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Yahoo!/ACNielsen Internet Confidence Index


Yahoo! and ACNielsen Release Inaugural Results of Yahoo!/ACNielsen Internet Confidence Index

-- First Research Study Examines Consumer Attitudes and
Confidence Regarding E-commerce Services

-- Study Reveals Breadth of Information, Ability to Compare
Prices, and Selection As Main Motivators Driving Consumer E-commerce

-- Consumers to Spend Nearly $10 Billion Online During Next Three Months

Auckland, July 2, 2001 – According to results of the inaugural Yahoo!/ACNielsen Internet Confidence Index, more than four out of 10 (42 percent) U.S.-based Internet users intend to purchase online during the next three months, and will spend an estimated $9.9 billion via the Web during that period.

The first ever Index results were announced today by Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet communications, commerce and media company, and ACNielsen, the world's leading market research firm.

The first study of the Yahoo!/ACNielsen Internet Confidence Index (the E-commerce Index) is designed to measure consumer confidence in e-commerce services, based on attitudes and intended behavior.

In a separate announcement today, Yahoo! and ACNielsen announced the launch of the overall Index program, which will provide a barometer for consumer confidence in Internet offerings, giving the industry a powerful tool around which to design policies and services.

The E-commerce Index measures consumers' overall confidence in e-commerce, reflecting their attitudes toward motivators and barriers to e-commerce, as well as intended purchasing behavior. The Index score for the initial E-commerce Index wave has been set to 100 for use as a baseline, and future waves of the E-commerce Index will be released quarterly, providing trended Index scores.

"The results from the first wave of the Yahoo!/ACNielsen Internet Confidence Index reinforce the importance that consumers place in price comparison tools, selection, and the availability of information when evaluating online purchases," said Grant Winfrey, senior marketing director for Yahoo!'s commerce services. "Interestingly, the Index showed that convenience was not a primary motivator to consumers' purchasing patterns online."

"One of the more striking findings of the Index is the substantial dollar amount of e-commerce that is expected to be transacted during the next three months," Brian Milnes, Managing Director Pacific, ACNielsen eRatings.com

"Despite industry consolidation and a changing business landscape, the Index clearly demonstrates the public's continued confidence in making purchases over the Web."

E-commerce Confidence

The study revealed that attitudes toward e-commerce among different age groups were primarily driven by product selection, comfort with online credit card use and customer service, with the youngest age group surveyed (ages 18 - 24) displaying higher confidence in these areas. Regionally, Internet users in the Northeast U.S.
exhibit generally higher confidence in e-commerce overall, especially in regard to delivery of goods purchased, price comparison tools and the ability to find better prices online. The following table illustrates various demographic segment Index scores in relation to the baseline:

E-commerce Index 100 (baseline)
Internet users 118
Heavy Internet users 134
Light Internet users 94
Non-Internet users 69

The study showed that the main motivators driving online purchasing are the ability to get a wide array of product information, the ability to compare prices, and product selection. Consumers rated comfort with using a credit card online and disclosure of personal information as the biggest barriers, but also revealed that they are relatively confident that the goods they order online will be delivered properly. Convenience does not appear to be a significant motivator to online shopping, and consumers are less confident in their ability to find better prices online.

Comparing heavy Internet users (daily use) with light Internet users, overall confidence among heavy users is driven by higher confidence in online credit card use, convenience, availability of information and proper delivery of goods, as well as the ability to compare prices. While men and women indexed similarly in most
attributes, men have more confidence that they will find lower prices online.

Intended Purchasing Behavior

More than four out of 10 (42 percent) Internet users said they intend to purchase online during the next three months, with more than three in five (63 percent) surveyed intenders indicating they would purchase once a month or more frequently. Among previous online purchasers, nearly seven out of 10 (68 percent) people intend to purchase over the next three months. On average, purchasers will spend
an estimated $184 each during the same time period.

Yahoo!/ACNielsen Internet Confidence Index Methodology

The Yahoo!/ACNielsen Internet Confidence Index is a research study intended to measure and trend U.S.-based consumers' confidence levels in Internet products, services and issues. Using ACNielsen's research expertise and Yahoo!'s insight into online consumer behavior, the two companies developed a proprietary measurement Index. ACNielsen conducts research for the Index through a random-digit-dial telephone survey, utilizing a sample size of 1,000 adults, ages 18 and above, who may or may not be currently using the Internet. The study is designed to measure attitudes from a general consumer audience. The Index is computed using factor analysis, which defines the relationship between the attributes which are measured and the overall Index score. Each survey study focuses on a specific Web-based product, service or Internet-related issue, and Yahoo! and ACNielsen
plan to jointly publish the E-commerce Index results on a quarterly basis.

About ACNielsen

ACNielsen, a company of VNU N.V., is the world's leading market research firm, offering measurement and analysis of marketplace dynamics, consumer attitudes and behavior, and new and traditional media in more than 100 countries. Clients include leading consumer product manufacturers and retailers, service firms, media and entertainment companies and the Internet community.

About Yahoo!

Yahoo! Inc. is a leading global Internet communications, commerce and media company that offers a comprehensive branded network of services to more than 192 million individuals each month worldwide. As the first online navigational guide to the Web, www.yahoo.com is the leading guide in terms of traffic, advertising, household and business user reach. Yahoo! is the No. 1 Internet brand globally and reaches
the largest audience worldwide. The company also provides online business and enterprise services designed to enhance the productivity and Web presence of Yahoo!'s clients. These services include Corporate Yahoo!, a popular customized enterprise portal solution; audio and video streaming; store hosting and management; and Web site tools and services. The company's global Web network includes 24 World properties. Yahoo! has offices in Europe, Asia, Latin America, Canada and the United States, and is headquartered in Sunnyvale, Calif.

Yahoo! and the Yahoo! logo are registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

-0-


- Additional Index Data Follows -

ADDITIONAL INDEX DATA

Ranking of Motivators and Barriers to E-commerce

Motivators Barriers
1. Information about products and services 1. Comfort with credit card usage
2. Price Comparison 2. Confidentiality of personal information
3. Selection of products and services 3. Customer service
4. Convenience 4. Proper delivery of goods


Internet Confidence Index by Gender
Among all respondents, men and women have similar confidence in e-commerce. Among Internet users, however, men are marginally more confident.

Yahoo!/ACNielsen, E-commerce Index 100 (baseline)
All respondents
Men 102
Women 98
Internet users
Men 123
Women 113
Non-users
Men 66
Women 72


Internet Confidence Index by Age
Younger respondents display the most confidence in online
purchasing.

Yahoo!/ACNielsen, E-commerce Index 100 (baseline)
Ages 18 - 24 123
Ages 25 - 34 104
Ages 35 - 44 110
Ages 45 and above 89


Internet Confidence Index by Region (Internet users)
Among Internet users, survey respondents from the Northeast are most confident in purchasing online.

Yahoo!/ACNielsen, E-commerce Index 100 (baseline)
Northeast 133
Midwest 114
South 113
West 117


Internet Confidence Index by Education (Internet Users)
People with at least a college degree are significantly more confident compared to those with only a high school degree or less.

Yahoo!/ACNielsen, E-commerce Index 100 (baseline)
Some college or higher 116
High school or less 84


Intended Purchasing (Internet users)
More than four in ten (42 percent) Internet users intend to purchase something online during the next three months, spending $9.9 billion during the same time period. Heavy Internet users are twice as likely as light users to buy something online in the next three months.

Spending
Will spend between $1 and $50 31%
Will spend between $51 and $100 24%
Will spend between $101 and $200 14%
Will spend between $201 and $500 18%
Will spend more than $500 12%

Frequency
Once a week or more 11%
Once every two to three weeks 19%
Once a month 33%
Once every two months 14%
Once every three months 20%
Less often 4%

- ENDS -

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