• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
The Internet Money Math - Business Models on the Web
 

The Internet Money Math - Business Models on the Web

on

  • 6,617 views

The Internet Money Math - Business Models on the Web

The Internet Money Math - Business Models on the Web
Rina Shainski, General Partner,Carmel Ventures

Statistics

Views

Total Views
6,617
Views on SlideShare
6,142
Embed Views
475

Actions

Likes
8
Downloads
377
Comments
2

3 Embeds 475

http://www.smo.co.il 465
http://www.slideshare.net 9
http://www.theinternetmoney.com 1

Accessibility

Categories

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

12 of 2 previous next

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • What is 'PV' ? Thanks.
    Are you sure you want to
    Your message goes here
    Processing…
  • Posted by: www.smo.co.il<br /><br/>
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    The Internet Money Math - Business Models on the Web The Internet Money Math - Business Models on the Web Presentation Transcript

    • The Internet Money Math Business Models on the Web Rina Shainski, General Partner, Carmel Ventures www.carmelventures.com MIT Forum, 25 December 2007
    • Carmel Areas of Interest Investment Areas Next gen. Infrastructure applications for Telco & Mobile Digital Home and IPTV TeraOp Displays Next Gen. Enterprise Software Internet & Digital Media On-line Advertising Confidential 2
    • Internet Media Interactive, Flexible and Measurable Measurable indication of user interest: page views, minutes Variety of business models – all convertible into page views clicks and actions Collaborative and Viral (UGC, Social Networks) Ease of update – always fresh Ease of access – just a click or two away Internet advertising, as of 2007 is growing faster than other types of media Confidential 3
    • US advertising market ($M) Internet advertising spending is taking money from the print media Source: T Weisel Partners.
    • ‘06 US media consumed (hrs/wk)& total ad spend ($B) Billions Hours Source: Jupiter research Online ad spending was disproportionate to the time spent surfing the net in the US in 2006. Confidential 7
    • Ad-funded value chain •CPM •Page Views •CPC •CPA •Minutes Ads$$$ Content Confidential 8
    • How ad $$ are split An advertiser has a $1 budget and hires Advertiser an Agency to manage the spending and creative strategy. $1.00 The agency gets a percent of the Agency Budget as a fee for its services, then decides how to allocate the remainder. $0.15-0.18 The agency could choose to purchase inventory from an Ad Network. The Network owns a collection of inventory Ad Network it purchased from Publishers. Alternatively , the agency $0.05-$0.07 could purchase inventory directly from a Publisher or Engine. Ad Server & Technology A 3rd party typically places the ad on the site and $0.01-$0.02 sends information back to the Agency on how the ad performs. Engines Publisher Comparison Search The Publisher or Engine displays the ad on $0.32-$0.40 shopping $0.32- their site, where visitors will see or otherwise interact with it. $0.04-$0.06 $0.40 Source: CIBC World Markets Corp. Confidential 9
    • Internet business models – variety and creativity Free Service – Ad-funded (Facebook, Myspace, eSnips) Free Service – Ads & Referral fees (Tripadvisor, MyThings) Freemium – Free & Premium services (Skype, Linkedin) Transactional – Ebay, Kasamba, Zopa (p2p lending) Subscription – eHarmony (dating), Games (Blizzard) Ad-networks – Google, Quigo, Kontera
    • The Penny Gap- “freemium” content But really….. toughest part of a new venture - it's getting your users to pay you anything at all. The biggest gap in any venture is that between a service that is free and one that costs a penny. At some point, the cost to acquire a paying customer is so high, it makes sense to consider shifting from a pay model to a free model. Source: Josh Kopelman, First Round Capital Confidential 11
    • Getting Started – simple ad-funded model Annual Expenses Breaking Even – Ad-funded model Staff: Revenues 2.4M 100% 5-8 employees at 100k-120k 500k-960k Marketing - - Infrastructure: 10K-15K/mo 120k-180k Cogs* 1.2M 50% Other (legal, admin) 150k – 200k Expenses 1.2M 50% Total: 770k-1240k EBIDTA - 0% * Assuming ad sales through ad-network Reaching 2.4M Annual Revenues At $1 CPM need 2.4B PV annually = 200M PV monthly; which at 5PV/visit needs 40M monthly visits What Impacts CPM – wide range $0.5 - $20 Demographics (age, gender, ethnicity) Category (health, weather, finance, cars) US vs International Direct or through ad-network
    • Top 50 US Properties ( September ‘07) Rank Property Unique Visitors (000) Rank Property Unique Visitors (000) Total Audience 182,362 1 Yahoo! Sites 136,180 26 Shopzilla.com 25,023 2 Google Sites 131,538 27 Best Buy 24,807 3 Microsoft Sites 119,194 28 Craigslist 24,427 4 Time Warner 119,084 29 Yellowpages.com 24,221 5 Fox interactive media 81,325 30 Disney Online 23,822 6 ebay 80,510 31 Sears sites 23,522 7 Amazon sites 59,058 32 Monster Worldwide 23,390 8 Wikipedia sites 55,157 33 Bank of America 23,354 9 Ask network 51,636 34 Gannet sites 22,272 10 New York Times Digital 47,997 35 ESPN 22,186 11 Apple Inc 43,775 36 Expedia 21,796 12 Viacom Digital 42,796 37 EW Scripps 21,045 13 Wal-mart 42,462 38 Real.com 20,242 14 Target Corporation 41,933 39 Photobucket.com 19,628 15 CNET Networks 35,731 40 United Online 19,305 16 Weather Channel, The 34,124 41 WebMD Health 18,346 17 Facebook 33,660 42 Lycos Sites 18,335 18 Adobe Sites 31,848 43 Circuit city stores Inc 18,268 19 AT&T 29,843 44 The Mozilla Corp 17,981 20 Verizon Comms 29,072 45 JC Penny 17,976 21 CBS 28,714 46 Artistsdirect 17,743 22 Gorilla Nation 26,556 47 Overstock.com 17,478 23 Comcast 26,479 48 NFL 17,397 24 Superpages 25,603 49 Hearst Corp 17,122 25 Glam media 25,394 50 CareerBuilder 17,021 Category Source: ComScore Media Metrix Demographics Confidential 13
    • US Top 50 Ad Focus Ranking (September ‘07) Rank Property Unique Visitors (000) Reach % Rank Property Unique Visitors (000) Reach % Total Audience 182,362 100% 156,962 1 advertising.com** 86% 26 Vibrant Media** 72,273 40% 155,430 2 Yahoo! Ad Network** 85% 27 eBay.com 69,272 38% 139,496 3 Google Ad** 76% 28 Myspace.com 68,746 38% 134,754 4 Blue Lithium** 74% 29 Gorilla Nation 66,605 37% 134,227 5 Yahoo! 74% 30 CPX Interactive** 66,319 36% 133,430 6 ValueClick** 73% 31 Undertone Networks** 60,564 33% 131,898 7 Tribal Fusion** 72% 32 MSN.COM 58,678 32% 131,088 8 Specific Media** 72% 33 PrecisionClick** 56,093 31% 123,992 9 Google 68% 34 YouTube.com 53,521 29% 115,172 10 Casale Media Network** 63% 35 AdDynamix** 51,882 28% 107,573 11 AOL Media 59% 36 Ask Networks 51,636 28% 105,266 12 DRIVEpm** 58% 37 Amazon 49,775 27% 103,586 13 MSN-windows live 57% 38 Business.com 46,148 25% 96,608 14 Traffic marketplace** 53% 39 Mapquest.com 45,592 25% 95,012 15 Yahoo.com 52% 40 Kontera** 44,164 24% 93,829 16 interCLICK** 51% 41 eBay.com 43,123 24% 90,690 17 24/7 real Media** 50% 42 Walmart.com 39,902 22% 90,684 18 Tremor Media 50% 43 about.com 39,873 22% 88,826 19 AOL Media 49% 44 The Nabbr Network 35,917 20% 84,206 20 adconion media** 46% 45 Facebook 33,660 18% 82,955 21 Colective media** 45% 46 Vizi Media** 27,556 15% 81,368 22 Burst Media** 45% 47 Real cities 26,486 15% 79,907 23 AdBrite** 44% 48 Superpages 25,603 14% 78,592 24 Centro 43% 49 CNN 25,581 14% 73,863 25 ADSDAQ** 41% 50 Weather.com 25,176 14% Source: ComScore Media Metrix ** Denotes ad network Confidential 14
    • Web Analytics - example Source: quantcast.com Confidential 16
    • Web Analytics - example Source: quantcast.com Confidential 17
    • Important Metrics CPM – cost per mille – wide range of values $0.5-$20 Page Views - PV CPC, CPA – cost-per-click cost-per-action typically used between ad-networks and advertisers Uniques/mo – correlates with reach and exposure PV/Unique – important for cost of user acquisition CTR – correlates with response Visits/mo; PV/Visit - CPM*(Visits/mo*PV/Visit)/1000 = revenues/mo
    • The rise & rise of social networks 2005 2007 Rank Web site Rank Web site 1 yahoo.com 1 yahoo.com 2 msn.com 2 google.com 3 google.com 3 youtube.com 4 ebay.com 4 live.com 5 amazon.com 5 msn.com 6 microsoft.com 6 myspace.com 7 facebook.com 7 myspace.com 8 wikipedia.org 8 google.co.uk 9 hi5.com 9 aol.com 10 orkut.com 10 go.com Source: Alexa •Consumption patterns are changing •New major players have gained traction quickly, in UGC and social networks Confidential 19
    • Opportunities in social networks, targeting & video By 2011, 50% of all online adults and 84% of online teens in the US will use social networking each month Behavioral Targeting: •Advertisers want to engage larger audiences with fewer ad impressions •Publishers want to better monetize their “long tail” for less. •Individuals want to see more personalized ads Source: emarketer.com Confidential 20
    • Content Partners with Distribution Content owners partner with on-line distribution channels. New distribution technologies: AJAX, RSS, and Widgets Source: avenue a razorfish Confidential 21
    • Summary Advertising budgets are shifting from traditional media to on-line Internet advertising is expected to keep on growing Social Network ads, targeted ads, display ads and video ads are expected to lead the growth Variety of successful business models Lots of opportunities and lots of competition Easy to start but challenging to grow big – distribution is key! Monetization drives value Many small exits side-by-side with big and huge successes Confidential
    • Thank You Rina Shainski, General Partner, Carmel Ventures rinas@carmelventures.com