Internet predictions for 2006

Internet predictions for 2006
By Bambi Francisco
Last Updated: 12/28/2005 6:33:01 PM


SAN FRANCISCO (MarketWatch) -- In keeping with the tradition of offering up lists predictions for the new year, here are my top forecasts about online trends and stocks in the new year.

Please accept my mea culpa now since my outlook will undoubtedly turn out to be off the mark, like most predictions.

For instance, I wouldn't have prognosticated at the end of 2004 that the most-searched word on Merriam-Webster's site in 2005 would be "integrity." Nor would I have guessed that Google (GOOG) would top $100 billion in valuation, and take a 5% stake in Time Warner's AOL, or that engineers would be better at advertising than professional marketers.

But here are some ideas.

Consuming Apple

Apple Computer (AAPL) continues to shine as it grabs a larger share of new markets for entertainment gadgets and media centers that hold video, pictures and music. (AAPL)Apple may not dominate our offices -- with only 3% of the PC market share -- but it will increasingly dominate every other room -- like our living rooms, game rooms, kitchens, bedrooms, and bathrooms. Apple is already the No. 7 music retailer, according to NPD. It's among the top 10 most visited online retailers, according to comScore. And, it was the fastest-growing Web property, according to Nielsen/NetRatings. Additionally, I predict Apple will release an updated video iPod in the first quarter and will sign up CBS and News Corp (NWS) in content deals similar to those it has already struck with NBC Universal and Walt Disney (DIS).

EBay vs. Comcast

EBay (EBAY) and Comcast (CMCSK) will compete against each other for voice over Internet services. EBay will aggressively push the Skype VoIP service on its power sellers as well as merchants on Shopping.com. By doing so, Skype will surpass its goal of generating $200 million in sales this year. Comcast, meanwhile, will be trying to entice its dominant base of cable broadband customers to use its own VoIP service. Comcast will roll out its VoIP service to its 40 million households next year. Additionally, the Skype phone, which can be purchased today via Skype's select partner Ipevo, will improve. For instance, the phone will be wireless, so we won't have to be tethered to our desks.

The rise of free agents

Amateur or user-generated video will emerge as entertaining content to be used in commercials. The Asian Backstreet Boys -- the amateurs who parodied the Backstreet Boys in several videos and uploaded them onto Google Video and nearly crashed the search engine's servers because of their popularity -- will be signed up to do commercials for a major consumer brand, like Coca-Cola, or a well-known Internet/technology consumer brands, like Netflix (NFLX) or Tivo (TIVO). Tivo already has plans to try to make advertisements entertaining enough so that viewers choose to watch them rather than skip over them. To this end, one major traditional media company -- News Corp, Viacom, CBS, NBC Universal, Walt Disney, Time Warner (TWX) -- or an Internet giant -- Google, Yahoo or Microsoft's MSN -- will automate licensing and copyright protection for new undiscovered talent.

Google commercializes video

Google's AdSense made bloggers walking billboards for its advertising network. Next year, Google will attempt to become the agent of all those free agents I mentioned above. I predict that Google's highly-anticipated online payment service will be launched in 2006. When it is, Google will be able to charge users to watch the videos, and split the fee with the amateur video content provider. Additionally, Google will become the network operator for San Francisco's low-cost or free WiFi initiative. Oh, and Google shares will test $400.

Tech geeks become media chic

Engineers will become increasingly valuable as content companies spend more resources on search and other interactive and communications tools to engage their audiences. Unfortunately, content companies realizing that it's not just their job to create content but to create a solid search and interactive experience, won't be able to lure the best and brightest engineers because the geeks are going to work for the big four, where there is a higher purpose.

Amazon Galaxy

Speaking of a higher purpose, Google, NASA and Amazon.com (AMZN) CEO Jeff Bezos will shake hands on an agreement to collaborate on space missions. Google has already announced its commitment to search and organize NASA's trillions of bits of data from its satellites. Bezos will provide the services of his startup company Blue Origin, which will build the spacecraft and send the first explorers out into the galaxy to search for good cheap real estate to set up colonies. Google will say OK to this deal, only if everyone in the galaxy can get high-speed Internet access.

Microsoft/Yahoo vs. Google/AOL

Microsoft (MSFT) and Yahoo (YHOO) will forge a greater alliance now that Google has taken a $1 billion stake in AOL. Microsoft's MSN and Yahoo's instant messaging clients are to be integrated in 2006. But that's just the start.

Bloggers turn into merchandisers

Just as Google turned bloggers into walking billboards, Yahoo will increasingly turn bloggers into salesmen. Yahoo's "Shoposphere" -- where it can harness the opinions of bloggers -- will gain some traction. The shoposphere allows bloggers to create personalized shopping lists around specific interests or groups that other people can relate to. For instance, there's a shopping list for "Bachelors," created by a bachelor, or a shopping list for "Foodies," created by someone who likes to cook. The power of personal selling isn't exactly a new idea. We can remember those Tupperware parties, right? And, the idea is also similar to what VStore had in mind. VStore -- which launched in 1999 and is now defunct -- enabled Internet users to create their own personalized stores, and get a cut for everything they sold. Of course, fewer than 5% of Internet users were on broadband. Now, with more people online and finding ways to make money online via advertisements, why wouldn't they try to sell stuff too?

Video sales get pumped up

Just as music singles drove online content sales to nearly $1 billion in the first half of 2005, according to the OPA, video sales will begin to be a small part of paid content online. In 2006, sales of video content, like music videos or shows, for 99 cents apiece on Comcast or DirecTV, or $1.99 purchase on Apple's iTunes music store, will begin to ramp up and catch on.

Meat-market cleanup

Because of rising concerns that social-networking sites allow people to disguise themselves, and potentially harm unsuspecting members, there will be a social-network crackdown. As part of this, there will be new attempts to monitor members and to make sure that children don't gain access to these virtual meat markets. Of course, there will be more noise than actual results. After all, I recently managed to create a Google blog for my nephew, notwithstanding the fact that he's only two months old.

Social serendipity

Internet users will begin to socialize in ways they can't even imagine. Last week, over the course of the 60-hour NY transit strike, I met half a dozen people in taxi cabs and shared Christmas cookies with others. Those who were in NY and had to pay a $15 flat fee to the taxi driver for an hour-long drive that got you just two miles while you shared the ride with strangers -- know what I mean.

How that translates on the Web, I don't know. But if you think you have the answers, let me know.

Happy New Year!

 

Good read. I really should've bought Google shares when they were announced. I can't wait for Google Wallet

 

Interesting info... Thanks

 

this was a good article. thanks

 

Your Always Welcome Guy To Ma Home lolz