Live Voice Communications Over The Internet To Explode

The whole world is already talking about the Internet, but now more and more Internet users are talking over it. Revenues for communications and messaging services bringing live voice communications to the Internet (Web talk) will increase at a compound annual growth rate of 200% from $208 million in 2000 to $16.5 billion by year end 2004, according to a report just released by International Data Corp., an information technology research and consulting firm in Framingham, Mass. Indeed, more than 25 Web-talk service providers launched commercial offerings last year, according to the report. "By 2004, the amount of time users spend talking on the Web will exceed 3 trillion minutes a year," says Mark Winther, group vice president, worldwide telecommunications research. The growth in Web-talk applications can be attributed to a combination of the declining cost of bandwidth and improved Internet performance, leveraging the browsers, portals, and network structures already in place on the Internet. Web-talk service providers, who use a free business model, make their money from four revenue sources: advertising, up-selling to premium services, hosted services, and e-commerce fees. This year, the bulk of revenues will be generated from premium services, accounting for $96.3 million, or 46% of the market. Through 2004, revenues from hosted services and advertising will increase the fastest, however, says the report.