. It's MSN Messenger product is designed to compete with AOL's Instant Messenger, a much higher-quality product which pioneered the Net message software category and which has quietly gained dominance over the area in the last year.

Netscape is continuing to lose the browser war against Microsoft's Internet Explorer, according to a new study by WebSideStory. In an analysis of 31 million individual visitors to 114,000 web sites world-wide, WebSideStory found that 44.7% of surfers were using IE 4.x, 24.9% were using IE 5.x, and 3.6% were using Explorer 3.x. In comparison, 22% of surfers use Netscape Communicator 4.x and 2.3% still use Netscape Navigator 3.x. According to WebSideStory, this represents a decline of almost 8% in Netscape's market share since March 1999 when the company's last survey was conducted. WebSideStory also found that 1.4% of those surveyed now used WebTV and that other minority browsers made up the remaining 1.1%. WebSideStory believe that the pre-installation of Explorer on most home computers over the last few years has worked in Microsoft's favour - especially amongst non-expert users who may be reluctant to download and install new software onto their PCs. The situation may be different in Australia, though: a survey of Australian Cybermalls' logs for July showed that Netscape's 3.x and 4.x browsers are still used by 48.5% of Mall visitors, against 49% using IE and 2.5% using minority browsers.

According to research firm Jupiter Communications, online retailing accounted for 6% of all retail sales in the USA over the last year, and is now expected to account for a steady 6% to 6.5% of all retail sales until 2002. Furthermore, the company believes that Australia is now only 12 to 18 months behind US trends and that a similar pattern is likely to be mirrored here in the near future. Jupiter found that most online retail purchases are currently being made because of low cost, on impulse or because of convenience factors - but that neither the percentage of total retail sales or the motivational factors behind online buying are likely to change substantially in the next 3 years. It estimated that US consumers spent $11.8 billion in online retail purchases in the last year. In Australia, Jupiter estimate that less than 20% of all domestic Net users have shopped online more than 5 times at present. However, they also believe that it will be less than 3 years before online shopping will become an everyday experience in Australia.

The "free" ISP revolution which has proven successful in the UK after initially failing in the USA looks set to appear in Australia shortly. Melbourne- based FreeOnline announced today that it plans to launch a free service in September. The announcement follows an earlier one by Sydney provider FreeISP that it plans to launch a similar service in October. Brisbane's In4Free have already been operating a variant of the idea for several months. Under the proposed "free" deals, users will gain free online access in exchange for viewing ads and having their online behaviour tracked so that advertising can be targeted more closely at the users' interests over time. Privacy-conscious Americans rejected similar US-based services en masse when they were trialed a few years ago, but in the UK (where local calls are timed and access fees are high), free ISP FreeServe pioneered a revolution which has seen the majority of UK ISPs convert to the new model during the last 12 months. Both FreeOnline and FreeISP hope to list on the stock exchange soon after opening their doors.

Lengthy careers are a thing of the past, according to Telstra CEO Ziggy Switkowski. Speaking at Melbourne University over the weekend, Mr Switkowski confided to graduates that Telstra now plans its workforce requirements on the assumption that employees would only stay an average of 5 years with the company. This was a trend that was increasing in all western countries as a fall-out of 1990s downsizing and retrenchments, he said, which have led to an increasingly mobile workforce. The situation in Australian information technology is now even worse, it was also revealed, with a recent study showing that few IT employees now stay with an employer for longer than 2 years. The accelerating pace of change and critical skills shortages in many areas - with consequent high salaries and competitive bidding for skilled personnel - are seen as root causes of the exceptionally high level of turnover in this growing area.

According to a new ACNielsen study commissioned by the CSIRO, 86% of Australians are now more interested in technology news than sport (67%) or politics (63%). CSIRO Chief Executive Dr Malcolm McIntosh said the poll is the third in five years to identify the strong interest held by Australians in the science and technologies that are reshaping their lives, careers, industries and communities. The study also disclosed some surprising differences in how the sexes view technology. The poll found that while Australian men are as equally interested in science, technology and innovation as they are in sport, Australian women are significantly more interested in health, science, technology, innovation and the environment than in sport. Female respondents expressing a strong interest in new medical discoveries outnumbered those very interested in sport by 300%. Strong female interest in science, technology and the environment was also more than double that expressed in sport. Sixty per cent of women were very interested in medical science, but only 20 per cent in politics. Strong male interest in science and innovation was also more than double interest in politics

The World Health Organisation (WHO) confirmed today that health researchers may be unable to accurately determine the health risks associated with mobile phones until 2005. WHO's EMF project manager Dr Michael Repacholi said today that it may take until 2005 for WHO to completes its research into electromagnetic field (EMF) concerns. Studies over the last few years - most of them carried out in Australia - have indicated that there may be a strong link between mobile phones and health problems, prompting the Federal Government to invest $5 million last year into its own research into the dangers that mobile telephones may pose to consumers. WHO confirmed that it now has several major studies of its own underway around the world which will attempt to clarify whether EMF radiation exposure can cause cancer, changes in behaviour, memory loss, Parkinson's or Alzheimer's disease, as well as a possible link between mobiles and brain cancer which originally came from disturbing Australian studies reported last year. However, because the experiments may take several years to carry out, results are not expected to be known for a further 5 years.

The recent success of free ISPs in Europe may see both Microsoft and AltaVista attempt to resurrect the idea in the USA, where it had previously failed. This week Microsoft quietly moved into the low-cost dial-up market by offering a $12-a-month access deal in conjunction with the Costco discount chain. The new service, called "Microsoft MSN Internet Access Presented by Costco Online," is being sold as a CD-ROM at Costco outlets in the USA for $US35.97 and includes three months of Net access. Microsoft have recently been rumoured to be contemplating offering a completely free ISP service to US consumers in the hope of destroying AOL and its recent acquisition, Netscape. AltaVista, meanwhile, unveiled a new zero-cost dial-up ISP service in conjunction with 1stUp.Com yesterday. The service - which will be paid for by ads broadcast onto a subscriber's screen - will allow AltaVista to gather more data about consumers who use the service, which in turn will allow it to offer more targeted advertising. A similar model has been used by the UK's FreeServe, which saw it triple AOL's UK subscriber base in under a year, and is being contemplated by several Australian companies.

Australian Internet stocks have taken a plunge over the last fortnight, reflecting a "correction" in the USA's NASDAQ which has seen the values of many early Net leaders disintegrate this year as the companies have continued to lose money. Recent domestic stock issues - such as Spike Networks, eCorp, All Sports, Sausage Software and Travel.Com.Au - have all shed between 10% and 20% of their value over the last few weeks, with many now trading below their issue price. Only two companies - E*Trade and Reckon Software - have shown any gains during the period, and most investors who held onto their Net stocks have lost money from the exercise. Even Telstra (Australia's largest and most profitable company) has shed $1.4 billion over the last two weeks as a result of the Government's decision to issue a further tranche of shares in the beleaguered telco. Market analysts believe that the current downturn in Net stocks is a long-overdue correction (rather than foreshadowing the long-expected bursting of the Net bubble) and believe that - to some degree - Australian investors are simply mirroring the current skittishness of their US counterparts.

According to a new study by Forrester Research, the Net may favour national retailers over their smaller local competitors. This is almost the opposite of earlier expectations that the Net would strengthen the competitive position of small businesses. Forrester's study found that while small and medium retail businesses typically win 50% of consumer dollars in the offline market, at present they have only managed to win 9% of online revenues. Technology, brand, scale and the cost of developing sites which match the convenience of large retailers' efforts were identified as the 4 main reasons why smaller businesses are failing to compete online at the present time. Forrester found that national retailers are driving traffic and sales on their sites with a combination of strong brand names, lower prices and sophisticated technology to facilitate ordering, inventory management and promotions. However, Forester believe that the volume of online retail business will double between 1999 and 2002, and that the deep pockets of national retail chains will still be vulnerable to consumers who require local, personal contact with the merchant in addition to online ordering facilities.

America Online (AOL) has announced plans to roll out a free ISP in the UK called Netscape Online in a last-ditch attempt to hold onto the 600,000 customers it has acquired since it opened there in 1996. AOL, the world's largest ISP, has come under increasing pressure in the UK since rival FreeServe launched a free ISP service in the country late last year and acquired 1.75 million subscribers - almost 3 times AOL's audience - in less than 10 months. Since that time as many as 200 other UK ISPs have also launched "free" dial-up services funded by advertising, while 95 have adhered to the pay-by-the-hour model. As a result, analysts estimate that there are now close to 6 million Britons online - and that as many as 50% of them now have more than one dial-up account. [NB: The technical difficulties which have interfered with daily updates the last two weeks have now been resolved. Australian Cybermalls will be relocating to our new hosting company eservers towards the end of this month. Thankyou for your patience].

The public scandal that has surrounded the awarding of Australia's second Internet casino licence to Gocorp deepened today when it was revealed that another person associated with the company's early lobbying efforts had a serious criminal conviction. Queensland's Courier-Mail - which first broke the story - reported today that it had discovered that former champion athlete Reg Austin had lobbied the Queensland Government intensively in late 1997 in an effort to secure the licence for a company affiliated to Gocorp, only a few months after pleading guilty to misappropriating $92,986 as a superannuation agent for an insurance company and being convicted of fraud in a Sydney court. The ongoing revelations of alleged impropriety surrounding the online casino licence has already seen Queensland State Treasurer David Hamill step aside over the weekend, pending the outcome of formal investigations into the the affair. It has also prompted increasingly embattled State Premier Peter Beattie to move this week to strip all ALP members involved in the casino deal of their potential profits; and to forbid party colleagues from buying shares in the impending float of the State's TAB.

Telstra has expanded its partnership with the US-based C/Net, announcing that it had signed a deal today to bring an Australianised version of the C/Net service to its Big Pond Internet portal. The deal expands on the telco's existing contract, which has seen it broadcast a semi-localised version of C/Net's news headlines for the last two years. Telstra also inked a deal today with Walhalla.Com to bring its Kidz.Net.Au service to Big Pond as well. According to a Telstra spokesperson, the company is aggressively seeking content and strategic partnerships for Big Pond to "provide quality, tailored services for Big Pond members". Kidz.Net.Au allows children aged 18 or less to access 500,000 web sites which have been vetted by Kidz.Net to meet content requirements suitable for children.

Australians have taken to the Internet three times faster than pay-TV, according to a new study released today. AC Nielsen has revealed that after 4.5 years of intensive promotion and billions of dollars in infrastructure investment, less than 7.3% of Australian households have so far elected to hook into the pay-TV networks run by the three surviving players Foxtel, Optus and Austar. This is significantly lower than the number of Australian households which hooked up to the Net during the same period, according to studies by the Australian Bureau of Statistics (ABS). In its most recent estimate, the ABS revealed that between 20% and 25% of all Australians accessed the Net during the last 12 months, and that at least 20% of Australian households now have an online connection. Most of this growth occurred over the last 4 years in parallel with the introduction of pay-TV into Australia. According to Nielsen, the Nine Network currently captures 29.9% of the country's TV viewing audience, followed by followed by Seven (26.2%), Ten (19.5%), ABC (14.3%) and SBS (2.8%). Pay-TV's share of 7.3% is split amongst 60-plus channels.

After several months of static movement the overall number of Australian web sites edged ahead last month, despite continued marginal declines in both Sydney and Melbourne. Our monthly Australian Internet Growth Index, which has been attempting to estimate the number of actual "live" Australian sites on the Net for the last 3 years (rather than the number of registered domains), recorded slight rises across all other parts of the country - most notably in Adelaide and Brisbane. The August 1st figures (with July 1st figures in brackets) are as follows:

Australian Internet Growth Index July 1999
(Figures Show Estimated Live Sites)

Brisbane - 2,433 (2,109)
Sydney - 7,102 (7,234)
Melbourne - 5,026 (5,054)
Adelaide - 2,297 (1,942)

Perth - 2,488 (2,419)
Hobart - 835 (787)
Canberra - 1,933 (1,891)
Darwin - 1,768 (1,758)

During July 1999 Australian Cybermalls hosted 64,979 visitors, a slight rise on June's 62,761 (and missing a day's traffic because of the fiscal year roll-over of our statistics software). This was equivalent to 219,075 page displays and consumed 6.5Gb of bandwidth.