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Tech Industry

Report: Source of new Net users may dry up

The growth of the U.S. Internet audience is declining largely because many adults cannot afford a personal computer or they are unimpressed with the Internet.

The flow of new U.S. Internet users seems to be drying up, according to a report issued today by New York-based Cyber Dialogue.

The Internet market research firm concluded that the growth of the U.S. Internet audience is declining largely because many adults cannot afford a personal computer or they believe owning one is unnecessary--and many surf the Internet and never return.

The latter group of one-time users totaled 27.7 million Americans in September, compared with 9.4 million in 1997, the report found.

"Marketers can no longer count on a rising tide of new users in the United States to float all boats," Cyber Dialogue vice president Thomas Miller said. "Most [online companies] must begin to shift resources to better emphasize online customer retention."

Most industry analysts are predicting enormous growth in online revenues for the next several years, but many have qualified their projections by saying the growth eventually would taper. Analysts predict that if this occurs, the e-tailers providing the most value and customer service will best weather any downturns in growth.

"The name of the game today is to increase your share of online customers' wallets, not just your share of eyeballs," Miller said. "[Effective customer service] is much more important today than in the past."

Cyber Dialogue surveyed 2,000 people, split evenly between Internet users and non-Internet users. It has been studying online customer growth since 1995.