Westpac and MYOB launched getonline.co.nz to make free websites available for all New Zealand businesses for the first 12 months, enabling them to be found and become more competitive.
The latest MYOB business monitor found that only 32% of New Zealand businesses had a company website. In Otago, the figure was only 26%.
That was despite 80% of New Zealanders using the internet to research products or services before they bought.
The study also showed 35% of businesses that were online enjoyed more customer engagement, and 30% increased revenue as a result of their online presence.
The research showed that if businesses had a website, their sales grew, Mr Bailey said.
Businesses in Otago wanted to communicate with their customers and wanted to increase the products and services they had on offer, the survey showed.
"If they link into this opportunity, it gives a presence online and meeting the objectives of communication and growing their business.
"Business development is a key focus for most local businesses in the region."
Otago Chamber of Commerce chief executive John Christie was surprised at the low number of Otago businesses with a web presence and would be encouraging his members to sign up.
"I am staggered to think that we are that low, not that I am doubting the statistic.
"It is important for Dunedin businesses to combat the tyranny of distance by using the web to promote their businesses.
"I know some companies who are using online, website and other tools very effectively, allowing them to be based in Dunedin."
However, Mr Christie warned that businesses should have a strategy to use their web presence to wrap around their other professional services.
It was not enough to put up a website and do nothing else. It had to be part of their continuing communication and marketing strategy.
Mr Bailey was in Dunedin to meet business professionals and found a warm reception to the idea of the online initiative.
He also found that although business was still tough in the South, it had not got worse from his last visit. Retailers were finding sales hard to make.
He discovered during his visit that among the reasons businesses did not have websites was because they believed it was difficult and complex to set up and that it cost too much at anything between $1000 and $20,000.
The free one being offered by Westpac and MYOB was entry level but would satisfy the basic needs of photographs, newsletters, online sales and communication with customers, he said.
After the first 12 months, the site would cost about $5 a month to maintain plus a $40-a-year domain name fee.
The website was optimised for use on smartphones, an important feature given that by 2014 more people were expected to access the internet through their mobile phone.
The goal was to sign up 10,000 New Zealand businesses by the end of the year.
"If we can sign up 10,000 businesses by the end of the year, I feel we have really done something to improve business in New Zealand," Mr Bailey said.
