At this rate, the Net economy will far outgrow established Americanindustries such as telecommunication ($300 billion) and airlines ($355billion), the study said.

The study found that e-commerce (the amount of business conducted directlyon the Net) increased 127 per cent in the first quarter of 1999, compared tothe same period in 1998.

Of the 3,400 businesses surveyed, more than one third did not exist before1996. The new businesses now employ 305,000 people, the survey said.Commenting on the findings of the survey, networking major Cisco Systemspresident John Chambers said, "the fact that the internet economy rose somuch in just one year underscores that companies are embracing the internetand that an internet economy is reshaping the economic landscape."The study, conducted to measure the size of internet economy, was sponsoredby Cisco Systems.

According to Anitesh Barua, who along with Andrew Whinston headed theresearch team, the study shows that the internet economy is an economicphenomenon never seen before.

For the purpose of the study, the internet economy was divided into foursegments - infrastructure, network application infrastructure,intermediaries, commerce - for measuring the economic impact of each.All the companies surveyed derived some portion of their network directlyfrom the Net. Data for the study was compiled from commercially availableresearch reports, Securities and Exchange Commission disclosures, productliterature and commercial websites.

The complete results of the study, performed by the Centre for Research inElectronic Commerce at the University of Texas's Graduate School ofBusiness, can be found at www.internetindicators.com.