The consolidation of all its digital operations under the 24.com umbrella is indicative that the Internet has become core to a media company`s business, says 24.com CEO Kim Reid.
Last week, Naspers, one of the country`s largest newspaper and magazine publishers, introduced 24.com, the merger of its Media24 and MWEB subsidiaries. The aim of the merger, states Naspers, is to capture 60% of the local online audience.
"The formation of 24.com shows just how seriously a company such as Naspers is taking the Internet. It has now become core to its overall strategy," says Arthur Goldstuck, MD of research and strategy company World Wide Worx.
Goldstuck says all Internet developments, such as 24.com, are the result of companies recognising emerging trends.
"While the growth of Internet connectivity is still quite slow in this country, those with five or more years of experience in using it are doing more with it," he says.
According to Goldstuck, there are about 3.6 million Internet users in SA, of whom 1.2 million are dial-up, or small office, home office users.
Reid says the creation of the 24.com portal is typical of a "Web 2.0" offering that recognises people want to use the Internet for more than just e-commerce or looking up information.
"Web 2.0 offerings have to include things such as free e-mail, search facilities and other lifestyle offerings," he says.
Reid says the majority of revenue for 24.com will come from advertising and that, while the response from advertisers has been positive, a lot more education needs to be done.
"We estimate that only about 0.8% of South African advertising revenue goes to online, compared with the 6% to 7% seen in Europe and the US, and the 10% to 12% seen in the Scandinavian countries," he says.
Goldstuck estimates South African Internet advertising revenue in 2007 should grow by about 25%, to R240 million.
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