Publication
06/2006
Number of pages
130
Price
3000 euros excl. VAT

Overview
 
The Internet’s leading companies have enjoyed a stunning rise (traffic, net revenues), and have established themselves as powerful brands, thanks to a handful of extremely popular key services. Their business models rely a great deal on advertising services and distribution, for low per-unit margin but high volume markets.

So these Internet giants are working to be as big as they can, by offering an array of (possibly free) appealing services. They are battling it out chiefly amongst themselves in the services market, seeking to gain a greater share of the pie, while also destroying rival services’ value by offering certain paid services for free, or at drastically reduced prices.

This ongoing battle of the Internet giants is not without consequences for the telecom industry. Concerned with creating new revenue streams, telcos can either elect to develop their own service offerings directly, or to join forces with Internet portals and act as intermediaries. These partnerships offer real opportunities, albeit varying depending on the nature of the service. The leading telecom operators, and mobile operators in particular, have been adopting very different approaches.

But portals’ appetite goes well beyond fixed and mobile services, and the Internet giants could well prove a direct threat to telcos’ longstanding access-centric business model. Recent developments are in fact allowing them to launch full frontal attacks on the Internet access (virtual operators, Wi-Fi), voice (VoIP), TV and mobile access (MVNO) markets.
 
 Internet Giants vs. Telcos in brief
 
• Advertising and Internet giants’ revenue models
• Web portals’ key services and innovations
• State of competition in fixed and mobile services
• Service-centric battle of the portals
• Emergence of Web 2.0 and its impacts
• Telcos’ role and place in fixed and mobile service distribution
• Partnership opportunities between Internet giants and Telcos

 
 Countries
 
• China
• France
• Germany
• Italy
• Japan
 • Spain
• South Korea
• United Kingdom
• USA
 
 
 
 Key questions
 
• What is the Internet giants’ current revenue model, and how will it evolve?
• Will web portals’ advertising model be viable in the long term?
• What are key services for Internet portals?
• Can advertising finance all the services?
• Why and how are portals competing with one another?

• What impact does the battle of the portals have on telcos?
• Can telcos come out winners by collaborating on services with one or several of the Internet giants?
• Are portals capable of threatening telcos’ traditional access-centric business model?

• How different is the situation in Western Europe, the US and in Asia (China, South Korea, Japan)? In terms of portals? In terms of fixed and mobile telecom markets? 
 Who should read this report?
 
Internet players
• Understanding service operators’ positioning and strategy
• Assessing the competition’s service developments, notably in partnership with operators

Telecom operators (fixed and mobile)
• Understanding Internet players’ global strategy
• Analysing partnership possibilities with Internet players
• Assessing the nature of the threat that portals pose to traditional business models

Equipment manufacturers (consumer devices)
• Gaining an understanding of the stakes and challenges involved in distribution for Internet players and telcos
• Tracking the services market’s chief stages of evolution

Investors and analysts
• Analysing the overall state of competition, in Asian markets in particular
• Understanding Internet players’ true impact on the telecom market
• Anticipating upcoming trends in portals and telcos’ ecosystem, particularly with the advent of Web 2.0 
 Services analysed
 
• Search engine
• blog
• webmail
• Instant Messaging
• VOD
• VoIP
• podcast
• flux RSS
• auctions
 • commerce C2C
• personalisation
• social networking
• communities
• music store
• mobile services
• Web 2.0
• content
 
Contents

1 - Internet players’ models

1.1 Internet giants’ revenue models
• Internet and the advertising market
• Advertising revenues at the heart of Internet giants’ business model
• Paid services business models

1.2 Features of the Internet giants’ key services
• Revenue potential, technological and marketing distinctions
• Search and aggregation services
• Media and multimedia services
• Community and personalisation services
• E-commerce and intermediary services
• Communication services
• Mobile services 

2 - Battle of the portals

2.1 Internet players’ general service offering

2.2 State of competition and positions of strength in the different markets
• General portal and website operations
• Webmail
• Instant messaging
• Searches, blogs and community services
• C2C commerce
• Music and video
• Mobile services

2.3 Changing shape of the competition landscape
• Forms of aggregation and multimedia hub
• Diversification of portals’ activities
• Forms of diversification
• Value destruction 

3 - Battle for services between operators and Internet portals

3.1 Distribution of portals’ services
• Distribution’s central role
• Distribution on fixed devices
• Distribution on mobile devices
• Other initiatives

3.2 Telcos’ investments in services
• Necessity of the access model
• Services’ role in operators’ strategies
• Operators’ place in the service arena
• The Neutrality Act

3.3 Partnerships between operators and Internet players
• Portal and environment
• Search
• Instant messaging
• Communities
• Auctions
• Music

3.4 Telcos’ decision-making criteria when considering collaboration with Internet portals 

4 - Threats facing telcos’ access offers

4.1 Entry onto the fixed Internet market
• Virtual wireline operator
• Interest in alternative technologies (Wi-Fi, WiMAX)

4.2 Portals as fixed telephony operators
• Free PC-to-PC telephony
• Ubiquitous VoIP

4.3 Portals’ place in TV’s PC-centric scenario
• Media Center scenario
• Linear streaming TV
• VOD

4.4 MVNO’s prospects 

Key players - Portals

• Global
• Amazon
• Apple/iTunes
• eBay/Skype
• Google
• Microsoft/MSN
• Yahoo !
•
• USA and Europe
• AOL
• Lycos
• Meetic
• MySpace
• Real
• Skyrock/Skyblog
•
 • Asia
• Alibaba
• Baidu
• Daum
• Livedoor
• Nate/Cyworld
• NetEase
• NHN/Naver
• Rakuten
• Shanda
• Sina
• Sohu
• Tencent/QQ
• TOM online
• 
 

Key players - Operators

• Fixed
• AOL
• BT
• China Telecom
• Comcast
• DT/T-Online
• FastWeb
• France Telecom
• Free
• Neuf Telecom
• SBC
• Softbank
• Telecom Italia
• Telefonica
• Tiscali
• Verizon
• Wind
 • Mobile
• 3
• Bouygues Telecom
• China Mobile
• Cingular
• KDDI
• KTF
• NTT DoCoMo
• O2
• Orange
• SK Telecom
• Sprint-Nextel
• Telefonica
• TIM
• T-Mobile
• Verizon Wireless
• Vodafone