The document discusses trends in the internet from 2010. It notes that the third wave of the internet was taking off around 2007-2008, marked by an explosion of internet innovations. The internet landscape had become highly fragmented, with over 100 million active websites and the proliferation of blogs and social media. This fragmentation led to substantial changes in the internet economy, including how online advertising works. Specifically, ad networks emerged as a way for publishers to more efficiently sell their unused ad inventory, and the largest players were focused on performance-based advertising. The online advertising market was categorized into premium display, non-premium display, search/contextual, and other forms like email. Non-premium display was experiencing the highest growth.

1. State of the Internet in 2010
Insights and Trends
Nils Reimelt
September 2010

2. The third Internet wave:
we are right in the middle of it
1 Sept `10 Internet Trends

3. 2007/2008: Take-off of the third internet wave
Number of Internet Innovations
1993 2000 2007
2 2
2 Sept `10 Internet Trends

4. Landscape
of
Internet
Services
3 Sept `10 Internet Trends

5. 4 Sept `10 Internet Trends

6. Agenda
Increasing Fragmentation
Hottest new Internet business models
Open Data movement
5 Sept `10 Internet Trends

7. Market fragmentation (1/3): 100 Million active websites around the world
Source: Netcraft
6 9/22/10 Introduction to Non-Premium Advertising
6 Sept `10 Internet Trends

8. Market fragmentation (2/3): Explosion of the Blogosphere
7 9/22/10 Introduction to Non-Premium Advertising
7 Sept `10 Internet Trends

9. Market fragmentation (3/3): Proliferation of Social Media
8 9/22/10 Introduction to Non-Premium Advertising
8 Sept `10 Internet Trends

10. Fragmentation leads to substantial change in the Internet economy
Observation 1
Fragmentation is changing the
Online Advertising Market
9 Sept `10 Internet Trends

11. “According to Google, more than
40 percent of online ad inventory
often goes unsold because
publishers don't have an efficient
way to sell the slots.”
Reuters, September 2009
10 9/22/10 Introduction to Non-Premium Advertising
10 Sept `10 Internet Trends

12. In the early days, the technology landscape was relative simple and
easy to manage
11 Sept `10 Internet Trends

13. Nowadays, navigating the landscape has become a lot more complex
12 9/22/10 Introduction to Non-Premium Advertising
12 Sept `10 Internet Trends

14. Ad-Networks are a response to market fragmentation
ThinkEquity
estimates there are
now more than 400
ad networks
Source: ThinkEquity, 2008, 2009
13 9/22/10 Introduction to Non-Premium Advertising
13 Sept `10 Internet Trends

15. Ad Networks: Branded sites building out extended networks to leverage
sales force and advertiser relationships
Source: ThinkEquity
14 9/22/10 Introduction to Non-Premium Advertising
14 Sept `10 Internet Trends

16. Big portals have strong interest in ad platforms and exchanges –
intense M&A, investments and other announcements
Portals Acquire to Create “Platforms”
– Yahoo! buys RightMedia ($850M), BlueLithium ($300M)
– Google buys DoubleClick ($3.1B)
– Microsoft buys aQuantive ($6.1B), AdECN ($75M)
– AOL buys Tacoda ($275M), Quigo ($300M) to create Platform A
– Tomorrow Focus acquires an additional 38% of AdJug Ltd. – now
holds a 55% stake
– OpenX has raised >$30m to date
15 9/22/10 Introduction to Non-Premium Advertising
15 Sept `10 Internet Trends

17. The largest ad-networks in the US and Germany – Mostly the domain of
performance oriented advertisers that require reach
US: Total Unique Visitors (m) – April 2009 Reach DE: Total Unique Visitors (m) – September 2009 Reach
OLINE POPULATION 100% 100%
ONLINE POPULATION
Platform-A 91% 78%
Google Ad Network
Yahoo! Network 87% 73%
TradeDoubler
Google Ad Network 85% 65%
AOL Advertising
ValueClick Networks 83% 61%
ValueClick Networks
Specific Media 82% 61%
AdScale
Fox Audience Netw. 77% 54%
Adconion
24/7 Real Media 77% 54%
Microsoft Media Network
Traffic Marketplace 74% 47%
Yahoo! Netwok
Microsoft Media Netw. 72% 43%
Vibrant Media
Tribal Fusion 72% 42%
Specific Media
Casale Media 71%
interCLICK 70%
Turn, Inc. 69%
Adconion 69%
CPX Interactive 68%
Collective Media 67%
ADSDAQ 64%
AudienceScience 63%
Burst Media 61%
Undertone Networks 50%
Source: ComScore May 2009, November 2009
16 9/22/10 Introduction to Non-Premium Advertising
16 Sept `10 Internet Trends

18. The online advertising market comprises of four main categories
Other Worldwide Online Advertising Market 2007–2013E
Classifieds, email advertising, e-mail based
lead generation, affiliate market
08-13E CAGR
$85,8bn.
%
10
Non- Premium Display
A personal site or leftover unsold inventory at
a major site. The advertiser is not guaranteed
a specific time-frame or placement for the
media buy. Lower priced $48,7bn.
Premium Display
All graphical display advertising sold on a
guaranteed-delivery basis through a
publisher‘s direct sales force, including rich
media and video. Higher priced
Search & Contextual
fees paid by advertisers to Internet search
providers to link the advertiser’s
Internet domain to a specific search term
17 9/22/10 Introduction to Non-Premium Advertising
17 Sept `10 Internet Trends

19. The premium display ad market is reaching its growth limits. Non-
premium display is the highest growth segment of online media
Worldwide premium display market
In € billion
08-13E CAGR
3%
Display market – category split
2007 2013E
34%
14%
Worldwide non-premium display market
In € billion
08-13E CAGR
86% 66%
22%
Premium Display Non-premium Display
Source: ThinkEquity The Opportunity In Non-Premium Display Advertising (May 2009)
18 9/22/10 Introduction to Non-Premium Advertising
18 Sept `10 Internet Trends

20. MARKET
-­‐
OVERVIEW:
FRAGMENTATION
OF
$,
INVENTORY
AND
LIMITED
AUTOMATION
MILLIONS
OF
400+ 2
MILLION
PUBLISHERS AD
NETWORKS ADVERTISERS
Top
500
$
n!
a .o $
e nt
gm
Mid-­‐sized 25
Top
Networks
ra
$
e
F $$$
$
s iv $
as
250+
Others
M $
125
InternaNonal
Small/Tail $
19 9/22/10 Introduction to Non-Premium Advertising
19 Sept `10 Internet Trends

21. Fragmentation leads to substantial change in the Internet economy
Observation 2
Fragmentation gives rise to new
Internet business models
20 Sept `10 Internet Trends

22. Aggregators: Fragmented Internet service offerings lead to vertical search
Aggregation: a Website
simple concept
Aggregator
(Crawler-Technology)
Vertical portals
with a specific topic
e.g. Classifieds, News, Portal B Portal C Portal D etc...
Shops, Travel, etc.
21 November 2009 Aggregationsportale
21 Sept `10 Internet Trends

23. Aggregators behave like a „vertical Google“
t
n`
do n
rs w
ato ir o ings
eg e
gr e th ffer
Vertical Search Engine A g av ct o
h u
od
pr
t e
en
t c har
on ffi e S
C ra u
T
ven
Re
Portal A Portal B Portal C Portal D etc...
„Look for the most fragmented markets with the most offerings“
22 November 2009 Aggregationsportale
22 Sept `10 Internet Trends

24. Examples of Aggregators
Classifieds News Reviews Shops Discounts Travel
URL Trovit.com Nachrichten.de Alatest.de smatch.com Disconto.de Kayak.com
Product Free search Aggregator for Search engine for E-Commerce Search engine Travel search
engine for news (like product reviews search engine for bargain engine
classified ads Google News) goods
Info Search real Automated news Provides Reviews, Aggregates Current offers Search for
estate to buy portal that crawls Ratings and Price offers from from discount discount airfaire,
or rent, used about 500 news Comparison for a other Online stores,drug hotel, car,
cars and jobs sources wide range of Shops stores and trade packages and
in your local products (categories chains in the even cruise
area fashion, living, vicinity prices
lifestyle)
Country DE, UK, ES, DE DE, FR, IT, ES, DE DE DEN, FI, FR, DE,
presence FR, IT, AR, US, BE, SV, AU IN, IT, NOR, ES,
CHI, BR, MX, DK, NO, CH, UK, SWE, UK
USA, OK, NL JP, CN, AT
Owner, Independent Hubert Burda Independent Otto Independent, Independent,
Funding company in Media company in Versandhandel, Business Angels $196 million
Spain, €600k Sweden, No Funding within Jörn Lubkoll, financing round
in Series A Funding Otto group Michael
Kottysch
23 November 2009 Aggregationsportale
23 Sept `10 Internet Trends

25. Trovit.com: aggregating classifieds portals in real estate, cars and jobs
Classifieds-Aggregator
URL Trovit.com
Produkt Free search engine for
classified ads
Historical Financials (€m)
Revenues EBITDA
24 22.10.2009 New Media International
24 Sept `10 Internet Trends

26. Alatest.de collects product reviews and calculates
a relative „alaScore“
25 22.10.2009 New Media International
25 Sept `10 Internet Trends

27. Smatch.com aggregates online-shops and offers a
„Meta-Shop“ with additionaly community features
sag mal Du könntest mir einen riesen gefallen tun
26 22.10.2009 New Media International
26 Sept `10 Internet Trends

28. Agenda
Increasing Fragmentation
Hottest new Internet business models
Open Data movement
27 Sept `10 Internet Trends

29. Groupon: Meet The Fastest Growing Company Ever
Groupon features a daily deal on the best stuff to do, see, eat, and buy in more than 150
cities around the world.
Groupon $1 billion in sales faster than any company in history
URL Groupon.com
Established October 2008
Employess >500
Funding Angel $1.0 Mio
Series A $6.8 Mio
Series B $30 Mio
Series C $135 Mio
Total $173 Mio
Valuation $1.35 Billion
The only company to reach a $1
billion valuation faster was YouTube
(now part of Google), founded in 2005
and still waiting to turn its first profit.
28 Sept `10 Internet Trends

30. 29 Sept `10 Internet Trends

31. Ranking of Business categories on Groupon
30 Sept `10 Internet Trends

32. 31 Sept `10 Internet Trends

33. • Continued market growth but
already signs of consolidation.
• And – again – aggregator sites are
developing
32 Sept `10 Internet Trends

34. Agenda
Increasing Fragmentation
Next hot new Internet business model
Open Data movement
33 Sept `10 Internet Trends

35. Private Shopping Clubs: As hot as Groupon
Revenues (€m)
E
FR US US US DE ES US
34 Sept `10 Internet Trends

36. Private Shopping Clubs: How it works
35 Sept `10 Internet Trends

37. Global Alliance: Club-Network „BrandsAlliance“ and
Groupon-Clone-Network „Global Group Buying AG“ are
merging operations
36 Sept `10 Internet Trends

38. Agenda
Increasing Fragmentation
Last hot new Internet business model
Open Data movement
37 Sept `10 Internet Trends

39. Inside the App Economy
The App Economy
Mobile
Webbrowser
Devices
Facebook iPhone iPad
38 Sept `10 Internet Trends

40. Social Gaming: Zynga
Facebook Application Statistics
39 Sept `10 Internet Trends

41. Zynga: well over $1 million in revenue a day.
40 Sept `10 Internet Trends

42. Zynga: 'FarmVille' Seeds Rake In Over $110,000 For Haiti
41 Sept `10 Internet Trends

43. Is there money to be made on Facebook?
Zynga Slide
Business: Social Games Business: Widgets/Ads
Founded: 2007 Founded: 2005
Financials: estimated 2009 revenues Financials: acquired by Google for
of $270 million $182 million
Playdom Zoosk
YES !
Business: Social Games Business: Dating
Founded: 2008 Founded: 2007
Financials: Recently acquired by Financials: Received $40.5M funding
Disney for $763 million
Source. Techcrunch.com
42 August 2010 Facebook Magazines - A way to exploit a new audience
42 Sept `10 Internet Trends

44. Accelerated Dealmaking in Russia
17/12
DST raises stake in 25/01
Mangrove, ABRT invest 16/03
Facebook to > 5% DST leads $135m
in Drimmi (soc. gaming)
funding in Groupon
18/01
Accel, Mangrove, invest 16/03 20/04
16/12
$20m in KupiVip DST, 1C Company and ProfMedia looks to sell
DST, Tiger invest
CEO invest $7m in Nival Rambler for $200m
$180m in Zynga
Network
01/2009 06/2010
15/01 06/02 12/04
C-Media to acquire Almaz Capital to Tencent values DST at
online news aggr. invest $3m (23%) in $3bn; Invests $300m
28/04
Newsland Alawar Ent.
DST acquires ICQ for
$187,5m
23/12 27/02 20/04
EBRD to invest $30m in Launch of ivi.ru, a KupiVIP launches
Almaz Capital Fund Hulu lookalike KupiLuxe
43
43 June 2010 Online Developments in Russia
43 Sept `10 Internet Trends

45. Agenda
Increasing Fragmentation
Hottest new Internet business models
Open Data movement
44 Sept `10 Internet Trends

46. Open Data: Use freely available data to create
useful visualizations -> data journalism
45 Sept `10 Internet Trends

47. Converting numbers to pictures
Refining disposable data by creating visual Flash-Tools
46 Sept `10 Internet Trends

48. Open Data is a philosophy and practice requiring
that certain data are freely available to everyone
47 Sept `10 Internet Trends

49. Trends and technologies we did not cover in this session
Multiplatform Semantic targeting
Realtime
Publishing Re-targeting
Media Buying Platforms
Location Based Services Ad Exchanges
Ad Revenue Optimizers
Measurement &
Crowdsourcing Community funding
Analytics
48 9/22/10
48 Sept `10 Internet Trends

50. Thank You!
49 9/22/10 Introduction to Non-Premium Advertising
49 Sept `10 Internet Trends

51. Appendix
Groupon
http://www.youtube.com/watch?v=SnTcwax3kxs
http://video.forbes.com/fvn/business/growing-groupon
http://www.facebakers.com/countries-with-facebook/
BrandsAlliance
http://www.excitingcommerce.de/2010/05/brandsalliance.html
http://www.excitingcommerce.de/2010/07/global-group-buying-ag.html
Open Data
http://www.guardian.co.uk/football/world-cup-match-replay
http://www.guardian.co.uk/news/datablog/2010/jun/09/bp-energy-statistics-consumption-reserves-energy#zoomed-picture
http://projects.latimes.com/homicide/map/
Data Exchange
http://www.bluekai.com/bluekai-exchange.html
50 Sept `10 Internet Trends

52. Digital Sky Technologies (DST)
COMPANY STRATEGY
 One of the largest pure Internet investors globally  Typical investment of $10m to $100m
 the #1 and often also the #2 and #3 positions in all CIS states
 Comprise over 70% of all pageviews in the Russian speaking
Internet „We are not going to sell the Russian
 Sites of DST hold a potential audience of over 300m people actives. Our model is Initial Public
Offering of the holding company, I mean
 Between 2005 and 2009 DST raised and invested more than $1
IPO of DST. Terms IPO depend on a
billion in over 30 companies and gained support from Russian
condition of the world markets and from
and Western funds. readiness DST for this event. I think, it
happens within the next three years“ , -
Yuri Milner (owner and CEO)
OWNERSHIP / MANAGEMENT
Yuri Milner and Gregory Finger 66% Activities
Alisher Usmanov 32% December 2009 Led a $180m investment round in Zynga
Renessans Group (Investment Bank) 2% October 2009 Raises stake in Facebook to more than 5%
In 2008 Alexander Tamas joined DST from Goldman Sachs and May 2009 Invested $200M in preference shares of
established a presence in London to spearhead further Facebook
international efforts. Summer 2008 Majority share in OE Investments (the
leading instant payment company in Rus.)
In 2009, Verdi Israelian, joined DST from Goldman Sachs SSG, to
oversee its CIS operations. December 2008 Buying of 53,16 % of Mail.ru
51 June 2010 Online Developments in Russia

53. Digital Sky Technologies (DST)
PORTFOLIO DST PORTFOLIO DST
Leading horizontal web- Leader of the interactive entertainment market of
Name: Mail.ru
portal in the Russian, 50m Eastern Europ. Incorporates operator, publisher and
UU 28M (WW) registered accounts in its
50.55% 100% developer of online games in Russia:
Revenue core product – free email, •Astrum Nival,
58 m USD
#1 portal in Russia 2007: diversified into 0 other •IT Territory / Time Zero,
Reach: 71% products •Nikita Online / DJ Games
Name: HH.ru Leading Russian job
UU (month) 1.5M (WW) portal, the daily number Provide the technologies to electronic trade in
100% PI 130m of visitors 120K. BM: corporate and state sectors of economy. Since
#1 job portal in Reach: 3,8% selling information from 2002: more than 65 000 auctions for a total sum,
Russia its CV 100% exceeding €12 000 mil. 1000 new participants in
a month.
Name: Meta.ua Big portal and search
UU 2.6M (WW) service in Ukraine • Latvian based IT company
Minority
PI 66M • Joint owner of social networks
#1 portal in • The total amount of users is more than 60M
Reach: 22% 75%
Ukraine
> 5%
Name: Vkontakte.ru Social network, the first
UU 20M (WW) place in number of PI,
30% 9.5M RU
75%
#1 social network in
PI 7.9 (bn.)
Russia Reach: 41,7%
Name: Odnoklassniki.ru The largest social
UU 18M (WW) network in Russia,
30% revenue 3,3 million USD
PI 4.1 bn.
#2 social network in in the I quarter 2008
Russia Reach: 31,7%
Led $180m investment
round in Zynga
52 June 2010 Online Developments in Russia