• by Masha Geller , January 17, 2003

Seems like everyone is talking about broadband this week. First thing Monday, Yahoo! announced the launch of streaming video technology for its online dating service, Yahoo! Personals. Mid-week, Nielsen/NetRatings reported that broadband access at home continues to post double-digit growth with a 59% year-over-year increase. Today, Yahoo! Inc. and ACNielsen released the results of their latest Internet Confidence Index, which also sheds some light on the issue.

According to Yahoo/ACNielsen, the type of Internet access is a significant factor in consumer confidence in the Internet. Overall, their data shows that broadband consumers are significantly more confident than dial-up modem consumers. Although Internet confidence declined marginally among broadband consumers in Q4 2002, confidence within this segment continues to remain significantly higher, by 21 points, than consumers accessing the Internet through a dial-up modem. Key motivators driving the increased confidence include convenience and high comfort levels with credit card usage.

So go ahead. Plan on rich media. The world can handle it.

Broadband aside, the fourth quarter 2002 results of the Yahoo/ACNielsen Index indicate a confidence level of 111 versus 115 for the same period last year, which is not surprising considering the current economic conditions. Not that we should be really worried. According to Manjima Khandelwal, VP of ACNielsen International Research, confidence levels remain relatively stable compared to other leading consumer related trends and indicators.

Based on survey responses, the Internet Confidence Index projects that US consumers will spend $14.8 billion online in the first quarter of 2003, which is comparable to the same period last year ($14.6 billion). Naturally, the projected spending levels are lower compared to last quarter - it is typical for consumers to spend less immediately after the holidays. Overall, the survey says that more users will shop online in the first quarter of 2003 compared to the first quarter 2002, with heavy Internet users leading the way.