Business in Vancouver: News that works for you

    Advertising is increasingly part of the Internet, but it hasn't become a big money-spinner yet

    by Alan Zisman (c) 1996 First published in Business in Vancouver ,  Issue #364 October 15, 1996   High Tech Office  column

    Prophecies of fortunes to be made through the Internet keep on coming. At Toronto's Comdex Canada '96 a while ago, Jason Morsink of IBM Canada suggested that by the beginning of the next decade, about 10 per cent of all retail, banking, and other commercial transactions could be taking place over the Net--about $200 billion annually across North America. While Rob Palmer, of Toronto's Bayshore Trust, agrees that Morsink's 10-per-cent figure is achievable, Tom Strong, a senior vice-president for technology with the Canadian Imperial Bank of Commerce, points out that "a lot of people will get poorer investing in this, and a small number will get very rich."

    Estimates for 1995 suggest that somewhere between $250 and $500 million was spent in Internet transactions, a figure Forrester Research suggests will grow to $9 billion by the end of the century--continual growth, but far from Morsink's $200 billion.

    Others suggest that continued free content on the World Wide Web will be paid for by ad sales, and you've probably noticed ads on some of the more popular pages. At first, these were simple little rectangles, mentioning the brand name of a car or a computer, linked to the manufacturer's own Web page for more information, but easy to skip over. Now, they're more and more in your face--larger, blinking or featuring mini-animations. Some pages feature a column of text alongside a continuing column of ads.

    Then there's the oddly-named cookies: many ads will "give you a cookie" behind the scenes, meaning that they're writing information to your hard drive--information that they will retrieve the next time you access that Web page. This allows them to show you a different ad each time, but the whole "cookie" concept, with Web pages writing and reading from personal hard drives, makes many users uneasy. (The latest versions of browsers from Netscape and Microsoft can be set to warn you when you're about to get a cookie, allowing you to refuse the treat.)

    Are Web ads big money-makers? WebTrack Information Services has published a list of the top 100 money-making sites, available at The list suggests that it's not quite mass media yet, although Webtrack is predicting about $3.5 billion in ad revenues by 2000 (compared to about $200 billion spent on print ads last year).

    Half of all the money spent on ads was received by only five popular sites--mostly commonly accessed Web-search pages. And even though the number-three spot, Yahoo, took in nearly $3 million in ad revenue, it still managed to lose over $1 million last year.

    And the amounts received in ads drops dramatically as you move down the list. Even the well-known and widely accessed Playboy site, at number 22, got only about $275,000 in ad revenue last year.

    Like Net commerce, ads may become a viable source of income, but aren't there yet.

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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan