Online, Offline, No Line, a distant memory after the recent financial crisis

The dot-com bubble might seem like a distant memory after the recent financial crisis, but around the world, the Internet continues to fuel hopes for innovation, wealth and economic expansion.

That's why the Internet has sparked something of an arms race between the U.S. and Europe over the past decade, with governments vying to expand its availability and use, hoping that the next technology billionaires spring from somewhere outside of Silicon Valley.

In Europe, politicians have tried to engineer catch-up programs to rival U.S. dominance of the Internet. France and Germany jointly started Quaero in 2005, a state-funded search engine designed to rival Google, Yahoo and Microsoft offerings. European Union governments keep a particularly close eye on Internet usage and have been pushing to make Web access available in all corners of the bloc.

Global Internet Habits

To take a closer look at this issue and how people in Europe and the U.S. use the Internet, the Wall Street Journal asked market-research firm GfK to poll people in 15 EU countries, Turkey and the U.S., asking whether they have readily available access to the Internet and to describe how they use it. A total of almost 17,000 people were polled.

It turns out that Western Europe lags behind the U.S. in terms of using the Internet for private purposes. Across Western Europe, 61% of people say they have access to the Web, either from home, work, an Internet cafe or a mobile device. In the U.S., 75% of respondents said they had similar access. Europe as a whole, including five Central and Eastern European states, lags even farther behind, with only 59% of those surveyed saying they have personal access to the Internet.

There are two countries in Europe that stand out for having particularly high Web access: the Netherlands (91%) and Sweden (86%). It's not a surprise that they are two of the most advanced economies in the world and on a per-capita basis, among the richest, too.

Many European countries fall far short of these figures. In Italy, only 39% of respondents said they have access to the Internet for private purposes. That puts Italy in the same league as Romania (36%) and Bulgaria (37%), two formerly communist countries that rank as the EU's poorest member states.

"In Italy and some other countries it might be a cultural thing, in addition to the economic issue. The Mediterranean countries are a lot more mobile-phone oriented and people there are more used to talking to each other," said Mark Hofmans, a managing director in GfK's Brussels office, who analyzed the survey results. He added that some governments, including Italy, have been slower to push broad Internet access than Sweden and the Netherlands.

When it comes to the digital economy, attitudes vary sharply on either side of the Atlantic. Content providers, who depend on subscriptions and advertisements to make money, are facing an uphill battle in Europe, while e-commerce, online banking and Web-based services seem to have established a dedicated following.

Asked whether all Internet content should be free, 42% of European respondents said "yes," compared with 21% in the U.S. Also, more Americans (57%) than Europeans (40%) said Internet content should be free with the understanding that advertisements and other marketing tools might be included. This means it might be harder for Internet ventures such as social-networking sites or online newspapers to find success in Europe. The richer the country, the more people seem willing to pay for Internet content. In Sweden, 23% of respondents said they were willing to pay for some form of Web content, followed by the Netherlands (19%) and the U.K. (18%).

Europeans do seem willing to do business online. Asked to name their single top use for the Internet outside of work, 13% of Western European respondents cited e-commerce, such as shopping on Amazon.com or eBay, compared with 12% of Americans. In the U.K., 26% of respondents named this as their top use for the Web.

"The U.K. does have a high prevalence of people who are prepared to spend money online," said Alexander Grous, an expert on technology and the Internet at the London School of Economics and Political Science. Dr. Grous cited a range of factors supporting this phenomenon, including growing trust in the security of Web-based transactions, companies pushing consumers online to pare costs, and lousy British weather, which makes shopping from the comfort of home seem like an attractive idea.

Source: The Wall Street Journal | Mon | 12/13/2009

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