AOL claims U.S. members made most online holiday sales

InfoWorld |  Business

AMERICA ONLINE (AOL) claimed on Tuesday that its U.S. members account for 70 percent of online consumer spending for the 2000 holiday season -- a claim analysts question.

AOL announced that its U.S. subscribers spent $4.6 billion shopping online during the holidays. Citing estimates reported by online marketers, such as Bizrate.com, AOL said its members made the majority of U.S. holiday online sales, said Patrick Gates, AOL's vice president for e-commerce.

Consumers in the United States spent more than $6 billion online between Nov. 20 and Dec. 26, according to Bizrate.com analysis. Bizrate's figure represents a 60 percent increase compared to the same period last year, when total holiday sales for the Web reached $3.75 billion.

But analysts questioned the accuracy of AOL's figure.

"There is no way that AOL members account for 70 percent of online holiday sales," said Ken Cassar, senior retail analyst for Internet market research firm Jupiter Communications in New York. "We disagree with their numbers." Cassar said that Bizrate's estimate for sales during the period "seem a bit low," comparatively inflating the percentage of AOL members' purchases.

A financial analyst concurred. "I find [AOL's claim] hard to believe," said Jeffrey Fieler, an analyst at Bear Stearns who covers e-commerce retailer Amazon.com. AOL's figure of 70 percent is "highly unlikely," he said.

AOL's sales figure accounts for all purchases made by AOL members online, including travel-related purchases such as airfare, hotel rooms, and rental cars. AOL's sales figure counted from mid November until Dec. 31, Cassar said. Comparing online sales estimates from Jupiter and high-tech research firm Forrester Research, based in Cambridge, Mass., Cassar said he estimates AOL members accounted for 43 percent of sales, which is "nothing to be ashamed of, assuming AOL's numbers are accurate, but not 70 percent," he said.

At 26 million subscribers in the United States, Dulles, Va.-based AOL represents about one-quarter of U.S. households and about a third of all U.S. Internet users, Cassar said, indicating that AOL members spend about a third more on average than other Internet users.

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