United States Newsletter - November, 2006

Hitwise announced that visits to the Hitwise Retail 100 Index¹, a collection of the top 100 online shopping websites in the U.S. increased 6.2 percent for the week ending November 11, 2006 compared to the same time period in 2005 (week ending November 12, 2005).

"Online retail strengthened in Q3 and in the six weeks since October 1, 2006 visits to the Hitwise Retail 100 Index have been up an average of 5.7 percent, which indicates strong growth for online retailers during the 2006 holiday shopping season," said Bill Tancer, General Manager of Research at Hitwise. "Historically, Thanksgiving Day is the peak day for market share of visits to the retail category, and this year, based on our data, is poised to surpass 2005. The strongest pre-Christmas spike should come the second weekend in December."

The latest version of video game systems launch this month with Sony's release of PlayStation 3 and Nintendo's roll out of the Wii console. Online searches for 'playstation 3' increased 171 percent for the week ending November 11, 2006 compared to the week ending October 28, 2006. Searches for 'nintendo wii' increased 135 percent in the same time period. Microsoft's Xbox 360, launched during the 2005 holiday season, saw an increase in searched to the term 'xbox 360' by 63 percent for the same time period above.

Google (www.google.com) was responsible for 18.16 percent of the visits to the PlayStation website (www.playstation.com) for the week ending November 11, 2006. Other leading sites driving traffic to the Playstation website were Yahoo! Search (www.search.yahoo.com), which accounted for 5.40 percent of upstream visits and MySpace (www.myspace.com), accounting for 4.57 percent of upstream visits in the same time period.

Today we released the Hitwise US Consumer Generated Media Report, which examines trends in social networking, photo hosting and sharing, and online video. According to the report, the market share of visits to the top 20 social networking sites accounted for nearly 1 in 20 internet visits in September 2006 (4.9% of all Internet visits). That number remained the same in October 2006.

It has been reported that there was a decline in visits to sites like MySpace and Facebook in September, which is a typical seasonal occurrence as school-aged users shift their attention from socializing online to academic pursuits. Last year, the market share of visits to the top 20 social networking sites decreased by 7.6% from August to September 2005, but recovered in October, increasing by 10.8% from September to October 2005. This year, a similar pattern emerged, with visits to the top 20 social networking sites decreasing by 7.3% from August to September 2006. Category traffic was flat from September to October 2006, indicating a slow down in growth, but by no means a decline.

The report shows how photo hosting sites like Photobucket, Imageshack and Slide have grown in conjunction with social networking as they provide a service necessary to the creation of user content. Online video, as we all know, has exploded as well, and has been the most significant shift in consumer content creation and entertainment consumption in the past year.