Potential Internet and online services hold enormous potential for reducing customer costs, improving business productivity, and expanding access to information, for consumers, businesses and students. The growth of Internet and online services will generate significant benefits to business and household users as well as employment opportunities in individual states and localities. For example, Internet and online services-related employment in five of the seven Task Force member companies grew from approximately 3,500 in 1993 to approximately 9,500 in 1995, an annual growth rate of more than 60 percent. B. Sizing the Internet and Online Service Market Internet and online services are experiencing rapid growth, but it is important to recognize that the industry is still relatively young. The Internet and online service marketplace has enormous potential, but the current level of revenues is quite small both in absolute dollars and relative to non-electronic sales of communication and information services.
Most consumers use online services principally for electronic mail and accessing information.
Content, which traditionally was supported by subscription revenues from online services, is increasingly being supported by advertising revenues as more content moves to the World Wide Web. C. Growth Potential Internet and online services are projected to grow rapidly during the next five years, assuming that those services can continue to develop in the unimpeded manner that they have over the past few years. Projections also differ on the mix of subscription and advertising revenues. This would represent less than five percent of mail order sales. The growth of Internet and online services will generate new sources of tax revenues for states from expanded employment, increased profitability from business productivity improvements, and expanded use of telecommunication services.