More than four out of five (83 percent) of 18 to 25 year olds are concerned about the privacy of personal information, cyberstalking and censorship says Microsoft.
However, according to the company's 'Internet Explorer 8 State of the Internet Nation' report, of those concerned about the web, 80 percent believe the benefits of the net outweigh the threats.
More than four in five (82 percent) of the 'Net Set' - the name Microsoft gave to the internet generation of 18 to 25 year olds – believe the web has led to greater education, while 81 percent say it has given them personal freedom.
Furthermore, 44 percent says the web has let them access more information and 72 percent think it has given them better business opportunities.
Microsoft also revealed that more than two thirds (70 percent) believe the internet helps people to do good through charity and fund raising, while almost all of those have also taken part in an online petition or campaign.
"The Net Set counts themselves lucky to be the first internet generation," said Science and Society Professor Robert Winston, from at Imperial College London.
"Unlike previous generations, the Net Set has grown up with global knowledge meaning they have bigger dreams, ambitions and the desire to engage with more people. The internet has changed the way we converse with each other and this age group has the ability to capitalise on this and create their own empire."
The results of the study were released as part of the launch of Microsoft's Life Academy project, which is offering three £10,000 grants to help young people grow their socially responsible idea into a project.
"Whether people are adventurers, entrepreneurs or creative thinkers, Life Academy can help inspire them to explore their future," said Julia Owen, Internet Explorer product manager for Microsoft.
For more information on the Life Academy or to take part visit Microsoft's dedicated web page.