A University of Texas study commissioned by Cisco Systems Inc. found that the Internet-related revenue of 3,400 companies grew to $108 billion in the first quarter of 1999, up nearly 69 percent from $64 billion a year earlier.
The study, conducted by the Center for Research in Electronic Commerce at the University of Texas Graduate School of Business, also shows that the Internet sector employed 2.3 million Americans at of the end of the first quarter.
The school’s economists estimate that total Internet-related revenue will rise to $507 billion this year, up 68 percent from $301 billion in 1998.
That’s roughly 20 times faster than the projected growth rate of the U.S. economy as a whole.
For the purposes of the study, the Internet sector is defined as companies providing four layers of products and services. These include businesses that build hardware for the basic Internet infrastructure; that provide networked applications; that act as co-called intermediaries over the Net, such as Web gateways or on-line travel agents; and Internet commerce businesses that sell directly over the Net.
“People normally think of the Internet economy as on-line transactions,” said Doug Karmin, a business development manager at Cisco. “But there’s a whole bunch of other stuff out there. The University of Texas created this methodology to break it all down into several layers.”
San Jose, Calif.-based Cisco makes networking hardware and software, including the powerful routers used to direct traffic over the Internet. Cisco posted sales of $12.15 billion in its latest fiscal year, ended July 31.
Cisco would come under the category of Internet infrastructure, but would also count as an Internet commerce company because sales over the Web account for 75 to 80 percent of Cisco’s total sales, Karmin said.
Among the more interesting features of the study, Karmin added, is that of the 3,400 companies surveyed, more than one-third did not exist before 1996.
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