The Big Four

Playing the eternal Gypsy and sooth sayer, I have listed four revenue growth

scorchers of the next few years. These streams are gathering momentum and will

leave many other popular industries behind. These are international growth

stories and the Indian trends may not be the same. Nor is it recommended that

they should be the same!

First is Online Gaming. Estimates by research groups predict that worldwide

online gaming revenue for 2004 would be to the extent of $1.4 billion. Revenues

are expected to triple by 2007 and players like Yahoo, Real Networks and CNET

are coming on strong. In the Asia Pacific region, online gaming revenues is

expected to reach $1.8 billion by 2008 as per latest IDC estimates. With growing

users of the Internet, more and more gamers are getting their thrills online.

Puzzle, board games, game show and card games are the popular categories and

money-spinners. Much of the games industry is now focused on multi player online

games (MMOGs) such as Everquest, Dark Age of Camelot and Star Wars Galaxies.

Pay-per-play browser games where users pay to enter skill based competitions for

some cash or other prize is the fastest growing sub-sector. It is expected to

grow at a CAGR of 40% till 2007.

Second is the net-based adult content industry. Pornography, the age-old

industry is huge by itself. In 2003 it was estimated to have grossed $57.0

billion worldwide and $12.0 billion in the US. This estimate includes adult

videos, escort services, magazines, clubs, phone sex, cable/pay per view, CD

Roms, Internet and others. Amongst these Internet is estimated at $2.5 billion

and growing. In fact with Internet and other advances in technology, adult

content has become even more lucrative. Some of the new technologies adopted by

the operators are: (a) wireless services-according to estimates, wireless adult

content could generate $1 billion to $6.5 billion in the years to come. New

technology will permit swapping pictures, browsing the web, instant messaging

and streaming video all in one phone. As connectivity and picture quality

improves, operators will provide streaming videos for the small screen (b)

video-on-demand billing- this include an electronic billing system which will

allow consumers to download and record chunks of content on CD's. Consumers

will be charged by the minute (c) geo-location software which lets web sites

identify the city where a person logs on. That lets operators target Internet

promotions to specific consumers in specific regions. We can safely predict that

technology-induced ease-of-service, privacy and insatiable demand will translate

to more and more dollars.

Third is the online advertisement industry. With business through the

Internet growing day-by-day online advertising is taking big strides. The amount

of money spent on Internet advertising was to the extent of nearly $2.3 billlion

for the first months of this year. IDC predicts that in the Asia/Pacific region

alone, online advertisement revenue is expected to grow at a CAGR of 39.8% over

the next five years-from $ 304.3 million to $1.62 billion by 2007. Push ads like

banners, buttons, sponsorships etc are now the dominating segment on the

Internet. Pull ads like search ads, classifieds, and permission marketing/e-mail

marketing are growing rapidly. This segment is expected to grow faster and reach

51.3% of the overall online ad revenue.

The fourth major revenue earner is the search industry. Interactive and

intelligent search will drive this growth. Estimates about the size of this

business vary from $5 billion to a more optimistic $8 billion worldwide in 2007.

The main sources of revenue for the search industry will be search based online

advertising, aided electronic commerce - where search engines become virtual

stores, and of course subscription and technology services. As search engines

throw up more and more 'relevant' information, it is possible that consumers

would be willing to pay for the results.

Whichever way we look at it, search will be one of the major revenue earners

of the future. Significantly there is little talk about any of these in India.

Maybe because there is no outsourcing involved!

The author is Editor-in-Chief of CyberMedia, the publishers of Dataquest

He can be reached at Shyam MalhotrA