Sunday, 1 June 2014

Internet trends 2014

I always look forward to Kleiner Perkins Caufield Byers (KPCB) internet trends report mainly because its not pages and pages of facts but interesting graphs and pictures. KPCB are a one of the premier venture capital companies in Silicon Valley and have helped fund companies like Facebook, Groupon, Twitter and Zynga. As a result that always have something interesting to share that help explain company behaviour. My favourite charts from their 164 page slide pack.

Its an old media saying that advertisers eventually follow eyeballs. As the advertisers follow eyeballs the biggest winner will be mobile (see below). To put this growth into context this time last year the amount of time spent on mobile was 12% versus 20% currently. It seems this has taken away from time spent on TV with even internet time declining by a percent. The chart helps to explain why investors are long mobile and short print.



Google's Android is the leading operating system. From a fragmented market just a few years ago Google is now in the clear lead with a dominant position similar to Microsoft Windows on the PC.  


This chart is interesting and helps explain why Apple bought Beats, as they not only have cool headphones but have started their own music subscription service. Everyone knows physical music sales are on the decline but not many realise that digital is following track. Ad supported music streaming services like Pandora and Spotify are becoming more popular with users than one by one purchases on iTunes.


This chart helps to explain Facebooks interest in Snapchat and Whatsapp, users from both companies share more photos than Facebook.



This chart shows why investors are willing to place such high values on Facebook and Twitter. They both only monetise at a fraction of Google, the trend is going the right way and if they can monetise anywhere near Google they will make a lot of money.


For younger users online is TV over 1/3 of millennials watching videos online. The most popular services Netflix and Youtube take up more than half of internet traffic during prime time.




While there is some technology excitement it is nothing like in 1999-2000 with the volume and number of IPOs down significantly since the bubble 14 years ago.


You can find the rest of the slide pack at http://www.kpcb.com/internet-trends

 Jason


Disclosure: Decisive has a long position in Facebook stock
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