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Marketing in the internet - as seen from Italy

No. 31 – February 20, 1999



loghino.gif (1071 byte) 1. Editorial: What's new?

This issue is about numbers - based on the half-year hostcount survey that was published on February 15. Some readers think quantity isn't important, what matters is quality; and I think they are right. It's also true that, even in a fast-moving environment, things don't change radically in six months or a year. But an analysis of trends leads to some interesting observations.

On a "global" scale the net grew 46 percent in a year; it nearly doubled in two years, tripled since 1996. That's pretty fast growth (though of course it isn't "exponential"); it's turbulent and uneven, as is to be expected for a development that is still quite young and unsettled.

The net is still concentrated in a very small part of the world. This unbalance is not diminishing; for the time being, it's getting worse. Growth in Europe a bit slower than in the United States, a bit faster that in the rest of the world. (For an analysis of the situation in Europe, see issue 30).

73 percent of the Internet is in North America; 17 percent in Europe; 10 percent in the rest of the world.

We notice, once again, remarkable differences between countries in all areas. Some have fast growth, some are static or even decrease. We are beginning to see considerable growth in some parts of Latin America (though of course still far removed from US or European levels). In the rest of the world we see a few isolated spots of relatively high activity in a general "emptiness" of very low density. We notice some sparks of growth in some parts of Asia, even a few glimpses in Africa - still very small, but not irrelevant.

Whichever way we look at it, one thing remains clear: 98 percent of the world's population has no access to these new communication tools. The potential of the net is still largely unrealized. But let's look at what's happening, because there are some interesting changes.


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loghino.gif (1071 byte) 2. Numbers worldwide

The new half-year survey by Network Wizards was published on February 15. These are the general hostcount figures:

of hosts
% growth
in six months in a year
January 1995 * 5.846.000 51,1 118,9
July 1995 * 8.200.000 40,3 106,8
January 1996 * 14,352,000 75.0 145.5
July 1996 * 16.729.000 16,6 104,0
January 1997 * 21.819.000 30,4 52,0
July 1997 * 26.053.000 19,4 55,7
January 1998 29.670.000 13,9 36,0
July 1998 36.739.000 23,8 41,0
January 1999 43.230.000 17,7 45,7
* Note: the survey method was changed starting January 1998. The data for years 1995-1997 are adjusted to the new survey criteria. Percentages for 1995 relating to 1994 are based on the old survey method.

Fast, but uneven growth. So far we can't see any "logical curve" in the net's development. It's the sum of many different trends. This may help to explain why none of the projections or forecasts has ever come true. As figures get larger, growth percentages tend to decrease.

Let's look at an update of the graph comparing European and worldwide growth:

Growth index of European and worldwide hostcount

January 1995 = 100

(January and July of each year)
Analysis on surveys by Network Wizards and RIPE (Réseaux IP Européens)


Growth in Europe matches the world average. The net is growing faster in the United States than in Europe; the "rest of the world" is slower (but, as we shall see, there are remarkable exceptions).

These are the figures for 33 countries (of 240 covered in the Network Wizards survey) with more than 50,000 internet hosts:

  end 1997 end 1998 % change % of total
United States 20.623.323 30.488.565 + 47,8 70,5
Japan 1.168.956 1.687.534 + 44,4 3,9
United Kingdom 987.774 1.423.844 + 44,2 3,3
Germany 994.296 1.316.893 + 32,4 3,1
Canada 839.141 1.119.172 + 33,4 2,6
Australia 665.403 792.351 + 19,1 1,8
Netherlands 381.172 564.129 + 48,0 1,3
Finland 450.044 546.244 + 21,4 1,3
France 333.306 488.043 + 46,4 1,1
Sweden 319.065 431.809 + 35,5 1,0
Italy 243.250 338.822 + 39,3 0,8
Norway 286.338 318.631 + 11,3 0,7
Taiwan 176.836 308.676 + 74,6 0,7
Denmark 159.358 279.790 + 75,6 0,6
Spain 168.913 264.245 + 56,4 0,6
Switzerland 114.816 224.350 + 95,4 0,5
Brazil 117.200 215.086 + 83,5 0,5
Korea 121.932 186.414 + 52,9 0,4
Russia 114.164 166.827 + 46,1 0,4
Belgium 87.938 165.873 + 88,6 0,4
South Africa 159.358 144.445 - 9,4 0,3
Austria 109.154 143.153 + 31,2 0,3
New Zealand 169.246 137.247 - 18,9 0,3
Mexico 41.659 112.620 + 170,3 0.3
Poland 77.594 108.588 + 39,9 0,3
Israel 64.233 97.765 + 52,2 0,2
Hungary 46.082 83.530 + 81,3 0,2
Hong Kong 66.617 82.773 + 24,3 0,2
Czech Republic 52.498 73.770 + 40,5 0,2
Singapore 57.605 67.060 + 16,4 0,2
Argentina 19.982 66.454 + 232,6 0,2
Ireland 38.406 54.872 + 42,9 0,1
Greece 26.917 51.541 + 91,5 0,1
World total 29.669.611 43.229.694 + 45,7  

We see a trend that goes against our expectations and hopes: so far the "rest of the world" has slower growth (41 percent) than the United States (48 percent). US domination is overwhelming: with 5 percent of the world's population the leading country has 70 percent of the internet. Concentration remains very high: ten countries, with 11 percent of the population, have 90 percent of the net.

As always, there are discrepancies between the figures in this survey and the European data (see issue 30) probably due to differences in timing and technique. But the general perception of situations and trends is the same.

This is the picture by general geographic areas:

Grandi aree geografiche

Analysis on surveys by Network Wizards – 15 february 1999


There is strong concentration in a few countries in each of those areas. 96 percent of North America is in the United States. Practically all of the Pacific is in two countries, Australia and New Zealand. 68 percent of Asia is in Japan, 93 percent of Africa is in Southafrica, 75 percent of Central-South America is in Brazil and Argentina. Only in Europe no country has more than 20 percent, but even here (as we have seen) there are considerable unbalances.

The next graph shows how dominant is the position of the United States and how much of the net is concentrated in a few other countries.

Ten countries

Countries with over 400,000 internet hosts - Analysis on data by Network Wizards – February 15, 1999

Note: in this "pie", as in the next, the slice for France is increased to account for minitel.


NOver time, concentration will have to decrease. Not because of "saturation" in the more advanced countries (we are not close to that threshold) but as a result of faster growth in the rest of the world. But at this stage the share of the "ten largest countries" is increasing.

If, for better readability of the chart, we remove the United States, this is the situation in the other 16 countries with over 200,000 internet hosts.

16 countries

Countries with over 200,000 internet hosts (US not included)
Analysis on data by Network Wizards – February 15, 1999


In the next graph we see that there are remarkable differences in the growth rate by country,

Internet hosts in 24 countries

Countries with over 100,000 internet hosts (United States not included) – Analysis on data by Network Wizards

The green lice of bars indicates growth in one year.
The yellow slice for France is an estimate of the minitel factor.


Differences are considerable; some countries more than doubled in a year, wile others had slower growth - or even a decrease.

SThe next chart is even more relevant: it shows density, i.e. hostcount as related to population.

Internet hosts per 1000 inhabitants in 27 countries

Countries with over 50,000 hosts and density over 4 - Analysis on data by Network Wizards

As in other charts, the green lice of bars indicates growth in one year.
The yellow slice for France is an estimate of the minitel factor.


As we noticed for the first time six months ago, Finland has lost its traditional leadership. The highest density now is the United States. The worldwide survey confirms a strong increase in some European countries. Denmark is now ahead of two traditionally high-density countries, Australia and New Zealand; if the Netherlands keep up their growth rate they could move even higher in this "ranking". Among non-European countries, Taiwan has overtaken Japan and Hong Kong.

Some countries with less than 50,000 hosts, not included in this chart, have high density. Of course Iceland (that in the worldwide analysis doesn't seem to have overtaken Finland, as indicated by the European hostcount - but in any case with 81 hosts per 1000 inhabitants is very close to the "top of the list"). Countries with relatively high density include Estonia (14.7 - ahead of many Western European countries) and tiny Bermuda (19.4). Slovenia (9.3) has higher density than Hungary or the Czech Republic. Some countries in the Middle East, such as the Arab Emirates (7.8), Cyprus (5.2) and Kuwait (3.7) are well above the average in their region. As we shall see, Uruguay (4.8) has much higher density than any other country in Latin America.

Average density worldwide is very low: less than : 0.8 internet hosts per 1000 inhabitants.

Now let's look at a chart that gives us some surprising insights: the relationship between internet activity and income (GNP).

Internet hosts in relation to income (GNP) in 33 countries

Countries with over 50,000 internet hosts - Analysis on data by Network Wizards

As in other charts, the green lice of bars indicates growth in one year.
The yellow slice for France is an estimate of the minitel factor.


We see some interesting facts. Such as the weakness of Germany and Japan in relation to their economy. France is not well placed if we don't consider minitel. Spain is behind Russia and only slightly ahead of Greece. Italy is extremely weak; it's already behind Mexico and Brazil, and if it doesn't accelerate it growth will probably be overtaken by Argentina. Even Britai doesn't look as shiny in this chart as it appears by overall size or density.


Some very large countries don't appear in these charts because of their presence in the internet is very small. China appears ho have only 6 percent growth in a year. India is much faster, up 85 percent. But these are still tiny numbers. There's more internet activity in Iceland than in the two largest countries in the world.

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loghino.gif (1071 byte) 3. Large low-density countries

There are some relevant changes in the situation of those seventeen countries that have over 50 million inhabitants but low net density. Twelve of these have over 1000 internet hosts:

  end 1997 end 1998 % change
Brazil 117.200 215.086 + 83,5
Russia 114.164 166.827 + 46,1
Mexico 41.659 112.620 + 170,3
Turkey 24.786 32.495 + 31,1
Thailand 14.378 20.572 + 43,1
China (excl. Hong Kong) 16.322 17.255 + 5,7
Ukraine 9.179 15.652 + 70,5
Indonesia 9.603 15.448 + 60,9
India 7.175 13.253 + 84,7
Philippines 4.313 9.204 + 113,4
Pakistan 1.219 3.096 + 154,0
Egypt 2.013 1.908 - 5,2

LThe relevance of data is questionable on small figures. But one fact is clear: even where net activity is marginal there are very large differences between countries. If we looked at low-density countries with less than 50 million inhabitants we would see an equally patchy and uneven picture.

As we did last year, we shall divide them in three groups: seven countries with density between 0.1 and 1.4 hosts per thousand inhabitants; five between 0.01 and 0.08; five that are almost totally isolated.

The green slice of bars in both charts is the increase in a year.

Seven low-density countries

Internet hosts per 1000 inhabitants – density between 0.1 and 1.4 – analysis on data by Network Wizards


We see some remarkable changes in this group. Brazil and Mexico have overtaken Russia. Three of these countries are above the world average (0.8) and have passed the 1 per thousand level.

There is a big difference between these and the more advanced countries; but there' another large gap between this group and the one that follows.

Five "very low density" countries

Internet hosts per 1000 inhabitants - density between 0.01 and 0.08 - analysis on data by Network Wizards

The yellow part of the bar is the density in China if we include Hong Kong.


Here again, the picture is changing. Indonesia is growing faster than the world average; if this trend continues, it could move into the "not very low density" group. We see some growth in the Indian "sub-continent", though the numbers are still very small; no relevant results, yet, of the commitment made a year ago by India's government to expand use of the internet. However Pakistan has overtaken China (of we don't consider the annexation of Hong Kong) and India could soon do the same.

Of course, as we know, there is a widespread presence in the net of Chinese people living outside mainland China (where there are severe restrictions on the use of all communication tools). It's not easy to estimate the size of that presence, but it's reasonable to assume that it could be the equivalent of 500,000 internet hosts. Small if compared to the US or Europe, but quite relevant.

The other five "large countries" ate still on the brink of total isolation. There are 244 (strictly controlled) internet hosts in Iran. In Nigeria they have grown from 49 to 410; though the number is very small (density 0,003) this indicates the beginning of a change. There are only 78 hosts in Ethiopia, 34 in Vietnam. There still no information about Bangladesh in the Network Wizards survey.

There are strong differences also in the rest of the "low density" areas. For instance in Africa there are countries with relatively higher density such as Namibia (1.7 hosts per 1000 inhabitants) or Botswana (0.4) as compared to 0.09 in Zimbabwe, 0.04 in Zambia or 0.02 in Kenya and Senegal (or to many African countries with density below 0.01). In North Africa the low density of Egypt (0.03) and Morocco (0.02) seems relatively high in comparison to Tunisia (0.007) or Algeria (less than 0.001) or the almost total isolation of Libya. There are countries such as Sudan, Angola, Somalia, Rwanda, Chad, Eritrea, Congo, Gabon where the survey didn't find any internet presence. If we exclude South Africa, there are fewer internet hosts in the whole continent than in Latvia or Lithuania. The same is true in many parts of Asia. "Globality", at this stage of the internet's development, is a myth.

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loghino.gif (1071 byte) 4. The Spanish-speaking area

There are some interesting changes also in the situation, that we had seen six months ago, of Spanish-speaking countries. An area with high long-term potential and considerable growth: as we shall see, it has doubled in a year.

Internet penetration in Latin America is still low compared to the United States or Europe, but it's interesting to note that Uruguay (4.8), Chile (2.1) and Argentina (1.9) have higher density than Brazil (1.5) and Mexico (1.2).

These are the figures (19 Spanish-speaking countries with over 500 internet hosts) according to the new worldwide survey:

  Hosts % growth
in a year
per 1000 inhabitants
Spain 264.245 + 56,4 6,7
Mexico 112.620 + 170,3 1,2
Argentina 66.454 + 232,6 1,9
Chile 30.103 + 68.9 2,1
Colombia 16.200 + 59,3 0,4
Uruguay 15.394 + 48,9 4,8
Venezuela 7.912 + 103,1 0,4
Dominican Rep. 4.825 - 0,3 0,6
Peru 4.794 + 40,4 0,2
Costa Rica 3.216 + 10,3 0,9
Puerto Rico 1.571 + 506,6 0,5
Ecuador 1,548 + 49,4 0,1
Paraguay 1.147 + 284,9 0.2
Guatemala 913 + 37,3 0,1
El Salvador 815 + 318,0 0,1
Panama 742 - 27,2 0,3
Nicaragua 715 + 41,6 0,2
Bolivia 626 + 13,8 0,1
Andorra 517 + 5,7 7,3

The Spanish-speaking area adds up to 550,000 internet hosts; twice as many as a year ago. If we estimated "Hispanic" activity on the net in the United States as 2 percent of the total, that figure would double. We should consider also that many of the literate people in Portuguese-speaking countries understand Spanish - and that could add the equivalent of another 250,000 hosts.

This is a fast-changing picture: eight countries in Latin America are growing faster than Spain.

If this trend continues (and that seems very likely) in a few years' time the Spanish language area in the internet will be bigger than the French or German. Such a trend is not surprising. There are over 400 million Spanish-speaking people around the world. With almost as many local differences as English - but they do understand each other.



(Of course the language understood by most people in the world is not English or Spanish. It's Chinese. That's quite complicated because it's 26 different spoken languages, that are the same in writing - or almost so. Another problem is that most of the people in China are isolated from the net. But, as we have seen, the Chinese net community across Southeast Asia and other parts of the world is approximately as large as the Spanish-speaking area. The Chinese-speaking population is ten times larger than Japan. Over time, that's another major potential development in the internet).

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