The excellent new future-gazing piece from Mary Meeker, embedded below, set the Internet abuzz last week. Her annual Internet Report has “acquired legendary status in the industry because it distilled from the froth some elements of reality”, says John Naughton, himself well regarded as a well-informed and prescient commentator. Naughton often characterises how most of us future-gaze technology trends with the joke of the policeman finding a man on his hands and knees under a lamp post:
“What are you doing?
“Looking for my keys”
“Is that where you dropped them”
“No, but at least I can see here”
However, one of Meeker’s strengths is that she bases her report on deep analysis of data trends. For example, Meeker estimates that there are now 2.3 billion internet users worldwide, which is nearly a third of the world's population and that number is growing at 8% per year. Read Write Web (@RWW) has a useful summary of some highlights. @RWW is interesting both for its often great content and for what it shows us about the state of mind in the US digerati. RWW’s "standout statistic was that 29% of USA adults now own a tablet or eReader, up from 2% less than three years ago. That's been fuelled by the rapid growth of devices like the iPad and Kindle.” For those of us less absorbed by US trends, recent research into the information ecosystem of six ‘Southern’ countries by IDS found this pattern replicated amongst ‘policy-actors’ in those countries.
Naughton, on the other hand, finds it even more startling that there are now 1.1 billion 3G mobile subscribers and that they are increasing at 37% per year. In the context of the important debates about net neutrality, Naugton’s take is interesting. He extrapolates from this trend to illustrate one of his current themes, the way that our freedom to roam on the net is being weakened since we all of us get mobile connectivity courtesy of telcos while those of us with iDevices accept that our apps and content are tightly managed by Apple.
Naughton, like me, was also interested in what Meeker shows us about advertising trends which will probably determine the trajectory of Facebook and its competitors.
“If you're Facebook, then it's less good news because mobile advertising is much less profitable than standard online advertising. Slide 19 of Meeker's deck estimates that the eCPM (short for "effective cost per mille" – cost per thousand impressions) for mobile ads is five times less than the desktop equivalent. This explains some of the reservations buried in Facebook's pre-IPO filings to the Securities and Exchange Commission”.
More apocalyptically, Michael Wolff argues in his MIT Technical review blog, The Facebook fallacy, that this weakness in the Facebook revenue model means it is a question of when it will crash, not if, and suggests that Facebook’s increasing dominance means a crash may bring down the Internet! Note that the blog illustrates well a core principle of the Internet Futures business: why be tentative, nobody else knows either.
But a lot of smart money follows Mary Meeker, indeed she has moved from Morgan Stanley and is now a partner at Kleiner, Perkins Caulfield & Byers, one of Silicon Valley's leading venture capital firms. She has done a lot of thinking about the implications of the data she studies so carefully, and presents them in a compelling set of slides envisaging possible futures. In a second blog we will consider how these trends might play out in eDiplomacy. Meanwhile, settle down for some serious thinking: