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Tuesday, April 26, 2005

The Age of Engagement - Global Internet Thesis

Mary Meeker has come up with an excellent snapshot and trendspotting of the growth of the internet and the digital economy. Some key highlights from her research:
The Internet globally is experiencing huge growth reflected in:
• 10-15% user growth
• 20-30% usage growth
• 30%+ monetization growth

Some Knowns about the Internet

Yahoo! — 917MM streaming video (mostly music) sessions (CQ4);
• <10% preceded by streaming ads (rising to 50%, in our view) with compelling CPMs
• Korea — TV channels allow users to download shows for ~$1
• Google — launched upload.video.google beta (4/05)
• Digital Music — 300MM iTunes / 16MM iPods sold
• Digital sales could rise to as much as 25% of global music sales in five years…
• At long last the threat has become the opportunity… - IFPI, Digital Music Report, 2005
• PayPal — 72MM accounts (CQ1); 22MM active users; 110MM payments with
• $6B in volume; 3-8% of iTunes
• Online Paid Content — $1.8B US revenue in 2004 per OPA
• Unleashing great, easy-to-access content (videos…) to 900MM+
• Internet plus 1B+ mobile phone users with low prices / high CPMs?
• Importantly, content ownership / rights create adoption governors.
• But, perhaps content owners can make it up on volume

Upward Rise
Google Net Revenue per Unique User
• Yahoo! Net Revenue per Active Registered User
• eBay Payments Revenue per Active Account

Top 5 Global Internet Market Cap Leaders
Google + Yahoo! + eBay + Yahoo! Japan + Amazon.com
• $ 2B = market value — pre-2000 IPO
• $178B = market value — Nasdaq peak – 3/10/00
• $ 32B = market value — Nasdaq trough – 10/9/02
• $197B = market value — 4/22/05

The top five Internet companies - what they were worth before 2000, before they went public, what they were worth at the highest point in the market, what they were worth at the lowest point and here's what they are worth now - so there is more worth there now than before the crash. It's one of many angles on 'recovery' in the tech sector
•Wireless Internet 196MM messaging subscribers (CQ4) in China, No. 1 in world
• VoIP 33MM registered Skype users (4/05) - fastest product ramp ever?
• Shanda Networking
• 2MM peak concurrent online gamers (+69% Y/Y, CQ4) in China
• PayPal 72MM accounts (+57% Y/Y, CQ1); 22MM users (+52%)
• Mobile Payments Dutch Railways rolling out SMS ticketing for trains
• Global N. America = 26% of Internet users in 2004; was 46% in 1998
• S. Korea Broadband penetration of 70%+ - No. 1 in world
• China - More Internet users < age of 30 than anywhere

There are some more data points to consider when thinking about the various online, mobile, phone, data, wireless, etc. markets around the world. Loking at different countries, PC and mobile installed base and growthand the ratio of the two. The U.S. has the lowest ratio, China has the higest. The relative prominence of phone vs. PC as platforms for daily info-living, and as opportunities for innovation, etc. are extremely different in these different markets. The full presentation is available here. A good read for gaining a snapshot perspectve of the intenet - well presented and analysed as well.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"