February 2004 - An Update From the Digital World


We update our Internet Ecosystem Framework
We compile what we believe are the most relevant publicly available metrics that represent key market trends in various parts of the Internet usage/user spectrum.

Overall Internet usage and user growth trends remain strong
As of CQ4:03, there were an estimated 751MM global Internet users (up 23% Y/Y) and 87MM global broadband subscribers (up 55% Y/Y).

Market proxies illustrated impressive CQ4 growth
Yahoo! visitor growth rose 23% Y/Y, while page view growth was up 32%, demonstrating strong usage trends. VeriSign Internet merchant transactions rose 71%. PayPal payments ramped 74%. And, WiFi user growth was estimated to be near 72%. We believe these numbers support our expectation of very strong, still early-stage, momentum for Internet growth in 2004.

Our Internet & PC Applications Software Industry view is Attractive
We continue to believe that, at the margin, online is gaining share from offline, and this should occur for some time to come, benefiting the Internet leaders. The outlook for strong revenue and operating margin growth in 2004 appears to be in place for the Internet leaders.


February 2004 - An Update From the Digital World (11 pages)