Study: Racial ‘Digital Divide’ is Narrowing

The disparity in Internet use among different ethnic groups in the United States is likely to “close significantly” within five years, according to a new study by New York-based research firm Jupiter Communications (Nasdaq: JPTR).

Yet the biggest “digital divide” — between rich and poor Americans — is not likely to go away so soon, the study indicates.

Jupiter’s findings echo those of a Forrester Research study released in April. That study also found that income, education and age are the real dividers when it comes to Internet use.

Double Digit Growth

By the end of this year, 4.6 million African-American households will be online, as will 3.8 million Hispanic-American households and 2.2 million Asian-American homes, Jupiter said. The growth rate for each group will be in the double digits over the next five years, according to the study.

However, less than half of U.S. households with average incomes under $15,000 (US$) — 19 percent of the country’s total population — will have Internet access by 2005, Jupiter said.

Age is also a factor in the digital divide, though Jupiter expects this gap to narrow over the next five years. The number of people aged 65 and over who are online will rise to 48 percent by 2005 from 32 percent this year, while Internet use by kids aged 2 to 12 will rise to 62 percent of that population from 32 percent.

The Clinton administration is making an effort to bring more of the U.S. population online, with grants and programs aimed at bringing computers and training to low-income neighborhoods. The Internet “is becoming to central in modern life” for anyone to be left behind, presidential adviser Gene Sperling said earlier this year.

Affinity Programming

Companies will benefit as more Americans go online, said Jupiter senior analyst David Card. “For the Internet to be a true mass medium, it will have to achieve higher penetration among all consumer segments,” Card said. “However, the critical mass penetration achieved by even the under-penetrated segments should encourage businesses that target online consumers with affinity programming strategies.”

Many businesses are doing just that. recently announced a plan to offer an online service for African-American homebuyers, through a partnership with Fannie Mae, Cendant Mortgage and HomeSide Lending Inc.

There are also numerous Web sites aimed at Spanish-speaking, Chinese and other ethnic communities around the country.

“These relatively small markets can generate revenues for content and services targeted at specific communities,” said Card.

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