Internet Trends 2010


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Some of the Internet Trends in 2010

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Internet Trends 2010

  1. 1. State of the Internet in 2010Insights and TrendsNils ReimeltSeptember 2010
  2. 2. The third Internet wave: we are right in the middle of it 1 Sept `10 Internet Trends
  3. 3. 2007/2008: Take-off of the third internet wave Number of Internet Innovations1993 2000 2007 2 22 Sept `10 Internet Trends
  4. 4. Landscape of Internet Services3 Sept `10 Internet Trends
  5. 5. 4 Sept `10 Internet Trends
  6. 6. Agenda Increasing Fragmentation Hottest new Internet business models Open Data movement5 Sept `10 Internet Trends
  7. 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. 8. Market fragmentation (2/3): Explosion of the Blogosphere 7 9/22/10 Introduction to Non-Premium Advertising 7 Sept `10 Internet Trends
  9. 9. Market fragmentation (3/3): Proliferation of Social Media 8 9/22/10 Introduction to Non-Premium Advertising 8 Sept `10 Internet Trends
  10. 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. 11. “According to Google, more than 40 percent of online ad inventory often goes unsold because publishers dont have an efficient way to sell the slots.” Reuters, September 2009 10 9/22/10 Introduction to Non-Premium Advertising10 Sept `10 Internet Trends
  12. 12. In the early days, the technology landscape was relative simple andeasy to manage 11 Sept `10 Internet Trends
  13. 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. 14. Ad-Networks are a response to market fragmentation ThinkEquity estimates there are now more than 400 ad networksSource: ThinkEquity, 2008, 2009 13 9/22/10 Introduction to Non-Premium Advertising 13 Sept `10 Internet Trends
  15. 15. Ad Networks: Branded sites building out extended networks to leveragesales force and advertiser relationships Source: ThinkEquity 14 9/22/10 Introduction to Non-Premium Advertising 14 Sept `10 Internet Trends
  16. 16. Big portals have strong interest in ad platforms and exchanges –intense M&A, investments and other announcementsPortals 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. 17. The largest ad-networks in the US and Germany – Mostly the domain ofperformance 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. 18. The online advertising market comprises of four main categoriesOther Worldwide Online Advertising Market 2007–2013EClassifieds, email advertising, e-mail basedlead generation, affiliate market 08-13E CAGR $85,8bn. % 10Non- Premium DisplayA personal site or leftover unsold inventory ata major site. The advertiser is not guaranteeda specific time-frame or placement for themedia buy. Lower priced $48,7bn.Premium DisplayAll graphical display advertising sold on aguaranteed-delivery basis through apublisher‘s direct sales force, including richmedia and video. Higher pricedSearch & Contextualfees paid by advertisers to Internet searchproviders to link the advertiser’sInternet domain to a specific search term 17 9/22/10 Introduction to Non-Premium Advertising 17 Sept `10 Internet Trends
  19. 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 marketIn € billion 08-13E CAGR 3% Display market – category split 2007 2013E 34% 14% Worldwide non-premium display marketIn € billion 08-13E CAGR 86% 66% 22% Premium Display Non-premium DisplaySource: 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. 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. 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. 22. Aggregators: Fragmented Internet service offerings lead to vertical search Aggregation: a Website simple concept Aggregator (Crawler-Technology) Vertical portals with a specific topice.g. Classifieds, News, Portal B Portal C Portal D etc... Shops, Travel, etc. 21 November 2009 Aggregationsportale 21 Sept `10 Internet Trends
  23. 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 Aggregationsportale22 Sept `10 Internet Trends
  24. 24. Examples of Aggregators Classifieds News Reviews Shops Discounts TravelURL Kayak.comProduct 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) goodsInfo 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, ATOwner, 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. 25. aggregating classifieds portals in real estate, cars and jobs Classifieds-AggregatorURL Trovit.comProdukt Free search engine for classified ads Historical Financials (€m) Revenues EBITDA 24 22.10.2009 New Media International24 Sept `10 Internet Trends
  26. 26. collects product reviews and calculates a relative „alaScore“ 25 22.10.2009 New Media International25 Sept `10 Internet Trends
  27. 27. 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 International26 Sept `10 Internet Trends
  28. 28. Agenda Increasing Fragmentation Hottest new Internet business models Open Data movement27 Sept `10 Internet Trends
  29. 29. Groupon: Meet The Fastest Growing Company EverGroupon features a daily deal on the best stuff to do, see, eat, and buy in more than 150cities around the world. Groupon $1 billion in sales faster than any company in historyURL Groupon.comEstablished October 2008Employess >500Funding Angel $1.0 Mio Series A $6.8 Mio Series B $30 Mio Series C $135 Mio Total $173 MioValuation $1.35 BillionThe only company to reach a $1billion valuation faster was YouTube(now part of Google), founded in 2005and still waiting to turn its first profit. 28 Sept `10 Internet Trends
  30. 30. 29 Sept `10 Internet Trends
  31. 31. Ranking of Business categories on Groupon30 Sept `10 Internet Trends
  32. 32. 31 Sept `10 Internet Trends
  33. 33. • Continued market growth but already signs of consolidation. • And – again – aggregator sites are developing32 Sept `10 Internet Trends
  34. 34. Agenda Increasing Fragmentation Next hot new Internet business model Open Data movement33 Sept `10 Internet Trends
  35. 35. Private Shopping Clubs: As hot as Groupon Revenues (€m) E FR US US US DE ES US34 Sept `10 Internet Trends
  36. 36. Private Shopping Clubs: How it works35 Sept `10 Internet Trends
  37. 37. Global Alliance: Club-Network „BrandsAlliance“ and Groupon-Clone-Network „Global Group Buying AG“ are merging operations36 Sept `10 Internet Trends
  38. 38. Agenda Increasing Fragmentation Last hot new Internet business model Open Data movement37 Sept `10 Internet Trends
  39. 39. Inside the App Economy The App Economy Mobile Webbrowser Devices Facebook iPhone iPad38 Sept `10 Internet Trends
  40. 40. Social Gaming: Zynga Facebook Application Statistics39 Sept `10 Internet Trends
  41. 41. Zynga: well over $1 million in revenue a day. 40 Sept `10 Internet Trends
  42. 42. Zynga: FarmVille Seeds Rake In Over $110,000 For Haiti 41 Sept `10 Internet Trends
  43. 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 millionSource. 42 August 2010 Facebook Magazines - A way to exploit a new audience42 Sept `10 Internet Trends
  44. 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, a KupiVIP launches Almaz Capital Fund Hulu lookalike KupiLuxe 43 43 June 2010 Online Developments in Russia43 Sept `10 Internet Trends
  45. 45. Agenda Increasing Fragmentation Hottest new Internet business models Open Data movement44 Sept `10 Internet Trends
  46. 46. Open Data: Use freely available data to create useful visualizations -> data journalism45 Sept `10 Internet Trends
  47. 47. Converting numbers to picturesRefining disposable data by creating visual Flash-Tools46 Sept `10 Internet Trends
  48. 48. Open Data is a philosophy and practice requiringthat certain data are freely available to everyone47 Sept `10 Internet Trends
  49. 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. 50. Thank You! 49 9/22/10 Introduction to Non-Premium Advertising49 Sept `10 Internet Trends
  51. 51. Appendix Groupon BrandsAlliance Open Data Data Exchange Sept `10 Internet Trends
  52. 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 ofestablished a presence in London to spearhead further Facebookinternational 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, tooversee its CIS operations. December 2008 Buying of 53,16 % of 51 June 2010 Online Developments in Russia
  53. 53. Digital Sky Technologies (DST)PORTFOLIO DST PORTFOLIO DST Leading horizontal web- Leader of the interactive entertainment market of Name: portal in the Russian, 50m Eastern Europ. Incorporates operator, publisher and UU 28M (WW) registered accounts in its50.55% 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: Leading Russian job UU (month) 1.5M (WW) portal, the daily number Provide the technologies to electronic trade in100% 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: Big portal and search UU 2.6M (WW) service in Ukraine • Latvian based IT companyMinority 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: 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: 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 2008Russia Reach: 31,7% Led $180m investment round in Zynga 52 June 2010 Online Developments in Russia