The State of Capital Markets and an Update on Technology Trends, 2001
Upcoming SlideShare
Loading in...5
×
 

The State of Capital Markets and an Update on Technology Trends, 2001

on

  • 1,711 views

This presentation, given by Mary Meeker at the Internet Summit 2001 conference on July 23 in Carlsbad California, discusses the state of capital markets while providing an update on technology trends.

This presentation, given by Mary Meeker at the Internet Summit 2001 conference on July 23 in Carlsbad California, discusses the state of capital markets while providing an update on technology trends.

Statistics

Views

Total Views
1,711
Views on SlideShare
1,201
Embed Views
510

Actions

Likes
0
Downloads
19
Comments
0

4 Embeds 510

http://www.kpcb.com 503
http://kpcb.com 3
http://www.slideee.com 3
https://www.kpcb.com 1

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

The State of Capital Markets and an Update on Technology Trends, 2001 The State of Capital Markets and an Update on Technology Trends, 2001 Document Transcript

  • July 2001 The State of Capital Markets and An Update on Technology Trends Mary Meeker Presented at The Industry Standard’s Internet Summit 2001, Carlsbad, Ca. THESTANDARDINTELLIGENCE FOR THE INTERNET ECONOMY INTERNET SUMMIT 2mary.meeker@morganstanley.com OVERVIEWOVERVIEW Where We Have Been. . . Where We Are. . . So, How Long Before Things Improve? Thoughts On Internet Growth
  • 3mary.meeker@morganstanley.com Where We Have Been . . . 4mary.meeker@morganstanley.com WHAT JUST HAPPENED… Unprecedented Innovation. . . Unprecedented Technology Progress… Significant Wealth Creation… Significant Wealth Destruction…
  • 5mary.meeker@morganstanley.com INTERNET “BIG BANG” . . . ONCE IN A LIFETIMEINTERNET “BIG BANG” . . . ONCE IN A LIFETIME 150MM PCs primed for THE BROWSER! Aug 8th 1995 Netscape IPONetscape IPONetscape IPONetscape IPO Aug 8th 1995 Netscape IPONetscape IPONetscape IPONetscape IPO Apple, IBM, Compaq & Microsoft laid the foundation. . . Killer Apps – #1 – email #2 – browser 6mary.meeker@morganstanley.com INTERNET-TYPE “BIG BANGS” RARELY OCCURINTERNET-TYPE “BIG BANGS” RARELY OCCUR Name Ten Companies?InflectionCatalystBig Bang Anglogold, Newmont, Barrick, Gold Fields, Rio Tinto, Freeport McMoran, Placer Dome, Homestake, Normandy, Harmony 44% 1852 - Hydraulic mining in CA 4 years later 1848 – Gold found at Sutter’s Mill, CA California Gold Rush
  • 7mary.meeker@morganstanley.com INTERNET-TYPE “BIG BANGS” RARELY OCCURINTERNET-TYPE “BIG BANGS” RARELY OCCUR Name Ten Companies?InflectionCatalystBig Bang GM, Ford, Toyota, Volkswagen, DaimlerChrysler, PSA Puegot Citroen, Nissan, Fiat-Iveco, Renault, Hyundai 78% 1913 - Ford assembly line, MI 27 years later 1886 - Benz and Daimler build first auto, Germany Automobile 8mary.meeker@morganstanley.com INTERNET-TYPE “BIG BANGS” RARELY OCCURINTERNET-TYPE “BIG BANGS” RARELY OCCUR Name Ten Companies?InflectionCatalystBig Bang ???2000 – AOL TWX merger 2005? – ~50% homes broadband 1992 – NSCA creates Mosaic 1994 – Netscape founded, IPO in 1995 Internet
  • 9mary.meeker@morganstanley.com TECH COMPANY MAXIMSTECH COMPANY MAXIMS • 5% of tech IPOs create 90%+ of the tech wealth – bottom line, few companies win big... • On average, 4 “Ten Baggers” IPO’d per year since 1980 • 53% of IPOs above IPO price historically Only 24% of 1999/2000 IPOs above IPO price 10mary.meeker@morganstanley.com DIGITAL DARWINISM MAXIMDIGITAL DARWINISM MAXIM When Charles Darwin presented his theory of evolution in 1859, he described a world in which only the fittest survive… a world in which species must constantly adapt to their changing environment or face extinction… a world in which organisms must continue to grow in a profitable direction and develop new skills and traits or perish… a world in which the surrounding conditions for life can, suddenly and drastically, improve or take a turn for the worst. Evan Schwartz, Digital Darwinism
  • 11mary.meeker@morganstanley.com BUSINESS MAXIMBUSINESS MAXIM • #1 is Awesome • #2 can be OK • #3 can be Brutal • #4 – Huh? Who? Fuhgetaboutit 12mary.meeker@morganstanley.com To make a spectacular showing, you only had to find one big winner out of eleven [in a selected portfolio]. The more right you are about one stock, the more wrong you can be on all others and still triumph as an investor. . . The occasional five-and ten-bagger, and the rarer twenty- bagger, has helped my fund outgain the competition - and I own 1,400 stocks. It’s amazing how it works. Peter Lynch, One Up on Wall Street INVESTING MAXIM – HUNT FOR “TEN-BAGGERS”INVESTING MAXIM – HUNT FOR “TEN-BAGGERS”
  • 13mary.meeker@morganstanley.com MAJOR “TECH CYCLE” MAXIMSMAJOR “TECH CYCLE” MAXIMS Technology Mainframe Minicomputer PC Internet Computing Timing 15 years from PC cycle (1980) to Internet cycle (1995) Technology Mainframe Minicomputer PC Internet Computing Timing 15 years from PC cycle (1980) to Internet cycle (1995) 1960s 1970s 1980s 1990s1960s 1970s 1980s 1990s 14mary.meeker@morganstanley.com MAJOR “TECH CYCLE” MAXIMS (CONTINUED)MAJOR “TECH CYCLE” MAXIMS (CONTINUED) Pattern of Company Creation Boom (1st-2nd inning) Bust (3rd inning) Bust/Boomlet (4th inning) Pattern of Wealth Creation Boomlet (1st-2nd inning) Bust (3rd inning) Boom (4th inning) Pattern of Company Creation Boom (1st-2nd inning) Bust (3rd inning) Bust/Boomlet (4th inning) Pattern of Wealth Creation Boomlet (1st-2nd inning) Bust (3rd inning) Boom (4th inning)
  • 15mary.meeker@morganstanley.com MAJOR “TECH CYCLES” DON’T OCCUR OFTENMAJOR “TECH CYCLES” DON’T OCCUR OFTEN It's important to remember that the whole notion of the entrepreneurial cycle is messiness and creative destruction. Looking ahead, we'll see a long period of new foundation-building, consolidation and convergence. I definitely saw excesses close up and personal in the mid-1980s, but I also learned that some of the greatest companies were also grown out of that too...such as Microsoft, Apple and America Online. Dan Case, The Wall Street Journal (Kara Swisher) 16mary.meeker@morganstanley.com TECH CYCLE OF CHANGE / GROWTHTECH CYCLE OF CHANGE / GROWTH Source: Mobile Commerce Report, Durlacher Growth Hype Disappointment Realism We Believe We Are Here
  • 17mary.meeker@morganstanley.com THESE “CYCLES” CAN BE UGLY FOR STOCKSTHESE “CYCLES” CAN BE UGLY FOR STOCKS Oracle - Oct ‘90 - down 81% to $0.13 now at $19...up 14,346% Compaq - Dec ‘91 - down 71% to $1.40 now at $16...up 1,019% Dell - Jun ‘92 - down 45% to $0.24 now at $27...up 11,233% Cisco - Jul ‘94 - down 51% to $1.09 now at $17...up 1,473% America Online - Oct ‘96 - down 68% to $1.42 now at $45…up 3,044% Oracle - Oct ‘90 - down 81% to $0.13 now at $19...up 14,346% Compaq - Dec ‘91 - down 71% to $1.40 now at $16...up 1,019% Dell - Jun ‘92 - down 45% to $0.24 now at $27...up 11,233% Cisco - Jul ‘94 - down 51% to $1.09 now at $17...up 1,473% America Online - Oct ‘96 - down 68% to $1.42 now at $45…up 3,044% 18mary.meeker@morganstanley.com USER INTERFACE: AOL Time Warner Microsoft Yahoo! COMMERCE: eBay Amazon.com INFRASTRUCTURE: VeriSign Cisco Sun Microsystems Dell VERTICALS: Expedia CNET Networks Homestore.com FreeMarkets TMP Worldwide USER INTERFACE: AOL Time Warner Microsoft Yahoo! COMMERCE: eBay Amazon.com INFRASTRUCTURE: VeriSign Cisco Sun Microsystems Dell VERTICALS: Expedia CNET Networks Homestore.com FreeMarkets TMP Worldwide WHO ARE INTERNET “WINNERS?”WHO ARE INTERNET “WINNERS?” Aggregate Value -- @ Netscape IPO (8/95) ~ $90 B Aggregate Value -- @ Now (7/01) ~ $900 B Greater than the following S&P Sectors: Energy, Utility, Basic Materials, and Transportation
  • 19mary.meeker@morganstanley.com WEALTH DESTRUCTION HAS BEEN SIGNIFICANT, ACROSS THE BOARD… WEALTH DESTRUCTION HAS BEEN SIGNIFICANT, ACROSS THE BOARD… Source: Morgan Stanley Internet Research, Data as of 07/12/01 Internet Pure-Plays 362 Internet companies Internet Pure-Plays 362 Internet companies S&P Non-Tech Companies 26 companies… WorldCom, Wal-Mart, GE, Proctor & Gamble, Home Depot, Ford, Coca-Cola, American Express, Bristol Myers Squibb, DuPont, McDonalds, Clear Channel, Honeywell, Gap, JP Morgan, Charles Schwab, Gillette, Merck, Bellsouth, Comcast, Carnival, Royal Dutch Petroleum, Int’l Paper, Shering Plough, Interpublic Group, Applera S&P Non-Tech Companies 26 companies… WorldCom, Wal-Mart, GE, Proctor & Gamble, Home Depot, Ford, Coca-Cola, American Express, Bristol Myers Squibb, DuPont, McDonalds, Clear Channel, Honeywell, Gap, JP Morgan, Charles Schwab, Gillette, Merck, Bellsouth, Comcast, Carnival, Royal Dutch Petroleum, Int’l Paper, Shering Plough, Interpublic Group, Applera Mkt Cap 12/31/99 $1,142B Mkt Cap 7/12/01 415B Wealth Destruction (727)B Mkt Cap 12/31/99 $2,723B Mkt Cap 7/12/01 1,989B Wealth Destruction (734) ~$730B~$730B ~$730B~$730B 20mary.meeker@morganstanley.com Where We Are . . . . . .Right Now We are in the Difficult 3rd Inning,
  • 21mary.meeker@morganstanley.com 0% 10% 20% 30% 40% 50% 60% 1960 1962 1965 1967 1970 1972 1975 1977 1980 1982 1985 1987 1990 1992 1995 1997 2000 TECH HAS BECOME LARGE PART OF THE ECONOMYTECH HAS BECOME LARGE PART OF THE ECONOMY U.S.-Based IT % of Nominal Business Capital Equipment Spending PC Internet(%) Source: Morgan Stanley Internet Research; Data as of 06/31/01 Annual Growth Rate of IT Spending = 14% Trendline % = 49% CQ4:00 = 53% 22mary.meeker@morganstanley.com ECONOMY (U.S. GDP) CONTINUES TO SLOW…ECONOMY (U.S. GDP) CONTINUES TO SLOW… Source: Morgan Stanley; Data as of 07/0601; *C2002E figures initiated on 12/12/2000 E – Morgan Stanley Estimate; A – Actual Jan 2000 Jul 2001 C2000 C2001 C2002 4.3%E 3.6%E 5.0%A 1.2%E 3.0%E 4.2%*
  • 23mary.meeker@morganstanley.com ONLY 6% Y/Y TECH REVENUE GROWTH - CQ1:01ONLY 6% Y/Y TECH REVENUE GROWTH - CQ1:01 6% 0% 5% 10% 15% 20% 25% 30% CQ1:95 CQ1:96 CQ1:97 CQ1:98 CQ1:99 CQ1:00 %Y/YRevenueGrowth 0 200 400 600 800 1000 1200 MorganStanleyTech35Index(MSH) Y/Y Revenue Growth Morgan Stanley Tech-35 Index (MSH) Average = 15% CQ1:01 24mary.meeker@morganstanley.com ONLY 42% OF TECH BEAT EPS ESTIMATES -- CQ1:01ONLY 42% OF TECH BEAT EPS ESTIMATES -- CQ1:01 0% 10% 20% 30% 40% 50% 60% 70% 80% C Q 1:96 C Q 1:97 C Q 1:98 C Q 1:99 C Q 1:00 C Q 1:01 0 200 400 600 800 1000 1200 % of Tech Companies Reporting Positive Earnings Surprise Morgan Stanley Tech 35 Index (MSH) %ofTechCompaniesReportingaPositiveEarningsSurprise MorganStanleyTech35Index(MSH) Average = 58% 42%
  • 25mary.meeker@morganstanley.com 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 #Raised/#Lowered 500 1,000 1,500 2,000 2,500 3,000 CYCLES OF TECH EPS REVISIONS - 1980-2001CYCLES OF TECH EPS REVISIONS - 1980-2001 Source: IBES, Morgan Stanley Research3 month moving average of the ratio of upward revisions to downward revisions for the stocks in the S&P 500 tech sector. The gray overlay is the NASDAQ composite. 11/80 4/84 6/88 12/93 10/991/95 NASDAQ 5/82 5/ 86 3/ 91 6/ 97 26mary.meeker@morganstanley.com TECH BECAME A HUGE PORTION OF S&P 500 MARKET CAPITALIZATION TECH BECAME A HUGE PORTION OF S&P 500 MARKET CAPITALIZATION Dec 1989 1 - S&P500 = $2.3T Jul 2001 3 - S&P500 = $10.7T Sector Weight Consumer Staples 16% Energy 13% Consumer Cyclicals 11% Communication Services 10% Financials 9% Health Care 9% Capital Goods 8% Technology 8% Basic Materials 8% Utilities 6% Transportation 2% Total: 100% 1 as of 12/29/89 8 Sector Weight Technology 20% Financials 18% Consumer Staples 11% Health Care 13% Capital Goods 9% Consumer Cyclicals 9% Energy 7% Basic Materials 4%Utilities 3% Transportation 1% Total: 100% 3 as of 07/09/01 1 Source: Morgan Stanley Internet Research Sector Weight Technology 37% Financials 12% Consumer Staples 9% Health Care 9% Consumer Cyclicals 8% Capital Goods 7% Communication Services 7% Energy 5% Basic Materials 2%Utilities 2% Transportation 1% Total: 100% 2 as of 03/10/00 1 Mar 2000 2 - S&P500 = $11.5T Communication Services 6%
  • 27mary.meeker@morganstanley.com So, How Long Before Things Improve? • Capital Markets • Business Climate 28mary.meeker@morganstanley.com Capital Markets
  • 29mary.meeker@morganstanley.com 0 100 200 300 400 500 600 1995 1996 1997 1998 1999 2000 2001 2002 2003 GlobalInternetUsers 0% 50% 100% 150% 200% 250% InternetUserY/YGrowthRate (MM) Source: Morgan Stanley Internet Research July 24, 2001 GROWTH EXPECTATIONS WERE OUT OF LINEGROWTH EXPECTATIONS WERE OUT OF LINE 30mary.meeker@morganstanley.com WHAT HAPPENED IN 1999/2000…WHAT HAPPENED IN 1999/2000… •69% of tech venture funding of the past 25 years… •55% of tech public financing of the past 21 years...
  • 31mary.meeker@morganstanley.com 0 10 20 30 40 50 60 70 80 90 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 YTD $ Billions Technology Financings Telecom Financings GLOBAL TECH & TELECOM CAPITAL RAISING. . .GLOBAL TECH & TELECOM CAPITAL RAISING. . . Source: SDC; Updated as of 7/10/2001. Included IPOs, follow-ons, convertibles and high yield. 32mary.meeker@morganstanley.com TECH IPO VOLUME PERSPECTIVETECH IPO VOLUME PERSPECTIVE 1980-1994 40 IPOs, on average, per year ranging from 12 (1982) to 98 (1993) 1980-1994 40 IPOs, on average, per year ranging from 12 (1982) to 98 (1993) 1995-2000 191 IPOs, on average, per year ranging from 90 (1998) to 318 (1999) 1995-2000 191 IPOs, on average, per year ranging from 90 (1998) to 318 (1999) “Normal” tech IPO volume is 79% lower than last 5 year level
  • 33mary.meeker@morganstanley.com WHAT’S WORKING IN THE STOCK MARKET?WHAT’S WORKING IN THE STOCK MARKET? S&P Sector 2001 YTD* Basic Materials 5 DuPont, Alcoa Transportation 6% Southwest, Union Pacific Comm Services 2 Verizon, SBC Financials (5) Citigroup, AIG Energy (8) Exxon, Royal Dutch Consumer Staples (8) Coca-Cola, Philip Morris Capital Goods (6) GE, Tyco Utility (14) Enron, Duke Health Care (13) Pfizer, Merck Technology (19) Microsoft, Intel Mkt Cap Leaders * As of 07/19/01 S&P 500 (8%) 20001999 Change 54(12) 34(9) (40)75 4(8) 1216 227 242 (15)24 17%(11%) (40)17 (10%)20% 34mary.meeker@morganstanley.com Business Climate
  • 35mary.meeker@morganstanley.com I.T. SPENDING PATTERN RECOGNITION...I.T. SPENDING PATTERN RECOGNITION... • In 2000, U.S. IT spending rose 23% Y/Y. Only 3 years since 1960 when annual IT spending growth exceeded or equaled 23%. • Since 1960, when IT spending growth has fallen below GDP growth, as we believe it will in 2001...it has taken, on average, one to two years for IT spending growth to again exceed GDP growth. • Inventory adjustments, company rationalization, more bankruptcies, market confidence, psychology, and the passage of time are key variables for recovery. Note that it is important to differentiate between the recent strong growth in I.T. spending and the excesses in the Telecom Services area. 36mary.meeker@morganstanley.com Summary and Thoughts on Internet Growth
  • 37mary.meeker@morganstanley.com 11 The Internet is still in the early innings of its evolution. Simply put, ‘connectivity’ and ‘convergence’ are powerful secular trends, and handfuls of companies should have outsized market shares owing, in part, to network effects. The Internet is still in the early innings of its evolution. Simply put, ‘connectivity’ and ‘convergence’ are powerful secular trends, and handfuls of companies should have outsized market shares owing, in part, to network effects. 38mary.meeker@morganstanley.com CONNECTIVITY / USES EXPANSION ARE KEY…CONNECTIVITY / USES EXPANSION ARE KEY… Chat 5% eMail 8% Instant Messenger (AIM/ICQ) 68% Direct Access to the Internet 4% AOL Time Warner Web Properties 1% AOL Proprietary Content 14% CQ1:98 AOL: 235MM User Hours/Month CQ1:01 AOL: 2,890MM User Hours/Month Chat 18% eMail 24% AOL Proprietary Content 41% Direct Access to the Internet 17% 42% of user hours 81% of user hours
  • 39mary.meeker@morganstanley.com Global Internet user growth should rise at an annual rate of 20%+ for the next three to five years or so. • 300MM+ Internet users today • 5% global penetration today vs. 15% for telephones Global Internet user growth should rise at an annual rate of 20%+ for the next three to five years or so. • 300MM+ Internet users today • 5% global penetration today vs. 15% for telephones 22 40mary.meeker@morganstanley.com Internet usage growth could continue to rise at a rate of 1.2 to 2.0 times user growth for the next several years, or longer, as uses ramp and broadband and wireless access take off – and yes, these are powerful rates of growth. Internet usage growth could continue to rise at a rate of 1.2 to 2.0 times user growth for the next several years, or longer, as uses ramp and broadband and wireless access take off – and yes, these are powerful rates of growth. 33
  • 41mary.meeker@morganstanley.com INTERNET USER/USAGE ECOSYSTEM GROWTH IS STILL STRONG...BUT SLOWING . . . INTERNET USER/USAGE ECOSYSTEM GROWTH IS STILL STRONG...BUT SLOWING . . . Source: Morgan Stanley Internet Ecosystem Framework; 6/07/01 User Y/Y Growth - Mean 126% 124% 112% 57% Usage Y/Y Growth - Mean 164% 145% 107% 86% Mean Y/Y Usage/User Multiplier 1.30 1.17 0.96 1.50 Q2:00 Q3:00 Q4:00 Q1:01 42mary.meeker@morganstanley.com BROADBAND WILL BE BIG BUT IT’S STILL EARLY…BROADBAND WILL BE BIG BUT IT’S STILL EARLY… Source: Morgan Stanley Internet Research,; Arbitron/Coleman Jan 2001 U.S. Broadband Household Penetration 6% 13% 21% 29% 37% 46% 0 10 20 30 40 50 2000 2001E 2002E 2003E 2004E 2005E Broadband Internet households use the Internet for 134 minutes a day, 61% higher than dial-up households.
  • 43mary.meeker@morganstanley.com Industry rationalization is occurring rapidly setting the stage for the emergence of clear sector winners. Industry rationalization is occurring rapidly setting the stage for the emergence of clear sector winners. 44 44mary.meeker@morganstanley.com Opportunities for rising online customer monetization are likely in the offing. Opportunities for rising online customer monetization are likely in the offing. 55
  • 45mary.meeker@morganstanley.com We are likely still in the early stages of wealth creation related to the evolution of the Internet, but the number of companies that are real winners will be small. We are likely still in the early stages of wealth creation related to the evolution of the Internet, but the number of companies that are real winners will be small. 66 46mary.meeker@morganstanley.com But, it may take 6-18 months of sluggish conditions and relative pain to work through many of the excesses created over the past decade. Note that Telecom Services excesses could take longer. We believe the worst of the declines are over…and...we will get back to normal… …but people have to remember / realize what “normal” means! But, it may take 6-18 months of sluggish conditions and relative pain to work through many of the excesses created over the past decade. Note that Telecom Services excesses could take longer. We believe the worst of the declines are over…and...we will get back to normal… …but people have to remember / realize what “normal” means! 77
  • 47mary.meeker@morganstanley.com Ø Entrepreneurship is really hard… and it’s REALLY hard to be a great entrepreneur – why is there only one Michael Jordan and one Tiger Woods? Ø And the people…the team... leadership… are key… Ø Biggest risk we all face is not being willing to continue to take risks... Ø Entrepreneurship is really hard… and it’s REALLY hard to be a great entrepreneur – why is there only one Michael Jordan and one Tiger Woods? Ø And the people…the team... leadership… are key… Ø Biggest risk we all face is not being willing to continue to take risks... CLOSING THOUGHTS...CLOSING THOUGHTS... 48mary.meeker@morganstanley.com DISCLAIMERDISCLAIMER V = More volatile. We estimate that this stock has more than a 25% chance of a price move (up or down) of more than 25% in a month, based on a quantitative assessment of historical data, or in the analyst's view, it is likely to become materially more volatile over the next 1-12 months compared with the past three years. Stocks with less than one year of trading history are automatically rated as more volatile (unless otherwise noted). We note that securities that we do not currently consider "volatile" can still perform in that manner. The information and opinions in this report were prepared by Morgan Stanley & Co. Incorporated (“Morgan Stanley Dean Witter”). Morgan Stanley Dean Witter does not undertake to advise you of changes in its opinion or information. Morgan Stanley Dean Witter and others associated with it may make markets or specialize in, have positions in and effect transactions in securities of companies mentioned and may also perform or seek to perform investment banking services for those companies. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. Within the last three years, Morgan Stanley & Co. Incorporated, Dean Witter Reynolds Inc. and/or their affiliates managed or co-managed a public offering of the securities of CSG Systems International, Convergys Corporation, Electronic Data Systems, Galileo International, KPMG Consulting, Palm Inc., Perot Systems, Texas Instruments, Viasystems Group Inc., Vignette, VeriSign, Veritas Software, webMethods, Xerox, Avanex Corp., Unigraphics Solutions, Agile Software, Ariba, Click Commerce, E.piphany, i2 Technologies, Informatica, McAfee.com, ON Semiconductor, TMP Worldwide, Tickets.com, RealNetworks, Inc., priceline.com Inc, Martha Stewart Living, Intuit, Homestore.com, WebMD, FreeMarkets Inc., Extreme Networks Inc., Expedia Inc., Exodus Communications, eBay Inc., drugstore.com Inc., DoubleClick Inc., Avenue A Inc, Aspect Communications, AsiaInfo Holdings, Inc., Ask Jeeves Inc., ARTISTdirect Inc., AOL Time Warner Inc., Amazon.com, 3Com, Broadcom Corporation, Brocade Comm. Systems, CacheFlow Inc., Inktomi Corporation, Redback Networks Inc., Silicon Laboratories, Scient Corporation, Sanmina, Power-One, Flextronics International, Celestica Inc, Alcatel Optronics, Advanced Switching, Arrow Electronics, Ciena Corporation, Copper Mountain Networks, Harris Corporation, Level 3 Communications, Lucent Technologies Inc., Motorola, Sycamore Networks Inc., Ingram Micro, Conexant, Compaq Computer Corp., DELL, Advanced Energy Industries, Agilent Technologies, ASM Lithography Hld. NV, Axcelis Technologies Inc., BE Semiconductor, Cymer, DuPont Photomasks, Kulicke & Soffa, Lattice Semiconductor, LTX Corporation, Mattson Technology Inc., PRI Automation, Transmeta Corporation, STMicroelectronics, SanDisk, Semtech Corporation, Rambus, NVIDIA Corporation, Nat'l Semiconductor, LSI Logic, International Rectifier, GlobeSpan Inc., Atmel Corp, ARM Holdings, AMDOCS, Illuminet Holdings Inc., MetaSolv Software Inc., AnswerThink, DiamondCluster Int'l, Digitas Inc., Digital Insight Corp., Mainspring Inc., Sapient, VIA NET.WORKS, Inc., PSINet Inc., Internet Initiative Japan, InterNAP Network Services, iBeam Broadcasting, Genuity Inc., Equant SA, Digex, Akamai Technologies, Inc., Aether Systems, Inc., Getty Images Inc., SilverStream Software, Marimba and GoAmerica, Inc.. Morgan Stanley & Co. Incorporated, Dean Witter Reynolds Inc. and/or their affiliates make a market in the securities of Cisco Systems, CSG Systems International, Electronic Data Systems, Fiserv, KPMG Consulting, Palm Inc., SunGard Data Systems, TeleTech, Texas Instruments, Vignette, Vitria Technology Inc., VeriSign, Veritas Software, WorldCom Inc., webMethods, Xilinx, Yahoo!, Apple Computer Inc., Autodesk, ADTRAN Inc., Adaptec, Avanex Corp., Dassault Systemes, Mentor Graphics, Parametric Technology, Structural Dynamics Res., Synopsys, BEA Systems, Click Commerce, CheckFree Corp., Documentum, Informatica, J.D. Edwards, McAfee.com, Novell, Oracle, Openwave Systems Inc., PeopleSoft, PurchasePro, Siebel Systems, TMP Worldwide, Tickets.com, RealNetworks, Inc., priceline.com Inc, Microsoft, Intuit, Homestore.com, WebMD, FreeMarkets Inc., Extreme Networks Inc., Expedia Inc., Exodus Communications, Electronic Arts, eBay Inc., drugstore.com Inc., DoubleClick Inc., CNET, Avenue A Inc, Aspect Communications, AsiaInfo Holdings, Inc., Ask Jeeves Inc., ARTISTdirect Inc., AOL Time Warner Inc., Amazon.com, 3Com, Broadcom Corporation, Brocade Comm. Systems, CacheFlow Inc., Inktomi Corporation, Juniper Networks, Redback Networks Inc., Silicon Laboratories, Scient Corporation, Sanmina, Power- One, Flextronics International, Adobe Systems, ADC Telecommunications, Advanced Fibre, Alcatel, Applied Materials, Anaren Microwave Inc., AudioCodes, Copper Mountain Networks, Ceragon Networks, Ltd., Ericsson, Glenayre Technologies, JDS Uniphase Corp., Level 3 Communications, Molex, Motorola, Polycom, Powerwave Technologies, Proxim, Inc., Tellabs, DMC Stratex Networks, Tech Data, Avid Technology, Conexant, DELL, Gateway, Read-Rite, Advanced Energy Industries, ASM Lithography Hld. NV, Axcelis Technologies Inc., BE Semiconductor, Cymer, DuPont Photomasks, KLA-Tencor, Kulicke & Soffa, Lam Research, Lattice Semiconductor, LTX Corporation, Mattson Technology Inc., PRI Automation, Silicon Valley Group, Transmeta Corporation, SanDisk, Semtech Corporation, Rambus, Qualcomm Inc., PMC - Sierra Inc., NVIDIA Corporation, Microchip Technology, Maxim Intg. Products, Linear Technology, Intel Corp, GlobeSpan Inc., Atmel Corp, Altera Corporation, ARM Holdings, Concord Communications, Comverse Technology, Illuminet Holdings Inc., Inet Technologies, MetaSolv Software Inc., Micromuse Inc., Visual Networks, AnswerThink, Cambridge Tech. Partners, DiamondCluster Int'l, Digitas Inc., Digital Insight Corp., Mainspring Inc., MarchFirst Inc., Sapient, VIA NET.WORKS, Inc., StorageNetworks, OmniSky Corporation, Internet Initiative Japan, InterNAP Network Services, Genuity Inc., EarthLink Inc., Digex, Akamai Technologies, Inc., Aether Systems, Inc., Electronics for Imaging, Getty Images Inc., TIBCO Software, SeeBeyond, SilverStream Software, Network Associates, Marimba, Compuware, BMC Software, GoAmerica, Inc. and Hyperion Solutions. Morgan Stanley & Co. Incorporated, Dean Witter Reynolds Inc. and/or their affiliates or their employees have or may have a long or short position or holding in the securities, options on securities, or other related investments of issuers mentioned herein. An employee or director of Morgan Stanley & Co. Incorporated, Dean Witter Reynolds Inc. and/or their affiliates is a director of Equifax Inc., Adaptec, AOL Time Warner Inc., DELL, InterNAP Network Services, Equant SA and Eastman Kodak. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advisors as they believe necessary. Where an investment is denominated in a currency other than the investor’s currency, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from the investment. Past performance is not necessarily a guide to future performance. Income from investments may fluctuate. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. To our readers in the United Kingdom: This publication has been issued by Morgan Stanley Dean Witter and approved by Morgan Stanley & Co. International Limited, regulated by the Securities and Futures Authority Limited. Morgan Stanley & Co. International Limited and/or its affiliates may be providing or may have provided significant advice or investment services, including investment banking services, for any company mentioned in this report. Private investors should obtain the advice of their Morgan Stanley & Co. International Limited representative about the investments concerned. This publication is disseminated in Japan by Morgan Stanley Dean Witter Japan Limited and in Singapore by Morgan Stanley Dean Witter Asia (Singapore) Pte. To our readers in the United States: While Morgan Stanley Dean Witter has prepared this report, Morgan Stanley & Co. Incorporated and Dean Witter Reynolds Inc. are distributing the report in the US and accept responsibility for it contents. Any person receiving this report and wishing to effect transactions in any security discussed herein should do so only with a representative of Morgan Stanley & Co. Incorporated or Dean Witter Reynolds Inc. To our readers in Spain: Morgan Stanley Dean Witter, SV, SA, a Morgan Stanley Dean Witter group company, supervised by the Spanish Securities Markets Commission (CNMV), hereby states that this document has been written and distributed in accordance with the rules of conduct applicable to financial research as established under Spanish regulations. To our readers in Australia: This publication has been issued by Morgan Stanley Dean Witter but is being distributed in Australia by Morgan Stanley Dean Witter Australia Limited A.C.N. 003 734 576, a licensed dealer, which accepts responsibility for its contents. Any person receiving this report and wishing to effect transactions in any security discussed in it may wish to do so with an authorized representative of Morgan Stanley Dean Witter Australia Limited. To our readers in Canada: This publication has been prepared by Morgan Stanley Dean Witter and is being made available in certain provinces of Canada by Morgan Stanley Canada Limited. Morgan Stanley Canada Limited has approved of, and has agreed to take responsibility for, the contents of this information in Canada. Additional information on recommended securities is available on request. © Copyright 2001 Morgan Stanley Dean Witter & Co.
  • July 2001 The State of Capital Markets and An Update on Technology Trends Mary Meeker Presented at The Industry Standard’s Internet Summit 2001, Carlsbad, Ca. THESTANDARDINTELLIGENCE FOR THE INTERNET ECONOMY INTERNET SUMMIT