Asian Internet users expected to climb to 64 million by 2003

Asian Internet users expected to climb to 64 million by 2003

SEOUL (AFP): The number of Asian Internet users is expected to
soar by 40 percent a year to hit 64 million in 2003, generating
billions of dollars in e-commerce and advertising revenue,
research seen Thursday showed.

U.S. investment bank Goldman Sachs said in a report that
electronic commerce revenues in the region would generate US$32
billion while Internet advertising would grow into a $1.5 billion
business by 2001.

"At the end of 1998 there were 15 million Internet users in
Asia but this market is expected to grow by a compound annual
rate of 40 percent during the next five years to total 64 million
by 2003," the report said.

The expected growth rate -- which will more than quadruple the
number of web surfers in Asia from the current level -- will be
twice as much as that in the giant US market, it said.

By 2003, China, South Korea, India and Australia will boast 70
percent of Internet users in the booming Asia Pacific market,
with e-commerce exploding by 145 percent a year from its 1998
level of $700 million.

Asia's Internet companies are expected to grow through a
series of successful share offerings which look set to turn the
region into a global Internet hub, the global investment giant
said in its Asia Web report.

It suggested investors could ride the lucrative Internet wave
in Asia by injecting funds into regional telecommunications firms
such as South Korea's SK Telecom and Korea Telecom.

In addition, they could invest in firms with "embedded
Internet assets" such as Singapore Press Holdings and Hong Kong's
Wharf Holdings, and also through dedicated Internet providers
such as Corp, China.com and Pacific Internet.

"Asia's Internet scene lags behind that of the U.S. by about
two to three years, but the gap is narrowing rapidly," Goldman's
Rajeev Gupta said in an extract of the report seen here.

"Given that local content is developing and U.S. companies are
seeking local alliances, the Internet scene in Asia is becoming
both real and highly lucrative," he added.

But the investment expert warned that valuations of Internet
companies were tricky.

While the market capitalization price to sales ration was the
single most important benchmark, other variables such as
discounted cash flow and discounted future earnings also had to
be taken into account.

South Korea is Asia's second fastest growing Internet market
after Japan with an estimated three million users at the end of
last year and 10 million forecast by 2002.

Its giant conglomerates are now maneuvering to cash in on the
nascent Internet trading business, navigating their way through a
web of regulations on cyber transactions.

Several Internet hubs such as Lycos and Yahoo have signed up
to joint ventures with Korean firms and some portal services are
also considering setting up joint ventures in South Korea.