A study conducted by the Online Publishers Association (OPA) analyzes the Internet habits of 18-to-34-year-olds, and confirms what many people already suspect: Gen X and Y have embraced the Web in a big way. While the initial installment of the study--unveiled today--reaffirms some commonly held beliefs about the sexes, it also reveals less obvious insights about how the highly coveted demographic accesses the 'Net, and the degree of trust it places in the medium. Conducted in conjunction with comScore Networks, the study found that a whopping 73 percent of all 18-to-34-year-olds are online. Their time spent on the Web accounts for 38 percent of total time spent online by the entire U.S. population. These numbers become even more staggering considering that this group comprises 24 percent of the total U.S. population. "This study really debunks the myth that teens are the heaviest users online," asserts Lauren Wiener, managing director at Meredith Interactive, publisher of American Baby. The company acquired the title to expand its reach to young families, particularly women ages 25-34. "Eighteen-to-34-year-olds aren't spending significantly more time online," says OPA president Michael Zimbalist, "but in that same amount of time, they're doing a much wider range of activities." Their level of familiarity with the Internet mirrors that notion. As compared to 77 percent of all Internet users age 18 and above, 82 percent of 18-to-34-year-olds are comfortable with the technology. And, judging from the sophisticated ways they use the Internet, comfort is a relative term. For instance, 25 percent of this group sends or shares video via the Web, compared to 6 percent of all Internet users. Plus, 42 percent burn downloaded music to CDs, versus 24 percent of all Internet users 18 and older. The 18-to-34-year-old demo turns to the Web for entertainment. In fact, 30 percent visit entertainment sites daily, compared to 32 percent who read newspaper entertainment sections and 19 percent who read entertainment magazines. The demo not only accesses the Internet for music, movies, and gaming, but for utilitarian purposes such as career information, classifieds, and car rentals. The Web is so integrated into the lives of 18-to-34-year-olds, it's becoming commonplace for them to use it no matter where they are. Compared to 15 percent of people age 18 and above, 24 percent of 18- to-34-year-olds access the Web from friends' homes, and 16 percent use a cell phone to surf the 'Net. "Online is a part of their day anywhere, anytime they have a moment," explains Meredith's Wiener, who sees the Web as an integral component to print campaigns. A mom-to-be may see a print ad featuring a nursery, she suggests, and then go online to "try out paint colors, evaluate crib manufacturers, and buy it--and do it all online during her lunch break." "I was glad to see their activity in things like banking and financial categories," comments J. Riley McDonough, vice president of sales at ESPN.com, which counts men as 95 percent of its readership. For the majority of financial categories including personal finance and online trading, penetration is about the same for 18-to-34-year-olds as for those age 18 and above. Yet, the younger group is more likely to do banking transactions, check account balances online, and use online payment services such as PayPal. "They have a high degree of not only involvement, but trust in the Internet," suggests McDonough, especially when compared to older generations, which he believes maintain "a high degree of skepticism." Not surprisingly, men differ from women, primarily in terms of the type of information they access via the Web. While 18-to-34-year-old men rarely visit retail sites, 10 of the 15 content categories their female counterparts gravitate toward fall under the retail umbrella, such as cosmetics and home furnishings. On the other hand, the men in this group go online most often for information about gaming, cars, and sports. Although they do visit retail sites for select things, more than 30 percent access movie ticket sites, and 39 percent visit consumer electronics retail sites. When it comes to employing the study to help garner more online ad dollars, "this gives us a lot of additional ammo," McDonough says.
Microsoft Corp.'s MSN will debut a search service within the next 12 months that includes a Newsbot, Blogbot, and Answerbot. Yusuf Mehdi, corporate vice president of the MSN Information Services & Merchant Platform division, gave more than 500 advertisers, agency executives, and other MSN business partners their first glimpse of features of the search service at last week's Strategic Account Summit held at the company's Redmond, Wash. Headquarters. "Today, one out of every two people say they don't find what they're looking for in a search," Mehdi said. He demonstrated a MSN toolbar that offers consumers the ability to click once to narrow the search process. The MSN Newsbot, now in test mode and available in 10 countries outside of the United States, aggregates news from various sources. The Newsbot updates information every 10 minutes, organizes articles by category, links photos to each story, and suggests articles based on what a consumer has viewed in the past--similar to the way in which Amazon offers readers suggestions based on their past book or music selections. The MSN Blogbot will allow Web surfers to find blogs featuring topics of their choosing, a feature that MSN says no other search provider currently offers. Also in development is the MSN Answerbot, which will offer the ability to answer questions such as "What's the highest mountain?" The Answerbot will employ a natural language interface. Microsoft's MSN is a latecomer to the search party; MSN currently outsources its search services to Yahoo!'s Overture. Company CEO Steve Ballmer last week admitted that not developing search capabilities in-house is "probably the thing that I have felt worst about--not making the R&D (research and development) investment ourselves, upfront." Ballmer commented on the search issue during last week's MSN Strategic Account Summit. He said the company would have a service out within the next year, although some insiders say a product could be out as soon as the third quarter--but a paid inclusion service is likely to take much longer to develop. "We will have the best search services in the world, bar none; the best information services, bar none; the best communications and PC help services, bar none," a revved-up Ballmer told attendees when asked about MSN's search strategy. "We want to be the best from a user and advertiser perspective; the technology will largely be built internally." The MSN Newsbot will aggregate news from more than 4,000 global news sources and let consumers find news related to particular topics. They can also browse by section---sports, business, technology, or world news. Over time, the bot will offer personalized content and recommend relevant links based on previous reading habits. Mehdi said that in addition to being an essential tool for Internet users, search can also be used as a direct marketing and brand marketing tool. "Further standardization is required to make buying online [media] as easy as buying offline [media], but we feel that online has yet to leverage its most unique selling point---the richness of its data," Mehdi said. "Within the next 12 months, there will be an evolution in demographic and geographic targeting." Mehdi said MSN's search product will also integrate aspects of social networking, instant messaging, and online gaming. David Cole, senior vice president of MSN, said that MSN's business now revolves around information services and online advertising, communication services, and premium services. He said the MSN model is a mix of advertising and revenue drawn from subscriptions and transactions. "The access business is a flat, declining business," Cole said. Highlighting further changes in the MSN service, Mehdi and Cole said that MSN will introduce a music service later this year, an overhauled My MSN, and improvements related to customizing pages.
Just weeks after Yahoo! and Google announced their new local search offerings, interactive Yellow Pages (IYP) aggregator InfoSpace staked its claim in the online Yellow Pages marketplace after reaching an agreement to acquire IYP listings provider Switchboard.com. The move, announced Friday, will cost InfoSpace $7.75 per share, or approximately $160 million. It also means that InfoSpace gets 23 percent of the IYP market through its combined network of sites and distribution partners, according to comScore Networks' comScore MediaMetrix. Jim Voelker, Chairman and CEO, InfoSpace, notes that the acquisition immediately establishes InfoSpace as the premier online aggregator of Yellow Pages content: "Through this acquisition, we nearly double our share of online directory traffic, gain a proven technology platform, and add several new and important partner relationships." Like Web search, the IYP market is growing fast, but some industry analysts believe listings networks like InfoSpace could face some serious competition for traffic and ad dollars from their larger search cousins, which are also making significant investments in local search. "The question is--which platform is easier for advertisers?" says Greg Sterling, program director, digital directories-interactive local media, The Kelsey Group. "Internet Yellow Pages generates considerable traffic, but it pales in comparison to Google and Yahoo!" While he admits that companies like InfoSpace will be competing with the Web search kingpins for traffic, Sterling says there may be less competition for advertisers, since many advertisers will want to advertise across multiple mediums. Sterling claims that currently, there is no clear winner in terms of data quality between online Yellow Pages and Google and Yahoo!'s local services. "Historically," he says, "Web search provides the better user experience." The user interface, he notes, is something most consumers are already familiar with. For advertisers, Sterling says that AdWords is a proven platform for traffic-generating keyword buys, but more and more IYP publishers like Verizon's SuperPages are starting to implement pay-per-click keyword search. Ultimately, Sterling says, "whoever provides the better user experience will be the winner, de facto. That'll be where the loyalty goes." This is clearly Google's strategy, and Sterling says this is something Yellow Pages providers like InfoSpace will need to make a priority. "Going forward, Internet Yellow Pages will have to provide a superior user experience because they already have such a traffic disadvantage." Brian McManus, executive vice president, Search and Directories, InfoSpace, contends that Web search and IYP are more complementary than competitive services. "We have partnerships with Google and Yahoo!" McManus notes. He says that the way Google and Yahoo! generate results is markedly different from the way IYP does. Google and Yahoo! crawl the Web for links and ranks according to the number of times the search query term is mentioned. InfoSpace, as an aggregator, crawls Yellow Pages listings across multiple listings providers to bring back actual listings and exact matches. McManus says that 70 percent of local merchants don't even have Web sites, so they can't advertise with search, and even the ones who do probably don't have too many links to their site. He says that local merchants are therefore more likely to provide their listings to Internet Yellow Pages than Google or Yahoo!. While he concedes that Google and Yahoo! generate significant awareness from their brand images and higher traffic than IYP, McManus says that InfoSpace is not in the business of directly trying to compete with either for their traffic, because there is a market for both. "[Google] won't own all the traffic," he says. "Their reach is big, but searchers are going to a lot of other sites too--and that's increasing, not decreasing," McManus maintains. In fact, McManus says that through Switchboard, InfoSpace is actually positioned to partner with most of its major competitors. "Switchboard has done a great job creating relationships with major merchant aggregators and vertical merchant aggregators." He adds that Switchboard's ad server, while not on the scale of a network like DoubleClick, enables advertisers to manage their individual campaigns the same way they can through search. Interestingly, Verizon SuperPages, one of Switchboard's largest competitors in providing IYP listings, currently powers the Yellow Pages for InfoSpace's search engine properties WebCrawler, MetaCrawler, and Dogpile. McManus says that InfoSpace has no plans to replace the SuperPages listings with Switchboard listings. "We've got a great relationship with SuperPages, and we expect that to continue," he says, adding that "[the partnership] allows their advertisers to have a larger reach too." McManus claims that InfoSpace is more interested in adding partners than distancing itself from its competitors. "Aggregation is the key to good user experience," he says. For local merchants, many of whom don't have Web sites, Yellow Pages directories are a crucial source of consumer traffic. A recent Kelsey Group study says that the Yellow Pages industry generates nearly $15 billion in advertising revenues, and is receiving marked increases in the number of online consumer searches versus print-based consumer searches. The study expects the number of online Yellow Pages searches will grow 25 percent annually, accounting for more than 30 percent of total Yellow Pages lookups by 2006, and 45 percent of total lookups by 2008.