New Worry for Online Ad Revenue: As Sales Slow, Are We Entering "Dot Calm" Period?

By: E&P Staff Raising a red flag for those who project double digit online ad revenue growth for many, many years, The New York Times on Sunday reports that sales for many advertisers are already tailing off.

The article opens: "Has online retailing entered the Dot Calm era?"

It continues: "Since the inception of the Web, online commerce has enjoyed hypergrowth, with annual sales increasing more than 25 percent over all, and far more rapidly in many categories. But in the last year, growth has slowed sharply in major sectors like books, tickets and office supplies.

"Growth in online sales has also dropped dramatically in diverse categories like health and beauty products, computer peripherals and pet supplies. Analysts say it is a turning point and growth will continue to slow through the decade.

"The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.

"The slowdown is the result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits."

The full article is available at


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