I recently wrote about today’s Internet usage from a financial perspective. McKinsey Quarterly (the world renowned consultancy’s business journal) reported our interactions with the Web to be worth an astounding €150 billion euro a year. The business journal has now published an article on new research by McKinsey Global Institute looking at the Web’s impact on economic growth, employment and productivity.

The study, which addresses the Web economies of thirteen countries (the G8 nations and five other nations including my home country Sweden), found that the Web today accounts for a significant portion of the world’s Gross Domestic Product (GDP) and more and more plays an important role in economic growth.

Here’s a summary of some of the most interesting findings highlighted by McKinsey Quarterly:

• The Web accounts for 3.4% of overall GDP in these thirteen countries. More than 50% of this relates to private usage (mainly advertising and online purchases). The Web economy now exceeds sectors such as agriculture and energy.
• In the mature countries studied (the G8 countries plus South Korea and Sweden), McKinsey found the Web to have accounted for as much as 21% of GDP growth between 2004 and 2009.
• McKinsey found most of the economic value of the Web to fall outside the technology sector with 75% of the benefits captured by the more traditional industry sectors.
• In Sweden (the country where the Web economy has had the biggest contribution to GDP growth), the Web economy contributed to as much as 15% of GDP growth between 1995 and 2009 and 33% between 2004 and 2009. Germany comes second with 14% between ’95 and ’09 and 24% between ’04 and ’09.

Overall, a very interesting read this bank holiday weekend for academics and professionals alike. If you’re not spending tomorrow (Sunday) at Wentworth like me watching Manassero do a McIlroy and Edfors shoot a 64 to beat Donald for the €750,000 pay check, you have no real excuse for not digging into the full report of the study (which was recently presented at the high-profile e-G8 Forum in Paris) during your morning coffee.

NB: The Internet/Web economy is defined by McKinsey Global Institute as the “sum of Internet consumption (services, access, e-commerce, etc.), private investment, public expenditure, and the trade balance in Internet-related goods and services”.

One of my favourite business magazines Inc. published an article in their February ’10 edition on rebranding online. The article illustrates some of the issues around rebranding a business online today using two case studies:

Company (a) recently acquired their ideal domain name (envelope.com). However, as much of the business for its current site (actionenvelope.com) originated from search-engines (e.g. they have allegedly been the ranked first for ‘envelopes’ on Google’s search-engine for quite some time), they decided to build an entire new site for envelope.com rather than just migrating the current site over to the new domain name. Customers would still be able to use their standard login accounts on the new site but the content (including product names) would be new (in order to avoid being penalised by search-engines for having duplicate content). After the launch, search traffic to the old site remained steady but the traffic to its new site gradually increased. The long-term aim is to merge the two sites and close the old one down once envelopes.com becomes as well-established and ranked on Google et al as the initial site.

Company (b) also purchased a new domain name (evo.com). However, instead of being risk-averse and running two sites in parallel, company (b) decided to just move its current site (evogear.com) to the new domain name. The content on its old site would be redirected to the equivalent pages on the new site using a so called “301 redirect” (a status code for permanently moving a web page). However, company (b)’s approach wasn’t as successful as company (1)’s. After the re-launch and the 301 redirect, search traffic decreased by almost 40% and the company’s ranking for business critical keywords moved from the first Search Engine Result Page (SERP) on Google to the 35th page. Furthermore, the company’s sales decreased by approx. $200,000 USD in just two weeks. The company was required to put in months of hard work to recover its search traffic and sales.

I think these two cases really illustrates the importance of doing your research before engaging in a complete rebranding of your site which would involve a move to a new domain name, especially if the site has a large number of inbound links and is heavily dependent on search traffic. A 301 redirect is recommended by many SEO experts as well as Google when e.g. merging two sites and one wants to make sure the old links appearing on SERPs are redirected to the equivalent new pages. However, as illustrated in the second case, a 301 redirect might not always achieve desired outcome. A software engineer from Google commented on company (b)’s experience and suggested moving a site in phases rather than all content in one go. Moreover, as pointed out by the Google engineer, migrating to a new Content Management System (CMS) during a move to a new domain might also have a negative impact on search rankings (e.g. it may take some time for search engines to interpret the new content structure and properly index the new site). Moving to a new domain or not, a site’s CMS can have a big impact on its search-engine friendliness. For more information around this topic and SEO in general, I recommend reading The Art of SEO by Enge, Fishkin, Spencer and Stricchiola.

In conclusion, Google et al have added another dimension of complexity to rebranding businesses today and I think the above shows that it’s not one to be taken lightly. Have you been involved in rebranding an established Web site which included a move to a new domain? If so, did you achieve the desired outcome? Let us know by leaving a comment below.

McKinsey Quarterly recently published a very intriguing piece on the consumer surplus created on the Internet today. The online journal found that we, perhaps not very surprisingly, today obtain considerable value from our interactions with the Web, whether it’s from using sites like LinkedIn for professional networking or services like YouTube for streaming videos. What’s more remarkable is that this usage is estimated to be worth a staggering €150 billion euro a year with a net benefit for consumers of approx. €100 billion euro a year (after subtracting elements like subscription fees, pop-up ads and privacy issues). This figure is expected to grow further to €190 billion euro by ’15, e.g. as new wireless services become available and more people get access to high speed Internet connections.

Some interesting stats from the article:

• Four online services (e-mail, search, social networks and instant messaging) generate 52% of the consumer surplus.
• The business models with the highest consumer surplus are those based around communications (44%) followed by Web services (38%) and entertainment (18%).
• The online services which generate the least amount of consumer surplus are blogs, games/gambling and directory services.
• Only some 20% of Internet users today pay to use an online service.

McKinsey also addresses how businesses and entrepreneurs might more evenly divide the surplus between consumers and their Internet ventures, e.g. by charging more for content (like Rupert Murdoch did for the Times in 2009 by requiring people to pay to gain access to the paper online). But as mentioned by some of McKinsey’s readers, is this value really for online service providers to take advantage of? As stated by a CEO from Spain: “the moment you truly monetise the Web … is the moment you lose its biggest value: participation.”. As pointed out by McKinsey, online service providers operate in a market environment which allows them to generate revenues from e.g. both advertisers as well as their end-users (a scenario an economist might refer to as a two-sided market or network). As the value to the different parties in a two-sided market/network mainly depends on the number of users on the other end of the market, why try to restrict access when engagement and participation appear to be king?

On a side note, Harvard Business Review published a great article on two-sided markets/networks and network effects in ’06 which I highly recommend to anyone looking for further reading around these topics.

McKinsey’s What Matters recently published an essay on how technology can improve collaboration among knowledge workers and make them more productive.

The essay includes an interactive feature that examines twelve different types of collaboration efforts in the workplace and the tools required for these interactions to thrive.

According to the authors, one must understand the details of how collaboration workers get their work done in order to increase their productivity. Collaboration workers have been defined as “those who interact to solve problems, serve customers and conceive new ideas”.

McKinsey first identified twelve segments of these workers. Each segment was characterised by the day-to-day activities required for their respective jobs. The twelve segments were then matched with the technologies and tools that best support their workflows.

Example:

Segment: Manager

• Characteristics: The manager supervises other people and business processes
• Job types: Editors, film directors and line managers
• Well suited tools: Conceptual authoring, shared workspace, wiki, virtual whiteboard, instant messenger, video conferencing and telepresence
• Adequate tools: Fax, podcasts, RSS, surveys, co-authoring, document/file sharing and audio bridge
• Ill suited tools: Authoring, annotations, e-mail, blogs, application/screen sharing, real-time polling and web conferencing

Interestingly, e-mail, which is one of most widely used communication tools today, has been classified as ill suited for the manager.

The interactive feature is based on Adobe Flash and is very well built. I recommend everyone with an interest in Enterprise 2.0, Web 2.0 and collaboration to read the essay and play around with the feature.

A panel of experts, which included Clive Holtham of Cass Business School, has named Tim Berners-Lee, who invented the World Wide Web in 1989, the most influential figure in technology over the last 150 years. The nominees were given marks across the following five categories: innovation; ground-breaking technology; industry success; impact on society and influence.

Here are the 10 most influential people in technology:

1. Tim Berners-Lee: Founder of the modern World Wide Web
2. Sergey Brin: Co-founder of Google
3. Larry Page: Co-founder of Google
4. Guglielmo Marconi: Inventor of the Radiotelegraph system
5. Jack Kilby: Inventor of the Integrated Circuit and Calculator
6. Gordon Moore: Co-founder of Intel
7. Alan Turing: Played a major role in deciphering German Code in the 2nd World War
8. Robert Noyce: Co-founder of Intel
9. William Shockley: Co-inventor of the Transistor
10. Don Estridge: Led the development of the IBM computer

The complete list, which was sponsored by Intel, can be found here.