1995’s Internet intoxication will lead to something of a hangover as the much-hyped customer base fails to materialise quite as anticipated, according to International Data Corp senior vice-president of research, Frank Gens. He predicts that 20% of Web site-owning Fortune 500 companies, discouraged by a lack of return on investment,will abandon their addresses, creating ghost sites on the Web. On-line numbers will continue to grow but there will be a high turnover as newbie Net surfers are underwhelmed by content quality and cancel their on-line subscription services. An unstable customer base and stretched Internet resources will impact the potential profits of suppliers such as Netscape Communications Corp, the report suggests. International Data reckons Internet access prices could drop as low as $15 a month this year, and that on-line companies will derive most of their profits from providing on-ramp services. Without naming names, Gens predicts two of the big four on-line services, America Online Inc, Prodigy Services Co, Compuserve Inc and Microsoft Corp with the Microsoft Network, will struggle to stay alive this year. He expects strategic investments to be paramount as seeds of new leadership positions are sown in advance of a shake-out of players. There will be a certain amount of revenge of the (Unix) nerds effect as technologies such as Java and Netscape leap to prominence even on Microsoft systems and Unix servers drive Intranet development. – Ray Hegarty
