Internet Markets: crisis 2.0?

75 %
25 %
Information about Internet Markets: crisis 2.0?
Technology
end

Published on November 4, 2008

Author: Jinger

Source: slideshare.net

Mick Gourevitch RBC Internet Markets: crisis 2.0?

Internet drivers: the end of 1990’s: news sites; mid 2000’s: blogs; 2006-2007: social networks; 2008 and further: video + mobile?

the end of 1990’s: news sites;

mid 2000’s: blogs;

2006-2007: social networks;

2008 and further: video + mobile?

Video New huge market: Analysts predicted 600% growth for 2007-2012

New huge market:

Analysts predicted

600% growth

for 2007-2012

Mobile The growth of users with 240x320 screen resolution in Runet (Liveinternet data)

The growth of users with 240x320 screen resolution in Runet (Liveinternet data)

Mobile advertising revenues $19,5 billion in 2012; 3,5 billion mobile phones worldwide; 70% penetration 3G in Korea and Japan; Worldwide mobile television subscriptions are expected to grow 5x to $19 bln by 2012 compared with $408 mln in 2007, Pricewaterhouse said .

$19,5 billion in 2012;

3,5 billion mobile phones

worldwide;

70% penetration 3G

in Korea and Japan;

Worldwide mobile television subscriptions are expected to grow 5x to $19 bln by 2012 compared with $408 mln in 2007, Pricewaterhouse said .

People are ready to watch video on mobile As it follows from the last Azuki Systems Inc. survey, 25% of US respondents already access video on their mobile phones every week But it is still irregular pastime: only 6% spend more then 4 hours for it Source: Azuki Systems Inc., September 2008

As it follows from the last Azuki Systems Inc. survey,

25% of US respondents already access video on their mobile phones every week

But it is still irregular pastime: only 6% spend more then 4 hours for it

Source: Azuki Systems Inc., September 2008

Do you really want to talk about it?

Do you really want to talk about it?

Autumn 2008: “ Verge of collapse” “ Global economic meltdown” “ The end of web 2.0 era” We all die?

“ Verge of collapse”

“ Global economic meltdown”

“ The end of web 2.0 era”

We all die?

Fact Pack (1/3) Plans to lay-off company stuff: Yahoo: 10% of more till the end of year; eBay: 10% (about 1600 employees); Online ad network AdBrite: 40%; Top 3 social network Hi5: 15%; Those companies, that haven’t cut off the staff, have frozen their new vacancies Who will be the next?..

Plans to lay-off company stuff:

Yahoo: 10% of more till the end of year;

eBay: 10% (about 1600 employees);

Online ad network AdBrite: 40%;

Top 3 social network Hi5: 15%;

Those companies, that haven’t cut off the staff, have frozen their new vacancies

Who will be the next?..

Fact Pack (2/3) Industry forecasts are lowered: ZenithOptimedia: Global ad spending growth 2008 6,6% 4,3% 2009 6,0% 4,0% Goldman Sachs: decline in separate ad revenues for TV – 7% for broadcast networks – 5% for the radio, outdoor, magazines sectors – 5-10%

Industry forecasts are lowered:

ZenithOptimedia: Global ad spending growth

2008 6,6% 4,3%

2009 6,0% 4,0%

Goldman Sachs: decline in separate ad revenues

for TV – 7%

for broadcast networks – 5%

for the radio, outdoor, magazines sectors – 5-10%

Fact Pack (3/3) ZenithOptimedia: 2009-2010 – 12% growth ad spending in CEE; Internet advertising is expected to grow by an average of 23% per year between 2007 and 2010 globally; Russia is expected to be top 6 ad market (Oct. 2008 forecast).

ZenithOptimedia:

2009-2010 – 12% growth ad spending in CEE;

Internet advertising is expected to grow by an average of 23% per year between 2007 and 2010 globally;

Russia is expected to be top 6 ad market (Oct. 2008 forecast).

Are they right?

Internet crisises: history 1998 crisis in emerging countries; Dot.com burst 2000’s; 2008-…

1998 crisis in emerging countries;

Dot.com burst 2000’s;

2008-…

Dot.com crisis 2000’s: outcome  Shake-out;  Many start-ups have been frozen;  Companies, which have had a strong monetization model and invested resources in technical development, became the leaders of new epoch. They created new web 2.0 Internet

 Shake-out;

 Many start-ups have been frozen;

 Companies, which have had a strong monetization model and invested resources in technical development, became the leaders of new epoch.

They created new web 2.0 Internet

Crisis 2008: net out Good news: World Internet penetration is more then 20% of population (Russia – 23%, Poland – 42%); Internet is a basic sociological necessit y of life now; Diversified revenues of Internet-companies (media ads, context ads, micropayments, e-commerce); Internet became a whole industry; Internet dictates its will to the traditional economics (music industry, for ex.)

Good news:

World Internet penetration is more then 20% of population (Russia – 23%, Poland – 42%);

Internet is a basic sociological necessit y of life now;

Diversified revenues of Internet-companies (media ads, context ads, micropayments, e-commerce);

Internet became a whole industry;

Internet dictates its will to the traditional economics

(music industry, for ex.)

Crisis 2008: net out Bad news: Huge amount of startups without established revenue model (they still try to sell happiness); Huge cost expenses (esp. for videohostings); Stock market dependence; Owners of start-ups still need to justify previous funding GET YOUR REVENUE MODEL NOW OR GO HOME

Bad news:

Huge amount of startups without established revenue model

(they still try to sell happiness);

Huge cost expenses (esp. for videohostings);

Stock market dependence;

Owners of start-ups still need to justify previous funding

GET YOUR REVENUE MODEL NOW OR GO HOME

Our forecast: We will survive! <not all of us> :)

Social networking and dating sites People need to communicate every day Diversified revenue model; Vast audience; Micropayments; It is very good for you, if you have API.

People need to communicate every day

Diversified revenue model;

Vast audience;

Micropayments;

It is very good for you, if you have API.

Video You should find a revenue model or you have problems Still have no revenue model; Cost expenses are highest (servers, channels); The most experimental forms of ads (video ads included) are the most susceptible to cutbacks. But: Vast audience; People will prefer to watch a new film at home, not in cinema.

You should find a revenue model or you have problems

Still have no revenue model;

Cost expenses are highest (servers, channels);

The most experimental forms of ads (video ads included) are the most susceptible to cutbacks.

But:

Vast audience;

People will prefer to watch a new film at home, not in cinema.

Search Search still feels good!  Search is the most protected area of online advertising, with its low price and high CTR SearchIgnite report: 27% growth in search spending for 3Q2008/3Q2007 But: Many advertisers leaves the market The fall of CPC

Search still feels good! 

Search is the most protected area of online advertising, with its low price and high CTR

SearchIgnite report:

27% growth in search spending for 3Q2008/3Q2007

But:

Many advertisers leaves the market

The fall of CPC

Email IM and social networks to overtake email With the growth of social networks and IM-audience, email loses its market share. IDC: IM is set to overtake email as the preferred form of business communication by the 2 nd half of 2010. Email services moves to become more social

IM and social networks to overtake email

With the growth of social networks and IM-audience, email loses its market share.

IDC: IM is set to overtake email as the preferred form of business communication by the 2 nd half of 2010.

Email services moves to become more social

Marketing services Audience measurement; For startups it is still necessary to endorse its audience for venture investors. But where are those investors? Marketing researches; Are needed to understand new trends and directions for development. But who will pay for it? Advertising networks. Will need to reduce the prices; weak networks will die. But today most of networks become to be more contextual.

Audience measurement;

For startups it is still necessary to endorse its audience for venture investors. But where are those investors?

Marketing researches;

Are needed to understand new trends and directions for development. But who will pay for it?

Advertising networks.

Will need to reduce the prices; weak networks will die. But today most of networks become to be more contextual.

Mobile It is not enough just to “produce and sell ring tones” any more. You need to move forward and diversify your core services or prepare to be eaten by mobile operators.

It is not enough just to “produce and sell ring tones” any more.

You need to move forward and diversify your core services or prepare to be eaten by mobile operators.

New products We have new market rules here: No more fast money: if you have no clear monetization model, you have no funding. No more “another facebook clones” for fast selling. Investors don’t want to see “sellers of happiness” any more

We have new market rules here:

No more fast money: if you have no clear monetization model, you have no funding.

No more “another facebook clones” for fast selling.

Investors don’t want

to see “sellers of happiness” any more

Brave New World

Audience We predict the growth of the time spent in Internet : People need to know news every day. People need to reduce their expenses (YouTube and Hulu instead of cinema; social networks instead of clubs and restaurants). On the other hand, we see the decline of local broadband penetration on further months. It gives a chance for mobile Internet.

We predict the growth of the time spent in Internet :

People need to know news every day.

People need to reduce their expenses (YouTube and Hulu instead of cinema; social networks instead of clubs and restaurants).

On the other hand, we see the decline of local broadband penetration on further months. It gives a chance for mobile Internet.

Internet advertising We predict no decline, but the growth wouldn’t be so impressive as it used to be before. The hardest hit ad category – financing advertising – contributes only about 4% of global ad expenditure. So why Internet advertising should not decline hardly? Huge TV-, Outdoor and Print ad budgets would be redistributed to the benefit of Internet (depends on the market) Context and search ads will expand.

We predict no decline, but the growth wouldn’t be so impressive as it used to be before.

The hardest hit ad category – financing advertising – contributes only about 4% of global ad expenditure.

So why Internet advertising should not decline hardly?

Huge TV-, Outdoor and Print ad budgets would be redistributed to the benefit of Internet (depends on the market)

Context and search ads will expand.

Portals/ Media-holdings The point depends of: Degree of your revenue stability and diversification. Amount of your venture initiatives. Internet could be your driving force

The point depends of:

Degree of your revenue stability and diversification.

Amount of your venture initiatives.

Internet could be your driving force

What analytics says: People will stop to buy; People will stop to get fun and go to cinema; People will stop to eat; People will need no sex….. Are they right?

People will stop to buy;

People will stop to get fun and go to cinema;

People will stop to eat;

People will need no sex…..

Are they right?

So what to do? Be realistic. Adapt quickly. Make cuts. Became cash-flow positive ASAP. GET REAL!

Be realistic.

Adapt quickly.

Make cuts.

Became cash-flow positive ASAP.

GET REAL!

Believe me!

Any questions about video and mobile? :) [email_address]

Add a comment

Related presentations

Related pages

Dot-com bubble - Wikipedia, the free encyclopedia

... the Internet bubble, ... Subprime mortgage crisis; United States housing bubble; ... "Stock market bubble effects on mergers and acquisitions".
Read more

Euro zone crisis 2.0? Greek stocks tank - Stock Markets ...

Euro zone crisis 2.0? Greek stocks tank. Katrina Bishop ... market reaction itself has made it much less likely that Greece will be able to ...
Read more

Will Web 2.0 Survive the Financial Crisis? - Businessweek

Will Web 2.0 Survive the Financial Crisis? ... Web 2.0 lets everyone share their ideas, ... China Rattles Markets With Yuan Devaluation;
Read more

Financial crisis of 2007–08 - Wikipedia, the free ...

5.5 Continuation of the financial crisis in the U.S. housing market; ... Telephone and Internet account access was restored when the bank reopened.
Read more

Internet market sees crisis, consolidation - Telecompaper

Internet market sees crisis, consolidation ... The year 2001 was a year of crisis and consolidation in the Brazilian Internet market, ...
Read more

The Global Financial Crisis and Tanzania: Effects and ...

2.0 GLOBAL FINANCIAL CRISIS ON TANZANIA ... dividends from investments they had made in real estates and financial markets. The bank of Tanzania has ...
Read more

Malaysia Meltdown: Asian Currency Crisis 2.0 Sends Ringgit ...

... Asian Currency Crisis 2.0 Sends Ringgit, Stocks, Bonds ... "has opted to step back from intervening in the market in response to the falling ...
Read more

BBC NEWS | Business | Market crisis 'will happen again'

The world will suffer another financial crisis, former Federal Reserve chief Alan Greenspan has told the BBC. "The crisis will happen again but it will be ...
Read more

MARKET FAILURES AND REGULATORY FAILURES: LESSONS FROM PAST ...

market failures were that led to the crisis, and paves the way for thinking about regulatory solutions that can address these failures.
Read more

Is Europe ready for Greek Crisis 2.0? | Boston Herald

Is Europe ready for Greek Crisis 2.0? ... European stocks mostly rose while Asian markets were mixed. (AP Photo/Petros Giannakouris) 1 . Monday ...
Read more