Web-savvy teens will eventually follow the money

When today's teenagers grow out of video games, tire of Napster, and consider Britney Spears and Eminem passé, they will turn to the Web less for entertainment purposes and more for financial reasons, a study has found.

Today's Web-savvy 16- to 22-year-olds will swarm to online financial sites with greater zeal and, more importantly, less fear than older generations, according to Internet study group Forrester Research.

"The Net generation is just beginning to show financial potential," Forrester analyst Ekaterina Walsh said in a statement. "It will quickly grow into a prime market."

Teen consumers already favor electronic transactions. One-third of them holding bank accounts transfer money over the Internet, a quarter pay bills online, and of those with brokerage accounts, 55 percent trade stocks online, Forrester said.

The study, released Thursday, flies in the face of the growing number of teen-targeted sites that are flailing. Kibu.com, backed by Internet heavy hitters such as Netscape co-founder Jim Clark, former Excite@Home chairman Tom Jermoluk and venture capital firm Kleiner Perkins Caufield & Byers, recently closed.

Snowball.com, a network of sites that caters to teens, has laid off 100 employees from its 350-person staff. Its stock is also down more than 95 percent from its high. Its rival iTurf is trading below $1, hovering near its 52-week low.

If teen content, community and e-commerce sites failed at shaking any real money loose from those baggy jeans, what makes anyone think that they will mature into online buying powers once they hit adulthood?

Watch video

Forrester, which drew on data from three surveys for the report, titled "The Next Financial Consumer," said teens are more likely to use the Web for financial matters than today's adults because they're more comfortable using it.

By the time most of today's 16- to 22-year-olds are worrying about car payments, college loans or getting married, the Web will have wound its way into almost every part of their lives, the report said.

As an example of teens' deftness with the Internet, Forrester holds up Napster creator Shawn Fanning, the 19-year-old who created the controversial and wildly popular music-sharing site.