EarthLink Competition
Now Viewing EarthLink's competition in: Internet Service Providers (primary)
Recent Developments
US PC Shipments Increasing - US PC shipments, a demand driver for ISP services, rose 3 percent in first quarter 2008 compared to a year earlier, according to Gartner. Reduced PC prices helped sustain shipment growth by offsetting the negative impact of US economic weakness. Sales of home mobile PCs, which are lightweight, small tablet PCs intended for home use, continue to drive US PC shipment growth, according to Gartner.
Software Flaw may Impact ISPs - A flaw in the Internet's Domain Name System (DNS) architecture, discovered in mid-2008, seriously threatens the Internet, according to the inventor of DNS. DNS matches computer names to their numerical addresses, and the vulnerability gives malicious attackers a way to redirect Web traffic and emails to systems under their control. ISPs are likely targets for attackers, since a compromise of one DNS server could have a far broader impact than an attack on a corporate server. While IT vendors whose products are affected by the vulnerability are releasing patches to make the flaw harder to exploit, the cost for ISPs to apply the patches may be considerable, as virtually every DNS server on the Internet is vulnerable, as are client devices such as modems with embedded DNS software.
Tiered Pricing Models Tested - ISPs are considering tiered pricing models where customers are charged more as their bandwidth use increases. The increase in broadband Internet use isn't spread evenly throughout the US: about 5 percent of Time Warner's 8 million Internet subscribers use 50 percent of the bandwidth. Time Warner is testing a pricing model in which the lowest tier is $29.95 a month for 5 gigabytes of data transfer and the highest is $54.90 for 40 gigabytes. Users pay overage charges when they exceed those caps.
Competitive Landscape
Demand is driven by consumer and business demands for information. The profitability of individual companies depends heavily on efficient operations and good marketing, as most costs are fixed. Big ISPs have large economies of scale in operations, purchasing, and marketing. Small companies can compete successfully by serving small markets or providing technical expertise to customers.
Internet Service Providers Industry Forecast
from Hoover's/D&B subsidiary First Research
The output for the US computing services, including software, which includes Internet content providers, is forecast to grow at an annual compounded rate of 5.3 percent between 2007 and 2012.
Content Providers Growth Steady
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Greater use of Internet drives demand
- Economies of scale favor larger companies
- Risk: Slowing economy cuts business demand
Industries Where EarthLink Competes
- Telecommunications Services
- Data Services
- Internet & Online Services Providers (primary)
- Fixed-line Voice Services Providers
- Data Services
