Generation i: Tuned in, logged on, cashed up

Meet Generation i: Aged between 13 and 29, numbering 67.7 million, and with $302.4 billion to spend. No wonder Web startups are scrambling to get acquainted.

The Sparta, New Jersey high school junior, spends at least a couple hours a day on the Internet and spends more time online during weekends. Greco mostly downloads digital music in the MP3 format and chats on America Online's ICQ service. "It's a big part of my life," he said. "It feels weird when it's not there."

That's sweet music to, and a host of other competitors' ears. Snowball, which is planning an initial public offering in March, is one of many sites targeting the 13-to 29-year-old crowd. According to Snowball, Generation Y plus Generation X equals Generation i. Snowball, which operates a network of sites including and male entertainment site IGN, even went so far as to trademark the "Gen i" term.

The reasons to target Generation i are clear: demographics and disposable income, which is spent freely online. Generation i, the largest generation since the baby boomers, is hard to pin down, but if advertisers and e-commerce companies hook this brand-savvy bunch early, they could have a lifetime customer. "We define Generation i as a generation that has grown up on the Internet and is Web-centric," said Mark Jung, CEO of Snowball. "I'm 38 and Web-savvy but didn't grow up with it. There's a difference."

According to the U.S. Census Bureau, 15-to 24-year olds, a subset of Generation i, consisted of 67.7 million people in 1998 with a combined disposable income of $302.4bn. "This group of Internet user is more malleable and will use the Net for everything," said Brad Greenspan, chairman of eUniverse which operates a network of sites targeting music fans and gamers. "It's much better for advertisers to capture them now than try to convert them later."

Forrester Research analyst Ekaterina Walsh agreed. She said 16- to 22-year-olds will spend roughly $4.5bn online in 2000. "The long-term potential for Snowball to attract advertisers looks good," Walsh said. "This audience develops brand loyalty at a very early age. By 20 it may be too late."

That fact puts Generation i Web sites in a good market. "At the end of the day, these sites are enablers," said Allen Weiner, vice president of analytical services for NetRatings. "They put users in a position to buy."

Next page / Part 2: Big backers, big losses