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Asia's Net directories industry seen consolidating by 2004

Summary

The Internet directories industry in Asia will likely consolidate to about five by 2004 on limited advertising revenue as financing dries up, an industry study said.

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SINGAPORE--The Internet directories industry in Asia will likely consolidate to about five by 2004 on limited advertising revenue as financing dries up, an industry study said.

"The predicted growth in advertising revenue and e-commerce opportunities will remain sufficient to support only a few portals," said Sunil Gupta, executive director and head of Asian Internet research at Morgan Stanley Dean Witter in Singapore. "The Internet portal market will consolidate from hundreds if not thousands of portals to just (four or five) by 2004."

Advertising, which will be the main source of revenue for these Net search directories, is expected to surge to US$1.9 billion by 2004 from US$87 million last year, Gupta said. Electronic commerce will likely account for between 20 percent and 30 percent of sales.

The surviving Internet directories in Asia are expected to be worth at least US$17 billion in market value by 2004, the study said.

Net search directories in Asia such as Lycosasia.com and Sina.com are looking to capitalize on the rising popularity of the Internet to boost sales.

This year, the number of Internet users in Asia excluding Japan is expected to grow 47 percent to 50 million and more than triple that by 2004, said Gupta.

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