"There are two main angles to view," says Pitkow about his survey results. "First, the number of new users to older users decreased, that is, the percent of users new to the Internet fell significantly. Just 36 percent of those responding said they had been online for less than a year compared to 60 percent in the fourth survey done a year ago.
"Second, growth seems to be stabilizing in terms of core demographics among Web users. In the previous surveys, we saw changes of 5 to 20 percent, for example, in age, occupation and income. Now the majority of changes are less than 5 percent. The trends are continuing, but the rate of change is much slower."
Demographically, the average age of respondents increased to 34.9 years from 33.0 in the last survey completed last spring. The gender statistics were basically unchanged: 31.4 percent female.
Another confirmation of the slowing of the Web using different data comes from Matthew K. Gray, a physics student at the Massachusetts Institute of Technology and the author of the World Wide Web Wanderer, the first autonomous agent on the Web used to track Web growth since 1993.
On his pages (http://www.mit.edu/ people/mkgray/net/web-growth-summary.html), which include one named "Web Growth Summary," he says, "The Web has grown very fast. In fact, the Web has grown substantially faster than the Internet at large, as measured by number of hosts.... The rate of the Web's growth has been and continues to be exponential but is slowing in its rate of growth. For the second half of 1993, the Web had a doubling period of under three months, and even today [June 1996] the doubling period is still under six months."
The bottom line, says Pitkow, is that not as many new users are jumping on the Web. And he predicts that his GVU survey this spring will show the demographics remaining essentially the same.
He is the first to admit his "survey" demands qualification because there is no central registry of Web users, no way to define the population. It also suffers from self-selection because users must first find the survey on the Internet and then fill in Web-based forms.
"People have to know how to use the Web to take a survey, so there is a bias to heavier users. If someone is looking for data on behaviors of heavy users or daily users, then we have good data. The best use, though, is to augment existing data with the intent of focusing on the real users of the system," says Pitkow.
For hard data, he points to the research work of the National Survey of Hardware Ownership, a quarterly syndicated report from PC-Meter L.P. that covers consumer ownership of PCs, subscriptions to online services and Internet usage patterns. PC-Meter measures audience exposure or reach at Web sites by collecting information digitally through PC-Meter software, which is installed on panel members' PCs in 10,000 households. The panel is demographically balanced to mirror the population of U.S. PC owners.
Their most recent survey results, released during Internet World Dec. 9 in New York, found that home use of the Web more than doubled in the last year. About 11.1 percent of U.S. households claim to have used the Web at home in the last month - a total of 11 million - compared to 4.4 percent (4.3 million) a year ago. Currently, there are 98.7 million households in the United States.
Supporting Pitkow's findings, the survey also found that the Web is most widely used among higher income households and those in which the householder has an advanced degree. About 33.1 percent of households with annual incomes over $100,000 claim to have used the Web compared to 5.5 percent with incomes of $25,000 or less. About 28 percent of advanced degree holders "surf" the Web versus 5.3 percent whose highest degree is from high school. The Web is most popular in the West, with 14.6 percent of households surfing, compared to 11.2 percent in the South, 10.6 percent in the Northeast and 8.6 percent in the North Central census area.
Knee-deep in all the data and statistics, Pitkow pushes the point most forcefully that new growth won't occur until new and inexpensive "plug and play" technologies like Web TV or the Internet phone become widely available.
"Over 80 percent of the Fortune 500 [companies] now have a Web presence, so the large corporations are well-represented. Within households, the higher income brackets own computers, and there is more than 65 percent saturation already for Web access. So you will not see tremendous new users there," says Pitkow.
For the Georgia Tech researcher now at the Xerox Palo Alto Research Center in California, where he is completing work on his doctorate, the evolution of the Web is now entering Phase Two. Phase Zero belonged to the pioneers; Phase One, the computer users. Phase Two is the rest of the world.
The keynote for 1997, he believes, will be Darwinism and the survival of the fittest, a question of who remains and who does not. He also sees the introduction of the Internet for political ends as one of the major turning points for the Web in 1996, a use likely to evolve further this year. Critical, too, is the data privacy issue, which he says is just beginning to see the spotlight.
"This is something that will play out in the coming year, especially when you look at where the technology is going. Digital interactive computing will be everywhere, with the ability to monitor and track behavior. We are very likely to see some legal decisions in this arena," he says.
Still other transformations are already occurring on the Web, especially in the commercial arena. They are showing up in the work done by marketing professor Sunil Gupta, director of the Hermes Project at the University of Michigan Business School, in cooperation with GVU and Pitkow.
The Hermes Project has three objectives: understand why customers and businesses decide to try, use and provide commercial resources on the World Wide Web; develop a reliable methodology to track and predict important customer and corporate trends; and provide useful commerce-related information to the Web community.
Already, Gupta's data and research are turning up some far-researching conclusions about trends in customer and corporate use of the Web and their implications for online vendors.
For example, his results indicate that the newer users on the Web are at once more demanding and less sophisticated. He notes in a recently published paper, "As the Web grew, and new technologies and resources became available, the earlier user applied his skill to figure out how best to use these resources. While they are very interested in computers and technological products, the newer users neither have the skills nor the patience to determine why things are not working as advertised. When a resource at a Web site (say a new video or audio clip) does not work for them, they are more likely to abandon the site and less likely to return. (This observation is based on an examination of 175 browser history files obtained from users around the world.)"
Yet, even with this level of sophistication, the new users find the Web an important source to seek and evaluate commercial offerings, the third most popular use of the Web behind reference and reading e-zines and e-papers, according to Gupta's surveys.
In all this, the critical point for Gupta is not commercial transactions on the Web per se, but the behaviors and dispositions that the Web and the Internet are creating and reinforcing for the company and the consumer of the future.
"Who can say whether the medium for commercial transactions will be the Web or not? What we can say is that the transaction will be interactive, it will be digital. Marketing will have greater reach than ever before, and the user will have more control. Something like this will occur; we will not go back to the old way of conducting transactions," says Gupta.
"As this happens, it will be more difficult for the customer to figure out which companies to transact business with. Why? Customers in the physical world have come to rely on a variety of cues when judging which vendor to buy a product from. On the Web, those cues are not generally present."
For example, he notes that companies work hard at differentiating themselves from their competitors in the physical world by carefully choosing their associations, such as their magazine advertising placements and the stores in which they display their products. Customers also rely on these distinctions. Without the physical cues, many companies weaken their differentiation on the Web by appearing similar to their competitors.
"In fact, the need to create such distinctions is further heightened on the Web. Why? Because this medium tends to allow easy comparisons across competing Web vendors on more quantifiable traits like price, availability, calories, miles per gallon, and not on the nonquantifiable differentiating qualities," says Gupta.
In another recently published paper, he identified six factors that help explain why one product category is more successful on the Web than others.
"First, the product category has a better fit with the profile of the typical Web user. Second, the product category requires the consumer to process a lot of information due to the complexity of the product or a rapid pace of change. Third, the products in the category have moderate to high prices, resulting in significant savings if the cheapest vendor could be quickly located. Fourth, information and transactions are both time-sensitive. Fifth, products can be tried or delivered digitally. Sixth, the markets are thin on both the buyer and supplier side or the customers are not densely located in a geographical area," noted Gupta.
What approaches should be considered by companies that are wedded to the Web? He believes that companies must think about creative ways to signal their uniqueness, reliability and quality to potential customers. In addition to large advertising campaigns both on and off the Web, new approaches might include renting a reputable intermediary's name. Gupta gives the example of Virtual Vineyards (http://www.virtualvin.com/) where the reputation of Peter Granoff, California wine expert and vice president of Virtual Vineyards, helps largely unknown wineries gain access to a global market.
"Another example is the creation of Virtual 5th Avenues through cooperation with other vendors serving the same customer segment. This effectively creates a lifestyle-based subnet. Take a look at Shop.com (http://www.shop.com/) and its list of Virtual Malls. A third example is to provide services and products related to a particular task, such as creating a group of companies that help customers negotiate, buy, insure and service used oil drilling equipment," says Gupta.
The commercial issues cited by Gupta raise the prospect of numerous divergent paths. Through it all comes the clear message: the need to redefine what it means to provide products, processes and services given the potential ubiquity of the intranet, Internet and the Web and the changing habits of a faceless buyer.
Whether it's micro-marketing that caters to the tastes and needs of smaller and smaller consumer segments, the rush of companies to establish footholds on corporate intranets to the exclusion of their competitors or the need to more sharply define the consumers' geographical space versus their interest space, the Web is now transforming the market of the present and shaping the market of the future.