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Nearly half of Internet users say Internet online becoming a necessity

67% Would Prefer Internet Connection Over TV or Phone if Stranded on Desert Island; 47% of Laptop Owners Say They Take It Along on Vacation to Go Online

8 in 10 Say Internet Makes Everyday Activities Easier and More Convenient; Nearly Three-Quarters of Users Capitalize on Medium to Get Information on Products; 7 in 10 Think Internet is Important for Kids' Education; Almost Half of Parents Would Rather Kids Go Online Than Watch TV

December 3, 1998

America Online/Roper Starch Cyberstudy press release

Dulles, VA, December 3, 1998 - Nearly half of Internet online users say the medium is now becoming just about a necessity, and almost three-quarters use it to make better buying decisions, according to a study released today by America Online, Inc. and Roper Starch Worldwide, one of the nation's largest marketing research and consulting firms.

The first-ever "America Online/Roper Starch Cyberstudy 1998," a sample of 1,001 adult Americans who subscribe to online and Internet services from home, reveals that more than three-quarters (77%) of the online population believe that being online has made their lives better and 8 in 10 say that it makes many activities easier and more convenient.

In fact, the interactive medium has so penetrated users' everyday lives that nearly half of those with laptops take them along on vacation to go online and two-thirds would prefer an Internet connection if stranded alone on an island for an extended period of time over a television or a telephone. Moreover, 7 in 10 adults think going online is important for children, and almost half believe that "being online has a more positive influence on my children than watching television."

Bob Pittman, America Online, Inc. President and Chief Operating Officer, said: "This first-of-its-kind study confirms that our vision for the interactive medium is becoming a reality: Internet online is becoming a necessity - in fact, other Roper research suggests it has surpassed VCRs, stereos and cable TV as a necessity for those who have access to them. The study also shows that the medium dramatically improves people's lives. Whether it's keeping in touch with friends and family, getting information to make better buying decisions or trading stocks, people are clearly seeing everyday tasks are easier and more convenient when they're done online - and the longer people have been online, the more benefits they notice."

Marshall Cohen, America Online Senior Vice President of Brand Development and responsible for the company's consumer research, added: "This study demonstrates that this new medium has firmly established itself among all age groups, from senior citizens to young adults, and is rapidly penetrating the everyday lives of people in all walks of life. It's clear that Internet online is rapidly achieving its potential to bring convenience to people's lives, and that users see it as one of the most important developments of this century."

Edward Keller, President of Roper Starch Worldwide, said: "The study shows that online users are very aware of the new ground they are breaking simply by being online. Very large numbers see online as having a major impact on society, particularly in the areas of education, the workplace, media and entertainment - and even democracy itself."

Study Underscores Value and Potential of Medium in Daily Lives of Users

America Online, Inc. commissioned Roper Starch Worldwide to produce a random survey of 1001 people (18 years +) who subscribe to an Internet/online service at home. Interviews were conducted via telephone in August 1998 and the results have a +/-3% margin of error. Over 60 closed- and open-ended questions were asked of participants on various topics, ranging from how and why they use Internet online, how being online has impacted their lives and society and what prompts their activity online, to their thoughts about its future impact.

Key findings in the study underscore its increasing penetration and its growing value and potential in the daily lives of users:

• · 71% of the online consumer population has been online for under three years and 29% has only been online for a year or less.
• · Yet almost half (44%) already say the interactive medium is just about a necessity to them and 77% believe it has made their lives better.
• · When asked about 16 everyday activities, more than eight in ten respondents said engaging in those activities online was either "much or somewhat easier" than "the way they used to do it." Leading this list of activities deemed "much easier" to do online were tracking stock portfolios and trading stocks.
• · 71% of the online consumer population say they regularly or occasionally go online to get information about products to buy, both on- and off-line.
• · 87% say they regularly or occasionally go online to communicate with friends and family and 94% say that the online medium makes communication with friends and family much or somewhat easier than methods they used before.
• · 80% of those using Internet and online services today have suggested to friends and family that they get online.
• · 69% of those online feel that it "is important for children today to know how to go online and use the Internet." And almost half (47%) of them believe that being online has a more positive influence on their children than watching television (35%).
• · 79% of users said the computer would be considered the most important invention of the 20th Century.
• · Of those in the population who own a laptop computer, almost half (47%) take it on vacation.
• · 26% of all online users check their e-mail on vacation.
• · When asked to imagine being stranded alone on a deserted island for an extended period of time with access to only one of three technologies, 67% of those surveyed would prefer to have a computer connected to the Internet, while only 23% said they would want a working telephone and 9% opted for a television.

Mr. Pittman added: "This study reflects a historic benchmark in research tracking online trends and behavior - research that provides a window on what is driving the medium's incredible growth. We intend to continue conducting these studies over the coming years to provide a reliable resource that tracks the development of this increasingly critical force in society."

More and More Finding Online Makes Life Better; Medium Fast Becoming a Necessity

This study clearly shows that as more and more Americans go online, they believe the medium makes their life better and many are incorporating it into their daily routine.

• · Already 87% of the entire online consumer population says they would miss online access if it were no longer available to them.
• · As the population spends more time online, they are more likely to miss it and to see the medium as a necessity. 64% of those who have been going online from home for three years or more say they would miss online access "a lot" and that "using an online or Internet service is just about a necessity to me."
• · When compared with other Roper research, the above results suggest that the Internet online medium has already surpassed VCRs, stereo systems and cable TV as a necessity for those in the population who have access to them.

The online medium is becoming an essential part of the lives of people of all ages.

• · 56% of those over 50 said they would miss having online access if it were no longer available compared to 47% of those aged 18 to 24.
• · The online population over age 50 is more likely to use the medium to manage and plan their finances, while those between the ages of 18 and 24 are more likely to use it to socialize.

The Interactive Medium: Making Communication Easier and Bringing People Together

The online population is relying more and more on the interactive medium to communicate with friends, family and business associates.

• · 87% of respondents say they go online to communicate with friends and family. In addition, when asked how the medium makes their life better, 35% of the responses given related to communications activities.
• · Nearly seven in ten (69%) of those surveyed agree that "using e-mail has made it easier for me to stay in touch with family and friends."
• · The survey also revealed that the online medium also appears to bring people together in the home. Specifically, eight in ten parents with children under 18 say they sometimes go online with their children and 66% say that they sometimes go online with their spouses.
• · Almost three in ten people online say they regularly or occasionally "meet new people with common interests online." Of those who meet new people online, 91% say it is easier than offline.
• · Over half (51%) prefer using e-mail to communicate with business associates to using the phone (35%) or regular mail (5%).

Interactive Medium Population is Now Nearly Three Times Larger than in 1995 and Reflects the Upscale Mass Market

The study shows that over the last two years, the online population has grown dramatically and it has transformed to reflect more and more the upscale mass market.

• · Women have sparked the growth of Internet online in the last 12 months - accounting for 57% of the new home online subscribers during that period. This recent trend has boosted the women's share of the interactive medium to 47%.
• · The study also reveals that the vast majority of the online consumer population would not characterize themselves as experts. Almost three- quarters (73%) of the population would characterize themselves as "novices" or at an "intermediate level" of expertise.

The current interactive population in America reflects an upscale mass-market base.

• · 65% of the interactive population is over age 35. These consumers are more likely to have graduated from college, to be married, to have children under the age of 18, and to represent a higher median household income bracket than the American public at large.
• · Online consumers are twice as likely than the average American to be an Influential American® (21% vs. 10%), as defined by Roper Starch. This means that they are more likely to have attended a public meeting on town or school affairs (41% vs. 14%), contacted a politician (27% vs. 13%), attended a political event (15% vs. 5%) or written a letter to a newspaper (12% vs. 5%) than average Americans.

Online Most Likely to Impact Education and the Workplace In the Future; Already Impacting Media

The study measured online users' feelings on how the interactive medium will affect life and society in the future. Those users say the interactive medium is poised to most greatly impact education (73%), the workplace (64%), and media and entertainment (47%). Interestingly, more women (71%) than men (58%) believe it will impact the workplace.

The online consumer population appears particularly interested in how the medium is changing society today. 75% say they are either "very" or "somewhat" interested in hearing news about Internet online and how it is changing society.

The medium may already be impacting how people use different types of media in their lives. Forty-three percent of those online say they viewed more television before they went online. By comparison, overwhelming numbers report the same degree of newspaper (83%) and magazine (83%) reading before and after going online. As an indication of the online medium's growing importance in delivering timely news, 50% of those surveyed indicated that they expect to get more of their news online two years from now.

Medium Now a Part of Online Population's Buying Behavior

Bob Pittman, President and COO of America Online, Inc., said: "This new research indicates that the Internet is revolutionizing the way consumers shop both online and offline, by building brands, providing consumer information and prompting purchases. Not since the advent of the covered shopping mall in the 1960s has a phenomenon caused such a dramatic shift in people's shopping behavior."

According to the study, the majority of America's Internet online population goes online for product information before making a making a major purchase.

• · Among those who shop online regularly or occasionally, almost half (47%) conduct online research as a first step before making a "major purchase" (on or off-line). Even 31% of those who hardly ever or have not yet made a purchase online say they first go online to gather information on the product they intend to buy.
• · Although e-commerce has only been widely available for a few years, of the American consumers online today, 45% say they have ever made purchases online and 31% make purchases "regularly or occasionally."

The majority of those who have shopped online agree that the online medium has made shopping easier.

• · Already 85% of those who shop online regularly or occasionally believe shopping online is much or somewhat "easier than the way they used to do it."

The study provides compelling evidence of the coming growth in e-commerce activities by showing a direct correlation between the length of time a consumer has been online and their execution of commerce activities.

• · Fully 59% of those who have been online for three years or more have made a direct online purchase.
• · Of those who have been online less than one year, 22% say they make purchases online regularly or occasionally; of those who have been online for under three years, 29% say they make regular or occasional purchases; and of those who have been online for three or more years, 43% say they make online purchases regularly or occasionally.

This trend holds true for other online commerce activities, including booking travel, banking, and stock trades.

Additionally, those Americans who have been online the longest express the greatest optimism about the future of online shopping. Those who have been online for at least three years strongly believe that online buying will become safer (62% vs. 12% who disagree). Most importantly, fully half of all those who have been online at least three years expect to increase their online purchasing.

About America Online, Inc.

America Online, Inc., based in Dulles, Virginia, is the world's leader in branded interactive services and content. America Online, Inc. operates two worldwide Internet online services: America Online, with more than 14 million members; and CompuServe, with approximately 2 million members. America Online, Inc. also operates AOL Studios, a leading builder of Internet brands for new market segments. Other branded Internet services operated by America Online, Inc. include AOL.COM, the world's most accessed Web site from home; Digital City, Inc., the No. 1 branded local content network and community guide on AOL and the Internet; AOL NetFind, AOL's comprehensive guide to the Internet; AOL Instant Messenger, an instant messaging tool available on both AOL and the Internet; and ICQ, an instant communication and chat technology on the Internet.

About Roper Starch Worldwide

Roper Starch Worldwide, founded in 1923, offers a wide range of marketing, advertising, and public opinion research services to global corporations, ad agencies, media firms and government agencies. Its services include custom marketing and opinion research in the U.S. and around the world, plus a family of syndicated research and consulting services: Roper Reports, the flagship of the Roper family, which is the nation's most comprehensive trend analysis and consulting service; Roper Reports Worldwide, which measures consumer values, attitudes and behavior in 35 countries; The Roper Youth Report, which monitors youth aged 6 to 17; The Roper Affluent Report, focused on the top 7% of America's households; and Roper Green Gauge, which explores environmental attitudes and behavior. The Starch Ad Readership service is the nation's most comprehensive system for tracking print ad effectiveness. Add+Impact is a proprietary method used by Roper Starch for ad pre-testing.

Roper Starch Worldwide has its headquarters in New York and offices in Princeton, NJ, Washington, D.C., Dallas, Newport Beach, CA, London and Hong Kong.